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, 2008o
            
            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














Power Save Energy,
Co.


(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 x No 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





Page
- 1


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


Yes o No x





Revenue
for the fiscal year ended December 31, 2008 is $5,963,483 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, 2008 amounted to
$10,634,803.





The number of shares outstanding of
each of the registrant's classes of common stock as of December 31, 2008 was
28,956,988 shares.





DOCUMENTS
INCORPORATED BY REFERENCE





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






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. or its contractors will be responsible for warehousing and
shipping the product to customer.





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.





Page
- 4


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 one full time employee, its Chief Executive Officer, Michael
Forster.








Item
      1A.
            Risk
      Factors.




RISKS
RELATED TO OUR BUSINESS




We
currently depend on the services of Mr. Forster as our sole 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.




At present, Mr. Forster
is our sole 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, and when we retain additional
employees will be dependent upon their services. The loss of Mr. Forster, or any
future key employee would have a significant impact on our operations. Our
future success will depend in part on our ability to retain Mr. Forster and new
key employees and to identify, hire and retain additional personnel. If we fail
to hire and retain personnel in key positions, we may be unable to grow our
business successfully.




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.




Page
- 5


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.





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.







Page
- 6


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.




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, 2008, 28,956,988 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.





Page
- 7


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 effect 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, 2007, our compliance with the SEC's rules concerning internal
controls will be costly, time-consuming and 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, 2008. 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 be required to
make substantial changes to our internal controls in order for our management to
be able to attest that as of December 31, 2008, 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. While our business is not as sophisticated or complex as these
larger companies, we anticipate it will be time-consuming, costly and difficult
for us to develop and implement the internal controls necessary for our
management to attest that our internal controls are effective as of December 31,
2008. We may need to hire additional financial reporting and internal controls
personnel, acquire software and retain a third party consultant during 2008. If
our management is unable to attest that our internal controls are effective as
of December 31, 2008, investors may react by selling our stock and causing its
price to fall.





Page
- 8


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. 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.








Power-Save
was dismissed from a recently filed lawsuit reported in our last 10-Q. As
previously stated in the 10-Q, “On or about July 18, 2008, Power-Save Energy
Company was served with a lawsuit for wrongful death from an auto accident
involving Michael Forster’s son, Alex Forster.”  Power-Save has been
completely dismissed from this lawsuit with prejudice against the Plaintiff
from ever filing a subsequent lawsuit against Power-Save. The dismissal was
filed by the plaintiffs counsel in the San Luis Obispo Superior Court on August
19, 2008.  An 8k-information statement will be filed related to the
dismissal.





On or
about September 6, 2007, we were served with a lawsuit from a former officer of
our predecessor company, Safari Associates, Inc. The former officer, Stephen
Steeneck, alleges breach of contract, quantum meruit, unjust enrichment and
other causes of action for failure to remit payment on loans Mr. Steeneck
alleges he made to Safari Associates, Inc. and for failure to pay deferred
compensation in the amount of $500,000.00.  On February 17, 2009, Mr.
Steeneck obtained a judgment against the Company for $125,520.06.





In addition, from time to time and in the course of business, we may become
involved in various legal proceedings seeking monetary damages and other relief.
The amount of the ultimate liability, if any, from such claims cannot be
determined. However, in the opinion of our management, there are no legal claims
currently pending or threatened against us that would be likely to have a
material adverse effect on our financial position, results of operations or cash
flows.





Page
- 9


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 2008 and 2007:










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




Twelve months Ended December 31, 2007
              
              High
              
              LowOctober
      1, 2007 — December 31, 2007
              
              $
              0.90
              
              $
              1.10July
      1, 2007 — September 30, 2007
              
              
              1.01
              
              
              0.30April
      1, 2007 — June 30, 2007
              
              
              1.95
              
              
              0.45January
      1, 2007 — March 31, 2007
              
              
              2.60
              
              
              0.35







The
source of this information for fiscal year 2008 and 2007 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, 2008, there were approximately 349 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.





