Securities
and Exchange Commission


Washington,
D.C. 20549





FORM
10-K





x
            
            Annual
      report under Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the fiscal year ended December 31, 2009o
            
            Transition
      report under Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the transition period from ____________ to
  ____________








Commission
file number: 0-30215








(Exact
name of registrant as specified in its Charter)





Utah
            
            87-9369569(State or Other Jurisdiction of Incorporation or Organization)
            
            (I.R.S. Employer Identification No.)3940-7
      Broad Street, #200, San Luis Obispo, CA
            
            93401(Address
      of Principal Executive Offices)
            
            (Zip
      Code)





(866)
297-7192


(Issuer’s
Telephone Number, Including Area Code)





Securities
Registered under Section 12(g) of the Exchange Act:





Common Stock, $.001 Par
Value


(Title of
Class)







Check
whether the Company: (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 Company was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes xNo  o





Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-K contained in this form, and no disclosure will be contained, to
the best of Company’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  x





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





Large accelerated filer o
            Accelerated
      filer o
            Non-accelerated
      filer o
            Smaller
      reporting company x





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


Yes oNo x





Revenue
for the fiscal year ended December 31, 2009 is $4,701,881 the aggregate market
value of the voting stock held by non-affiliates of the registrant based on the
closing bid price of such stock as of December 31, 2009 amounted to
$4,438,936.





The
number of shares outstanding of each of the registrant's classes of common stock
as of December 31, 2009 was 28,956,884 shares.





Page
- 1





DOCUMENTS
INCORPORATED BY REFERENCE





In this
report, references to “we”, “us” or “our” collectively refer to Power Save
Energy Company.








SPECIAL
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS





This
report and the documents incorporated into this report contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the “PSLRA”), including, but not limited to, statements relating to the
Company’s business objectives and strategy. Such forward-looking statements are
based on current expectations, management beliefs, certain assumptions made by
the Company’s management, and estimates and projections about the Company’s
industry. Words such as “anticipates,” “expects,” “intends,” “plans,”
“believes,” “seeks,” “estimates,” “forecasts,” “is likely,” “predicts,”
“projects,” “judgment,” variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict with respect to timing, extent,
likelihood and degree of occurrence. Therefore, actual results and outcomes may
differ materially from those expressed, forecasted, or contemplated by any such
forward-looking statements.





Factors
that could cause actual events or results to differ materially include, but are
not limited to, the following: continued market acceptance of the Company’s
products; the Company’s ability to expand and/or modify its products on an
ongoing basis; general demand for the Company’s products, intense competition
from other developers, manufacturers and/or marketers of energy reduction and/or
power saving products; the Company’s negative net tangible book value; the
Company’s negative cash flow from operations; delays or errors in the Company’s
ability to meet customer demand and deliver products on a timely basis; the
Company’s lack of working capital; the Company’s need to upgrade its facilities;
changes in laws and regulations affecting the Company and/or its products; the
impact of technological advances and issues; the outcomes of pending and future
litigation and contingencies; trends in energy use and consumer behavior;
changes in the local and national economies; and other risks inherent in and
associated with doing business in an engineering and technology intensive
industry. See “Management’s Discussion and Analysis or Plan of Operation.” Given
these uncertainties, investors are cautioned not to place undue reliance on any
such forward-looking statements.





Unless
required by law, the Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. However, readers should carefully review the risk factors
set forth in other reports or documents that the Company files from time to time
with the Securities and Exchange Commission (the “SEC”), particularly Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and any Current Reports on
Form 8-K.







Page
- 2












PART I





Item 1.
            Description
      of Business.





(a)
            Business
      Development





Formation





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.





(b)
            Business
      of the Company





The
Company’s Principal Products and Technology





Power-Save
Energy Co., manufactures, markets, and sells electricity saving devices for
homeowners, Power-Save 1200, 3200 and 3400. Power-Save also now markets and
sells renewable energy devices, photovoltaic electricity systems, Power-Save
Solar and Power-Save Wind Turbine that produce electricity generated from wind
energy. The product lines intended to reduce homeowner's electricity
consumption, generate renewable energy and overall reduce the consumer's
electric utility bill.





Power-Save
Energy Co. intends to aggressively market the product lines using television as
it main advertisement channel. Power-Save will market the Power-Save product
lines utilizing Direct Response Television Commercials played on cable TV across
America. Power-Save will retain the services of a full service Call Center to
take incoming orders as a result of the TV commercials. Power-Save will utilize
PayPal Merchant services to accept payment for items and FedEx to ship products.
Power –Save Energy Co. sells and ships its products to contractors who are
wholesale customers of Power Save. Power Save is responsible for warehousing and
shipping its product for all customers, both wholesale and retail.





Product
Development





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.







Page
- 3







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.





Marketing
and Sales





We market
our products through our website, through 60 second and 120 second direct
response television commercials which are played on cable TV across America, and
through select Internet advertising. We retain the services of a full service
call center to take incoming orders that result from the TV commercials, and use
PayPal Merchant services to accept payment for products. We farm out to
independent sales individuals our telephone and email based leads and we pay
sales commissions only on closed sales. Installation of our products is
typically done by independent electrical contractors. We have established a
nationwide network of electrical contractors and electrical service companies to
act as installers and resellers of our products across the country.





Manufacturing
and Distribution





We
own the designs for our products. We have the products manufactured to our
design specifications and under our UL certification by an unrelated third party
manufacturer in China. We order from the manufacturer on a purchase order basis.
The manufacturer provides warehousing services and will ship to us or directly
to our customers. While we currently rely on one manufacturer as the sole
supplier of our products, we believe that the components for our products and
the manufacturing and warehousing services we receive from our supplier are
available from a number of other manufacturers.





Competition





We face
direct competition from companies that offer products with similar features. We
attempt to compete against these companies on the basis of our brand, our
marketing, product pricing, product features, and reliability.





We
currently have only one employee and limited financial resources. Our
competitors have or may have greater financial resources, production, sales,
marketing, engineering and other capabilities with which to develop,
manufacture, market and sell their products, and more experience in research and
development than we have. In addition, other established or new companies may
develop or market products competitive with, or superior to, our products. See
"Risk Factors" above.





Government
Regulation





Sales of
the Company’s product are not dependent on deregulation of the electrical energy
market as the Company’s product can be sold in regulated and deregulated
markets.





Effect
of Environmental Regulations





The
Company is not aware of any federal, state, or local provisions regulating the
discharge of materials into the environment or otherwise relating to the
protection of the environment with which compliance by the Company has had, or
is expected to have, a material effect upon the capital expenditures, earnings,
or competitive position of the Company.





Employees





The
Company has two full time employees. We currently have 7 sales
repesentatives.








Item 1A.
            Risk
      Factors.





RISKS
RELATED TO OUR BUSINESS





We
currently depend on the services of Mr. Forster as our key employee; the
loss of Mr. Forster's services would adversely affect our business. Our future
growth will be limited if we cannot successfully attract and retain employees
with the expertise required for our business.





Mr. Forster is
our key employee. We intend to retain a small employee base while we
transition from a development company to an operating company. As a result, we
are highly dependent on Mr. Forster's services. The loss of Mr. Forster would
have a significant impact on our operations. Our future success will depend in
part on our ability to retain Mr. Forster.


Page
- 4


We
face competition from much larger and well-established companies.





