**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington
      D.C. 20549**





**FORM
      10-KSB/A**


**(Amendment
      No. 1)**





Annual
      Report under Section 13 or 15(d) of the Securities Exchange Act of
      1934


For
      the
      fiscal year ended December 31, 2005





Commission
      file number: 000-50739





**ENERGENX,
      INC.**


State
      or
      other jurisdiction of incorporation or organization: NEVADA


I.R.S.
      Employer Identification Number: 20-1044677





6200
      E.
      Commerce Loop


Post
      Falls, Idaho 83854


Telephone:
      (208) 665-5553





Securities
      registered under Section 12(b) of the Exchange Act


NONE





Securities
      registered under Section 12(g) of the Exchange Act


Common
      Stock, $0.001 par value





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or 15(d) of the Exchange Act. o





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.  Yes x No
o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of registrant’s knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-KSB
      or any amendment to this Form 10-KSB. o





The
      issuer’s revenues for its fiscal year ended December 31, 2005 were **** $0.





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates, computed by reference to the price at which the common equity
      was last sold (on January 13, 2006 at $0.50 per share), as of March 15, 2006
      was
      $5,938,434.





The
      number of shares of Common Stock, par value $0.001, of the issuer outstanding
      as
      of March 15, 2006, was **** 27,497,276
      shares.




Transitional
      Small Business Disclosure Format (Check one): Yes o; Nox





**EXPLANATORY
      NOTE**





Energenx,
      Inc. is filing this amendment to its Form 10-KSB for the fiscal year ended
      December 31, 2005, filed with the Securities and Exchange Commission on March
      31, 2006 (the “Original Filing”), in response to a comment letter from the SEC
      received on July 13, 2006. Our amendments:





•
            amend
                and restate Item 8A to amplify our disclosure on our evaluation of
                disclosure controls and procedures, and to add Management’s Annual Report
                on Internal Control over Financial
                Reporting;





•
            amend
                Item 12 to update certain disclosure concerning the sharing of expenses
                between Energenx and Bedini Electronics in
                2005;





•
            amend
                and restate the Report of Independent Registered Public Accounting
                Firm to
                include auditor association with the cumulative
                data;





•
            amend
                the statements of stockholders equity and cash flows to include disclosure
                of certain stock options granted in conjunction with a common stock
                purchase.





•
            amend
                Notes 12 and 13 to the Notes to Financial Statements to include disclosure
                concerning the estimation of certain stock options granted to
                non-employees;





•
            amend
                and restate the Section 302 Certifications to comply with Item 601(b)(3)
                of Regulation S-B;





As
      a
      result of these amendments, the certifications pursuant to Section 302 and
      Section 906 of the Sarbannes-Oxley Act of 2002, filed as exhibits to the
      Original Filing, have been re-executed and re-filed as of the date of this
      Form
      10-KSB/A.





Except
      for the amendments described above, this Form 10-KSB/A does not modify or update
      other disclosures in, or exhibits to, the Original Filing.





1








**TABLE
      OF CONTENTS**


**PART
                I**
            
            
            **Page**Item
                1.
            Description
                of Business
            4Item
                2.
            Description
                of Property
            12Item
                3.
            Legal
                Proceedings
            12Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            12**PART
                II**Item
                5.
            Market
                for Common Equity and Related Stockholder Matters
            12Item
                6
            Management’s
                Discussion and Analysis or Plan of Operation
            15Item
                7.
            Financial
                Statements
            26Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure
            26Item
                8A.
            Controls
                and Procedures
            28Item
                8B.
            Other
                Information
            28**PART
                III**Item
                9.
            Directors,
                Executive Officers of the Registrant; Compliance with Section 16
                (a) of
                the Securities Exchange Act
            29Item
                10.
            Executive
                Compensation
            32Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            34Item
                12.
            Certain
                Relationships and Related Transactions
            35Item
                13.
            Exhibits
            37Item
                14.
            Principal
                Accountant Fees and Services
            37EXHIBIT
                INDEX
            
            
            39SIGNATURES
            
            
            40





2





**FORWARD
      LOOKING STATEMENTS**





This
      Report on Form 10-KSB and the documents incorporated by reference include
“forward-looking statements”. To the extent that the information presented in
      this Report on Form 10-KSB discusses financial projections, information or
      expectations about our business plans, results of operations, products or
      markets, or otherwise makes statements about future events, such statements
      are
      forward-looking. Such forward-looking statements can be identified by the use
      of
      words such as “intends”, “anticipates”, “believes”, “estimates”, “projects”,
“forecasts”, “expects”, “plans” and “proposes”. Although we believe that the
      expectations reflected in these forward-looking statements are based on
      reasonable assumptions, there are a number of risks and uncertainties that
      could
      cause actual results to differ materially from such forward-looking statements.
      These include, among others, the cautionary statements in the “Risk Factors” and
“Management’s Discussion and Analysis or Plan of Operation” sections of this
      Report on Form 10-KSB. These cautionary statements identify important factors
      that could cause actual results to differ materially from those described in
      the
      forward-looking statements. When considering forward-looking statements in
      this
      prospectus, you should keep in mind the cautionary statements in the “Risk
      Factors” section above and “Management’s Discussion and Analysis or Plan of
      Operation” section below, and other sections of this Report on Form
      10-KSB.





The
      statements contained in this Report on Form 10-KSB that are not purely
      historical are forward-looking statements within the meaning of Section 27A
      of
      the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
      1934, including, without limitation, statements regarding our expectations,
      objectives, anticipations, plans, hopes, beliefs, intentions or strategies
      regarding the future. All forward-looking statements included in this document
      are based on information available to us on the date hereof, and we assume
      no
      obligation to update any such forward-looking statements. It is important to
      note that our actual results could differ materially from those included in
      such
      forward-looking statements. There are many factors that could cause actual
      results to differ materially from the forward looking statements. For a detailed
      explanation of such risks, please see the section entitled “Risk Factors”
beginning on page 18 of this Report on Form 10-KSB/A. Such risks, as well as
      such other risks and uncertainties as are detailed in our SEC reports and
      filings for a discussion of the factors that could cause actual results to
      differ materially from the forward- looking statements. Given these
      uncertainties, readers are cautioned not to place undue reliance on the
      forward-looking statements.




The
      following discussion should be read in conjunction with the audited consolidated
      financial statements and the notes included in this Report on Form 10-KSB and
      the section entitled “Management’s Discussion and Analysis or Plan of Operation”
included in this Report on Form 10-KSB.




3


**PART
      I**





**Item
      1.**   **Description
      of Business.**





**TABLE
      OF CONTENTS**





**A.**
            **Energenx
                - Introduction, Business Strategy****B.**
            **Energenx
                Research and Product Development Programs****C.**
            **Licensed
                Proprietary Technology****D.**
            **Out-Licensed
                Technology****E.**
            **Competition****G.**
            **Strategic
                Alliance****H.**
            **Marketing
                and Sales****I.**
            **Patents,
                Trademarks, and Copyrights****J.**
            **Employees**





**A.**  **Energenx
      Inc. - Introduction, Business Strategy**





Energenx,
      Inc. (“Energenx”), is a technology based company engaged in the discovery,
      research and development of novel electromagnetic motor/generator and battery
      charger systems. Energenx, formerly Bedini Technology, Inc., was incorporated
      in
      Nevada on September 29, 1999.





Our
      proprietary technology is based on a hybrid electromagnetic motor/generator
      and
      on a two phase solid state battery charger that uses an innovative method for
      pulse charging batteries, both invented by John C. Bedini, a co-founder of
      Energenx, who is currently the Vice President for Research and Development
      of
      Energenx and a member of the board of directors.





The
      hybrid electromagnetic motor/generator is a low friction motor that utilizes
      a
      flywheel design configured with opposing magnets to charge dead batteries in
      a
      highly efficient manner, needing only a small trigger pulse of electricity
      from
      a primary battery or from the electrical power grid. We have built and tested
      several hybrid motor/generator prototypes based on the hybrid electromagnetic
      motor/generator. We intend to develop and test energy generation system
      prototypes that can be utilized to efficiently charge batteries for many home
      and industrial applications.





Our
      patented battery charger system is based on a solid state battery charger that
      uses a two phase method to charge batteries with pulsating current rather than
      with a constant charge current as is used with conventional battery chargers.
      This technology can be used to increase and preserve for a longer period of
      time
      the energy stored in the charged battery as compared to constant current battery
      chargers. We have utilized this solid state pulse battery charger technology
      in
      our lead product candidate, the Potential Battery Charger.






4


Energenx
      acquired the exclusive worldwide patent rights to the platform technology
      underlying the hybrid electromagnetic motor/generator from John Bedini pursuant
      to an Exclusive License Agreement and Right to Purchase Patents dated October
      8,
      1999. Energenx also acquired worldwide patent rights to proprietary battery
      charging technology from John Bedini pursuant to a second Exclusive License
      Agreement and Right to Purchase Patents dated May 1, 2001.





Our
      business strategy is to segregate the market pertaining to various energy
      generation and battery charging products and technical applications, then enter
      into sub-licensing agreements with third party companies. We plan to derive
      our
      revenues from licensing fees, royalties from product sales, profits from the
      manufacture and sale of key proprietary components and from research and
      development contracts.





On
      December 1, 2004, Energenx entered into an Exclusive Technology License
      Agreement with GTG Corp. pursuant to which Energenx granted an exclusive
      sub-license to sell and manufacture the Potential Battery Charger to GTG Corp.
      GTG Corp. is largely owned and controlled by Marvin Redenius, a member of our
      board of directors. The exclusive license is limited to North America and covers
      the electric vehicle market, excluding automobiles. Under the terms of the
      sub-license agreement, Energenx will receive a 5% royalty based on the gross
      sales price of the units by GTG Corp. In addition, the agreement contemplates
      that Energenx will supply proprietary electronic components of the Potential
      Battery Charger, known as Potential hybrid modules, to the licensee on a cost
      plus basis. The grant of the exclusive sub-license was part of an integrated
      transaction whereby Mr. Redenius purchased an aggregate of 4,800,000 shares
      of
      common stock of Energenx in return for an aggregate investment of $1 million
      between March and August 2004. Mr. Redenius also became a member of our board
      of
      directors as part of these transactions in March 2004.





On
      December 27, 2004 Energenx and Edward II, Inc. (“Edward II”), a Nevada
      corporation and a reporting company under Section 13 or Section 15(d) of the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”), entered into
      an Acquisition Agreement and Plan of Merger (the “Acquisition Agreement”)
      whereby Energenx acquired all of the outstanding shares of common stock of
      Edward II from its sole shareholder in exchange for payment of cash at a per
      share price equal to the par value of $0.001. Energenx was the surviving
      corporation in the transaction and its officers and directors became those
      of
      the surviving corporation. The sole director and officer of Edward II resigned
      on the effective date of the merger. Edward II was a blank check company
      incorporated in March 2004, and had no business activities prior to the date
      of
      the Acquisition Agreement. Edward II was incorporated for the purpose of
      becoming a fully reporting company and subsequently finding a merger candidate.
      Pursuant to Rule 12g-3 of the Exchange Act Energenx is the successor issuer
      to
      Edward II for reporting purposes under the Exchange Act.





Our
      executive offices are located at 6200 E. Commerce Loop, Post Falls, Idaho 83854,
      telephone number (208) 665-5553.





Energenx’s
      fiscal year end is December 31.





5


**B.**  **Energenx
      Research and Product Development Programs**





**Solid
      State Pulse Battery Chargers**





Our
      pulse
      charging solid state battery charger system uses a two phase method to charge
      batteries with pulsating current rather than with a constant charge current
      as
      is used with conventional battery chargers. This type of device uses a timed
      electrical pulse to create a waveform in a direct current electrical pulse
      to be
      discharged into the battery receiving the charge. Our research indicates that
      this technology can be used to increase and preserve for a longer period of
      time
      the energy stored in the charged battery as compared to constant current battery
      chargers. Through our research and development efforts, we have refined our
      pulse charging technology through several product prototypes.





**Battery
      Charger Products**





We
      have
      completed development of a solid state pulse current battery charging system
      called the Potential Battery Charger, specifically designed to charge electric
      powered vehicles such as golf carts, ATVs, forklifts and back-up battery
      systems. The current prototype of the Potential Battery Charger is designed
      to
      be specifically used to charge golf cart batteries. This charger incorporates
      the use of our patented solid-state technology. The Potential Battery Charger
      draws approximately one third as much power as a conventional charger, charges
      the battery in less time, and does not cause the battery to heat up or off-gas
      during the charging process. In a direct comparison between the Potential
      Charger and a commercially available battery charger, the Potential Charger
      draws approximately 425 watts of electrical charge while the commercial battery
      charger draws over 1200 watts. The Potential Charger also charges the battery
      in
      35% less time. Again, in a direct comparison between the Potential Charger
      and a
      commercially available model, the Potential Charger was able to completely
      recharge a golf cart battery in 7 hours while the commercial charger required
      a
      full 12 hours to complete the task.





Besides
      these obvious economic advantages to the Potential Battery Charger, there are
      three other major benefits. The first is that the battery remains at room
      temperature during the entire charge cycle. Experts in the battery industry
      know
      that over-heating of the battery during the charge cycle is the primary reason
      for premature failure of the battery. Most of the energy saved by the Potential
      Charger is the energy not lost to the production of heat in the battery during
      the charge cycle. The second is that when charging a battery with the Potential
      Battery Charger the battery off-gases much less than during conventional
      charging. This reduces water loss in the battery during the charging process,
      and therefore reduces maintenance requirements. The third is that ultimately
      the
      battery will last at least as long, or longer, than the manufacturer specifies,
      based on the lack of heat damage to the battery **.** The
      electro-deposition process produced by the Potential Battery Charger is
      extremely fine. This maintains the battery plates in “like new” condition at the
      end of each charge cycle. The net result of this is that the batteries become
      capable of delivering many more charge/discharge cycles than batteries charged
      conventionally. This extends the life of the batteries and reduces the cost
      of
      battery replacement. This can be the largest economic benefit because battery
      replacement is the most expensive unnecessary cost associated with running
      electric vehicles.





6


During
      2005 we have continued our development of variations of the Potential Battery
      Charger for specific markets to accommodate 12-volt, 24-volt, 36-volt and
      48-volt applications with a wide range of capacity requirements.





**Electromagnetic
      Motor/Generator Battery Energy System**





The
      hybrid electromagnetic motor generator can produce mechanical energy using
      electrical energy pulses from a primary bank of batteries (or another source
      of
      electricity) and efficiently recharges a second bank of batteries
      simultaneously. The charging and discharge of the banks of batteries are cycled
      so that at any given point in time, one bank of batteries is charging the other
      bank of batteries while it also utilizes excess energy to provide electrical
      current, via a direct current/alternating current inverter, to be consumed
      for
      other purposes. The two phase pulse system for charging the second bank of
      batteries is based on the same proprietary technology as that used in the
      Potential Battery Charger. Prototype models have demonstrated remarkable
      efficiencies, with seventy percent battery recharge as well as thirty percent
      mechanical energy production.





We
      intend
      to develop and test energy generation systems that can be utilized to
      efficiently charge batteries for many home and industrial applications. It
      is
      contemplated that our electromagnetic motor generator battery systems could
      be
      used to efficiently store energy from various sources, for example, from the
      electrical grid, from alternating current generators, from solar cells, wind
      or
      hydropower turbines, and be available for long term back up power.





**C.**  **Licensed
      Proprietary Technology**





**Bedini
      Exclusive Technology License Agreements**





On
      October 8, 1999, pursuant to an Exclusive Technology License Agreement and
      Right
      to Purchase Patents, we obtained an exclusive license from John Bedini to a
      patent application and any proprietary technology developed by John Bedini
      involving a back electromagnetic force permanent electromagnetic motor
      generator. A patent application covered by the license agreement relating to
      this technology was subsequently filed on January 13, 2000 and issued as a
      patent on May 21, 2002 concerning a “Device and method of a back EMF permanent
      electromagnetic motor generator”. John Bedini also agreed, in the event that he
      was granted domestic or foreign patents relating to the back electromagnetic
      force permanent electromagnetic motor generator in the future, that John Bedini
      would, within 60 days, assign all right, title and interest in such patents
      to
      Energenx. After the patent application covered by the license agreement was
      issued, John Bedini assigned the patent to Energenx, with Energenx retaining
      its
      obligations under the license agreement.