Page
- 10


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.





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 2008 COMPARED TO FISCAL YEAR 2007




Revenue
for the year ended December 31, 2008 was $5,963,483 compared to $2,309,907 for
the year ended December 31, 2007. This is an increase of $3,653,575 (158%).
Sales of the Company's PS1200 energy-savings product for homeowners and the
introduction of two new products, the PS 3200 and PS 3400 for light commercial
and industrial continued to increase in 2008, and, in July 2008, the Company
introduced its solar products which accounted for over $1,000,000 in revenue.
The gross profit for the year ended December 31, 2008 was $3,605,518 compared to
$1,870,033 for the year ended December 31, 2007. This was an increase of
$1,735,485 (93%). The gross profit percentage for all of 2008 was 60.5% compared
to 80.1% for 2007. The decrease in gross profit percentage was the result of two
factors: (1) the gross profit percentage from the solar energy products is lower
than the gross profit percentage of the Power-Save home and commercial energy
savings devices, and (2) the Company increased commercial sales through
resellers which resulted in lower margins.





Page
- 11


Advertising
and marketing expense for the year ended December 31, 2008 was $513,139 compared
to $296,483 for the year ended December 31, 2007. This was an increase of
$216,656 (73%). The Company continued to market its home and commercial power
savings devices through television and internet advertising. In addition, in
2008 the Company produced a new commercial for the television promotion of its
solar products.





Sales
commissions for the year ended December 31, 2008 was$1,034,401 compared to
$655,558 for year ended December 31, 2007. This was an increase of
$540,544(82%).





General
and administrative expenses for the year ended December 31, 2008 were $1,034,401
compared to $465,096 for the year ended December 31, 2007, an increase of
$596,305. Included in the increase were the following items which are considered
to be nonrecurring. (1) The Company lost a lawsuit in February with a former
executive of the Company. The total judgment entered against the Company was
$125,520 including interest, plus legal fees incurred by the Company to defend
the lawsuit of $32,050. (2) The Company incurred a bad debt expense of $122,259
from one customer who filed for bankruptcy. The company was an installer of
solar products. (3) The Company incurred $55,795 in legal and accounting bill
for due diligence for a merger which was not consummated. Other major increases
in general and administrative expenses are as follows. Due to the increase in
revenue, the costs associated with processing credit card and other payments
systems increased by $59,505 (171%). Printing and production costs for brochures
and other printed materials increased by $62,692 (1198%). With the addition of a
new warehouse and showroom, the Company incurred occupancy costs of $40,758 in
2008. There were no facilities in 2007. Travel and other related expenses
increased by $130,568 in 2008. The majority of the costs were incurred for trips
to China to provide due diligence on products the Company was importing and
review the costs and design of the solar product which was introduced in 2008
and wind turbine products. All other general and administrative expenses showed
minor increase and decrease representing less than 1% of the increase in general
and administrative expense.





Liquidity and Capital
Resources


As of
December 31, 2008 the current assets exceeded the current liabilities by
$1,999,347. During the year ended December 31, 2008, the Company issued a total
of 1,925,716 restricted shares of common stock with the Company receiving net
proceed of approximately $1,033,871.The proceeds were used to purchase for
inventory Solar and Wind products, prepay for television commercials for the two
new products and for additional working capital. The Company is profitable and
has been able to generate sufficient funds from its current operations to fund
its current level of activity.






































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





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





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




Item
      7A.
            Quantitative
      and Qualitative Disclosures About Market
Risk








Item
      8.
            Financial
      Statements and Supplementary Data.




The
information required by this item is incorporated by reference to pages F-1
through F-12 of this annual report on Form 10-K.