We face
competition from much larger and well-established companies, including KVAR
Energy and others. These companies have or may have greater financial resources,
production, sales, marketing, engineering and other capabilities with which to
develop, manufacture, market and sell their products, and more experience in
research and development than we have. In addition, other established or new
companies may develop or market products competitive with, or superior to, our
products. We cannot assure you that our competitors will not succeed in
developing or marketing technologies or products that are more effective or
commercially attractive than our products or that would render our products and
services obsolete. Our success will depend in large part on our ability to
maintain a competitive position with our products.








Lower
than expected market acceptance of our products or services would negatively
impact our business.





We have yet to
establish significant customer acceptance of our products. End-users will not
begin to use our products unless they determine that our products will save them
energy costs and are safe and reliable. These and other factors may affect the
rate and level of market acceptance of our products, including:





•
            our
      product's price relative to competing products or alternative means of
      saving energy costs;•
            effectiveness
      of our sales and marketing efforts;•
            perception
      by our targeted end-users of our product's reliability, efficacy and
      benefits compared to competing technologies;•
            willingness
      of our targeted end-users to adopt new technologies;
and•
            development
      of new products and technologies by our
  competitors.







If our products
and services do not achieve market acceptance, our ability to achieve any level
of profitability would be harmed and our stock price would decline.





Price
competition would negatively impact our business.





Our
profitability could be negatively affected in the future as a result of
competitive price pressures in the sale of energy saving products, which could
cause us to reduce the price of our products. Any such reduction could have an
adverse impact on our product margins and profitability.





We
may experience delays in product introductions and our products may contain
defects which could seriously harm our results of operations.





We may
experience delays in the introduction of new products and enhancements. Delays
in product or enhancement release dates, whether caused by factors such as
unforeseen technology issues or otherwise, could negatively impact our sales
revenue in the relevant period. In addition, we may terminate new product or
enhancement development efforts prior to any introduction of a new product or
enhancement. Any delays for new product offerings currently under development or
any product defect issues or product recalls could adversely affect the market
acceptance of our products, our ability to compete effectively in the market,
and our reputation, and therefore could lead to decreased product sales and
could seriously harm our results of operations.





Risks
Relating to Our Industry





We
face risks associated with our products and product development, including new
product introductions and transitions.





Energy
conservation is a growing industry with increased research and development being
spent on a number of alternative solutions. If we are unable to anticipate or
keep pace with changes in the marketplace and the direction of technological
innovation and customer demands, our products may become less useful or obsolete
and our operating results will suffer. To compete successfully, we will need to
continue to demonstrate the advantages of our products and services over
alternative products and technologies, and convince end users of the advantages
of our products and services. The success of our products depends on several
factors, including proper new product definition, product cost, timely
completion and introduction of new products, proper positioning of new products
in relation to our total product portfolio and their relative pricing,
differentiation of new products from those of our competitors, and market
acceptance of these products.





Page
- 5


We
may be sued for violating the intellectual property rights of
others.





The energy
saving industry is characterized by a substantial investment in patent and other
intellectual property rights. Determining whether a product infringes a patent
involves complex legal and factual issues, and the outcome of patent litigation
actions is often uncertain. We have not conducted an extensive search of patents
issued to third parties, and no assurance can be given that third party patents
containing claims covering our products, parts of our products, technology or
methods do not exist, have not been filed, or could not be filed or
issued.





In the event
that we become subject to a patent infringement or other intellectual property
lawsuit and if the relevant patents or other intellectual property were upheld
as valid and enforceable and we were found to infringe or violate the terms of a
license to which we are a party, we could be prevented from selling our products
unless we could obtain a license or were able to redesign the product to avoid
infringement. If we were unable to obtain a license or successfully redesign our
system, we might be prevented from selling our system. If there is an allegation
or determination that we have infringed the intellectual property rights of a
competitor or other person, we may be required to pay damages, or a settlement
or ongoing royalties. In these circumstances, we may be unable to sell our
products at competitive prices or at all, our business and operating results
could be harmed and our stock price may decline.





RISKS
RELATED TO OUR COMMON STOCK AND CAPITAL STRUCTURE





We
may experience significant fluctuations in the market price of our common
stock.





The market price
of our common stock may experience significant fluctuations. These fluctuations
may be unrelated or out of proportion to our operating performance, and could
harm our stock price. Any negative change in the public's perception of the
prospects of companies that employ similar technology or sell into similar
markets could also depress our stock price, regardless of our actual
results.





The market price
of our common stock may be significantly affected by a variety of factors,
including:





•
            the
      announcement of new products, product enhancements, new services or
      service enhancements by us or our competitors;•
            announcements
      of strategic alliances or significant agreements by us or by our
      competitors;•
            technological
      innovations by us or our competitors;•
            quarterly
      variations in our results of operations;•
            acquisition
      of one of our competitors by a significantly larger
    company;•
            general
      market conditions or market conditions specific to technology
      industries;•
            sales
      of large blocks of our common stock; and•
            domestic
      and international macroeconomic
factors.





Our
board of directors has the right to issue additional shares of common stock,
without stockholder consent, which could have the effect of creating substantial
dilution or impeding or discouraging a takeover transaction.





Pursuant to our
articles of incorporation, our board of directors may issue additional shares of
common or preferred stock. Any additional issuance of common stock could have
the effect of impeding or discouraging the acquisition of control of us by means
of a merger, tender offer, proxy contest or otherwise, including a transaction
in which our stockholders would receive a premium over the market price for
their shares, and thereby protects the continuity of our management.
Specifically, if in the due exercise of its fiduciary obligations, our board of
directors was to determine that a takeover proposal was not in the best interest
of the Company or our stockholders, shares could be issued by our board of
directors without stockholder approval in one or more transactions that might
prevent or render more difficult or costly the completion of the takeover
by:





•
            diluting
      the voting or other rights of the proposed acquirer or insurgent
      stockholder group;•
            putting
      a substantial voting block in institutional or other hands that might
      undertake to support the incumbent board of directors;
  or•
            effecting
      an acquisition that might complicate or preclude the
    takeover.





Page
- 6


The
market price of our securities could be adversely affected by sales of
registered and restricted securities.





Actual sales or
the prospect of future sales of shares of our common stock under Rule 144 may
have a depressive effect upon the price of, and market for, our common stock. As
December 31, 2009, 28,956,884 shares of our common stock were issued and
outstanding. Of such issued and outstanding shares, 20,063,902 are currently
"restricted securities." In addition, the balance of the outstanding shares
under some circumstances may, in the future, be under a registration under the
Securities Act of 1933, as amended, or the "Securities Act," or in compliance
with Rule 144 adopted under the Securities Act. In general, under Rule 144,
subject to the satisfaction of other conditions, a person who has beneficially
owned restricted shares of common stock for at least one year is entitled to
sell, within any three month period, a number of shares that:





•
            does
      not exceed the greater of 1% of the total number of outstanding shares of
      the same class; or•
            if
      the common stock is quoted on NASDAQ or a stock exchange, the average
      weekly trading volume during the four calendar weeks immediately preceding
      the sale.







A person who
presently is not and who has not been one of our affiliates for at least three
months immediately preceding a sale and who has beneficially owned the shares of
common stock for at least two years is entitled to sell these shares under Rule
144 without regard to any of the volume limitations described above. We cannot
predict what effect, if any, that sales of shares of common stock, or the
availability of these shares for sale, will have on the market prices prevailing
from time to time. Nevertheless, the possibility that substantial amounts of
common stock may be sold in the public market may adversely affect prevailing
prices for our common stock and could impair our ability to raise capital in the
future through the sale of equity securities.