Under
      the
      1999 License Agreement Energenx agreed to pay an up front license fee of
      $50,000. The license fee was paid over a several year period ending in
      2004 **.** In
      addition Energenx must pay a royalty of five percent on of the net selling
      price
      per unit of any licensed product sold by Energenx. Energenx was granted the
      right to enter into exclusive sublicenses concerning the licensed technology
      upon written authorization from John Bedini. **** Energenx
      must pay to John Bedini a three percent royalty on all product royalty income
      per unit received by Energenx from a sub-licensee. In addition, Energenx
      undertakes to pay to John Bedini fifty percent of any license fee paid as part
      of a sub-license agreement.





7


On
      May 1,
      2001, we entered into an Exclusive Technology License Agreement with John
      Bedini, our Vice President for Research and Development, a director, and a
      co-founder of our company. Pursuant to the License Agreement John Bedini granted
      Energenx an exclusive worldwide license to proprietary technology involving
      a
      monopole energy delivery system utilized in charging batteries. The license
      covers any patents, any filed patent applications or patent applications to
      be
      filed in the future, and improvements, proprietary information including trade
      secrets, technical and scientific information and know how for the purpose
      of
      using the proprietary battery charging technology. At the time of the Licensing
      Agreement one patent application concerning the proprietary battery charging
      technology had been filed and was subsequently issued as a patent. In addition,
      another patent concerning the proprietary battery charging technology and
      covered by the Licensing Agreement was filed on December 21, 2001 and was issued
      as a patent on January 13, 2004. John Bedini also agreed, in the event that
      he
      was granted domestic or foreign patents relating to proprietary technology
      involving a monopole energy delivery system utilized in charging batteries
      in
      the future, that John Bedini would, within 60 days, assign all right, title
      and
      interest in such patents to Energenx. After the patent applications covered
      by
      the license agreement were issued, John Bedini assigned each of the patents
      to
      Energenx, with Energenx retaining its obligations under the license
      agreement.





Under
      the
      2001 License Agreement Energenx agreed to pay an up front license fee of
      $58,000. John Bedini was issued 856,721 shares of common stock of Energenx
      in
      lieu of payment of the license fee. In addition Energenx must pay a royalty
      of
      five percent on of the net selling price per unit of any licensed product sold
      by Energenx. Energenx was granted the right to enter into exclusive sublicenses
      concerning the licensed technology upon written authorization from John
      Bedini. **** Energenx
      must pay to John Bedini a three percent royalty on all product royalty income
      per unit received by Energenx from a sub-licensee. In addition, Energenx
      undertakes to pay to John Bedini fifty percent of any license fee paid as part
      of a sub-license agreement.





Under
      both the 1999 and 2001 License Agreements, we are obligated to pay all patent
      filing, prosecution and maintenance costs. John Bedini, the licensor, has the
      first right to bring suit against any third party infringers and is responsible
      for all of our costs and expenses incurred in conjunction with such suit. If
      John Bedini chooses not to bring such a suit, we have the right to do so, and
      will pay the costs and expenses of such a suit against a third party infringer.
      Either party shall be entitled to recovery of damages in a suit against a third
      party infringer brought by that party.





Under
      the
      1999 License Agreement, the license terminates upon expiration of the last
      to
      expire of the licensed patents or patents to be filed in the future concerning
      the proprietary Energenx technology. Energenx can terminate the License
      Agreements upon sixty day notice.





Under
      the
      2001 License Agreement, the license terminates upon expiration of the last
      to
      expire of the licensed patents or patents to be filed in the future concerning
      the proprietary Energenx technology, unless John Bedini is no longer a
      shareholder of Energenx. While he continues to be a shareholder of Energenx,
      royalties will continue to be payable under the License Agreements. Energenx
      can
      terminate the License Agreements upon sixty day notice, but only with the
      permission and agreement of John Bedini.





8


Under
      both the 1999 and 2001 License Agreements, either party can terminate the
      Exclusive Technology License Agreement if the other party defaults in the
      performance of any obligation under the agreement, is adjudged bankrupt, becomes
      insolvent, makes an assignment for the benefit of creditors or is placed in
      the
      hands of a receiver or trustee in bankruptcy, and such default or circumstance
      is not cured within 30 days after receiving notice by the other party specifying
      such default or circumstance. Termination of the agreement would not relieve
      either party of any obligation to the other party incurred prior to such
      termination.





**D.**  **Out-Licensed
      Technology**





On
      December 1, 2004, we entered into an Exclusive Technology License Agreement
      with
      GTG Corp., an Iowa based corporation largely owned and controlled by Marvin
      Redenius, a member of our board of directors. Pursuant to that agreement, we
      granted GTG Corp. an exclusive license in the area of North America (the United
      States, Canada and Mexico) to proprietary Energenx technology relating to a
      battery charging system, known as the Potential Battery Charger, for charging
      battery operated vehicles, excluding automobiles. The license granted to GTG
      Corp. includes a license under existing patents rights owned by Energenx and
      to
      any patent applications to be filed to the extent that it relates to the
      proprietary Energenx technology involving a battery charging system utilized
      for
      charging battery operated vehicles other than automobiles. The license shall
      remain exclusive for a period of ten years, with an option to extend the
      exclusivity for an additional ten years. GTG Corp. was not granted the right
      to
      sublicense under the agreement.





GTG
      Corp.
      agreed to pay royalties equal to five percent of the gross sales price of all
      products sold which utilize the licensed proprietary technology. A de minimus
      up
      front license fee of $1 was paid by GTG Corp. for the license.





As
      condition to entering into the Exclusive Technology License Agreement, GTG
      Corp.
      agreed to purchase all of our proprietary hybrid module components to be
      installed in the Potential Battery Chargers, named “Radiant modules” in the
      agreement, but now referred to as Potential modules between the parties, on
      a
      cost plus basis at a base price of $50.00 per module.





Under
      the
      Exclusive Technology License Agreement, we are obligated to pay all patent
      filing, prosecution and maintenance costs. We have the first right to bring
      suit
      against any third party infringers and are responsible for all of our costs
      and
      expenses incurred in conjunction with such suit. If we choose not to bring
      such
      a suit, GTG Corp. has the right to do so, and will pay the costs and expenses
      of
      such a suit against a third party infringer. Either party shall be entitled
      to
      recovery of damages in a suit against a third party infringer brought by that
      party.





The
      license terminates upon expiration of the last to expire of the licensed patents
      or patents to be filed in the future concerning the proprietary Energenx
      technology. Either party can terminate the Exclusive Technology License
      Agreement if the other party defaults in the performance of any obligation
      under
      the agreement, is adjudged bankrupt, becomes insolvent, makes an assignment
      for
      the benefit of creditors or is placed in the hands of a receiver or trustee
      in
      bankruptcy, and such default or circumstance is not cured within 30 days after
      receiving notice by the other party specifying such default or circumstance.
      Termination of the agreement would not relieve either party of any obligation
      to
      the other party incurred prior to such termination.





9


**E.**  **Competition**





We
      compete with many small and large energy generation and battery charger
      companies that are developing and marketing battery charger and energy
      generation systems similar to those being developed by us, especially in the
      area of battery chargers. There are many companies, both public and private,
      including well-known battery manufacturing companies, engaged in developing
      new
      types of battery chargers. Our major competitors are currently large companies
      such as Exide International, Coleman, LVS Sales, Diversified Power
      International, LLC, EZ-GO, Inc., Lester and Associated. These are large and
      diversified companies with far ranging capabilities to market their products
      and
      to develop follow on products. Many of these large battery manufacturing
      companies that also make battery chargers and smaller battery charger companies
      have well funded research departments concentrating on improving the efficiency
      and effectiveness of their battery chargers. We expect substantial competition
      from these companies as they develop different and/or novel approaches to
      charging batteries and battery storage of energy. Some of these approaches
      may
      directly compete with the battery chargers or hybrid motor/generators that
      we
      are currently or are considering developing.





Certain
      smaller battery charger companies may also be competitors, such as Posicharge
      (a
      subsidiary of AreoVironment), Japlar Schauer, VDC Electronics, Inc., Deltran,
      Iota Engineering, Stontronics and Xantrex. Many of these companies have
      substantially greater capital, research and development and human resources
      and
      experience than us and represent significant long-term competition for us.
      In
      addition, many of these competitors have significantly greater experience than
      us in undertaking testing of new products and obtaining regulatory approvals.
      It
      will be difficult to distinguish our battery charger products from the currently
      battery chargers and gain market share.





**F.**  **Strategic
      Alliance - GTG Corp.**





Pursuant
      to the Exclusive Technology License Agreement entered into in December 2004,
      the
      licensee GTG Corp. intends to test the sublicensed prototype battery charger
      known as the Potential Battery Charger. If positive results from such testing
      are obtained, GTG intends to manufacture, market and sell Potential Battery
      Charger products. As part of the Exclusive Technology License Agreement GTG
      agreed to purchase all Potential modules on a cost plus basis at a base price
      of
      $50.00 per module. Each Potential Battery Charger will require installation
      of
      this Potential module into its electronic circuitry prior to becoming
      operational. We intend to develop other versions of the Potential Battery
      Charger with varying voltage levels for use in forklifts, ATVs and other battery
      powered vehicles. GTG Corp. will have the right to manufacture and sell these
      newer versions of the Potential Battery Charger under the same terms and
      conditions as the original Potential Battery Charger.





10


**G.**  **Marketing
      and Sales**





We
      do not
      intend to manufacture the products we may develop. We intend to contract out
      the
      bulk of the manufacturing of the Potential hybrid modules pursuant to the
      license agreement with GTG Corp., or, in the future, other proprietary modules
      to be designed for each product, with final testing, potting and packaging
      of
      the hybrid modules to be done in house. We intend to license to, or enter into
      strategic alliances with companies like GTG Corp., and larger companies in
      the
      battery charger business which are equipped to manufacture and/or market our
      products, if any, through their well developed distribution networks. A similar
      approach is planned for the energy supply systems. We intend to license some
      or
      all of our worldwide patent rights to more than one company to achieve the
      fullest development, marketing and distribution of our products, if any. We
      may,
      however, do the initial marketing for the different products, before deciding
      on
      the cooperation partners, and may undertake such activities as sales through
      a
      franchising network for specific products, in which case we would subcontract
      the manufacturing of the product(s), and outsource the distribution. The best
      suited business form will be decided an a case-to-case basis.





**H.**  **Patents,
      Trademarks, and Copyrights**





We
      are
      substantially dependent on our ability to obtain and maintain patents and
      proprietary rights for our product candidates, particularly those relating
      to
      the technology underlying our Potential Battery Charger, our lead product,
      and
      to avoid infringing the proprietary rights of others. We have interests in
      three
      patents issued by the United States Patent and Trademark Office. We obtained
      exclusive worldwide licenses to three patent applications, all of which
      subsequently became issued patents. We have sublicensed to GTG Corp. our rights
      to two of the three patents listed below to the extent that they relate to
      a
      battery charging system for charging electric vehicles, excluding automobiles.
      Additional patent applications may be forthcoming from our ongoing research
      and
      development.





On
      October 8, 1999, we obtained an exclusive worldwide license from John Bedini
      to
      any proprietary technology being developed by John Bedini involving a back
      electromagnetic force permanent electromagnetic motor generator. A patent
      application covered by the license agreement relating to this technology was
      subsequently filed on January 13, 2000 and issued as a patent on May 21, 2002
      concerning a “Device and method of a back EMF permanent electromagnetic motor
      generator”.





On
      May 1,
      2001, we obtained an exclusive worldwide license from John Bedini to any
      proprietary technology being developed by John Bedini involving a monopole
      energy delivery system involved in charging batteries, including a patent
      application filed on March 13, 2001 entitled “Device and method for utilizing a
      monopole motor to create back EMF to charge batteries,” that was later issued as
      a patent on April 8, 2003. An additional patent application covered by the
      license agreement relating to this technology was subsequently filed on December
      21, 2001 and issued as a patent on January 13, 2004 concerning a “Device and
      method for pulse charging a battery and for driving other devices with a pulse.”
After the patent applications covered by each of the license agreements were
      issued, John Bedini assigned each of the patents to Energenx, with Energenx
      retaining its obligations under the license agreements.





11


**Issued
      Patents**





U.S.
      Patent 6,392,370 issued May 21, 2002 for a “Device and method of a back EMF
      permanent electromagnetic motor generator”. Expires January 12,
      2020.





U.S.
      Patent 6,545,444 issued April 8, 2003 for a “Device and method for utilizing a
      monopole motor to create back EMF to charge batteries”. Expires March 13,
      2021.





U.S.
      Patent 6,677,730 issued January 13, 2004 for a “Device and method for pulse
      charging a battery and for driving other devices with a pulse”. Expires December
      21, 2021.





These
      patents can expire earlier if they are allowed to abandon or are not adequately
      maintained. We do not have any patents pending.





We
      have
      not filed for any copyright or trademark protection to date.





**J.**  **Employees**





We
      currently have three full time employees, one of whom is involved in both
      management and research and development, and two of whom is in
      administration/management. We have one part-time employee.





**Item
      2.**   **Description
      of Property.**





Our
      operations are conducted from our offices in Post Falls, Idaho. On March 31,
      2004 we leased approximately 5,000 square feet of office and research and
      development space in Post Falls on a two year renewable basis at a rental rate
      of $2,200 per month. We have prepaid for the full two year period of the lease,
      in the amount of $52,800.





**Item
      3.**   **Legal
      Proceedings.**





We
      are
      not involved in any legal proceedings, and there are no material pending legal
      proceedings of which we are aware.





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





Energenx
      did not submit any matters to a vote of its stockholders in the fourth quarter
      of 2005.





**PART
      II**





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





Our
      common stock is not traded on any securities exchange and there is currently
      no
      market for our common stock.





12


The
      transfer agent of Energenx is Nevada Agency and Trust Company, 50 West Liberty
      Street, Suite 880, Reno, Nevada 89501.





As
      of
      March 15, 2006 there were approximately 169 holders of record of Energenx’s
      common stock, of which 27,497,270 were issued and outstanding.





We
      have
      never paid cash dividends on our common stock. We presently intend to retain
      future earnings, if any, to finance the expansion of our business and we do
      not
      anticipate that any cash dividends will be paid in the foreseeable future.
      Our
      future dividend policy will depend on our earnings, capital requirements,
      expansion plans, financial condition and other relevant factors.





**F.**  **Equity
      Compensation Plan Information**





The
      following table sets forth information about the common stock available for
      issuance under compensatory plans and arrangements as of December 31,
      2005.





(a)
            (b)
            (c)Plan
                Category
            Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights.
            Weighted-average
                exercise price of outstanding options, warrants, and
                rights
            Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column
                (a))Equity
                compensation plan approved by security holders (1)
            0
            $0
            300,000Equity
                compensation plans not approved by security holders (2)
            0
            $0Total
            0
            $0
            300,000





(1)
            On
                October 7, 1999 the shareholders of Energenx adopted the 1999 Stock
                Option
                Plan with 300,000 shares of common stock reserved for issuance under
                the
                Plan under which the board of directors may grant incentive or
                non-statutory stock options to officers, directors, employees, consultants
                and advisors of Energenx.





(2)
            On
                March 18, 2004, we granted an option outside of our 1999 Stock Option
                Plan
                to Marvin Redenius, a member of our board of directors, to purchase
                an
                additional 2,400,000 shares of common stock with an exercise price
                of
                $0.20833 per share if the options were purchased within 180 days
                of the
                date of the option grant and a higher exercise if exercised in the
                following 180 days. The options were exercised by Marvin Redenius
                in two
                equal portions within the 180 day period and he was issued 2,400,000
                shares of common stock.