Index to Financial
      Statements
                  PageReport
      of Independent Registered Public Accountant Accounting
Firm
                  F-1Consolidated
      Balance Sheet as of December 31, 2008.
                  F-2Consolidated
      Statements of Operations for the Years ended December 31, 2008 and
      2007.
                  F-3Consolidated
      Statements of Stockholders' (Deficit) for the Years ended December 31,
      2008 and 2007.
                  F-4Consolidated
      Statements of Cash Flows for the Years Ended December 31, 2008 and
      2007.
                  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, 2008, and the related statements of operations, stockholders'
equity and cash flows for the years ended December 31, 2008 and 2007 . 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, 2008 and the results of its operations and cash flows for the years
ended, December 31, 2008 and 2007 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,
2009

















F
- 1











Power-Save
Energy Company


Balance Sheet


December
31, 2008





Current
      AssetsCash
      and Cash Equivalents
                      
                      $
                      513,249Accounts
      receivable, net of allowance
                      
                      
                      945,053Inventory
                      
                      
                      873,872Prepaid
      expenses
                      
                      
                      76,528Total
      current assets
                      
                      
                      2,408,702Equipment,
      net of accumulated depreciation
                      
                      
                      47,469Intangible
      assets, net of accumulated amortization
                      
                      
                      10,286Other
      assets
                      
                      
                      28,705Total
      assets
                      
                      $
                      2,495,162LIABILITIES
      AND STOCKHOLDERS' EQUITYLiabilitiesCurrent
      liabilitiesAccounts
      payable
                      
                      $
                      55,687Other
      current liabilities liability
                      
                      
                      125,520Income
      taxes payable
                      
                      
                      228,148Total
      current liabilities
                      
                      
                      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 issued and outstandingAdditional
      paid-in-capital
                      
                      
                      1,292,914Retained
      earnings
                      
                      
                      763,936Total
      stockholders' equity
                      
                      
                      2,085,807Total liabilities and
      stockholders' equity
                      
                      $
                      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, 2008 and 2007





2008
                        
                        
                        2007Revenue,
      net
                        $
                        5,963,483
                        
                        
                        $
                        2,309,908Cost
      of salesMerchandise
                        
                        2,099,095
                        
                        
                        
                        400,092Other
      costs
                        
                        258,870
                        
                        
                        
                        39,783Total
      cost of sales
                        
                        2,357,965
                        
                        
                        
                        439,875Gross
      margin
                        
                        3,605,518
                        
                        
                        
                        1,870,033Operating
      expensesAdvertising
      and promotion
                        
                        513,139
                        
                        
                        
                        296,483Sales
      commissions
                        
                        1,196,102
                        
                        
                        
                        655,558General
      and administrative
                        
                        1,034,401
                        
                        
                        
                        465,096Total
      operating costs and expenses
                        
                        2,743,642
                        
                        
                        
                        1,417,137Net
      income (loss) before provision for income taxes
                        
                        861,876
                        
                        
                        
                        452,896Provision
      for income taxes
                        
                        270,837
                        
                        
                        
                        118,158Net
      income (loss)
                        $
                        591,039
                        
                        
                        $
                        334,738Earnings
      per common share:Basic
                        $
                        0.021
                        
                        
                        $
                        0.012Diluted
                        $
                        0.021
                        
                        
                        
                        N/AShares
      used in computing earnings per shareBasic
                        
                        28,395,217
                        
                        
                        
                        27,031,168Diluted
                        
                        28,412,250
                        
                        
                        
                        N/A

















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, 2007
                                      
                                      31,230,295
                                      
                                      
                                      
                                      31,230
                                      
                                      
                                      
                                      256,770
                                      
                                      
                                      
                                      (161,841
                                      )
                                      
                                      
                                      126,159Common
      stock subsequently cancelled
                                      
                                      (4,199,127
                                      )
                                      
                                      
                                      (4,199
                                      
                                      
                                      
                                      4,199
                                      
                                      
                                      
                                      --
                                      
                                      
                                      
                                      --On conversion of debtNet
      income for the year ended
                                      
                                      --
                                      
                                      
                                      