An
investment in our company may be diluted in the future as a result of the
issuance of additional securities.





In order to
raise additional capital to fund our business plan, we may issue additional
shares of common stock or securities convertible, exchangeable or exercisable
into common stock from time to time, which could result in substantial dilution
to current stockholders. The issuance of additional debt securities would result
in increased expenses and could result in covenants that would restrict our
operations. No arrangements for any such offering exist, and no assurance can be
given concerning the terms of any future offering or that we will be successful
in issuing common stock or other securities at all. If adequate funds are not
available, we may not be able to continue our operations or implement our
planned additional research and development activities, any of which would
adversely affect our results of operations and financial condition.





We
may be the subject of securities class action litigation due to future stock
price volatility.





In the past,
when the market price of a stock has been volatile, holders of that stock have
often instituted securities class action litigation against the company that
issued the stock. If any of our stockholders brought a lawsuit against us, we
could incur substantial costs defending the lawsuit. The lawsuit could also
divert the time and attention of our management.





We
have never paid dividends on our capital stock, and we do not anticipate
paying any cash dividends in the foreseeable future.





We have paid no
cash dividends on any of our classes of capital stock to date. We currently
intend to retain our future earnings, if any, to fund the development and growth
of our business. In addition, the terms of any future debt or credit facility,
if any, may preclude us from paying dividends. As a result, capital
appreciation, if any, of our common stock will be your sole source of gain for
the foreseeable future.





Because
we will be required to comply with the internal control attestation provisions
of Section 404 of the Sarbanes-Oxley Act of 2002 beginning for the fiscal year
ended December 31, 2009, our compliance with the SEC's rules concerning internal
controls will not be costly, time-consuming or difficult for us.





The
Sarbanes-Oxley Act of 2002, or "SOX," that became law in July 2002 requires
changes in some of our corporate governance, public disclosure and compliance
practices. Currently, the SEC's rules under Section 404 of SOX will require us
to have our management attest to the adequacy of our internal controls in our
annual report on Form 10-K for the year ended December 31, 2009. No member of
our management has any experience in complying with Section 404. Furthermore, we
have been advised by our independent registered public accounting firm that we
will notbe
required to make changes to our internal controls in order for our management to
be able to attest that as of December 31, 2009, our internal controls are
effective. Larger public companies which have been required to comply with
Section 404 have encountered significant expenses, both from diversion of
management time and attention, the acquisition of new computer software, the
employing of additional personnel and training and third party internal controls
consultants. We may need to hire additional financial reporting and internal
controls personnel, acquire software and retain a third party consultant during
the fiscal year 2010. If our management is unable to attest that our internal
controls are effective as of December 31, 2009, investors may react by selling
our stock and causing its price to fall.





Page
- 7


Our
common stock is traded on the OTC Bulletin Board, which may be detrimental to
investors.





Our common stock
is currently traded on the OTC Bulletin Board, ticker symbol “PWSV”. Stocks
traded on the OTC Bulletin Board generally have limited trading volume and
exhibit a wide spread between the bid and ask quotation. Accordingly, you may
not be able to sell your shares quickly or at the market price if trading in our
stock is not active.





Line
of Credit





At the
present time, the Company does a $70,000 line of credit with Wells Fargo Bank
with a zero balance.





Item
    1B.
            Unresolved
      Staff Comments.





None





Item
    2.
            Description
      of Property.





The
Current principal office of the Company is located at 3940-7 Broad Street, #200,
San Luis Obispo, CA 93401.








Item 3.
            Legal
      Proceedings.





None.







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





None.





PART
II





Item 5.
            Market
      for Common Equity and Related Stockholder
  Matters.





Market
for Common Stock





The
common stock of this Issuer is now quoted Over the Counter on the Bulletin Board
("OTCBB") (Symbol PWSV). We have one class of securities, Common Voting Equity
Shares ("Common Stock"). The Company's Securities may be quoted in the
over-the-counter market, but there is presently, and historically, no
substantial market for our common stock. Even so, quotations for, and
transactions in, the Securities are capable of rapid fluctuations, resulting
from the influence of supply and demand on relatively thin volume. There may be
buyers at a time when there are no sellers, and sellers when there are no
buyers, resulting in significant variations of bid and ask quotations by
market-making dealers, attempting to adjust changes in demand and supply. A
young market is also particularly vulnerable to short selling, sell orders by
persons owning no shares of stock, but intending to drive down the market price
so as to purchase the shares to be delivered at a price below the price at which
the shares were sold short. Based upon standard reporting sources, the following
information is provided during the fiscal years 2009 and 2008:






Twelve months Ended December 31, 2009
            
            High
            
            
            LowOctober
      1, 2009 — December 31, 2009
            
            $
            0.33
            
            
            
            0.17July
      1, 2009 — September 30, 2009
            
            
            0.55
            
            
            
            0.27April
      1, 2009— June 30, 2009
            
            
            0.75
            
            
            
            0.26January
      1, 2009 — March 31, 2009







Twelve months Ended December 31, 2008
            
            High
            
            LowOctober
      1, 2008 — December 31, 2008
            
            $
            1.78
            
            
            1.00July
      1, 2008 — September 30, 2008
            
            
            2.85
            
            
            1.64April
      1, 2008— June 30, 2008
            
            
            3.45
            
            
            0.99January
      1, 2008 — March 31, 2008
            
            
            3.15
            
            
            0.25








The
source of this information for fiscal year 2009 and 2008 is trading information
as reported by the National Association of Securities Dealers Composite or other
qualified inter-dealer Quotation Medium.





(b)
Holders


As of
December 31, 2009, there were approximately 350 stockholders of record of the
Company's Common Stock. The number does not include beneficial owners who held
shares at broker/dealers in "street name"





(c)
Dividends


We have
not paid any cash dividends on our Common Stock, and do not anticipate paying
cash dividends on our Common Stock in the next year. We anticipate that any
income generated in the foreseeable future will be retained for the development
and expansion of our business. Future dividend policy is subject to the
discretion of the Board of Directors and will depend upon a number of factors,
including future earnings, debt service, capital requirements, business
conditions, the financial condition of the Company and other factors that the
Board of Directors may deem relevant.





Debt
and Services





As of the
date of the issuances set forth above, the average daily high and low bids were
unavailable to the Issuer. The Company's Securities may be quoted in the
over-the-counter market, but there is presently, and historically, no
substantial market for our common stock. This Issuer has determined that,
quotations for, and transactions in, the Securities are capable of rapid
fluctuations, resulting from the influence of supply and demand on relatively
thin volume. There may be buyers at a time when there are no sellers, and
sellers when there are no buyers, resulting in significant variations of bid and
ask quotations by market-making dealers, attempting to adjust changes in demand
and supply. A young market is also particularly vulnerable to short selling,
sell orders by persons owning no shares of stock, but intending to drive down
the market price so as to purchase the shares to be delivered at a price below
the price at which the shares were sold short.





Recent
Sales of Unregistered Securities





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.





Item 6.
            Selected
      Financial Data





We are a
“smaller reporting company” as defined by Regulation S-K and as such, are not
providing the information contained in this item pursuant to Regulation
S-K.





Item 7.
            Management’s
      Discussion and Analysis of Financial Condition and Results of Operations
      or Plan of Operation.





OVERVIEW





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 we
"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
- 8


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.