**Recent
      Sales of Unregistered Securities; Use of Proceeds From Registered
      Securities**





On
      March
      12, 2004, we issued an aggregate of 7,727,000 shares of common stock in several
      transactions, as follows. An aggregate of 5,200,000 shares of common stock
      were
      issued to certain officers, directors and consultants of Energenx. John Bedini,
      Vice President for Research and Development was issued 3,000,000 shares; Gary
      Bedini, President and CEO was issued 1,000,000 shares; Rick Street, Chief
      Financial Officer, Treasurer and Secretary, was issued 200,000 shares; Thomas
      Bearden, director, as issued 200,000 shares; Hans Werner Huss, director, was
      issued 200,000 shares; Raymond Kuh, consultant, was issued 200,000 shares;
      Klaus
      Lewin, consultant, was issued 200,000 shares; and Peter Lindeman, consultant,
      was issued 200,000 shares. The shares were issued to these individuals at $0.001
      per share in lieu of compensation due to those individuals for services rendered
      in 2002 and 2003 to Energenx as officers, directors, and consultants. John
      Bedini and Gary Bedini, officers of Energenx, were each issued one million
      shares at $0.001 per share in lieu of compensation for fiscal year 2003. In
      addition, John Bedini was issued an additional two million shares of common
      stock at $0.001 per share to prevent default under the terms of the Exclusive
      Technology License Agreement dated October 8, 1999. The issuance of the
      securities was exempt from the registration requirements of the Securities
      Act
      pursuant to the exemption set forth in Section 4(2) and Regulation D, Rule
      505
      of the Securities Act.





13


Also
      on
      March 12, 2004, an aggregate of 2,527,000 shares of common stock was issued
      to
      three entities who converted loans and interest in an aggregate amount of
      $126,350 **** to
      Energenx into shares of common stock, with the shares valued at $0.05 per share.
      Suncraft Ltd. converted aggregate loans of $26,500 into 530,000 shares of common
      stock. The loans were originally made to Energenx between April and July of
      2002. The interest due on the loan, in the amount of $326.25 was assigned to
      Key
      Financial Services and was converted into shares. Marycliff Investment Corp.
      (“Marycliff”) converted aggregate loans in a principal amount of $28,000 into
      560,000 shares of common stock. Marycliff loaned Energenx $10,000 on September
      13, 2002 at an interest rate of 6% per annum. Marycliff also converted the
      principal amounts of loans in an aggregate amount of $18,000 from other parties
      that had loaned Energenx that aggregate amount in 2002 into shares of common
      stock as part of the 560,000 shares issued to Marycliff on March 12, 2004.
      The
      interest on the principal loan amounts aggregating to $28,000, converted into
      shares by Marycliff, in the aggregate amount of $2,394.00, was assigned to
      Key
      Financial Services, including the accrued interest of $902 on the Marycliff
      principal loan amount of $10,000. The accrued interest on the loans assigned
      by
      Marycliff to Key Financial Services included interest of $1,492 previously
      assigned by other parties to Marycliff. Key Financial Services, Inc. converted
      aggregate loans and interest of $71,850 into 1,437,000 shares of common stock.
      The loans were originally made with an interest rate of 6% per annum. The loans
      converted into shares included principal amounts of $63,550 and $8,300 of
      accrued interest, all of which was assigned to Key Financial by other
      parties. **** The
      issuance of the securities was exempt from the registration requirements of
      the
      Securities Act pursuant to the exemption set forth in Section 4(2) and
      Regulation D, Rule 505 of the Securities Act.





On
      March
      18, 2004, we issued 2,400,000 shares of common stock at $0.20833 per share
      to
      Marvin Redenius, who subsequently became a member of our board of directors,
      for
      gross proceeds of $500,000. On the same date we granted an option to Marvin
      Redenius to purchase an additional 2,400,000 shares of common stock with an
      exercise price of $0.20833 per share if the options were purchased within 180
      days of the date of the option grant and a higher exercise if exercised in
      the
      following 180 days. The options were exercised by Marvin Redenius in two equal
      portions within the 180 day period and he was issued 1,200,000 shares of common
      stock on July 8, 2004 and the same number of shares on August 5, 2004. Gross
      proceeds of $500,000 were paid to Energenx for the exercise of the options.
      The
      options were granted outside of our 1999 Stock Option Plan. Marvin Redenius
      is
      an accredited investor. The issuance of the securities was exempt from the
      registration requirements of the Securities Act pursuant to the exemption set
      forth in Section 4(2) and Regulation D, Rule 505 of the Securities Act. We
      received gross proceeds of $1 million from this private placement.





14


On
      September 30, 2005, Energenx, Inc. (“Energenx”) entered into a Subscription
      Agreement with Marvin Redenius, a member of the Board of Directors of Energenx.
      Pursuant to the Subscription Agreement Marvin Redenius has agreed to purchase
      3,000,000 shares of common stock of Energenx for a purchase price of $1,500,000.
      This private placement is exempt from registration pursuant to Section 4(2)
      of
      Securities Act of 1933, as amended, and pursuant to Rule 505 of Regulation
      D. As
      of December 31, 2005, Energenx confirmed receipt of $200,000 of the $1,500,000
      total purchase price pursuant to the Subscription Agreement signed September
      30,
      2005. Energenx has subsequently received an additional $200,000 of the
      $1,500,000 total purchase price.





**Item
      6.**   **Management’s
      Discussion and Analysis or Plan of Operation.**





THE
      FOLLOWING PLAN OF OPERATIONS SECTION SHOULD BE READ IN CONJUNCTION WITH OUR
      FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ON PAGES F-1 THROUGH
      F- **20** FOLLOWING THE SIGNATURE PAGES OF THIS ANNUAL REPORT. ALL STATEMENTS IN THIS
      ANNUAL REPORT RELATED TO ENERGENX’S CHANGING FINANCIAL OPERATIONS AND EXPECTED
      FUTURE OPERATIONAL PLANS CONSTITUTE FORWARD-LOOKING STATEMENTS. THE ACTUAL
      RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED OR EXPRESSED IN SUCH
      STATEMENTS.





**A.**  **General.**





Since
      commencement of operations in 1999, our efforts have been principally devoted
      to
      research and development activities, including the development of an efficient
      energy generation system and battery chargers, recruiting management personnel
      and advisors, and raising capital.





Our
      current business strategy is to concentrate our financial resources primarily
      on
      the further development of our battery charger technology. In addition to the
      battery charger program, we plan to continue to undertake research and
      development on our electromagnetic motor/generator battery system.





**B.**  **Product
      Research and Development Plans**





Our
      current plan of operation for the next 12 months primarily involves meeting
      any
      demand for Potential modules from GTG Corp., and research and development
      activities on energy generation and battery charger prototypes.





Concerning
      the battery chargers, product research will continue on improving the efficiency
      of the Potential Battery Charger. We will continue our development of variations
      of the Potential Battery Charger for specific markets to accommodate 12-volt,
      24-volt, 36-volt and 48-volt applications with a wide range of capacity
      requirements. In 2006 we expect to be able to deliver a 36 volt and 48 volt
      variations of our Potential Battery Chargers to GTG Corp. for UL assessment
      and
      testing.





15


We
      may
      generate revenues pursuant to our Exclusive Technology License Agreement with
      GTG Corp. if they order Potential hybrid modules. We cannot assure you that
      GTG
      Corp. will order any Potential modules from us in 2006 or ever, that licensed
      battery charger products will ever reach the market giving rise to royalty
      payments or that additional revenues from patent licensing will be
      generated.





Concerning
      the further development of our electromagnetic motor/generator battery system,
      we intend to improve the current system and design larger scale systems that
      may
      allow us to generate larger amounts of energy that can be utilized to charge
      multiple banks of batteries.





While
      we
      have no plans to relocate our current research facility within the next twelve
      months, equipment purchases will be necessary if we receive orders for the
      Potential hybrid module from GTG Corp. Such equipment would include test
      equipment, oscilloscopes, analyzers, soldiering stations, and packaging
      equipment. Such equipment purchases are likely to be in the range of $100,000
      for the next twelve months. We may also need to hire up to three more employees
      if we receive orders from GTG Corp. We intend to contract out the bulk of the
      manufacturing of the Potential hybrid modules, with final testing, potting
      and
      packaging of the hybrid modules to be done in house.





Our
      actual research and development and related activities may vary significantly
      from current plans depending on numerous factors, including changes in the
      costs
      of such activities from current estimates, the results of our research and
      development programs, technological advances, determinations as to commercial
      viability and the status of competitive products. The focus and direction of
      our
      operations will also be dependent on the establishment of our collaborative
      arrangement with other companies, the availability of financing and other
      factors. We expect our development costs to increase as **** our
      battery charger systems development programs enters the later stages of
      development.





**C.**  **Liquidity
      and Capital Resources.**





As
      of
      December 31, 2005, we had $169,451 in cash and cash equivalents. In January
      2006
      we received $200,000 from a private placement (see below). We do not have any
      available lines of credit. Since inception we have financed our operations
      from
      private placements of equity securities and loans from
      shareholders.





Net
      cash
      used in operating activities during the fiscal year ended December 31, 2005
      was
      $431,417 resulting in a net loss of $504,212.





Net
      cash
      from financing activities for the fiscal year ended December 31, 2005 was
      $200,000. This does not include the $1,300,000 subscription receivable from
      Marvin Redenius pursuant to a Subscription Agreement signed on September 30,
      2005, in which Mr. Redenius subscribed for 3,000,000 shares of common stock
      of
      Energenx for $1,500,000. Of the $1,300,000 subscription receivable as of
      December 31, 2005, we have received $200,000 as of March 25, 2006. We can give
      no assurance that we will receive the remaining $1,100,000 subscription
      receivable from Mr. Redenius.





16


Our
      current real estate lease is on a two year renewal basis. We plan to finance
      our
      needs principally from the following:





·
            our
                existing capital resources and interest earned on that
                capital;





·
            revenues
                from purchase of Potential modules by GTG Corp., if
                any;





·
            royalty
                income, if any, from product sales by GTG Corp.;
                and





·
            through
                future private placement financing.





As
      mentioned above, we may generate additional revenues from GTG Corp. if they
      order Potential hybrid modules under our license agreement. We cannot at this
      time assure you that those orders will occur or revenues will be generated
      in
      fiscal year 2006, if at all.





We
      believe that we have sufficient capital resources to finance our plan of
      operation for at least the next six months. However, this is a forward-looking
      statement, and there may be changes that could consume available resources
      before such time. Our long term capital requirements and the adequacy of our
      available funds will depend on many factors, including the eventual reporting
      company costs, public relations fees, patent costs for filing, prosecuting,
      maintaining and defending our patent rights, among others.





We
      are
      pursuing potential equity financing, sub-licensing and other collaborative
      arrangements that may generate additional capital for us. We will need to raise
      additional capital or generate additional revenue to complete our development
      of
      product variations on our Potential Battery Charger and our hybrid
      electromagnetic motor/generator product candidate. We cannot assure you that
      we
      will generate sufficient additional capital or revenues, if any, to fund our
      operations beyond the six month period ending September 30, 2006, that any
      future equity financings will be successful, or that other potential financings
      through bank borrowings, debt or equity offerings, or otherwise, will be
      available on acceptable terms or at all.





**D.**  **Critical
      Accounting Policies and Estimates.**





This
      discussion and analysis of our financial condition and results of operations
      are
      based on our financial statements that have been prepared under accounting
      principles generally accepted in the United States of America. The preparation
      of financial statements in conformity with accounting principles generally
      accepted in the United States of America requires our management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and the disclosure of contingent assets and liabilities at the
      date
      of the financial statements and the reported amounts of revenue and expenses
      during the reporting period. Actual results could materially differ from those
      estimates. We have disclosed all significant accounting policies in note 2
      to
      the financial statements included in this Form 10-KSB. Our critical accounting
      policies are:





17


**Revenue
      recognition** *:* Royalties will be recognized as revenue when the amounts earned become fixed
      and
      determinable.





**Research,
      development costs:** Research
      and development costs are expensed as incurred.





**E.**  **Risks
      and Uncertainties**





**RISKS
      AND UNCERTAINTIES**





*You
      should carefully consider the risks described below in evaluating Energenx
      and
      our business. If any of the following risks actually occur, our business could
      be harmed. This could cause the price of our stock to decline. This report
      on
      Form 10-KSB contains, in addition to historical information, forward-looking
      statements, including statements about future plans, objectives, and intentions,
      that involve risks and uncertainties. Our actual results may differ materially
      from the results discussed in the forward-looking statements. Factors that
      might
      cause or contribute to these differences include those discussed below and
      elsewhere in this report.*





**Risks
      Related to Our Business**





**We
      will need additional funds, and if we are unable to raise them, we will have
      to
      curtail or cease operations.**





Our
      product development programs and the potential commercialization of our product
      candidates require substantial working capital, including expenses for in house
      and third party testing, manufacture of hybrid modules for use by GTG Corp.
      in
      its production of Potential Chargers pursuant to our License Agreement. Our
      future working capital needs will depend on many factors,
      including:





·
            the
                progress and magnitude of our product development
                programs,





·
            the
                scope and results of product development
                testing,





·
            the
                costs under current and future license agreements for our product
                candidates, including the costs of obtaining and maintaining patent
                protection for our product
                candidates,





·
            the
                costs of acquiring any technologies or additional product
                candidates,





·
            the
                rate of technological advances,





·
            the
                commercial potential of our product
                candidates,





·
            the
                magnitude of our administrative and legal expenses, including office
                and
                research development facilities rent,
                and





·
            the
                costs of establishing third party arrangements for
                manufacturing.







18


We
      have
      incurred negative cash flow from operations since we incorporated and do not
      expect to generate positive cash flow from our operations for at least the
      next
      several years. Therefore, we expect that we will need additional future
      financings in order to carry out our plan of operations beyond the next twelve
      months. While Marvin Redenius signed a Subscription Agreement with us in
      September 2005 under which he undertook to purchase 3,000,000 shares of our
      common stock for a subscription price of $1,500,000, to date he has purchased
      only 800,000 shares for an aggregate of $400,000. We can give no assurance
      that
      Mr. Redenius will purchase the remainder of our shares that he subscribed for
      and therefore we may never receive the $1,100,000 subscription
      receivable.





We
      may
      not be able to obtain adequate financing to fund our operations and any
      additional financing we obtain may be on terms that are not favorable to us.
      In
      addition, any future financings could substantially dilute our stockholders.
      If
      adequate funds are not available we will be required to delay, reduce or
      eliminate one or more of our product development programs, to enter into new
      collaborative arrangements on terms that are not favorable to us (i.e., the
      collaborative arrangements could result in the transfer to third parties of
      rights that we consider valuable), or to cease operations
      altogether.





**We
      have a limited operating history. We have a large accumulated deficit and may
      never become profitable.**





We
      have a
      limited operating history upon which investors may base an evaluation of our
      likely future performance. Since we began operations in 1999 we have been
      engaged in developing our research programs, recruiting outside directors and
      key consultants. We have not generated any revenue to date other than interest
      income. Our only income other than equity financings has been a modest amount
      of
      interest income. As of December 31, 2005, we had an accumulated deficit of
      $1,736,854 **** and
      our
      operating losses are continuing.





**We
      have no products available for sale and we may never be successful in developing
      products suitable for commercialization.**





All
      of
      our product candidates are at an early stage of development and all of our
      product candidates will require expensive and lengthy testing and regulatory
      clearances. None of our product candidates have been approved by regulatory
      authorities. We have no products available for sale and we do not expect to
      have
      any products commercially available for several years, if at all. There can
      be
      no assurance that our research will lead to the discovery of any commercially
      viable battery chargers or power generation devices. There are many reasons
      that
      we may fail in our efforts to develop our product candidates, including
      that:





·
            our
                product candidates will be
                ineffective,





·
            our
                product candidates will not be validated by independent
                testing,





·
            our
                product candidates will be too expensive to manufacture or market
                or will
                not achieve broad market
                acceptance,





·
            third
                parties will hold proprietary rights that may preclude us from developing
                or marketing our product candidates,
                or





·
            third
                parties will market equivalent or superior
                products.