                                      --
                                      
                                      
                                      
                                      --
                                      
                                      
                                      
                                      334,738
                                      
                                      
                                      
                                      334,738December 31, 2007Balance,
      December 31, 2007
                                      
                                      27,031,168
                                      
                                      
                                      $
                                      27,031
                                      
                                      
                                      
                                      260,969
                                      
                                      
                                      
                                      172,897
                                      
                                      
                                      
                                      460,897Privare
      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
                                      
                                      
                                      $
                                      2,085,807
































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, 2008 and 2007





2008
                                  
                                  
                                  2007Cash
      flows from operating activitiesNet
      Income (loss)
                                  $
                                  591,039
                                  
                                  
                                  $
                                  334,738Adjustments
      to reconcile net income (loss) to net cashProvided
      by operating activitiesDepreciation
      and amortization
                                  
                                  4,830
                                  
                                  
                                  
                                  1,830Change
      in operating assets and liabilities
                                  
                                  
                                  
                                  
                                  
                                  --Increase
      in accounts receivable
                                  
                                  (898,630
                                  )
                                  
                                  
                                  (26,980
                                  )Increase
      in inventory
                                  
                                  (763,004
                                  )
                                  
                                  
                                  (59,906
                                  )Decrease
      in prepaid expenses
                                  
                                  (66,528
                                  )
                                  
                                  
                                  (10,000
                                  )Increase
      (decrease) in accounts payable
                                  
                                  8,653
                                  
                                  
                                  
                                  11,844Increase
      in other liabilities
                                  
                                  125,520Increase
      in income taxes payable
                                  
                                  109,990
                                  
                                  
                                  
                                  118,158Net
      cash used in operating activities
                                  
                                  (888,130
                                  )
                                  
                                  
                                  369,684Cash
      flows from investing activitiesSecurity
      deposits
                                  
                                  (28,705
                                  )Acquisition
      of equipment
                                  
                                  (45,777
                                  )
                                  
                                  
                                  (4,468
                                  )Net
      cash used by investing activities
                                  
                                  (74,482
                                  )
                                  
                                  
                                  (4,468
                                  )Cash
      flows from investing activitiesNet
      proceeds from private placement
                                  
                                  1,033,872Net
      Proceeds from line of credit, net
                                  
                                  
                                  
                                  
                                  
                                  (13,137
                                  )Net
      cash provided by financing activities
                                  
                                  1,033,872
                                  
                                  
                                  
                                  (13,137
                                  )Net
      increase (decrease) in cash and cash equivalents
                                  
                                  71,260
                                  
                                  
                                  
                                  352,079Cash
      and cash equivalents at beginning of year
                                  
                                  441,989
                                  
                                  
                                  
                                  89,910Cash
      and cash equivalents at end of year
                                  $
                                  513,249
                                  
                                  
                                  $
                                  441,989Supplemental
      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, 2008 the carrying cost of these
instruments approximate their fair value.





Cash
Equivalents





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





Accounts
Receivable





Accounts
receivable are trade receivables which are reviewed by management on a quarterly
basis. The Company records a provision for uncollectible accounts when
collectability is in doubt.





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.




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





F
- 6




POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS








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





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





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





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





Income
Taxes





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





Earnings
Per Common Share





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











F
- 7




POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





Advertising





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





Segmented
Information





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





Concentration
of Credit Risk





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





Special
– purpose entities





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





Use
of estimates





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





Website
Development Costs





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





Note
3 – Recently issued accounting pronouncements





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities“. This Statement permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. The Company is currently assessing the impact
of SFAS No. 159 on its financial position and results of
operations.




In June
2007, the FASB issued FASB Staff Position No. EITF 07-3, “Accounting for
Nonrefundable Advance Payments for Goods or Services Received for use in Future
Research and Development Activities” (“FSP EITF 07-3”), which addresses whether
nonrefundable advance payments for goods or services that used or rendered for
research and development activities should be expensed when the advance payment
is made or when the research and development activity has been performed.
Management is currently evaluating the effect of this pronouncement on financial
statements.