RESULTS OF OPERATIONS: FISCAL YEAR 2009 COMPARED
TO FISCAL YEAR 2008





Revenue
for the year ended December 31, 2009 was $4,701,881 compared to $5,963,483 for
the year ended December 31, 2008. This was decrease of $1,261,602 (21%).Sales of
the Company’s solar and solar related products decreased by approximately
$1,000,000 in 2009 accounting for approximately 80% of the decrease. The Company
recognized that the ability of the customer to finance solar energy projects
during 2009 was very limited and caused this decrease. The Company is exploring
projects that will reduce some of the burden on homeowners to increase
residential solar energy and commercial and municipal projects where funding may
be available. Sales also decreased for the Company’s energy saving devices for
residential and commercial clients. The weakness in home construction and home
improvements, particularly in California and the southwestern part of the United
States reduced demand for the Company’s products. Sales to wholesale clients and
electricians were also weak in 2009. The Company expects the economy to improve
which should result in small but steady increases in revenue.




Gross
profit for the year ended December 31, 2009 was $2,442,051 compared to
$3,605,518 for the year ended December 31, 2008.This was a decrease of
$1,163,467(32%). The gross profit margin decreased to 51% from 60%. The decrease
in sales of 21% accounted for $244,328 of the decrease. In January 2009 the
Company wrote down the solar inventory by approximately $70,000 to reflect the
lower replacement cost of the inventory. There are several factors that caused
the overall gross profit margin to decline by approximately $850,000. There was
a decrease in the gross profit margins in the wholesale market due to increased
competition. Solar products have a much lower gross profit margin than the
Company’s power savings devices which decreased the overall gross profit. The
costs of goods sold included the cost of the products purchased and warehouse
and shipping costs. The decline in the later costs was marginal in
2009.




Advertising
and marketing expense for the year ended December 31, 2009 was $486,842 compared
to $513,139 for the year ended December 31, 2008. This was a decrease of $26,297
(5%). The Company continued to market its home and commercial power savings
devices through television and internet advertising, but reduced the frequency
during the year due to the weakness in the economy.




Sales
commissions for the year ended December 31, 2009 was$1,353,376 compared to
$1,196,102 for year ended December 31, 2008. This was an increase of
$157,274(13%). Commissions are based primarily on retail sales and wholesale
rates without giving account for discounts by the Company.




General
and administrative expenses for the year ended December 31, 2009 were $1,409,445
compared to $1,034,401 for the year ended December 31, 2008; an increase of
$373,044.Nonrecurring items included in general and administrative expenses was
a judgment against the Company in 2008 of $125,520. The Company did not have a
comparable expense in 2009. The following general and administrative expense
increased in 2009 from 2008. Officers’ compensation was $340,000 in 2009
compared to $60,000 in 2008. Compensation started in October 2008, allowing the
Company to reduce expenses during its development and early operating stage.
Collection costs including bank fees and bad debt expense was $274,979 in 2009
compared to $216,596 in 2008, an increase of $58,383 as a result of the
recession in 2009. Professional fees including accounting, legal, and consulting
fees for 2009 were $133,299 compared to $186,217 in 2008. Occupancy and office
expense in 2009 was $156,561 compared to $178,865 in 2008. Travel expense in
2009 was $419,763 compared to $148,537. The president of the Company traveled
extensively meeting with corporations, municipalities and manufacturers related
to potential solar projects both in and outside the United States.




In
January the Company invested $60,000 in a company which installs solar energy
for the housing and commercial projects. The company located in Arizona was
losing money in excess of all investments and the company wrote off the
investment.




Page
- 9


In 2009
the Company incurred and operating loss and recorded a recovery of federal
income taxes of $293,118. The Company has filed to carry back the loss to
recover taxes paid in prior years. In 2008, the Company had a provision for
federal and state income taxes of $270,837.




Liquidity and Capital
Resources





As of
December 31, 2009 the current assets exceeded the current liabilities by
$1,419,303.




Recent
Accounting Pronouncements








·           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 are 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 disclosures that an entity should make
      about events or transactions that occurred after the balance sheet date.
      This FASB ASC Topic should be applied to the accounting and disclosure of
      subsequent events. This 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 sources 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 sources 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 is effective for
      financial statements issued 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 disclosure of the financial
statements·           FASB ASC Topic 320,
      “Recognition and Presentation of Other-Than-Temporary Impairments”.
      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. This FASB ASC Topic does not amend
      existing recognition and measurement guidance related to
      other-than-temporary impairments of equity securities. The FASB ASC Topic
      shall be effective for interim and annual reporting periods ending 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
      periods after initial adoption, this FASB ASC Topic requires comparative
      disclosures 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.





Page
- 10


·           FASB ASC Topic 860,
      “Accounting for Transfer of Financial Asset”., 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 effects of
      a transfer on its financial position, financial performance, and cash
      flows; and a transferor’s continuing involvement, if any, in transferred
      financial assets. 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 key 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 financial assets. This additional
      guidance must be applied as of the beginning of each reporting entity’s
      first annual reporting period that begins after November 15, 2009, for
      interim periods within that first annual reporting period and for interim
      and annual reporting periods thereafter. 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 potentially be 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 reassessments 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 expected 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 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 amendments to 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. The amendments in this Update also require
      disclosures by major category of investment about the attributes of
      investments within the scope of the amendments in this Update, such as the
      nature of any restrictions on the investor’s ability to redeem its
      investments at the measurement date, any unfunded commitments (for
      example, a contractual commitment by the investor to invest a specified
      amount of additional capital at a future date to fund investments that
      will be made by the investee), and the investment strategies of the
      investees. 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 320-10-50-lB. 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. Early application is permitted in financial
      statements for earlier interim and annual periods that have not been
      issued.





Page
- 11


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, this Updated decided to eliminate the
disclosures 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.





Item 7A.
            Quantitative
      and Qualitative Disclosures About Market
Risk





We are a
“smaller reporting company” as defined by Regulation S-K and as such, are not
providing the information contained in this item pursuant to Regulation
S-K.





Item 8.
            Financial
      Statements and Supplementary Data.





The
information required by this item is incorporated by reference to pages F-1
through F-11 of this annual report on Form 10-K.








Page
- 12











Index
      to Financial Statements
            PageReport
      of Independent Registered Public Accountant Accounting
Firm
            F-1Balance
      Sheet as of December 31, 2009.
            F-2Statements
      of Operations for the Years ended December 31, 2009 and
    2008.
            F-3Statements
      of Stockholders' (Deficit) for the Years ended December 31, 2009 and
      2008.
            F-4Statements
      of Cash Flows for the Years Ended December 31, 2009 and
    2008.
            F-5Notes
      to Financial Statements.
            F-6
      - 11















Page
- 13









Gruber
      & Company, LLCCertified
      Public Accountant
            Telephone
      (636)561-5639121
      Civic Center Drive, Suite 125
            Fax
      (636)561-0735Lake
      Saint Louis, Missouri 63367



















REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








TO
THE BOARD OF DIRECTORS AND STOCKHOLDERS OF POWER-SAVE
ENERGY COMPANY





We have
audited the accompanying balance sheets of Power-Save Energy Company as of
December 31, 2009 and 2008, and the related statements of operations,
stockholders' equity and cash flows for the years ended December 31, 2009 and
2008. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform an audit of the Company's internal control
over its financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Power-Save Energy Company as of
December 31, 2009 and the results of its operations and cash flows for the years
ended, December 31, 2009 and 2008 in conformity with accounting principles
generally accepted in the United States of America.