19


**We
      cannot assure you that we will have future revenue or operating profits and
      you
      could lose your entire investment.**





We
      expect
      to incur substantial operating losses for at least the next several years.
      We
      currently have sufficient capital resources to fund our operations, with
      necessary adjustments to our general and administrative budget, at least through
      September 2006. We currently have no sources revenue and we cannot assure you
      that we will be able to develop other revenue sources or that our operations
      will become profitable, even if we are able to commercialize any products.
      If we
      do not generate significant increases in revenue, at some point in the future
      we
      may not be in a position to continue operations and investors could lose their
      entire investment.





**We
      do not currently have the capability to undertake manufacturing, marketing,
      or
      sales of any potential products.**





We
      have
      not invested in manufacturing, marketing or product sales resources. We cannot
      assure you that we will be able to acquire such resources. It is likely that
      we
      will also need to hire additional personnel skilled in engineering, product
      development and manufacturing of components if we develop additional product
      candidates with commercial potential. We have no history of manufacturing or
      marketing. We cannot assure you that we will successfully manufacture or market
      any product we may develop, either independently or under manufacturing or
      marketing arrangements, if any, with other companies. We currently do not have
      any arrangements with other companies, and we cannot assure you that any
      arrangements with other companies can be successfully negotiated or that such
      arrangements will be on commercially reasonable terms. To the extent that we
      arrange with other companies to manufacture or market our products, if any,
      the
      success of such products may depend on the efforts of those other
      companies.





**There
      is considerable technological change and uncertainty in our
      industry.**





We
      are
      engaged in the battery charger and energy generation field, which is
      characterized by extensive research efforts and rapid technological progress.
      New developments in energy generation devices are expected to continue at a
      rapid pace in both industry and academia. There can be no assurance that
      research and discoveries by others will not render some or all of our programs
      or products noncompetitive or obsolete **.** Our
      business strategy is based in large part upon a core technology related to
      pulse
      charging of batteries and of capturing back electromagnetic energy and
      converting this energy into electricity. There is no assurance that the
      application of these new and unproven technologies will result in the
      development of commercially viable products for the generation of energy or
      competitive battery chargers. No assurance can be given that unforeseen problems
      will not develop with these technologies or applications or we will ultimately
      develop those commercially feasible products.





**We
      are dependent on executive officers most of whom do not have employment
      contracts.**





Because
      of the specialized scientific nature of our business, we are highly dependent
      upon our ability to attract and retain qualified scientific and management
      personnel. The loss of John Bedini, our Vice President for Research and
      Development, as well as the licensor of our patent rights would be particularly
      detrimental to us. Also the loss of any of our other executive officers would
      be
      detrimental to us. We do not currently have employment agreements with any
      of
      our executive officers. We do not carry key man insurance on any of our
      personnel.





20


There
      is
      intense competition for qualified personnel in the areas of our activities,
      and
      there can be no assurance that we will be able to continue to attract and retain
      qualified personnel necessary for the development of our business. Loss of
      the
      services of or failure to recruit additional key scientific, technical and
      management personnel would be detrimental to our research and development
      programs and business.





**Our
      business could be harmed if we fail to protect our intellectual
      property.**





We
      have
      licensed rights to certain patented technology from John Bedini, an officer
      and
      director of Energenx, to whom we are obligated to pay royalties if we or our
      sublicensees develop products based upon the licensed technology. Because of
      the
      substantial length of time and expense associated with bringing new products
      through development and regulatory approval to the marketplace, the battery
      charger and energy generation industry places considerable importance on patent
      and trade secret protection for new technologies, products and processes. We
      have interests in three patents issued in the United States pursuant to our
      license agreements with John Bedini. We have sublicensed, within North America,
      certain proprietary technology including our patent rights to two patents to
      GTG
      Corp. We are obligated to pay the filing, prosecution and maintenance expenses
      with regard to all of these patents. We and our licensor plan to file patent
      applications in other countries, and we may seek additional patents in the
      future. Our patent position, like that of many technology development companies,
      is uncertain and involves complex legal and factual questions for which
      important legal principles are unresolved. We may not develop or obtain rights
      to products or processes that are patentable. Even if we do obtain additional
      patents, they may not adequately protect the technology we own or have
      in-licensed. In addition, others may challenge, seek to invalidate, infringe
      or
      circumvent any patents we own or in-license, and rights we receive under those
      patents may not provide competitive advantages to us. Further, the manufacture,
      use or sale of our products or processes, if any, may infringe the patent rights
      of others.





We
      cannot
      assure you as to the breadth or the degree of protection that any such patents,
      if issued, will afford us or that any patents based on the patent applications
      will be issued at all. In addition, we cannot assure you that others will not
      independently develop substantially equivalent proprietary information or
      otherwise obtain access to our know-how or that others may not be issued patents
      that may require licensing and the payment of significant fees or royalties
      by
      us for the pursuit of our business.





Other
      companies may have filed patent applications or received patents that cover
      technologies similar to ours. Our ability to make, use or sell any of our
      product candidates may be blocked by patents that have been or will be issued
      to
      third parties that we may not be aware of. The United States patent applications
      are confidential while pending in the Patent and Trademark Office, and patent
      applications filed in foreign countries are often first published six months
      or
      more after filing. Therefore, until a patent is issued, we have no way of
      knowing if a third party has a patent that could preclude us from
      commercializing our product candidates. Third party patent applications and
      patents could significantly reduce the coverage of our patents and limit our
      ability to obtain meaningful patent protection. If other companies obtain
      patents with conflicting claims, we may be required to obtain licenses to these
      patents or to develop or obtain alternative technology. We may not be able
      to
      obtain any such license on acceptable terms or at all. Any failure to obtain
      such licenses could delay or prevent us from pursuing the development or
      commercialization of our product candidates, which would adversely affect our
      business.





21


**Potential
      litigation concerning patent rights could involve significant expenses and
      damage our business.**





In
      the
      United States, the first to invent a technology is entitled to patent protection
      on that technology. For patent applications filed prior to January 1, 1996,
      United States patent law provides that a party who invented a technology outside
      the United States is deemed to have invented the technology on the earlier
      of
      the date it introduced the invention in the United States or the date it filed
      its patent application. In foreign countries, the first party to file a patent
      application on a technology, not the first to invent the technology, is entitled
      to patent protection on that technology. Under the patent laws of most
      countries, a product can be found to infringe a third party patent if the third
      party patent expressly covers the product or method of treatment using the
      product, or if the third party patent covers subject matter that is
      substantially equivalent in nature to the product or method, even if the patent
      does not expressly cover the product or method.





While
      we
      have not received notification of potential infringement of patents held by
      third parties, with respect to any of our product candidates, litigation, patent
      opposition and adversarial proceedings could result in substantial costs to
      us.
      Litigation and/or proceedings could be necessary or may be initiated to enforce
      any patents we own or in-license, or to determine the scope, validity and
      enforceability of other parties’ proprietary rights and the priority of an
      invention. The outcome of any of these types of proceedings could significantly
      affect our product candidates and technology. United States patents carry a
      presumption of validity and generally can be invalidated only through clear
      and
      convincing evidence.





Under
      our
      license agreements with John Bedini and with GTG Corp., we have the right to
      pursue any actions against third parties for infringement of the patent rights
      covered by those agreements. Under those arrangements we are not obligated
      to
      share any recovery from infringement suits brought by us. If we do not bring
      an
      infringement action, our licensor or licensee may bring such action and will
      be
      entitled to any recovery.





An
      adverse outcome of these proceedings could subject us to significant liabilities
      to third parties, require disputed rights to be licensed from third parties
      or
      require us to cease using such technology, any of which could adversely affect
      our business. Moreover, the mere uncertainty resulting from the initiation
      and
      continuation of any technology related litigation or adversarial proceeding
      could adversely affect our business pending resolution of the disputed
      matters.





22


If
      we do
      not exercise our right to prosecute and our licensors institute and prosecute
      patent proceedings, our rights will depend in part upon the manner in which
      these licensors conduct the proceedings. In any proceedings they elect to
      initiate and maintain, these licensors may not vigorously pursue or defend
      or
      may decide to settle such proceedings on terms that are unfavorable to
      us.





**Despite
      the use of confidentiality agreements, which themselves may be of limited
      effectiveness, it may be difficult for us to protect our trade
      secrets.**





We
      rely
      on trade secrets to protect technology in cases when we believe patent
      protection is not appropriate or obtainable. However, trade secrets are
      difficult to protect. While we require certain of our corporate collaborators,
      contractors and consultants to enter into confidentiality agreements, we may
      not
      be able to adequately protect our trade secrets or other proprietary
      information.





**We
      might face intellectual property claims that may be costly to resolve and could
      divert management attention.**





We
      may
      from time to time be subject to claims of infringement of other parties’
proprietary rights. We could incur substantial costs in defending ourselves
      in
      any suits brought against us claiming infringement of the patent rights of
      others or in asserting our patent rights in a suit against another company.
      Adverse determinations in any litigation could subject us to significant
      liabilities to third parties, require us to seek costly licenses from third
      parties and prevent us or our sublicensees from manufacturing and selling our
      potential products.





**We
      cannot assure you that our products will be awarded necessary certifications
      after independent testing.**





Our
      battery charger products will need to be tested independently before they are
      marketed and sold in the United States by Underwriters Laboratory and other
      similar organizations in other countries in order to obtain the UL or similar
      foreign certification product label. There can be no assurance that any products
      we or our licensees submit for testing of effectiveness and safety by
      Underwriters Laboratory or similar foreign organization will result in
      certification of that product. Without such certification sale of the products
      would be difficult if not impossible.





**If
      our product candidates do not achieve market acceptance, our business may never
      achieve profitability.**





Our
      success will depend on the market acceptance of any products we may develop.
      The
      degree of market acceptance will depend upon a number of factors, including
      the
      receipt and scope of regulatory approvals, the establishment and demonstration
      in the business community of the safety and effectiveness of our products and
      their potential advantages over existing technologies. Consumers may not accept
      or utilize any product that we may develop.




23


**Our
      controlling stockholders may make decisions that you do not consider to be
      in
      your best interest.**





As
      of
      March 15, 2006, our directors and executive officers beneficially owned
      approximately 57% **** of
      our
      outstanding common stock. As a result, our controlling stockholders are able
      to
      control all matters requiring stockholder approval, including the election
      of
      directors and the approval of significant corporate transactions. This
      concentration of ownership could also delay or prevent a change in control
      of
      Energenx that may be favored by other stockholders.





**We
      are significantly controlled by our management.**





Our
      executive officers comprise three of the six members of the Board of Directors.
      As a result, our management has the ability to exercise influence over our
      significant matters. This high level of influence may have a significant effect
      in delaying, deferring or preventing a change of control of our
      company.





**Risks
      Related to Our Industry**





**Potential
      technological changes in our field of business create considerable
      uncertainty.**





We
      are
      engaged in the battery charger and energy generation field, which is
      characterized by extensive research efforts and rapid technological progress.
      New developments in research concerning battery charging and energy generation
      may occur at a rapid pace in both industry and academia. We cannot assure you
      that research and discoveries by others will not render some or all of our
      programs or product candidates noncompetitive or obsolete. We cannot assure
      you
      that unforeseen problems will not develop with our technologies or applications
      or that commercially feasible battery charger or energy generation products
      will
      ultimately be developed by us.





**The
      markets in which we seek to participate are intensely competitive and many
      of
      our competitors are better capitalized and have more experience than we
      do.**





There
      are
      many companies, both public and private, including well-known battery
      manufacturing companies, engaged in developing new types of battery chargers.
      Our major competitors are currently large companies such as Exide International,
      Coleman, LVS Sales, Diversified Power International, LLC, EZ-GO, Inc., Lester
      and Associated. These are large and diversified companies with far ranging
      capabilities to market their products and to develop follow on products. We
      are
      years away from having an energy generation system product ready for the market
      and we do not currently have the resources to fund the development of such
      a
      product through the product development process. In addition we do not have
      the
      capability of marketing a battery charger product and will have to enter into
      a
      collaborative relationship with a larger company in order to market our battery
      chargers. It will be difficult to distinguish our battery charger products
      from
      the currently battery chargers and gain market share.





24


Certain
      smaller battery charger companies may also be competitors, such as Posicharge
      (a
      subsidiary of AreoVironment), Japlar Schauer, VDC Electronics, Inc., Deltran,
      Iota Engineering, Stontronics and Xantrex. Many of these companies have
      substantially greater capital, research and development and human resources
      and
      experience than us and represent significant long-term competition for us.
      In
      addition, many of these competitors have significantly greater experience than
      us in undertaking testing of new products and obtaining regulatory approvals.
      Furthermore, if we or our current or any future licensee is permitted to
      commence commercial sales of any product, we or our licensee will also be
      competing with companies that have greater resources and experience in
      manufacturing, marketing and sales. We have no experience in these areas. These
      other companies may succeed in developing products that are more effective
      or
      less costly than any that may be developed by us or our future licensee and
      may
      also prove to be more successful than us or our future licensee in production
      and marketing.





If
      we
      successfully develop and obtain approval for our product candidates, we will
      face competition based on the safety and effectiveness of our products,
      marketing and sales capability, patent position and other factors. Our
      competitors may develop or commercialize more effective or more affordable
      products, or obtain more effective patent protection, than we do. Accordingly,
      our competitors may commercialize products more rapidly or effectively than
      we
      do, which could hurt our competitive position.





**If
      product liability lawsuits are successfully brought against us, we may incur
      substantial liabilities and may be required to limit commercialization of our
      products.**





Our
      business and products will, in the future, expose us to potential product
      liability risks that in inherent in the testing, manufacturing and marketing
      of
      battery chargers and electrical generation products. If we cannot successfully
      defend ourselves against liability claims, we may incur substantial liabilities
      or be required to limit commercialization of our products. Our inability to
      obtain sufficient product liability insurance at an acceptable cost to protect
      against potential product liability claims could prevent or inhibit the
      commercialization of products we develop, alone or with corporate collaborators.
      We do not carry product liability insurance. We may not be able to obtain
      insurance at a reasonable cost, if at all.





**Other
      Risks**





**There
      is currently no market for our common stock; if listed the price of our stock
      may experience considerable volatility.**





There
      currently is no trading market for our common stock. It is our intention to
      undertake an initial public offering or engage in another strategy to have
      our
      common stock traded on the OTC Bulletin Board under a symbol to be determined.
      The OTC Bulletin Board is a limited market and subject to substantial
      restrictions and limitations in comparison to the NASDAQ system. There can
      be no
      assurance that a substantial trading market will ever develop for our common
      stock, or be sustained, if developed, or that current or future shareholders
      will be able to resell their securities or otherwise liquidate their investment
      without considerable delay, if at all.





25


Recent
      history relating to the market prices of listed newly public companies indicates
      that, from time to time, there may be significant volatility in the market
      price
      of our securities because of factors unrelated, as well as related, to our
      operating performance. Factors that could have a significant impact on the
      future market price of our common stock include, but are not limited to,
      announcements of technological innovations or new products by Energenx or its
      competitors, government regulatory action, patent or proprietary rights
      developments and market conditions for companies engaged in the development
      of
      alternative energy products. There can be no assurance that our common stock
      will ever qualify for inclusion within the NASDAQ System, or that more than
      a
      limited market will ever develop for our common stock.





**If
      our common stock is traded at a low price in the future, this may affect the
      ability of shareholders to sell their shares.**





Penny
      Stock Regulation Broker-dealer practices in connection with transactions in
      "Penny Stocks" are regulated by certain penny stock rules adopted by the
      Securities and Exchange Commission. Penny stocks generally are equity securities
      with a price of less than $5.00 (other than securities registered on certain
      national securities exchanges or quoted on the NASDAQ system). The penny stock
      rules require a broker-dealer, prior to a transaction in a penny stock not
      otherwise exempt from the rules, to deliver a standardized risk disclosure
      document that provides information about penny stocks and the risk associated
      with the penny stock market. The broker-dealer must also provide the customer
      with current bid and offer quotations for the penny stock, the compensation
      of
      the broker-dealer and its salesperson in the transaction, and monthly account
      statements showing the market value of each penny stock held in the customer's
      account. In addition, the penny stock rules generally require that prior to
      a
      transaction in a penny stock, the broker-dealer must make a written
      determination that the penny stock is a suitable investment for the purchaser
      and receive the purchaser's written agreement to the transaction. These
      disclosure requirements may have the effect of reducing the level of trading
      activity in the secondary market for a stock that becomes subject to the penny
      stock rules. When and if our common stock is listed on the OTC Bulletin Board,
      our stock will likely have a trading price of less than $5.00 per share and
      will
      not be traded on any exchanges, as they are defined. Therefore, our common
      stock
      is likely to become subject to the penny stock rules and investors may find
      it
      more difficult to sell their securities, should they desire to do
      so.