F
- 8




POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
Combinations.” SFAS No. 141 (Revised 2007) changes how a reporting enterprise
accounts for the acquisition of a business. SFAS No. 141 (Revised 2007) requires
an acquiring entity to recognize all the assets acquired and liabilities assumed
in a transaction at the acquisition-date fair value, with limited exceptions,
and applies to a wider range of transactions or events. SFAS No. 141 (Revised
2007) is effective for fiscal years beginning on or after December 15, 2008 and
early adoption and retrospective application is prohibited.





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





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








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





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





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




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.





F
- 9




POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS





The
following is a schedule of minimum future rental payments:


Year
      EndingDecember
      31,2009
                                $45,3982010
                                46,4822011
                                47,8772012
                                49,3132013
                                25,021Total
      minimum future rental payments
                                $214,091





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 September 30, 2008. The
balance due on the line of credit is $-0-.





Note
5 - Income Taxes


The
      provision for income taxes consists of the following:2008
                    
                    
                    2007Federal
      income tax
                    
                    $
                    206,488
                    
                    
                    $
                    92,475State
      income tax
                    
                    
                    64,349
                    
                    
                    
                    25,683Total
                    
                    
                    270,837
                    
                    
                    
                    118,158Income
      taxes based on statutory tax rates are as followsFederal
      income taxes
                    
                    
                    293,038
                    
                    
                    
                    153,338State
      income tax
                    
                    
                    76,276
                    
                    
                    
                    36,491Other
                    
                    
                    (98,477
                    )
                    
                    
                    (68,609
                    )Permanent
      timing differences
                    
                    
                    
                    
                    
                    
                    (3,062
                    )Total
                    
                    $
                    270,837
                    
                    
                    $
                    118,158







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
                            
                            
                            2,224$
                            10,286







F
- 10




POWER
SAVE ENERGY COMPANY.


NOTES
TO FINANCIAL STATEMENTS








Note
7 - Common Stock





Private
Placement


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





Options


On May
16, 2008, the Company issued 1,450,000 stock options to several service
providers and consultants to purchase shares of common stock at $2.01 per share.
These options were subsequently cancelled.





Preferred
Stock


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





Note
8 -Acquisition





Acquisition


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





As of
September 30, 2008, both parties agreed to rescind the transaction and U.S.
Energy agreed to return the $25,000.00 deposit to Power-Save Energy
Company.





Note
9 - Litigation





On or
about September 2007, the Company was served with lawsuit from a former
director/officer in the United States District Court, Southern District of New
York (Case No. 07CIV4770 (SCR)), for breach of contract, quantum meruit, and
unjust enrichment. Between November 2000 and April 2006, the former director /
officer claim the company owes $113,400.00 from loans the defendant made and
approximately $500,000.00 in compensation. The Company was unaware of the
allegations prior to the commencement of the lawsuit. The company's former Chief
Executive Officer, on behalf of the Company, hired counsel to defend the
lawsuit.  On February 13, 2009, judgment was entered against the
Company in the amount of $99,500, plus interest of $26,020. The liability has
been recorded in the financial statements as other liabilities.





Note
10 – Subsequent Events





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











F
- 11










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




Item
      9A.
            Controls
      and Procedures.




Effectiveness of Disclosure Controls
and Procedures.  Michael Forster, Power-Save’s Chief Executive
Officer, is responsible for establishing and maintaining adequate disclosure
controls and procedures.  In establishing such controls and procedures, he
considered, among other factors, a cost-benefit analysis of implementing certain
controls and recognized that no matter how well designed and operated, the
existence of controls and procedures provide only reasonable assurance of
achieving their objectives.