/s/Gruber &
Company


Gruber
& Company, LLC


Lake
Saint Louis, Missouri





March 25,
2010











F
- 1








Power-Save
Energy Company


Balance
Sheet


December
31, 2009 and 2008





ASSETSCurrent
      Assets
            
            2009
            
            2008Cash
      and Cash Equivalents
            
            $321,637
            
            $513,249Accounts
      receivable, net of allowance
            
            321,128
            
            945,053Inventory
            
            433,783
            
            873,872Prepaid
      expenses
            
            7,744
            
            76,528Federal
      income taxes recoverable
            
            233,615Deferred
      tax asset
            
            50,128Other
      current assets
            
            9,597Total current
      assets
            
            1,377,632
            
            2,408,702Equipment,
      net of accumulated depreciation
            
            52,853
            
            47,469Intangible
      assets, net of accumulated amortization
            
            9,452
            
            10,286Direct
      response advertising - net
            
            135,220
            
            -Other
      assets
            
            28,705
            
            28,705Total
      assets
            
            $1,603,862
            
            $2,495,162LIABILITIES
      AND STOCKHOLDERS' EQUITYLiabilitiesCurrent
      liabilitiesAccounts
      payable
            
            $93,549
            
            $55,687Other
      current liabilities
            
            
            
            125,520Income
      taxes payable
            
            
            
            228,148Total
      current liabilities
            
            93,549
            
            409,355Stockholders'
      equityPreferred
      stock, $.001 par value, 10,000,000 sharesAuthorized,
      none issued and outstandingCommon
      stock, $.001 par value, 100,000,000 shares
            
            
            
            28,957Authorized, 28,956,884 and 27,031,168 issued and
    outstanding
            
            28,957Additional
      paid-in-capital
            
            1,292,914
            
            1,292,914Retained
      earnings
            
            188,442
            
            763,936Total
      stockholders' equity
            
            1,510,313
            
            2,085,807Total
      liabilities and stockholders' equity
            
            $1,603,862
            
            $2,495,162








The
accompanying notes are an integral part of these financial
statements.








F
- 2





Power-Save
Energy Company


Statements
of Operations


For
the Years ended December 31, 2009 and 2008





2009
            
            2008Revenue
            
            $4,701,881
            
            $5,963,483Cost
      of salesMerchandise
            
            2,036,287
            
            2,099,095Other
      costs
            
            223,543
            
            258,870Total
      cost of sales
            
            2,259,830
            
            2,357,965Gross
      margin
            
            2,442,051
            
            3,605,518Operating
      expensesAdvertising
      and promotion
            
            486,842
            
            513,139Sales
      commissions
            
            1,353,376
            
            1,196,102General
      and administrative
            
            1,409,445
            
            1,034,401Total
      operating costs and expenses
            
            3,249,663
            
            2,743,642Net
      income (loss) before provision for income taxes and other income
      (expenses)
            
            (807,612)
            
            861,876Investment  (loss)
            
            (60,000)Net
      income (loss) before provision for income taxes
            
            (867,612)
            
            861,876Provision
      for (recovery of) income taxes
            
            (292,117)
            
            270,837Net
      income (loss)
            
            ($575,495)
            
            $591,039Earnings
      per common share:Basic
            
            ($0.02)
            
            $0.02Shares
      used in computing earnings per share
            
            28,956,884
            
            28,395,217

















The
accompanying notes are an integral part of these financial
statements.








F
- 3





Power-Save
Energy Company


Statement
of Stockholders' Equity


Additional
            
            RetainedCommon
      Stock
            
            
            
            Paid-
      in
            
            EarningsIssued
            
            Amount
            
            Capital
            
            (Deficit)
            
            TotalBalance,
      January 1, 2008
            27,031,168
            
            $27,031
            
            $260,969
            
            $172,897
            
            $460,897Private
      placement
            1,925,716
            
            1,926
            
            1,031,945
            
            
            
            1,033,871Net
      income for the year endedDecember
      31, 2008
            --
            
            --
            
            --
            
            591,039
            
            591,039Balance,
      December 31, 2008
            28,956,884
            
            28,957
            
            1,292,914
            
            763,936
            
            2,085,807Net
      income (loss)  for the year ended
            
            
            
            
            
            (575,494)
            
            (575,494)December
      31, 2009Balance,
      December 31, 2009
            28,956,884
            
            $28,957
            
            $1,292,914
            
            $188,442
            
            $1,510,313





























The
accompanying notes are an integral part of these financial
statements.








F
- 4








Power-Save
Energy Company


Statements
of Cash Flows


For
The Years Ended December 31, 2009 and 2008





2009
            
            2008Cash
      flows from operating activitiesNet
      Income (loss)
            
            ($575,494)
            
            $591,039Adjustments
      to reconcile net income (loss) to net cashProvided
      by operating activitiesDepreciation
      and amortization
            
            10,666
            
            4,830Change
      in operating assets and liabilitiesDecrease
      in accounts receivable
            
            623,925
            
            (898,630)Decrease
      in inventory
            
            440,089
            
            (763,004)Increase
      in prepaid expenses
            
            (66,436)
            
            (66,528)Increase
      in income taxes recoverable
            
            (233,615)Increase
      in deferred taxes
            
            (50,128)Increase
      in other assets
            
            (9,597)Increase
      (decrease) in accounts payable
            
            37,062
            
            8,653Increase
      (decrease) in other liabilities
            
            (125,520)
            
            125,520Increase
      (decrease) in income taxes payable
            
            (227,348)
            
            109,990Net
      cash used in operating activities
            
            (176,396)
            
            (888,130)Cash
      flows from investing activitiesSecurity
      deposits
            
            
            
            (28,705)Acquisition
      of equipment
            
            (15,216)
            
            (45,777)Net
      cash used by investing activities
            
            (15,216)
            
            (74,482)Cash
      flows from investing activitiesNet
      proceeds from private placement
            
            
            
            1,033,872Net
      Proceeds from line of credit, netNet
      cash provided by financing activities
            
            
            
            1,033,872Net
      increase (decrease) in cash and cash equivalents
            
            (191,612)
            
            71,260Cash
      and cash equivalents at beginning of year
            
            513,249
            
            441,989Cash
      and cash equivalents at end of year
            
            $321,637
            
            $513,249Supplemental
      disclosure of cash flow informationIncome
      taxes paid
            
            
            
            160,747








The
accompanying notes are an integral part of these financial
statements.





F
- 5





POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





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 December 31, 2009 the carrying cost of these
instruments approximate their fair value.





Cash
Equivalents





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





Accounts
Receivable





Accounts
receivable are recorded at the invoiced amount and are not interest bearing. The
Company maintains an allowance for doubtful accounts to reserve for potentially
uncollectible receivables. The Company reviews its accounts receivable by aging
category to identify significant customers or invoices with known disputes or
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.





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.





F
- 6


POWER
SAVE ENERGY COMPANY.
 NOTES
TO FINANCIAL STATEMENTS







Revenue
Recognition





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





Stock
- Based Compensation





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





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





The
Company accounts for its stock-based compensation in accordance with SFAS No.
123R, "Share-Based Payment, 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 year ended
December 31, 2008 and 2007.





Income
Taxes





Income
taxes are accounted for in accordance with SFAS 109, Accounting for Income
Taxes, using the asset and liability method. Deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and tax credit carry forwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.





Earnings
Per Common Share





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













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.