**We
      do not pay cash dividends.**





We
      have
      never paid dividends and do not presently intend to pay any dividends in the
      foreseeable future.





**Item
      7.** **Financial
      Statements.**





The
      Audited Financial Statements for this Form 10-KSB appear on pages F-1 through
      F-19 following the signature page below.





**Item
      8.** **Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure.**





26


On
      January 28, 2005, the board of directors of Energenx, Inc. unanimously passed
      resolutions dismissing the independent accounting firm Beckstead and Watts,
      LLP,
      Certified Public Accountants, 3340 Wynn Road, Suite B, Las Vegas, Nevada 89102
      and appointing the independent accounting firm Williams & Webster, PS.,
      Certified Public Accountants, 601 W. Riverside, Suite 1940, Spokane, Washington
      99201 to audit the financial statements of Energenx for the year ending December
      31, 2004. The board of directors dismissed the accounting firm Beckstead and
      Watts because that firm had performed the audits for Edward II, Inc., the blank
      check reporting company that Energenx merged with on December 28, 2004 and
      was
      not familiar with the business of Energenx, the surviving
      corporation.





In
      its
      audit of Edward II, Beckstead and Watts had expressed substantial doubt about
      the ability of Edward II, Inc. the blank check pre-merger corporation, to
      continue as a going concern because Edward II, Inc. had had limited operations
      at the time of the audit and had not commenced planned principal operations.
      Beckstead and Watts’ report on the audited financial statements of Edward II did
      not contain an adverse opinion or a disclaimer of opinion nor was it modified
      as
      to uncertainty, audit scope, or accounting principles, except for the going
      concern paragraph. There were no disagreements at the most recent fiscal year
      end and any subsequent interim period through the date of dismissal with
      Beckstead and Watts concerning any matter of accounting principles or practices,
      financial statement disclosure, or auditing scope or procedure by either Edward
      II or Energenx. As Energenx was the surviving corporation in the merger
      transaction the board of directors decided that the independent auditors of
      the
      pre-merger corporation Energenx, Williams & Webster, PS., should continue in
      that capacity.





On
      January 28, 2005, the board of directors of Energenx, Inc. unanimously passed
      resolutions appointing the independent accounting firm Williams & Webster,
      PS., Certified Public Accountants, 601 W. Riverside, Suite 1940, Spokane,
      Washington 99201 to audit the financial statements of Energenx for the year
      ending December 31, 2004.





Appointment
      of the new independent accountant was approved by Energenx’s Board of Directors,
      which undertook the following actions before the appointment of the
      accountant:




1
            The
                Board verified that the accountant was in good standing within the
                jurisdiction of its practice in the state of
                Washington.




2
            The
                Board verified that the accountant was a member in good standing
                of the
                Public Company Accounting Oversight Board
                (PCAOB).




3
            The
                Board verified that the accountant was capable of exercising objective
                and
                impartial judgment on all issues encompassed within its potential
                engagement, and that no member of the firm had any interest or
                relationship with any officer, director or principal
                shareholder.





27


**Item
      8A.** **Controls
      and Procedures.**





**Evaluation
      of Disclosure Controls and Procedures** .





Our
      management, including our Executive Officer and our Chief Financial Officer,
      has
      evaluated the effectiveness of our “disclosure controls and procedures” (as such
      term is defined in Rules 13a-15(e) and 15d-15(e) of the United States Securities
      Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the
      period covered by this Annual Report on Form 10-KSB. Based on that evaluation,
      our CEO and CFO have concluded that as of end of our last fiscal year our
      disclosure controls and procedures were not effective. Material weaknesses
      were
      specifically cited in relation to our report on Form 8-K filed on December
      6,
      2005 concerning the signing of a Subscription Agreement with Marvin Redenius
      on
      September 30, 2005 and the initial receipt of a portion of the subscription
      receivables on November 28, 2005. The material weaknesses were specifically
      identified as a delay in the notification of the receipt of wire transfers
      from
      our bank and a delay in the communication of the signing of the subscription
      agreement with Marvin Redenius and the receipt of the wire transfer to our
      outside securities counsel, resulting in late filings. As a result of the
      material weaknesses identified in their evaluation, our CEO and CFO have
      subsequently put into place modified disclosure controls and procedures which
      they believe will provide reasonable assurance that we are enabled to ensure
      that information required to be disclosed by us in reports that we file or
      submit under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified in United States Securities and Exchange
      Commission rules and forms. Specifically we have instructed our bank to notify
      us more promptly upon the receipt of a wire transfer and initiated a policy
      by
      which we monitor our account on a regular basis. In addition we have reviewed
      our disclosure controls and procedures concerning disclosure of material
      agreements to our outside securities counsel in order to avoid such an oversight
      of communication in the future.





Other
      than the changes in the monitoring of our bank account noted above, there has
      been no change in our internal control over financial reporting that occurred
      during our most recent fiscal quarter that has materially affected or is
      reasonably likely to materially affect our internal control over financial
      reporting





Our
      management, including our Chief Executive Officer and Chief Financial Officer,
      does not expect that our disclosure controls and procedures or internal control
      over financial reporting will prevent all errors and all fraud. A control
      system, no matter how well conceived and operated, can provide only reasonable,
      not absolute, assurance that the objectives of the system are met and cannot
      detect all deviations. Because of the inherent limitations in all control
      systems, no evaluation of controls can provide absolute assurance that all
      control issues and instances of fraud or deviations, if any, within the company,
      have been detected. While we believe that our disclosure controls and procedures
      have been effective, in light of the foregoing, we intend to continue to examine
      and refine our disclosure control and procedures to monitor ongoing developments
      in this area.





**Item
          8B.** **Other
          Information**




28






None.


**PART
      III**





**Item
      9.** **Directors
      and Executive Officers of the Registrant**





**A.** **Directors,
          Executive Officers, Promoters and Control
          Persons**





The
      current executive officers, directors and significant employees of Energenx
      are
      as follows:





**Name**
            **Age**
            **Position**Gary
                A. Bedini
            53
            President
                & Chief Executive Officer, DirectorRick
                M. Street
            48
            Chief
                Financial Officer, Secretary, Treasurer, DirectorJohn
                C. Bedini
            56
            Vice
                President of Research and Development, DirectorThomas
                E. Bearden, Ph.D.
            77
            DirectorMarvin
                Redenius
            41
            DirectorHans
                Werner Huss
            63
            Director




Each
      director is elected to hold office for a one year term or until the next annual
      meeting of stockholders and until his successor is elected and qualified. The
      officers of Energenx serve at the pleasure of Energenx’s Board of
      Directors.





The
      following sets forth certain biographical information with respect to the
      directors and executive officers of Energenx.





**Gary
      A. Bedini.** Gary
      Bedini and his brother John Bedini were co-founders of Energenx, previously
      named Bedini Technology, Inc. Gary Bedini has served as a director and President
      & CEO of Energenx since September 1999. Mr. Gary Bedini has over 25 years
      experience in consumer electronics industry. Gary Bedini was a co-founder of
      Bedini Electronics, Inc. with his brother John Bedini. Mr. Bedini possesses
      a
      broad knowledge of procurement, manufacturing, distribution, advertising and
      sales. Mr. Bedini was instrumental in securing numerous state of the art trade
      reviews and the 1996 Golden Note Award, given to the most innovative audio
      products **.** As a
      member of H.E.A.A. (Hi End Audio Association) he has participated in numerous
      efforts to promote and enhance the industries availability into export
      markets.





29


**Rick
      M. Street.**  **** Rick
      Street has served as a director of Energenx since November 2001. Mr. Street
      has
      served as Chief Financial Officer, Treasurer and Secretary of Energenx since
      June 2002. Rick Street, CPA, CIA has 21 years of management experience in
      accounting, auditing, development of management information systems, maintaining
      fully integrated computerized accounting programs designed for small businesses
      and experienced in all aspects of small business management. From 2002 until
      present he has been teaching accounting at North Idaho College, Gonzaga
      University and Spokane Community College. He currently holds a fulltime tenure
      track position at Spokane Community College and is a principal of an accounting
      practice in Spokane Washington. From 1996 to 2001 he was the Director of
      Internal Auditing for the Coeur d’Alene Casino & Resort in Worley, Idaho.
      From 1991 to 1996, Mr. Street was the controller of the Athletic Round Table,
      Inc., a non-profit charitable organization. Mr. Street received a Bachelor
      of
      Arts in Business Administration (accounting) in 1991 from Eastern Washington
      University and a Masters in Accountancy from Gonzaga University in 2003. He
      is a
      Member of the Washington State Society of Certified Public Accountants and
      a
      Member of the Institute of Internal Auditors and Chapter Secretary of the
      Spokane IIA Chapter.





**John
      C. Bedini.** John
      Bedini and his brother Gary Bedini were co-founders of Energenx, previously
      named Bedini Technology, Inc. John Bedini has been a director and Vice President
      of Energenx since September 1999. Mr. John Bedini is a scientist and well-known
      inventor. His work has produced many innovative audio products that have been
      marketed over a 25-year period to the audio electronics industry. Mr. Bedini
      has
      also developed a variety of products and technically innovative products for
      several different industries. His inventions include the BEDINI line of audio
      amplifiers, Bedini Audio Spacial Environment (B.A.S.E.), the Bedini Clarifier
      products, the Binaural Audio and several instruments for the medical industry.
      He has been awarded many patents related to his various inventions. Mr. Bedini
      has received broad industry recognition including designation as Distinguished
      Scientist of the year by the Association of Distinguished American Scientists.
      He is a graduate of Bell and Howell Institute of Technology.





**Thomas
      E. Bearden, Ph.D.** Thomas
      Bearden has served as a director of Energenx since June 2001. Thomas Bearden
      is
      a member of the Scientific Advisory Board of Energenx. Tom Bearden is a research
      scientist, inventor, consultant, and holds Ph.D. (Trinity University) in
      Science, M.S. (Georgia Tech) in Nuclear Engineering, and B.S. (Northeast
      Louisiana State) in mathematics. has participated in founding the first
      legitimate theory of COP>1.0 EM systems published in leading scientific
      journals. Dr. Bearden is Director of the Association of Distinguished American
      Scientists (ADAS), a Fellow Emeritus of the Alpha Foundation's Institute for
      Advanced Study (AIAS), CEO of CTEC, Inc., a private research and development
      company based in Huntsville, Alabama and serves as a member on the board of
      directors of two private companies. He has authored or co-authored more than
      200
      professional papers in the literature and has published several technical books.
      In his work with the AIAS, he has participated in authoring and co-authoring
      more than 100 scientific papers primarily in the area of advanced
      electrodynamics. Approximately one third of the papers have been published
      in
      leading scientific and research journals. Of the published articles one half
      of
      them are related to extracting usable electromagnetic energy.





30


**Marvin
      Redenius.** Marvin
      Redenius has served as a director of Energenx since his appointment to the
      board
      in March 2004. **** Since
      1990, Mr. Redenius has been the owner of Farm Advantage, Inc., an agriculture
      supply company operating in the mid-western U.S. Farm Advantage supplies
      innovative agricultural products and services. The company warehouses and
      distributes products from North Central, Iowa and has annual sales in excess
      of
      40 million dollars. Mr. Redenius also owns and operates Northern National
      Trucking, Inc., which consists of a fleet of 30 tractor trailers. Mr. Redenius
      and his family also own and operate Cristina Corp, a farm corporation. Mr.
      Redenius also owns GTG Corporation, which invests in early stage technology
      based companies.





**Hans
      Werner Huss.** Hans
      Werner Huss has served as a director of Energenx since January 2002. Mr. Huss
      graduated Diplom Ingenieur Electrical Engineering, with emphasis on Electronics,
      from the Technical University in Munich/Germany. He currently serves as
      President and Chairman of a new technology company Integrated Micrometallurgical
      Systems, Inc. based in Spokane, Washington. He is also involved in Consulting
      for several other start-up companies with promising new technologies, advising
      them in business and marketing matters. Previously, he has served in many
      functions in different companies in the U.S. and in Europe, most notably in
      executive positions of several high tech companies in different industries,
      such
      as: President, Euromissile G.I.E. in Paris, France (a management and sales
      company for missile systems in the EADS Group - European Aeronautics Defense
      and
      Space Company); President, MEADS International, Inc., in Orlando/Florida
      (tri-national management company for the Medium Extended Air Defense System,
      under contract from NAMEADSMA, the NATO agency in Huntsville, AL, managing
      this
      tri-national system under joint development in the U.S., Germany, and Italy);
      President, Magnetic Transit of America, Inc., in Los Angeles, CA (engineering
      and marketing company for a Mag-Lev Transportation system for inner urban use;
      a
      subsidiary of AEG/Daimler-Benz); General Manager of IBCOL Technical Services
      GmbH, in Munich, Germany (internationally operating marketing and sales company
      mainly in the fields of aircraft, aircraft parts, transportation systems,
      security and surveillance systems, medical systems); and, Program Manager for
      a
      mobile air defense system at Euromissile, Paris, France and at MBB, Munich,
      Germany.





Gary
      A.
      Bedini is the brother of John C. Bedini. There are no other family relationships
      between any of the officers and directors.





As
      we are
      a development stage company with no revenues from operations, few employees,
      and
      relatively simple financial statements, we have not, at this stage, constituted
      any board committees, including an audit committee. We intend to do so in the
      near future. Consequently we do not have an audit committee financial expert
      who
      is an outside director. As our business grows and our financial statements
      become more complicated, we intend to seek an outside director who can qualify
      as an audit committee financial expert.





We
      have
      not adopted a code of ethics that applies to our President and CEO (principal
      executive officer), or our Chief Financial Officer (principal accounting
      officer). As we have just recently become a reporting company required to file
      periodic reports with the SEC and as our common stock is not currently listed
      on
      any exchange, we have not yet dealt with this issue, but we intend to do so
      in
      the near future.







31






**B.** **Section
          16(a) Beneficial Ownership Reporting
          Compliance.**




Three
      reports on Form 4 filed on behalf of Marvin Redenius, Director, were filed
      late
      during December 2005 and January 2006 concerning the receipt of subscription
      receivables pursuant to a Subscription Agreement between Energenx and Marvin
      Redenius dated September 30, 2005.




**Item
      10.** **Executive
      Compensation.**





**A.**  **Summary
      Compensation Table**





The
      table
      below sets forth the aggregate annual and long-term compensation paid by us
      during our last three fiscal years ended December 31, 2003, December 31, 2004
      and December 31, 2005 to our Chief Executive Officer and our Vice President
      (collectively the “Named Executive Officers”). None of the other executive
      officers of Energenx had an annual salary and bonus for fiscal year 2005 that
      exceeded $100,000.





Name
                    and principal position
                Year
                Annual
                    CompensationSalary
                  ($)
                Bonus
                  ($)
                Other
                    annual compensation (1)Gary
                    A. Bedini
                  Pres.
                    & CEO, Director
                2005
                $104,932
                $02004
                $136,000
                $02003
                $0
                $0
                $1,000John
                    Bedini
                  Vice
                    Pres., Director
                2005
                $122,924
                $02004
                $48,214
                $02003
                $0
                $0
                $1,000





(1)
            On
                March 12, 2004, both Gary Bedini and John Bedini were issued one
                million
                shares of common stock valued at $0.001 per share in lieu of management
                compensation for the year 2003.