Mr.
Forster evaluated the effectiveness of the Company’s disclosure controls and
procedures as of December 31, 2008 based on (1)  whether there
was a design to ensure that material information relating to the Company was
made known to our Chief Executive Officer by others, particularly during the
period in which this report was being prepared and (2) effective, in that
they provided reasonable assurance that information required to be disclosed by
the Company in reports filed under the Exchange Act was recorded and
communicated to our management and then processed, summarized and reported
within the time periods specified in the Commission’s rules and
forms.





Based
upon its evaluation, our management has concluded that, as of December 31,
2008, our disclosure controls and procedures were effective in ensuring that the
information required to be disclosed by us in the reports that we file and
furnish under the Exchange Act was recorded, processed, summarized and reported,
within the time periods specified in the SEC’s rules, regulations and related
forms, and that such information was accumulated and communicated to our
management, including our chief executive officer and chief financial officer,
as appropriate, to allow timely decisions regarding the required
disclosure.




Management’s Report on Internal
Control Over Financial Reporting.  Under the supervision and with
the participation of Michael Forster, our Chief Executive Officer, our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act
Rules 13a-15(f) and 15d-15(f).




Our
management conducted its annual evaluation of the effectiveness of our internal
controls over financial reporting based on the Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission.  Management reviewed its policies and procedures designed to
(1) maintain records in reasonable detail so that transactions concerning
the Company’s assets are accurately and fairly reflected; (2) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and (3) 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 Company’s financial
statements.




Based on
this evaluation, management has concluded that our internal control over
financial reporting was effective as of December 31, 2008.




This
annual report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
company’s registered public accounting firm pursuant to temporary rules of
the Securities and Exchange Commission that permit us to provide only
management’s report in this annual report.




Limitations on Controls. 
Our management, including our Chief Executive Officer, does not expect that our
disclosure controls or our internal control over financial reporting will
prevent or detect all errors and all fraud.  A control system, no matter
how well designed and operated, can provide only reasonable, not absolute,
assurance that the control system’s objectives will be met.  Internal
control over financial reporting is a process that involves human diligence and
compliance and is subject to lapses in judgment and breakdowns resulting from
human failures.  In addition, the design of any system of controls is based
in part on certain assumptions about the likelihood of future events, and
controls may become inadequate if conditions change.  There can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions.





Page
- 25


Changes in Company’s Internal
Controls over Financial Reporting. In management’s opinion, there were no
material changes in the Company’s internal controls over financial reporting
during the fourth fiscal quarter for the year ending December 31, 2008,
covered by this report, that have materially affected, or are reasonably likely
to materially affect, its internal control over financial
reporting.




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
                  
                  42
                  
                  Chief
      Executive Officer
                  
                  2008
                  
                  Officer/DirectorLouis
      Fox
                  
                  60
                  
                  Chief
      Financial Officer
                  
                  2009
                  
                  OfficerDavid
      J. Forster
                  
                  38
                  
                  President/Director
                  
                  2007
                  
                  Officer/DirectorGary
      D. Stanwyck
                  
                  52
                  
                  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.





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.





Page
- 26


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 work 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.





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 2008 and 2007
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
                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
                0Gary
      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
                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/A





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, 2008by (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
              
              17,140,540
              
              59.2%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
              
              17,201,341
              
              59.4%






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 2008 and 2007 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-QSB or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements for those
fiscal years were $18,900 and $7000, respectively.





(2)
Audit-Related Fees.





The
aggregate fees billed in fiscal years 2008 and 2007 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 $16,450 and $18,250,
respectively.





(3) Tax
Fees.





The
aggregate fees billed in fiscal years 2008 and 2007 for professional services
rendered by the principal accountant for tax compliance, tax advice, and tax
planning were $2500 and $1250, respectively.





(4) All
Other Fees





The
aggregate fees billed in fiscal years 2008 and 2007 for products and services
provided by the principal accountant, other than the services reported in Items
14(1) through 15(3) above were $6300 and $0, respectively.