F
- 7




POWER
SAVE ENERGY COMPANY.
 NOTES
TO FINANCIAL STATEMENTS


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 are 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 disclosures that an entity should make
      about events or transactions that occurred after the balance sheet date.
      This FASB ASC Topic should be applied to the accounting and disclosure of
      subsequent events. This 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 sources 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 sources 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 is effective for
      financial statements issued 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 disclosure of the financial
statements·           FASB ASC Topic 320,
      “Recognition and Presentation of Other-Than-Temporary Impairments”.
      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. This FASB ASC Topic does not amend
      existing recognition and measurement guidance related to
      other-than-temporary impairments of equity securities. The FASB ASC Topic
      shall be effective for interim and annual reporting periods ending 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
      periods after initial adoption, this FASB ASC Topic requires comparative
      disclosures 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
- 8


POWER
SAVE ENERGY COMPANY.
 NOTES
TO FINANCIAL STATEMENTS


·           FASB ASC Topic 860,
      “Accounting for Transfer of Financial Asset”., 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 effects of
      a transfer on its financial position, financial performance, and cash
      flows; and a transferor’s continuing involvement, if any, in transferred
      financial assets. 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 key 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 financial assets. This additional
      guidance must be applied as of the beginning of each reporting entity’s
      first annual reporting period that begins after November 15, 2009, for
      interim periods within that first annual reporting period and for interim
      and annual reporting periods thereafter. 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 potentially be 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 reassessments 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 expected 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 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 amendments to 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. The amendments in this Update also require
      disclosures by major category of investment about the attributes of
      investments within the scope of the amendments in this Update, such as the
      nature of any restrictions on the investor’s ability to redeem its
      investments at the measurement date, any unfunded commitments (for
      example, a contractual commitment by the investor to invest a specified
      amount of additional capital at a future date to fund investments that
      will be made by the investee), and the investment strategies of the
      investees. 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 320-10-50-lB. 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. Early 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, this Updated decided to eliminate
the disclosures 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.





F
- 9





POWER
SAVE ENERGY COMPANY.
 NOTES
TO FINANCIAL STATEMENTS














The
Company is evaluating the impact that the following recently issued accounting
pronouncements may have on its financial statements and
disclosures.





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, 20092010
            
            
            $46,4822011
            
            
            47,8772012
            
            
            49,3132013
            
            
            25,021Total
      minimum future rental payments
            
            
            $168,693








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





Note
5 - Income Taxes


The
      provision for income taxes consists of the following:2009
            
            
            2008Federal
      income (recovery) tax
            
            $
            (293,118
            )
            
            $
            206,488State
      income tax
            
            
            1,000
            
            
            
            64,349Total
            
            $
            (292,118
            )
            
            $
            270,837Income
      taxes based on statutory tax rates are as followsFederal
      income taxes
            
            $
            (294,988
            )
            
            $
            293,038State
      income tax
            
            
            1,000
            
            
            
            76,276Other
            
            
            0
            
            
            
            (98,477Permanent
      timing differences
            
            
            1,000Total
            
            $
            (292,118
            )
            
            $
            270,837






F
- 10




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 December 31, 2008 is as follows:





Intangible
      assets, at cost
            
            $
            12,510Less
      - amortization allowed
            
            
            3,058$
            9,452






Note
7- Subsequent Events
 
 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.
  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.
 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.


F
- 11


Item
      9.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure.None.





Item 9A.
            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.





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.






Page
- 25




POWER
SAVE ENERGY COMPANY.
 NOTES
TO 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 December 31, 2009. In making this assessment, management used
the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in Internal Control-Integrated Framework.





Based on
its assessment, management concluded that, as of December 31, 2009, the
Company’s internal control over financial reporting is effective based on those
criteria.








Item 9B.
            Other
      Information.





None.





PART
III





Item 10.
            Directors,
      Executive Officers, and Corporate
Governance.





INFORMATION
ABOUT THE COMPANY'S EXECUTIVE OFFICERS AND DIRECTORS





The
following table sets forth the names and positions of the current officers and
directors of the Company. The Company has not had standing audit, nominating or
compensation committees of the Board of Directors or committees performing
similar functions. All such applicable functions have been performed by the
Board of Directors as a whole.





Board of Directors and Committees of the
Board





The
directors and executive officers currently serving the Company are as
follows:





Name
            
            Age
            
            Position
      With Company
            
            Year
      First Became
            
            Director
      or OfficerMichael
      Forster
            
            45
            
            Chief
      Executive Officer
            
            2008
            
            Officer/DirectorLouis
      Fox
            
            61
            
            Chief
      Financial Officer
            
            2009
            
            OfficerDavid
      J. Forster
            
            39
            
            President/Director
            
            2007
            
            Officer/DirectorGary
      D. Stanwyck
            
            53
            
            Director
            
            2007
            
            Director











Directors
will be elected for one-year terms at the annual stockholders' meeting. Officers
will hold their positions at the pleasure of the board of directors, absent any
employment agreement, of which none currently exists or is contemplated. There
is no arrangement or understanding between any of the directors or officers of
the Company and any other person pursuant to which any director or officer was
or is to be selected as a director or officer, and there is no arrangement, plan
or understanding as to whether non-management shareholders will exercise their
voting rights to continue to elect the current directors to the Company's board.
There are also no arrangements, agreements or understandings between
non-management shareholders and management under which non-management
shareholders may directly or indirectly participate in or influence the
management of the Company's affairs.





Page
- 26


Biographical
Information





MICHAEL FORSTER- CEO- Mr.
Forster is an experienced entrepreneur in all facets of business. He has
organized and executed the start-up of companies. He has worked under contract
in both the private and public company sectors to affect corporate and financial
restructuring. As well, Mr. Forster has held senior management level positions
at a Fortune 500 company. Mr. Forster holds a Bachelor of Science Degree in
Aeronautical Engineering from California Polytechnic State
University.







GARY D. STANWYCK- Gary
Stanwyck, M.D. F.A.P.A. graduated from Stanford University in Biology in 1971
and from Stanford Medical School in 1975. He completed his medical internship
and a Residency in Psychiatry in 1978 at the University of California, Davis. He
began the private practice of psychiatry in San Luis Obispo, California in 1978.
He subsequently opened and operated a multi-disciplinary outpatient mental
health clinic and as a joint venture project with French Hospital Medical Center
opened the Central Coast Psychiatric Center, an in-patient and day care
facility. He was the Medical Director of the unit. As a member of the French
Hospital Medical Staff, he was Chairman of the By-laws and Quality Assurance
Committees. He also served as Chief of the Medical Staff and as a member of the
Board of Directors of the hospital. From 1995 until 2006 he worked with the
California Department of Corrections. He was a member of the state wide Health
Services Division Strategic Task Force and Co-Chairperson of the state wide
Quality Improvement Training Committee. At the California Men's Colony in San
Luis Obispo, California he was Chairperson of the Medical Staff Quality
Assessment and Improvement Committe and Chief of the Medical Staff. Dr Stanwyck
has been a Diplomate of the American Board of Psychiatry and Neurology since
1983. He was elected a Fellow of the American Psychiatric Association in 2004.
Since 1996 he has been a member of the National Examination Committee for
Psychiatry Board Certification. Clinically, since 2006 Dr. Stanwyck has been
practicing Forensic Psychiatry in San Luis Obispo, California.





DAVID J. FORSTER- President
- David John Forster was born and raised in Northern California in 1970. He
attended California Polytechnic State University in 1988 where he received his
Bachelor of Arts Degree in Political Science with a minor in
Business.