**B.** **Option
          Grants in Fiscal Year 2005**





There
      were no option grants to our Named Executive Officers in 2005. No option grants
      have been made to any of our executive officers under the Energenx 1999 Stock
      Option Plan to date. We have not granted any stock appreciation
      rights.





**C.** **Aggregate
      Option Exercises in Fiscal Year 2005 Year End Option
      Values**





There
      were no option exercises by the Named Executive Officers in 2005. No unexercised
      options were held by the Named Executive Officers as of December 31,
      2005.





32


**D.** **Compensation
      of Directors**





We
      did
      not pay our non-employee directors (Messrs. Bearden, Huss and Redenius) for
      attending board meetings in 2005.





**E.** **Employment
      Contracts with Executive Officers and Termination of Employment and
      Change-in-Control Arrangements**





Energenx
      does not have an employment contract with its Named Executive Officer or any
      of
      its executive officers.





We
      do not
      have any arrangements with our Named Executive Officer or any of our other
      executive officers triggered by termination of employment or change in
      control.




33


**Item
      11.** **Security
      Ownership of Certain Beneficial Owners and Management.**





The
      following table sets forth certain information regarding beneficial ownership
      of
      our common stock as of March 15, 2006 (a) by each person known by us to own
      beneficially 5% or more of any class of our common stock, (b) by each of our
      executive officers and directors and (c) by all executive officers and directors
      of Energenx as a group. As of March 15, 2006 there were 27,497,276 shares of
      our
      common stock issued and outstanding. The numbers of shares beneficially owned
      include shares of common stock which the listed beneficial owners have the
      right
      to acquire within 60 days of March 15, 2006 upon the exercise of all options
      and
      other rights beneficially owned on that date. Unless otherwise noted, we believe
      that all persons named in the table have sole voting and investment power with
      respect to all the shares beneficially owned by them.





**Number
                of Shares****Name
                of**
            
            **Beneficially****Beneficial
                Owner (1)**
            
            **Owned**
            
            **Percent
                of Class**Gary
                A. Bedini (2)
            
            
            3,592,000
            
            
            13.06
            %John
                C. Bedini (3)
            
            
            5,658,000
            
            
            20.58
            %Rick
                M. Street (4)
            
            
            250,000
            
            
            *Marvin
                Redenius (5)
            
            
            5,600,000
            
            
            20.37
            %Thomas
                E. Bearden (6)
            
            
            320,402
            
            
            1.16
            %Hans
                Werner Huss (7)
            
            
            200,000
            
            
            *All
                directors and executive officers (six persons) as a group
            
            
            15,620,402
            
            
            56.81
            %Thomas
                G. Walsh (8)
            
            
            1,867,638
            
            
            6.79
            %Frank
                & Judith Ten Thy (9)
            
            
            1,632,588
            
            
            5.94
            %Key
                Financial Services, Inc. (10)
            
            
            1,437,000
            
            
            5.23
            %





*  Less
      than
      1%.





(1)
            Unless
                otherwise indicated, the address of each of the listed beneficial
                owners
                identified above is c/o 6200 E. Commerce Loop, Post Falls, Idaho
                83854.




(2)
            Gary
                A. Bedini. Includes 3,592,000 shares of common stock held by Gary
                Bedini.




34




(3)
            John
                C. Bedini. Includes 5,658,000 shares of common stock held by John
                Bedini.




(4)
            Rick
                M. Street. Includes 250,000 shares of common stock held by Rick
                Street.




(5)
            Marvin
                Redenius. Includes 5,600,000 shares of common stock held by Marvin
                Redenius.




(6)
            Thomas
                E. Bearden. Includes 320,402 shares of common stock held by Thomas
                Bearden.




(7)
            Hans
                Werner Huss. Includes 200,000 shares of common stock held by Hans
                Werner
                Huss.




(8)
            Thomas
                G. Walsh. Includes 1,867,638 shares of common stock held by Thomas
                Walsh.
                Thomas Walsh’s address is 1027 Sherman Avenue, Coeur d’Alene, Idaho
                83814.




(9)
            Frank
                and Judith Ten Thy. Includes 1,632,588 shares of common stock held
                in the
                name of the Frank Ten Thy and Judith Ten Thy Family Trust. Frank
                and
                Judith Ten Thy’s address is 3605 Broken Arrow Road, Coeur d’Alene, Idaho
                83815.




(10)
            Key
                Financial Services, Inc.. Includes 1,437,000 shares of common stock
                held
                by Key Financial Services, Inc. Key Financial Services, Inc.’s address is
                2910 East 57thSt., Suite 5, #355, Spokane, Washington
                99223.




**Item
      12.** **Certain
      Relationships and Related Transactions.**





On
      March
      12, 2004, we issued an aggregate of 7,727,000 shares of common stock in several
      transactions, as follows. An aggregate of 5,200,000 shares of common stock
      were
      issued to certain officers, directors and consultants of Energenx. John Bedini,
      Vice President for Research and Development was issued 3,000,000 shares; Gary
      Bedini, President and CEO was issued 1,000,000 shares; Rick Street, Chief
      Financial Officer, Treasurer and Secretary, was issued 200,000 shares; Thomas
      Bearden, director, as issued 200,000 shares; Hans Werner Huss, director, was
      issued 200,000 shares; Raymond Kuh, consultant, was issued 200,000 shares;
      Klaus
      Lewin, consultant, was issued 200,000 shares; and Peter Lindeman, consultant,
      was issued 200,000 shares. The shares were issued to these individuals at $0.001
      per share in lieu of compensation due to those individuals for services rendered
      in 2002 and 2003 to Energenx as officers, directors, and consultants. John
      Bedini and Gary Bedini, officers of Energenx, were each issued one million
      shares at $0.001 per share in lieu of compensation for fiscal year 2003. In
      addition, John Bedini was issued an additional two million shares of common
      stock at $0.001 per share to prevent default under the terms of the Exclusive
      Technology License Agreement dated October 8, 1999.





35


Also
      on
      March 12, 2004, an aggregate of 2,527,000 shares of common stock was issued
      to
      three entities who converted loans and interest in an aggregate amount of
      $126,350 **** to
      Energenx into shares of common stock, with the shares valued at $0.05 per share.
      Suncraft Ltd. converted aggregate loans of $26,500 into 530,000 shares of common
      stock. The loans were originally made to Energenx between April and July of
      2002. The interest due on the loan, in the amount of $326.25 was assigned to
      Key
      Financial Services and was converted into shares. Marycliff Investment Corp.
      (“Marycliff”) converted aggregate loans in a principal amount of $28,000 into
      560,000 shares of common stock. Marycliff loaned Energenx $10,000 on September
      13, 2002 at an interest rate of 6% per annum. Marycliff also converted the
      principal amounts of loans in an aggregate amount of $18,000 from other parties
      that had loaned Energenx that aggregate amount in 2002 into shares of common
      stock as part of the 560,000 shares issued to Marycliff on March 12, 2004.
      The
      interest on the principal loan amounts aggregating to $28,000, converted into
      shares by Marycliff, in the aggregate amount of $2,394.00, was assigned to
      Key
      Financial Services, including the accrued interest of $902 on the Marycliff
      principal loan amount of $10,000. The accrued interest on the loans assigned
      by
      Marycliff to Key Financial Services included interest of $1,492 previously
      assigned by other parties to Marycliff. Key Financial Services, Inc. converted
      aggregate loans and interest of $71,850 into 1,437,000 shares of common stock.
      The loans were originally made with an interest rate of 6% per annum. The loans
      converted into shares included principal amounts of $63,550 and $8,300 of
      accrued interest, all of which was assigned to Key Financial by other
      parties.





During
      the years ended December 31, 2004, and 2005 Energenx paid certain expenses
      on
      behalf of Bedini Electronics, Inc., a company privately owned by Gary Bedini,
      President and Chief Executive of Energenx and John Bedini, Vice President of
      Energenx. At the same time, Bedini Electronics, Inc. paid some of the expenses
      of Energenx. This was done as the two companies shared joint office space and
      split certain expenses. The net amount owing from Bedini Electronics at December
      31, 2005 and 2004 is $10,176 and $12,202, respectively. In April 2005, Energenx
      loaned Bedini Electronics $4,000 in cash for operations. This related loan,
      which bears interest of 6% per annum, is payable in monthly installments of
      $352. At December 31, 2005, the unpaid loan balance from Bedini Electronics
      was
      $2,037.





Also
      during the years ended December 31, 2002, Energenx loaned to Gary Bedini,
      President and Chief Executive of Energenx and John Bedini, Vice President of
      Energenx a total of $4,900. At the time Energenx was not paying the salaries.
      Because the transactions occurred while Energenx was still private, it was
      not
      subject to the Sarbanes-Oxley Act of 2002, and therefore, was not prohibited.
      However, now that Energenx is a fully reporting entity, the officers repaid
      the
      loan during the year ended December 31, 2005.





On
      March
      12, 2004, an aggregate of 4,600,000 shares of common stock were issued to
      certain officers and directors of Energenx. John Bedini, Vice President for
      Research and Development was issued 3,000,000 shares; Gary Bedini, President
      and
      CEO was issued 1,000,000 shares; Rick Street, Chief Financial Officer, Treasurer
      and Secretary, was issued 200,000 shares; Thomas Bearden, director, as issued
      200,000 shares; Hans Werner Huss, director, was issued 200,000 shares. The
      shares were issued to these individuals in lieu of cash compensation and in
      one
      instance in lieu of payments due under a license agreement. John Bedini and
      Gary
      Bedini, officers of Energenx, were each issued one million shares at $0.001
      per
      share in lieu of compensation for fiscal year 2003. In addition, John Bedini
      was
      issued an additional two million shares of common stock at $0.001 per share
      to
      prevent default under the terms of the Exclusive Technology License Agreement
      dated October 8, 1999. The remaining officers and directors of Energenx named
      above were also issued the shares enumerated above at $0.001 per share in lieu
      of compensation due to those individuals for services rendered in 2002 and
      2003.





36


On
      December 1, 2004, we entered into an Exclusive Technology License Agreement
      with
      GTG Corp., an Iowa based corporation largely owned and controlled by Marvin
      Redenius, a member of our board of directors. Pursuant to that agreement, we
      granted GTG Corp. an exclusive license in the area of North America (the United
      States, Canada and Mexico) to proprietary Energenx technology relating to a
      battery charging system, known as the Potential Battery Charger, for charging
      battery operated vehicles, excluding automobiles. The license granted to GTG
      Corp. includes a license under existing patents rights owned by Energenx and
      to
      any patent applications to be filed to the extent that it relates to the
      proprietary Energenx technology involving a battery charging system utilized
      for
      charging battery operated vehicles other than automobiles. The license shall
      remain exclusive for a period of ten years, with an option to extend the
      exclusivity for an additional ten years. GTG Corp. was not granted the right
      to
      sublicense under the agreement. GTG Corp. agreed to pay royalties equal to
      five
      percent of the gross sales price of all products sold which utilize the licensed
      proprietary technology. A de minimus up front license fee of $1 was paid by
      GTG
      Corp. for the license.





On
      September 30, 2005, Energenx entered into a Subscription Agreement with Marvin
      Redenius., a member of the Board of Directors of Energenx. Pursuant to the
      Subscription Agreement Marvin Redenius agreed to purchase 3,000,000 shares
      of
      common stock of Energenx for a purchase price of $1,500,000. The purchase price
      of the shares was set by the board of directors, excluding Marvin Redenius,
      pursuant to the recommendation of management. The purchase price of the shares
      is higher than that obtained by Energenx in its most recent private placements.
      Marvin Redenius largely owns and controls GTG Corp., an Iowa based corporation
      that signed an Exclusive Technology License Agreement on December 1, 2004 with
      Energenx, pursuant to which Energenx granted GTG Corp. an exclusive license
      in
      the area of North America (the United States, Canada and Mexico) to proprietary
      Energenx technology relating to a battery charging system, known as the
      Potential Battery Charger, for charging battery operated vehicles, excluding
      automobiles.





**Item
      13.** **Exhibits**





(a) Exhibits
      specified by item 601 of Regulation S-B.





See
      Exhibit Index - page 38.





**Item
      14.** **Principal
      Accounting Fees and Services.**





*Audit
      Fees.* Aggregate
      fees billed for professional services rendered by Williams & Webster in
      connection with its audit of Energenx’s financial statements as of and for the
      years ended December 31, 2005, and 2004, its reviews of Energenx’s unaudited
      condensed consolidated interim financial statements, and for SEC consultations
      and filings were $14,445 and $9,792.75 , respectively.





*Tax
      Fees* - We did
      not incur any fees and expenses from Williams & Webster, P.S. for the fiscal
      years 2005 and 2004 for professional services rendered for tax compliance,
      tax
      advice and tax planning.





*All
      Other Fees* - We
      incurred aggregate fees and expenses of $14,445 from Williams & Webster,
      P.S. for the fiscal years 2004 and 2005 annual audits.





37





**ENERGENX
      INC.**


**INDEX
      TO EXHIBITS**





Exhibits
            Description
                of Document2.1
            Acquisition
                Agreement and Plan of Merger between Energenx Inc. and Edward II,
                Inc.
                dated December 27, 2004 (Incorporated by reference to the corresponding
                exhibit to the Form 8-K previously filed by Energenx on December
                30, 2004
                (File No. 000-50739)) (the “December 30 Form 8-K”)2.2
            Articles
                of Merger (Nevada) dated December 28, 2004 (Incorporated by reference
                to
                exhibit 2.1 to the December 30 Form 8-K)3.1
            Restated
                Articles of Incorporation dated December 29, 2004 (Incorporated by
                reference to the corresponding exhibit to the Form 10-KSB previously
                filed
                by Energenx on April 15, 2005 (File No. 000-50739))3.2
            By-Laws
                (Incorporated by reference to the corresponding exhibit to the Form
                10-KSB
                previously filed by Energenx on April 15, 2005 (File No.
                000-50739))10.1
            1999
                Stock Option Plan (Incorporated by reference to exhibit 10.2 to the
                Form
                10-KSB previously filed by Energenx on April 15, 2005 (File No.
                000-50739))10.2
            Exclusive
                Technology License Agreement and Right to Purchase Patents between
                Bedini
                Technology, Inc. and John C. Bedini, dated October 8, 1999. (Incorporated
                by reference to exhibit 10.3 to the Form 10-KSB previously filed
                by
                Energenx on April 15, 2005 (File No. 000-50739))10.3
            Exclusive
                Technology License Agreement and Right to Purchase Patents between
                Bedini
                Technology, Inc. and John C. Bedini, dated May 1, 2001 (Incorporated
                by
                reference to exhibit 10.4 to the Form 10-KSB previously filed by
                Energenx
                on April 15, 2005 (File No. 000-50739))10.4
            Exclusive
                Technology License Agreement between Energenx, Inc. and GTG Corp.
                dated
                December 1, 2004. (Incorporated by reference to exhibit 10.5 to the
                Form
                10-KSB previously filed by Energenx on April 15, 2005 (File No.
                000-50739))10.5
            Commercial
                Lease Agreement between Energenx Inc. and Powderhorn Properties,
                LLC dated
                March 31, 2004. (Incorporated by reference to exhibit 10.6 to the
                Form
                10-KSB previously filed by Energenx on April 15, 2005 (File No.
                000-50739))






38




10.6
            Stock
                Purchase Agreement between Energenx, Inc. and Marvin Redenius dated
                March
                18, 2004. (Incorporated by reference to exhibit 10.7 to the Form
                10-KSB
                previously filed by Energenx on April 15, 2005 (File No.
                000-50739))10.7
            Stock
                Option Agreement between Energenx, Inc. and Marvin Redenius dated
                March
                18, 2004. (Incorporated by reference to exhibit 10.8 to the Form
                10-KSB
                previously filed by Energenx on April 15, 2005 (File No.
                000-50739))10.8
            Subscription
                Agreement between Marvin Redenius and Energenx, Inc. dated September
                30,
                2005(Incorporated by reference to the corresponding exhibit to the
                Form
                8-K previously filed by Energenx on December 6, 2005 (File No.
                000-50739))31.1
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Executive
                Officer31.2
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Financial
                Officer32
            Section
                1350 Certifications


___________





39





**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act of 1934, as amended,
      the
      registrant caused this Annual Report on Form 10-KSB to be signed on its behalf
      by the undersigned, thereunto duly authorized, in the City of Post Falls, Idaho
      on this 8th **** day
      of
      August, 2006.