(5) Audit
Committee Approval





During
fiscal year 2008 and 2007, 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.







Page
- 30


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, 2009
              By:
              /s/
      Michael ForsterMichael
      Forster Chief Executive OfficerDated:
      March 25, 2009
              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, 2009
              By:
              /s/
      David ForsterDavid
      Forster, President/ DirectorDated: 
      March  25, 2009
              By:
              /s/
      Gary D. StanwyckGary
      D. Stanwyck, Director







Page
- 32


EXHIBIT
31.1




CERTIFICATION PURSUANT TO
RULE 13a-14 AND 15d-14 UNDER


THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED







I,
Michael Forster, Chief Executive Officer of Power-Save Energy Company, certify
that:




I have reviewed this annual report on Form 10-K of Power-Save Energy
Company;









1.
                 
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 annual
report;









2.
                 
Based on my knowledge, the financial statements, and other financial information
included in this annual 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 annual 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 Company, as of, and for,
the periods presented in this Report;









4.
                 
I and the other certifying officers of the Company are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company 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 Company, including any
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this Report is being
      prepared;(b)
      Evaluated the effectiveness of the Company'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(c)
      Disclosed in this Report any change in the Company's internal control over
      financial reporting that occurred during the Company's most recent fiscal
      quarter (the Company's fourth fiscal quarter in the case of an annual
      report) that has materially affected, or is reasonably likely to
      materially affect, the Company's internal control over financial
      reporting; and







5.
                 
I and the other certifying officers have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Company's
auditors and to the audit committee of the Company'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 Company'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 Company's internal control
      over financial reporting.





Dated:
      March  25, 2009
            By:
      /s/ Michael
      ForsterMichael
      ForsterChief
      Executive Officer





Page
- 33


EXHIBIT
31.2




CERTIFICATION PURSUANT TO
RULE 13a-14 AND 15d-14 UNDER


THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED







I, Louis
Fox, Chief Financial Officer of Power-Save Energy Company, certify
that:




I have reviewed this annual report on Form 10-K of Power-Save Energy
Company;









1.
                 
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 annual
report;









2.
                 
Based on my knowledge, the financial statements, and other financial information
included in this annual 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 annual 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 Company, as of, and for,
the periods presented in this Report;









4.
                 
I and the other certifying officers of the Company are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company 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 Company, including any
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this Report is being
      prepared;(b)
      Evaluated the effectiveness of the Company'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(c)
      Disclosed in this Report any change in the Company's internal control over
      financial reporting that occurred during the Company's most recent fiscal
      quarter (the Company's fourth fiscal quarter in the case of an annual
      report) that has materially affected, or is reasonably likely to
      materially affect, the Company's internal control over financial
      reporting; and







5.
                 
I and the other certifying officers have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Company's
auditors and to the audit committee of the Company'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 Company'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 Company's internal control
      over financial reporting.





Dated:
      March  25, 2009
            By:
      /s/ Louis
      FoxLouis
      FoxChief
      Financial Officer





Page
- 34


EXHIBIT
32.1




CERTIFICATE 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 fiscal year ended December 31, 2008 as filed with the
Securities & Exchange Commission (the "Report"), each of the undersigned, in
the capacities and on the dates indicated below, hereby certifies pursuant to 18
U.S.C. Section 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; and2.
            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, 2009
            By:
      /s/ Michael
      ForsterMichael
      ForsterChief
      Executive Officer





Page
- 35


EXHIBIT
32.2




CERTIFICATE 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 fiscal year ended December 31, 2008 as filed with the
Securities & Exchange Commission (the "Report"), each of the undersigned, in
the capacities and on the dates indicated below, hereby certifies pursuant to 18
U.S.C. Section 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; and2.
            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, 2009
            By:
      /s/ Louis
      FoxLouis
      FoxChief
      Financial Officer





Page
- 36