He
pursued a career in politics working for the U.S. Congressional Office of Leon
E. Panetta and The Sierra Club where he lobbied within the arena of consumer and
environmental lawmaking. David took his experience in government further out
into the private sector by working as a Political Analyst for Pacific Resources
Engineering and Planning in Burlingame, California. There he proved to be a
vital asset lobbying local, state, and federal agencies on public transportation
projects and issues.





In 1997
he left politics for a corporate position with Kaiser Permanente Medical Group
in Oakland, California. Hired into a 2 year contract he proved to be a valued
high-level employee satisfying some diverse needs by demonstrating the ability
to assist Labor-Management with reorganizing over 3000 union employees and at
the same time resolving sensitive labor issues. In 1999 David was given the
opportunity to become a senior level manager for the Kaiser Call Center Project.
With this new challenge, David excelled, adding to the Call Centers success by
evaluating statistics and making accurate recommendations on the efficiency and
financial viability of the overall projects performance and
livelihood.





David
left Kaiser in 2002 to pursue a life long dream of owning his own restaurant. In
April of the same year he opened the doors to Longboards Grill in Pismo Beach,
California. For almost 4 years he organized and executed the start-up, creation,
and design of the restaurant concept and operation. In October of 2006 David
sold his profitable and well-known business.





LOUIS FOX– Chief Financial
Officer - Mr. Fox is a Certified Public Accountant  with over 30 years of
accounting experience. For the past  twenty years he has practiced
accounting in his own firm. Prior to staring his own firm, he worked for several
medium to large accounting firms. Mr. Fox has a Bachelor of Arts degree in
science from Alfred University and was enrolled in a Masters in
accounting program at Pace University.





Audit
Committee





The
Company does not have an audit committee financial expert (as defined in Item
401 of Regulation S-K) serving on its Board of Directors. The Company has not
yet employed an audit committee financial expert on its Board due to the
inability to attract such a person.











Page
- 27


CODE
OF ETHICS





The
Company has adopted a Code of Ethics and Business Conduct that applies to all of
its officers, directors and employees. The Code of Ethics was filed with the
2003 year's annual report as Exhibit 14.1. A copy of the Code of Ethics will be
posted on our website at www.power-save.com. Upon request, the Company will
provide to any person without charge a copy of its Code of Ethics. Any such
request should be made to Attn: Mr. Michael Forster, 3940-7 Broad Street, San
Luis Obispo, CA 93401. The Company's telephone number is (866)
297-7192.








Item 11.
            Executive
      Compensation.





Summary Compensation Table





Shown on
the table below is information on the annual and long-term compensation for
services rendered to the Registrant in all capacities, for the 2009, 2008, 2007
and 2006 fiscal years, paid by the Registrant to all individuals serving as the
Registrant's chief executive officer or acting in a similar capacity during the
last three completed fiscal years, regardless of compensation
level.





Annual
      Compensation
            Long
      Term CompensationAwards
            PayoutsName
      and Principal
              Position
            Yr.
            Salary
              ($)
            Bonus
              ($)
            Other
      Annual
              Compensation
              ($)
            Restricted
              Stock
              Award(s)
              ($)
            Securities
              Underlying
              Options/SARs
              (#)
            LTIP
              Payouts
              ($)
            All
      Other
              Compensation
              ($)Michael
      Forster
              (CEO
            2006
              2007
              2008
            0
              60,000
              60,000
            0
              0
              0
            0
              0
              0
            0
              0
              0
            0
              0
              0
            0
              0
              0
            0
              0
              02009
            240,000
            100,000
            0
            0
            0
            0
            0David
      Forster
              President
      / Director
            2006
              2007
              2008
            N/A
              0
              0
            N/A
              0
              0
            N/A
              0
              0
            N/A
              0
              0
            N/A
              0
              0
            N/A
              0
              0
            N/A
              0
              02009
            0
            0
            0
            0
            0
            0
            481,6901Gary
      D. Stanwyck
              Director
            2006
              2007
              2008
            N/A
              N/A
              0
            N/A
              N/A
              0
            N/A
              N/A
              0
            N/A
              N/A
              0
            N/A
              N/A
              0
            N/A
              N/A
              0
            N/A
              N/A
              02009
            0
            0
            0
            0
            0
            0
            0Louis
      Fox
              Chief
      Financial Officer
            2006
              2007
              2008
            N/A
              N/A
              N/A
            N/A
              N/A
              N/A
            N/A
              N/A
              N/A
            N/A
              N/A
              N/A
            N/A
              N/A
              N/A
            N/A
              N/A
              N/A
            N/A
              N/A
              N/A2009
            54,000
            0
            0
            0
            0
            0
            0


1.


Narrative
Disclosure to Summary Compensation Table





The
directors of the Registrant have voted on the compensation for their services as
directors.





Limitation
of Liability and Indemnification of Directors and Officers





The Utah
Revised Business Corporation Act permits a Utah corporation to indemnify a
present or former director or officer of the corporation (and certain other
persons serving at the request of the corporation in related capacities) for
liabilities, including legal expenses, arising by reason of service in such
capacity if such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed, to the best interests of the corporation, and
in any criminal proceeding if such person had no reasonable cause to believe his
conduct was unlawful. However, in the case of actions brought by or in the right
of the corporation, no indemnification may be made with respect to any matter as
to which such director or officer shall have been adjudged liable, except in
certain limited circumstances.





Page
- 28


Our
articles of incorporation and bylaws do not presently provide for the
indemnification of our officers and directors. However, we may elect to approve
such indemnification, by amendment to our articles of incorporation or bylaws,
in the future. Pursuant to Sections 16-10a-902 and 16-10a-907of the Utah Revised
Business Corporation Act, a corporation generally has the power to indemnify its
present and former directors, officers, employees and agents against expenses
incurred by them in connection with any suit to which they are or are threatened
to be made, a party by reason of their serving in such positions so long as they
acted in good faith and in a manner they reasonably believed to be in or not
opposed to, the best interests of the corporation and with respect to any
criminal action, they had no reasonable cause to believe their conduct was
unlawful. Having these provisions in our articles of incorporation and bylaws
may be necessary to attract and retain qualified persons as directors and
officers. These provisions would not eliminate the directors' duty of care, and,
in appropriate circumstances, equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under Utah law. In addition,
each director would continue to be subject to liability for breach of the
director's duty of loyalty to the Company, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
acts or omissions that the director believes to be contrary to the best
interests of the Company or its stockholders, for any transaction from which the
director derived an improper personal benefit, for acts or omissions involving a
reckless disregard for the director's duty to the Company or its stockholders
when the director was aware or should have been aware of a risk of serious
injury to the Company or its stockholders, for acts or omissions that constitute
an unexcused pattern of inattention that amounts to an abdication of the
director's duty to the Company or its stockholders, for improper transactions
between the director and the Company and for improper distributions to
stockholders and loans to directors and officers. Any such provision also would
not affect a director's responsibilities under any other law, such as the
federal securities law or state or federal environmental laws.





The
indemnification provided by the Utah Revised Business Corporation Act is not
exclusive of any other rights to which a director or officer may be entitled.
The general effect of the foregoing provisions may be to reduce the
circumstances under which an officer or director may be required to bear the
economic burden of the foregoing liabilities and expense.





Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons, we have been
advised that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable.





We
maintain a directors' and officers' liability insurance policy covering certain
liabilities that may be incurred by our directors and officers in connection
with the performance of their duties. The entire premium for such insurance is
paid by us.