ENERGENX,
              INC.By:
            /s/ Gary
              A.
              BediniGary
              A. BediniPresident
&
              Chief Executive Officer





In
      accordance with Section 13 or 15(d) of the Exchange Act of 1934, as amended,
      this Annual Report on Form 10-KSB has been signed below by the following persons
      on behalf of the registrant in the capacities indicated below on this 8th of
      August, 2006.





**Signature**
            **Title**/s/
                Gary A. Bedini
            Director,
                President & Chief Executive OfficerGary
                  A. Bedini
            (Principal
              Executive
              Officer)/s/
                Rick M. Street
            Director,
                Chief Financial Officer, Secretary, TreasurerRick
                M. Street
            (Principal
                Financial and Accounting Officer)/s/
                John C. Bedini
            Director,
                Vice President for Research and DevelopmentJohn
                C. Bedini/s/
                Thomas E. Bearden
            DirectorThomas
                E. Bearden/s/
                Hans Werner Huss
            DirectorHans
                Werner Huss/s/
                Marvin Redenius
            DirectorMarvin
                Redenius





40


Board
      of
      Directors


Energenx,
      Inc.


Post
      Falls, Idaho





REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







We
      have
      audited the accompanying balance sheets of Energenx, Inc. (an Idaho corporation
      and development stage company) as of December 31, 2005 and 2004, and the related
      statements of operations, stockholders’ equity and cash flows for the years then
      ended and for the period from September 29, 1999 (inception) to December 31,
      2005. 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. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes 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 Energenx, Inc. as of December
      31,
      2005 and 2004 and the results of its operations, stockholders’ equity and cash
      flows for the years then ended and for the period from September 29, 1999
      (inception) to December 31, 2005 in conformity with accounting principles
      generally accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 2 to the financial
      statements, the Company has no revenues, limited resources and a large
      accumulated deficit. These factors raise substantial doubt about the Company’s
      ability to continue as a going concern. Management’s plans are also discussed in
      Note 2. The financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.








Williams
      & Webster, P.S.


*Certified
      Public Accountants*


Spokane,
      Washington


March
      21,
      2006










**ENERGENX,
        INC.**
 **(A
        Development Stage Company)**
 **BALANCE
        SHEETS**


December
                312005
            
            2004**ASSETS****CURRENT
                ASSETS**Cash
            
            $
            169,451
            
            $
            413,015Inventory
            
            
            3,595
            
            
            —Notes
                receivable - related parties
            
            
            12,203
            
            
            17,102Prepaid
                expense
            
            
            6,924
            
            
            33,638Total
                Current Assets
            
            
            192,173
            
            
            463,755**PROPERTY
                AND EQUIPMENT, NET**
            
            
            19,673
            
            
            13,014**OTHER
                ASSETS**License,
                net of accumulated amortization
            
            
            68,800
            
            
            76,000Patents,
                net of accumulated amortization
            
            
            42,574
            
            
            49,424Total
                Other Assets
            
            
            111,374
            
            
            125,424**TOTAL
                ASSETS**
            
            $
            323,220
            
            $
            602,193**LIABILITIES
                AND STOCKHOLDERS' EQUITY****CURRENT
                LIABILITIES**Accounts
                payable
            
            $
            4,124
            
            $
            12,010Interest
                payable
            
            
            2,674
            
            
            2,674Interest
                payable - related parties
            
            
            2,607
            
            
            2,607Payroll
                taxes payable
            
            
            9,445
            
            
            12,670Notes
                payable
            
            
            1,660
            
            
            1,660Accrued
                payroll
            
            
            36,350
            
            
            —Total
                Current Liabilities
            
            
            56,860
            
            
            31,621**COMMITMENTS
                AND CONTINGENCIES**
            
            
            —
            
            
            —**STOCKHOLDERS'
                EQUITY**Preferred
                stock, $0.001 par value; 5,000,000 shares authorized,no
                shares issued or outstanding
            
            
            —
            
            
            —Common
                stock, $0.001 par value; 55,000,000 shares authorized,27,097,276
                and 26,697,276 shares issued and outstanding,respectively
            
            
            27,097
            
            
            26,697Additional
                paid-in capital
            
            
            1,976,117
            
            
            1,776,517Deficit
                accumulated during development stage
            
            
            (1,736,854
            )
            
            (1,232,642
            )Total
                Stockholders' Equity
            
            
            266,360
            
            
            570,572**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            $
            323,220
            
            $
            602,193


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





F-1


**ENERGENX,
        INC.**


**(A
        Development Stage Company)**


**STATEMENTS
        OF OPERATIONS**


Years
                Ended
            
            From
              September
                29,1999 (Inception) to
              December
                30
              2005December
                312005
            
            2004**REVENUES**
            
            $
            —
            
            $
            
            
            $
            —**OPERATING
                EXPENSES**Amortization
                and depreciation
            
            
            19,538
            
            
            18,892
            
            
            91,203Directors
                fees
            
            
            —
            
            
            
            
            
            60,000Consulting
            
            
            27,500
            
            
            103,870
            
            
            311,529General
                and administrative
            
            
            45,638
            
            
            42,544
            
            
            139,139Legal
                and accounting
            
            
            64,445
            
            
            25,096
            
            
            106,620License
                and fees
            
            
            385
            
            
            —
            
            
            107,524Marketing
            
            
            —
            
            
            —
            
            
            19,464Rent
            
            
            26,400
            
            
            21,340
            
            
            159,868Research
                and development
            
            
            169,212
            
            
            12,523
            
            
            218,333Salaries
                and benefits
            
            
            151,231
            
            
            184,216
            
            
            489,488Travel
            
            
            —
            
            
            —
            
            
            1,580**TOTAL
                OPERATING EXPENSES**
            
            
            504,349
            
            
            408,481
            
            
            1,704,748**LOSS
                FROM OPERATIONS**
            
            
            (504,349
            )
            
            (408,481
            )
            
            (1,704,748
            )**OTHER
                INCOME (EXPENSES)**Interest
                income
            
            
            137
            
            
            24
            
            
            161Interest
                expense
            
            
            —
            
            
            (2,872
            )
            
            (34,877
            )Loss
                on disposal of asset
            
            
            —
            
            
            —
            
            
            (1,709
            )Gain
                on forgiveness of debt
            
            
            —
            
            
            3,255
            
            
            4,319**TOTAL
                OTHER INCOME (EXPENSES)**
            
            
            137
            
            
            407
            
            
            (32,106
            )**LOSS
                BEFORE TAXES**
            
            
            (504,212
            )
            
            (408,074
            )
            
            (1,736,854
            )**INCOME
                TAXES**
            
            
            —
            
            
            —
            
            
            —**NET
                LOSS**
            
            $
            (504,212
            )
            $
            (408,074
            )
            $
            (1,736,854
            )NET
                LOSS PER COMMON SHARE,BASIC
                AND DILUTED
            
            $
            (0.02
            )
            $
            (0.02
            )WEIGHTED
                AVERAGE NUMBER OFCOMMON
                STOCK SHARESOUTSTANDING,
                BASIC AND DILUTED
            
            
            26,763,943
            
            
            24,221,221





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





F-2


**ENERGENX,
        INC.**
 **(A
        Development Stage Company)**
 **STATEMENT
        OF STOCKHOLDERS' EQUITY (DEFICIT)**


Common
                StockShares
            
            Amount
            
            Additional
                Paid-In
                Capital
            
            Deficit
                Accumulated
                During
                Development
                Stage
            
            TotalsCommon
                stock issued for cash at $0.001 per share
            
            
            7,836,168
            
            $
            7,836
            
            $
            (6,530
            )
            $
            —
            
            $
            1,306Net
                loss for period ending December 31, 1999
            
            
            —
            
            
            —
            
            
            —
            
            
            (3,588
            )
            
            (3,588
            )Balance,
                December 31, 1999
            
            
            7,836,168
            
            
            7,836
            
            
            (6,530
            )
            
            (3,588
            )
            
            (2,282
            )Common
                stock issued for convertible debt atan
                average of $0.31 per share
            
            
            195,060
            
            
            195
            
            
            59,815
            
            
            —
            
            
            60,010Common
                stock issued for cash at $0.33 per share
            
            
            330,000
            
            
            330
            
            
            109,670
            
            
            —
            
            
            110,000Stock
                offering costs
            
            
            —
            
            
            —
            
            
            (7,690
            )
            
            —
            
            
            (7,690
            )Common
                stock issued for equipmentat
                $0.33 per share
            
            
            9,750
            
            
            10
            
            
            3,240
            
            
            —
            
            
            3,250Net
                loss for year ending December 31, 2000
            
            
            —
            
            
            —
            
            
            —
            
            
            (67,889
            )
            
            (67,889
            )Balance,
                December 31, 2000
            
            
            8,370,978
            
            
            8,371
            
            
            158,505
            
            
            (71,477
            )
            
            95,399Common
                stock issued for cash at $0.33 per share
            
            
            453,000
            
            
            453
            
            
            150,547
            
            
            —
            
            
            151,000Common
                stock issued for servicesat
                $0.33 per share
            
            
            158,280
            
            
            158
            
            
            52,602
            
            
            —
            
            
            52,760Stock
                offering costs
            
            
            —
            
            
            —
            
            
            (4,440
            )
            
            —
            
            
            (4,440
            )Common
                stock issued for office equipment
            
            
            1,086
            
            
            1
            
            
            361
            
            
            —
            
            
            362Common
                stock issued for technology license
            
            
            5,140,326
            
            
            5,140
            
            
            52,860
            
            
            —
            
            
            58,000Common
                stock issued for services at $1.00per
                share
            
            
            2,606
            
            
            3
            
            
            2,603
            
            
            —
            
            
            2,606Net
                loss for year ending December 31, 2001
            
            
            —
            
            
            —
            
            
            —
            
            
            (301,595
            )
            
            (301,595
            )Balance,
                December 31, 2001
            
            
            14,126,276
            
            $
            14,126
            
            $
            413,038
            
            $
            (373,072
            )
            $
            54,092




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






F-3


**ENERGENX,
        INC.**
 **(A
          Development Stage Company)**
 **STATEMENT
            OF STOCKHOLDERS' EQUITY (DEFICIT)**


Common
                StockShares
            
            Amount
            
            Additional
                  Paid-In
                  Capital
            
            Deficit
                      Accumulated
                      During
                      Development
                      Stage
            
            TotalsBalance,
                December 31, 2001
            
            
            14,126,276
            
            $
            14,126
            
            $
            413,038
            
            $
            (373,072
            )
            $
            54,092Common
                stock issued for cash at $1.00per
                share
            
            
            24,000
            
            
            24
            
            
            23,976
            
            
            —
            
            
            24,000Common
                stock issued for loans payableat
                $1.00 per share
            
            
            20,000
            
            
            20
            
            
            19,980
            
            
            —
            
            
            20,000Net
                loss for year ending December 31, 2002
            
            
            
            
            
            
            
            
            
            
            
            (141,307
            )
            
            (141,307
            )Balance,
                December 31, 2002
            
            
            14,170,276
            
            
            14,170
            
            
            456,994
            
            
            (514,379
            )
            
            (43,215
            )Common
                stock issued for board of directorsfees
                at $0.05 per share
            
            
            1,000,000
            
            
            1,000
            
            
            49,000
            
            
            —
            
            
            50,000Common
                stock issued for consulting feesat
                $0.05 per share
            
            
            2,200,000
            
            
            2,200
            
            
            107,800
            
            
            —
            
            
            110,000Common
                stock issued for licensing feesat
                $0.05 per share
            
            
            2,000,000
            
            
            2,000
            
            
            98,000
            
            
            —
            
            
            100,000Net
                loss for year ending December 31, 2003
            
            
            —
            
            
            —
            
            
            —
            
            
            (310,189
            )
            
            (310,189
            )Balance,
                December 31, 2003
            
            
            19,370,276
            
            
            19,370
            
            
            711,794
            
            
            (824,568
            )
            
            (93,404
            )Common
                stock issued for cash valued at $0.18 perShare
                with options attached valued at $0.03 per
                share
            
            
            2,400,000
            
            
            2,400
            
            
            497,600
            
            
            —
            
            
            500,000Stock
                offering costs
            
            
            —
            
            
            —
            
            
            (50,000
            )
            
            —
            
            
            (50,000
            )Issuance
                of common stock for exerciseof
                options for cash of $0.21 per share
            
            
            2,400,000
            
            
            2,400
            
            
            497,600
            
            
            —
            
            
            500,000Common
                stock issued for loans payableat
                $0.05 per share
            
            
            2,527,000
            
            
            2,527
            
            
            123,823
            
            
            —
            
            
            126,350Merger
                and recapitalization of Company
            
            
            —
            
            
            —
            
            
            (4,300
            )
            
            —
            
            
            (4,300
            )Net
                loss for year ending December 31, 2004
            
            
            —
            
            
            —
            
            
            —
            
            
            (408,074
            )
            
            (408,074
            )Balance,
                December 31, 2004
            
            
            26,697,276
            
            
            26,697
            
            
            1,776,517
            
            
            (1,232,642
            )
            
            570,572Common
                stock issued for cash at $0.50 per share
            
            
            400,000
            
            
            400
            
            
            199,600
            
            
            —
            
            
            200,000Net
                loss for year ending December 31, 2005
            
            
            —
            
            
            —
            
            
            —
            
            
            (504,212
            )
            
            (504,212
            )Balance,
                December 31, 2005
            
            
            27,097,276
            
            $
            27,097
            
            $
            1,976,117
            
            $
            (1,736,854
            )
            $
            266,360





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




F-4




**ENERGENX,
        INC.**
 **(A
        Development Stage Company)**
 **STATEMENTS
        OF CASH FLOWS**


Years
                Ended
              December
                31,2005
            
            2004
            
            From
              September
                29,
              1999
              (Inception)
                to
              September
                30,
              2005**CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            $
            (504,212
            )
            $
            (408,074
            )
            $
            (1,736,853
            )Stock
                issued for directors fees
            
            
            —
            
            
            —
            
            
            50,000Stock
                issued for consulting fees
            
            
            —
            
            
            —
            
            
            110,000Stock
                issued for services
            
            
            —
            
            
            —
            
            
            55,366Stock
                issued for licensing fees
            
            
            —
            
            
            —
            
            
            100,000Stock
                issued for payment of interest
            
            
            —
            
            
            8,300
            
            
            8,300Gain
                on debt forgiveness
            
            
            —
            
            
            (3,255
            )
            
            (4,319
            )Loss
                on disposal of asset
            
            
            —
            
            
            —
            
            
            1,806Amortization
                and depreciation
            
            
            19,538
            
            
            18,892
            
            
            91,207Adjustments
                to reconcile net (loss) to net cashprovided(used)by
                operating activities:Decrease
                (increase) in note receivable - related parties
            
            
            4,899
            
            
            (5,600
            )
            
            (12,204
            )Decrease
                (increase) in prepaids
            
            
            26,714
            
            
            (33,638
            )
            
            (6,924
            )Increase
                (decrease) in interest payable
            
            
            —
            
            
            (19,990
            )
            
            5,282Increase
                (decrease) in accounts payable
            
            
            (7,886
            )
            
            (23,640
            )
            
            8,438Increase
                (decrease) in accrued payroll
            
            
            36,350
            
            
            —
            
            
            36,350Increase
                (decrease) in payroll taxes payable
            
            
            (3,225
            )
            
            12,670
            
            
            9,445Increase
                (decrease) in inventory
            
            
            (3,595
            )
            
            —
            
            
            (3,595
            )Net
                cash used by operating activities
            
            
            (431,417
            )
            
            (454,335
            )
            
            (1,287,701
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES:**Purchase
                of patent
            
            
            —
            
            
            —
            
            
            (68,501
            )Purchase
                of equipment purchased
            
            
            (12,147
            )
            
            (3,659
            )
            
            (39,362
            )Purchase
                of leasehold improvements
            
            
            —
            
            
            (2,890
            )
            
            (4,599
            )Net
                cash used by investing activities
            
            
            (12,147
            )
            
            (6,549
            )
            
            (112,462
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Cash
                paid for stock offering costs
            
            
            —
            
            
            (50,000
            )
            
            (62,130
            )Merger
                and recapitalization costs
            
            
            —
            
            
            (4,300
            )
            
            (4,300
            )Proceeds
                from issuance of convertible debt
            
            
            —
            
            
            —
            
            
            60,010Proceeds
                from notes payable
            
            
            —
            
            
            6,660
            
            
            199,610Payment
                of notes payable
            
            
            —
            
            
            (78,886
            )
            
            (109,882
            )Proceeds
                from sale of common stock and options
            
            
            200,000
            
            
            1,000,000
            
            
            1,486,306Net
                cash provided by financing activities
            
            
            200,000
            
            
            873,474
            
            
            1,569,614Change
                in cash
            
            
            (243,564
            )
            
            412,590
            
            
            169,451**Cash,
                beginning of period**
            
            
            413,015
            
            
            425
            
            
            —**Cash,
                end of period**
            
            $
            169,451
            
            $
            413,015
            
            $
            169,451**SUPPLEMENTAL
                CASH FLOW INFORMATION:**Interest
                paid
            
            $
            —
            
            $
            —
            
            $
            15,255Income
                taxes paid
            
            $
            —
            
            $
            —
            
            $
            —**NON-CASH
                INVESTING AND FINANCING ACTIVITIES:**Common
                stock issued for equipment
            
            $
            —
            
            $
            —
            
            $
            3,612Common
                stock issued for debt
            
            $
            —
            
            $
            118,050
            
            $
            198,060Common
                stock issued for technology license
            
            $
            —
            
            $
            —
            
            $
            58,000





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


F-5


**ENERGENX,
      INC.**


**(formerly
      Edward II, Inc.)**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**DECEMBER
      31, 2005 AND 2004**





**NOTE
      1 - ORGANIZATION AND DESCRIPTION OF BUSINESS**





The
      Company was incorporated on September 29, 1999 under the laws of the State
      of
      Nevada. The primary business purpose of the Company is to undertake research
      and
      development relating to an electromagnetic motor. The Company is in the
      development stage. The fiscal year end of the corporation is December
      31.