Item 12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.





STOCK OWNERSHIP





The
following table sets forth information as to our shares of common stock
beneficially owned as of December 31, 2008 by (i) each person
known by us to be the beneficial owner of more than five percent of our
outstanding common stock, (ii) each of our directors, (iii) each of our
executive officers named in the Summary Compensation Table and (iv) all of our
directors and executive officers as a group.





Title
      of Class
            
            Name
      and Address of
              Beneficial Owner
            
            Amount
      and Nature (1)
              Of
      Beneficial Owner
            
            Percent
              of
      Class (2)Common
            
            Michael
      Forster(3)
              3873
      Sequoia Drive
              San
      Luis Obispo, CA 93401
            
            11,415,540
            
            40%Common
            
            Gary
      D. Stanwyck (1)
              3873
      Sequoia Drive
              San
      Luis Obispo, CA. 93401
            
            0
            
            0%Common
            
            David
      J. Forster (2)
              619
      Camino Contento
              Arroyo
      Grande, CA. 93420
            
            0
            
            0%Common
            
            Louis
      Fox (4)
              3873
      Sequoia Drive
              San
      Luis Obispo, CA 93401
            
            60,801
            
            0.2%Includes
      all Officers and
              Directors
      of the Company
              As
      a group
            
            11,476,341
            
            40.2%








1
            Gary
      D. Stanwyck is a Director of the Company.2
            David
      J. Forster is the President and a Director of the
  Company.3
            Michael
      Forster is the Chief Executive Officer and Chairman of the
      Company4
            Louis
      Fox is the Chief Financial Officer of the
  Company





Page
- 29




Item
      13.
            Certain
      Relationships, Related Transactions and Director
    Independence.





Except as
set forth above, the Company has not entered into any transaction during the
last two years and it has not proposed any transaction to which the Company was
or is to be a party, in which any of the following persons had or is to have a
direct or indirect material interest:





-
            Any
      director or executive officer of the Company;-
            Any
      nominee for election as a director;-
            Any
      security holder named in the "Security Ownership of Certain Beneficial
      Owners and "management" section above; and-
            Any
      member of the immediate family (including spouse, parents, children,
      siblings, and in-laws) of any such
person.





Item 14.
            Principal
      Accountant Fees and Services.





(1) Audit
Fees.





The
aggregate fees billed in fiscal years 2009 and 2008 for professional services
rendered by the principal registered accountant for the audit of the Company's
annual financial statements and review of financial statements included in the
Company’s Form 10-Q or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years were $20,000 and $18,900, respectively.





(2)
Audit-Related Fees.





The
aggregate fees billed in fiscal years 2009 and 2008 for assurance and related
services by the principal accountant that are reasonably related to the
performance of the audit or review of the Company's financial statements and are
not reported under Item 14(1) above were $0 and $16,450,
respectively.





(3) Tax
Fees.





The
aggregate fees billed in fiscal years 2009 and 2008 for professional services
rendered by the principal accountant for tax compliance, tax advice, and tax
planning were $4000 and $2500, respectively.





(4) All
Other Fees





The
aggregate fees billed in fiscal years 2009 and 2008 for products and services
provided by the principal accountant, other than the services reported in Items
14(1) through 15(3) above were $0 and $0, respectively.





Page
- 30


(5) Audit
Committee Approval





During
fiscal year 2009 and 2008, the Audit Committee pre-approved all engagements and
fees for services the principal registered accountant provided since it was
formally formed. Prior to the formation of the Audit Committee, the entire Board
functioned as the Audit Committee and pre-approved all engagements and fees for
services the principal registered accountant provided.





PART IV





Item 15.
            Exhibits.





(a)
            Exhibits








EXHIBIT INDEX





Description of Document





Exhibit
              Number
            
            Description2.01
            
            Certificate
      of Incorporation of the Company, incorporated by reference to Exhibit 3.1
      to the Company's Annual Report on Form 10-SB filed on October 20,
      2000.2.02
            
            Articles
      of Amendment to Articles of Incorporation of the Company filed with the
      Secretary of State of Utah on or about July, 19832.03
            
            Articles
      of Amendment to Articles of Incorporation of the Company filed with the
      Secretary of State of Utah on September 10, 19932.04
            
            By-Law
      of Company incorporated by reference to Exhibit 2.04 to the Company’s
      Annual Report on Form 10-SB filed on October 20, 2000.Exhibit
      A
            
            Articles
      of Amendment to Articles of Incorporation of the Company filed with the
      Secretary of State of Utah incorporated by reference as filed in the
      companies DEF 14C on November 8, 2006.31.1
            
            Certification
      by Louis Fox,  Chief Financial Officer, pursuant to Section
      302of the Sarbanes- Oxley Act of 200231.2
            
            Certification
      by Michael Forster, Chief Executive Officer, pursuant to Section 302of the
      Sarbanes- Oxley Act of 200232.1
            
            Certification
      by Louis Fox, Chief Financial Officer, pursuant to Section 906of the
      Sarbanes- Oxley Act of 200232.2
            
            Certification
      by Michael Forster, Chief Executive Officer  pursuant to Section
      906of the Sarbanes- Oxley Act of 2002





Page
- 31





SIGNATURES







In
accordance with Section 13 or 15(d) of the Exchange Act, the Company caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.





POWER-SAVE
      ENERGY COMPANYDated: 
      March 25, 2010
            By:
            /s/ Michael ForsterMichael
      Forster Chief Executive OfficerDated:
      March 25, 2010
            By:
      /s/ Louis
      foxLouis
      Fox, Chief Financial Officer





In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Company and in the capacities and on the
dates indicated.





Dated: 
      March  25, 2010
            By:
            /s/ David ForsterDavid
      Forster, President/ DirectorDated: 
      March  25, 2010
            By:
            /s/
      Gary D. StanwyckGary
      D. Stanwyck, Director








Page
- 32


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 annual report on Form 10-K for the year ending December
31, 2009 of Power-Save Energy Company;





2. Based
on my knowledge, this annual 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:
      March  25, 2010
            By:
      /s/ Michael
      ForsterMichael
      ForsterChief
      Executive Officer





Page
- 33








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 annual report on Form 10-K for the year ending December
31, 2009 of Power-Save Energy Company;





2. Based
on my knowledge, this annual 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:
      March  25, 2010
            By:
      /s/ Louis FoxLouis
      FoxChief
      Financial Officer





Page
- 34











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 Annual Report of Power-Save Energy Company. (the
“Company”) on Form 10-K for the period ending December 31, 2009 as filed
with the Securities and Exchange Commission on the date hereof (the “Report”),
I, Michael Forster, President, Chief Executive Officer of the Company and a
member of the Board of Directors, certify, pursuant to 18 U.S.C. §1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:





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





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





Dated:
      March  25, 2010
            By:
      /s/ Michael ForsterMichael
      ForsterChief
      Executive Officer





Page
- 35


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 Annual Report of Power-Save Energy Company. (the
“Company”) on Form 10-K for the period ending December 31, 2009 as filed
with the Securities and Exchange Commission on the date hereof (the “Report”),
I, Louis Fox,   Chief Financial Officer of the Company and a
member of the Board of Directors, certify, pursuant to 18 U.S.C. §1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:





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





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





Dated:
      March  25, 2010
            By:
      /s/ Louis FoxLouis
      FoxChief
      Financial Officer








Page
- 36