On
      June
      1, 2001, the Company’s board of directors executed a unanimous written consent
      to amend its articles of incorporation to provide that the name of the Company
      be changed from Bedini Technology, Inc. to Energenx, Inc. (hereinafter
“Energenx” or the “Company”).





On
      December 23, 2004, the Company acquired all of the outstanding common stock
      of
      Edward II, Inc., a fully reporting public company. For accounting purposes,
      the
      acquisition has been treated as a recapitalization of Energenx with Energenx as
      the acquirer in a reverse acquisition. The historical financial statements
      prior
      to December 23, 2004 are those of Energenx, the operating company, while the
      Company maintains the legal structure of the acquired Edward II, Inc. This
      transaction is described more fully in Note 11.





**NOTE
      2 - SIGNIFICANT ACCOUNTING POLICIES**





This
      summary of significant accounting policies of Energenx, Inc. is presented to
      assist in understanding the Company’s financial statements. The financial
      statements and notes are representations of the Company’s management, which is
      responsible for their integrity and objectivity. These accounting policies
      conform to accounting principles generally accepted in the United States of
      America, and have been consistently applied in the preparation of the financial
      statements.





Accounting
      Method


The
      Company uses the accrual basis of accounting in accordance with accounting
      principles generally accepted in the United States of America.





Accounting
      Pronouncements


In
      March
      2006, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 156, “Accounting for Servicing of Financial Assets—an
      amendment of FASB Statement No. 140.” This statement requires an entity to
      recognize a servicing asset or servicing liability each time it undertakes
      an
      obligation to service a financial asset by entering into a servicing contract
      in
      any of the following situations: a transfer of the servicer’s financial assets
      that meets the requirements for sale accounting; a transfer of the servicer’s
      financial assets to a qualifying special-purpose entity in a guaranteed mortgage
      securitization in which the transferor retains all of the resulting securities
      and classifies them as either available-for-sale securities or trading
      securities; or an acquisition or assumption of an obligation to service a
      financial asset that does not relate to financial assets of the servicer or
      its
      consolidated affiliates. The statement also requires all separately recognized
      servicing assets and servicing liabilities to be initially measured at fair
      value, if practicable and permits an entity to choose either the amortization
      or
      fair value method for subsequent measurement of each class of servicing assets
      and liabilities. The statement further permits, at its initial adoption, a
      one-time reclassification of available for sale securities to trading securities
      by entities with recognized servicing rights, without calling into question
      the
      treatment of other available for sale securities under Statement 115, provided
      that the available for sale securities are identified in some manner as
      offsetting the entity’s exposure to changes in fair value of servicing assets or
      servicing liabilities that a servicer elects to subsequently measure at fair
      value and requires separate presentation of servicing assets and servicing
      liabilities subsequently measured at fair value in the statement of financial
      position and additional disclosures for all separately recognized servicing
      assets and servicing liabilities. This statement is effective for fiscal years
      beginning after September 15, 2006, with early adoption permitted as of the
      beginning of an entity’s fiscal year. Management believes the adoption of this
      statement will have no impact on the Company’s financial condition or results of
      operations.





F-6


In
      February 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial
      Instruments, an Amendment of FASB Standards No. 133 and 140” (hereinafter “SFAS
      No. 155”). This statement established the accounting for certain derivatives
      embedded in other instruments. It simplifies accounting for certain hybrid
      financial instruments by permitting fair value remeasurement for any hybrid
      instrument that contains an embedded derivative that otherwise would require
      bifurcation under SFAS No. 133 as well as eliminating a restriction on the
      passive derivative instruments that a qualifying special-purpose entity (“SPE”)
      may hold under SFAS No. 140. This statement allows a public entity to
      irrevocably elect to initially and subsequently measure a hybrid instrument
      that
      would be required to be separated into a host contract and derivative in its
      entirety at fair value (with changes in fair value recognized in earnings)
      so
      long as that instrument is not designated as a hedging instrument pursuant
      to
      the statement. SFAS No. 140 previously prohibited
      a qualifying special-purpose entity from holding a derivative financial
      instrument that pertains to a beneficial interest other than another derivative
      financial instrument. This
      statement is effective for fiscal years beginning after September 15, 2006,
      with
      early adoption permitted as of the beginning of an entity’s fiscal year.
      Management believes the adoption of this statement will have no impact on the
      Company’s financial condition or results of operations.





In
      May
      2005, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 154, “Accounting Changes and Error Corrections,”
(hereinafter “SFAS No. 154”) which replaces Accounting Principles Board Opinion
      No. 20, “Accounting Changes”, and SFAS No. 3, “Reporting Accounting Changes in
      Interim Financial Statements - An Amendment of APB Opinion No. 28”. SFAS No. 154
      provides guidance on accounting for and reporting changes in accounting
      principle and error corrections. SFAS No. 154 requires that changes in
      accounting principle be applied retrospectively to prior period financial
      statements and is effective for fiscal years beginning after December 15, 2005.
      Management does not expect SFAS No. 154 to have a material impact on the
      Company’s financial position, results of operations, or cash
      flows.





F-7


In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 153. This statement addresses the measurement
      of exchanges of nonmonetary assets. The guidance in APB Opinion No. 29,
“Accounting for Nonmonetary Transactions,” is based on the principle that
      exchanges of nonmonetary assets should be measured based on the fair value
      of
      the assets exchanged. The guidance in that opinion, however, included certain
      exceptions to that principle. This statement amends Opinion 29 to eliminate
      the
      exception for nonmonetary exchanges of similar productive assets and replaces
      it
      with a general exception for exchanges of nonmonetary assets that do not have
      commercial substance. A nonmonetary exchange has commercial


substance
      if the future cash flows of the entity are expected to change significantly
      as a
      result of the exchange. This statement is effective for financial statements
      for
      fiscal years beginning after June 15, 2005. Earlier application is permitted
      for
      nonmonetary asset exchanges incurred during fiscal years beginning after the
      date of this statement is issued. Management believes the adoption of this
      statement will have no impact on the financial statements of the Company.





In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 152, which amends FASB statement No. 66,
      “Accounting for Sales of Real Estate,” to reference the financial accounting and
      reporting guidance for real estate time-sharing transactions that is provided
      in
      AICPA Statement of Position (SOP) 04-2, “Accounting for Real Estate Time-Sharing
      Transactions.” This statement also amends FASB Statement No. 67, “Accounting for
      Costs and Initial Rental Operations of Real Estate Projects,” to state that the
      guidance for (a) incidental operations and (b) costs incurred to sell real
      estate projects does not apply to real estate time-sharing transactions. The
      accounting for those operations and costs is subject to the guidance in SOP
      04-2. This statement is effective for financial statements for fiscal years
      beginning after June 15, 2005. Management believes the adoption of this
      statement will have no impact
      on
      the financial statements of the Company.





In
      December 2004, the Financial Accounting Standards Board issued a revision to
      Statement of Financial Accounting Standards No. 123R, “Accounting for Stock
      Based Compensations.” This statement supersedes APB Opinion No. 25, “Accounting
      for Stock Issued to Employees,” and its related implementation guidance. This
      statement establishes standards for the accounting for transactions in which
      an
      entity exchanges its equity instruments for goods or services. It also addresses
      transactions in which an entity incurs liabilities in exchange for goods or
      services that are based on the fair value of the entity’s equity instruments or
      that may be settled by the issuance of those equity instruments. This statement
      focuses primarily on accounting for transactions in which an entity obtains
      employee services in share-based payment transactions. This statement does
      not
      change the accounting guidance for share based payment transactions with parties
      other than employees provided in Statement of Financial Accounting Standards
      No.
      123. This statement does not address the accounting for employee share ownership
      plans, which are subject to AICPA Statement of Position 93-6, “Employers’
Accounting for Employee Stock Ownership Plans.” The Company has previously used
      the guidance under SFAS No. 123 with regards to its stock option plan and
      therefore this revision will have no impact on its financial
      statements.





F-8


In
      November 2004, the Financial Accounting Standards Board (FASB) issued
      Statement of Financial Accounting Standards No. 151, “Inventory Costs— an
      amendment of ARB No. 43, Chapter 4”. This statement amends the
      guidance in ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the
      accounting for abnormal amounts of idle facility expense, freight, handling
      costs, and wasted material (spoilage). Paragraph 5 of ARB 43,
      Chapter 4, previously stated that “. . . under some circumstances, items
      such as idle facility expense, excessive spoilage, double freight, and
      rehandling costs may be so abnormal as to require treatment as current period
      charges. . . .” This statement requires that those items be recognized as
      current-period charges regardless of whether they meet the criterion of “so
      abnormal.” In addition, this statement requires that allocation of fixed
      production overheads to the costs of conversion be based on the normal capacity
      of the production facilities. This statement is effective for inventory costs
      incurred during fiscal years beginning after June 15, 2005. Management does
      not believe the adoption of this statement will have any immediate material
      impact on the Company, as the Company presently maintains minimal inventory
      amounts.





Accounting
      for Stock Options and Warrants Granted to Employees and
      Nonemployees


Statement
      of Financial Accounting Standards No. 123, “Accounting for Stock-Based
      Compensation” *,* defines
      a
      fair value-based method of accounting for stock options and other equity
      instruments. The Company has adopted this method, which measures compensation
      costs based on the estimated fair value of the award and recognizes that cost
      over the service period. In 2004, the Company adopted the changes to SFAS No.
      123 as prescribed by SFAS No. 123(R). See Note 13.





Cash
      Equivalents


The
      Company considers all highly liquid investments with a maturity of three months
      or less when purchased to be cash equivalents.





Compensated
      Absences


Employees
      of the Company are entitled to paid vacation, paid sick days and personal days
      off depending on job classification, length of service, and other factors.
      The
      Company’s policy is to recognize the cost of compensated absences when actually
      paid to employees. If the amount were estimable, it would not be currently
      recognized as the amount would be deemed immaterial.





Concentration
      of Credit Risk


The
      Company maintains its cash in one commercial account at a major financial
      institution. Although the financial institution is considered creditworthy
      and
      has not experienced any losses on its deposits, at December 31, 2005 and 2004
      the Company’s cash balance exceeded Federal Deposit Insurance Corporation (FDIC)
      limits by $69,451 and $313,015, respectively.





Derivative
      Instruments


The
      Financial Accounting Standards Board issued Statement of Financial Accounting
      Standards No. 133, “Accounting for Derivative Instruments and Hedging
      Activities” (hereinafter “SFAS No. 133”), as amended by SFAS No. 137,
“Accounting for Derivative Instruments and Hedging Activities - Deferral of
      the
      Effective Date of FASB No. 133”, and SFAS No. 138, “Accounting for Certain
      Derivative Instruments and Certain Hedging Activities”, SFAS No. 149, “Amendment
      of Statement 133 on Derivative Instruments and Hedging Activities”, SFAS No.
      150, “Accounting for Certain Financial Instruments with Characteristics of Both
      Liabilities and Equity”, and SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments, an Amendment of FASB Standards No. 133 and 140”. These
      standards establish accounting and reporting standards for derivative
      instruments, including certain derivative instruments embedded in other
      contracts, and for hedging activities. They require that an entity recognize
      all
      derivatives as either assets or liabilities in the balance sheet and measure
      those instruments at fair value.





F-9


If
      certain conditions are met, a derivative may be specifically designated as
      a
      hedge, the objective of which is to match the timing of gain or loss recognition
      on the hedging derivative with the recognition of (i) the changes in the fair
      value of the hedged asset or liability that are attributable to the hedged
      risk
      or (ii) the earnings effect of the hedged forecasted transaction. For a
      derivative not designated as a hedging instrument, the gain or loss is
      recognized in income in the period of change.





Historically,
      the Company has not entered into derivatives contracts to hedge existing risks
      or for speculative purposes.





At
      December 31, 2005 and 2004, the Company has not engaged in any transactions
      that
      would be considered derivative instruments or hedging activities.





Development
      Stage


The
      Company is in the development stage and has not commenced the sale of any
      products.





Earnings
      Per Share


On
      January 1, 1998, the Company adopted Statement of Financial Accounting Standards
      No. 128, which provides for calculation of "basic" and "diluted" earnings per
      share. Basic earnings per share includes no dilution and is computed by dividing
      net income available to common shareholders by the weighted average common
      shares outstanding for the period. Diluted earnings per share reflects the
      potential dilution of securities that could share in the earnings of an entity.
      Diluted net income (loss) per share is the same as basic net income (loss)
      per
      share as there are no common stock equivalents outstanding.





Estimates


The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.





Fair
      Value of Financial Instruments


The
      Company's financial instruments as defined by Statement of Financial Accounting
      Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
      include cash, notes receivable, accounts payable, accrued expenses and
      short-term borrowings. All instruments are accounted for on a historical cost
      basis, which, due to the short maturity of these financial instruments,
      approximates fair value at December 31, 2005 and 2004.





F-10


Going
      Concern


As
      shown
      in the accompanying financial statements, the Company has incurred an
      accumulated deficit of $1,736,854 through December 31, 2005 and has a history
      of
      recurring losses. The Company is currently putting technology in place which
      will, if successful, mitigate these factors which raise substantial doubt about
      the Company’s ability to continue as a going concern. The financial statements
      do not include any adjustments relating to the recoverability and classification
      of recorded assets, or the amounts and classification of liabilities that might
      be necessary in the event the Company cannot continue in existence. Management
      has developed technology that if proven will result in a marketable product. Management
      intends to seek additional capital from new equity securities offerings that
      will provide funds needed to increase liquidity, fund internal growth and fully
      implement its business plan.





Management
      believes $1,000,000 is needed to finance the plan of operation for at least
      the
      next twelve months. The timing and amount of capital requirements will depend
      on
      a number of factors, including demand for products and services and the
      availability of opportunities for international expansion through affiliations
      and other business relationships.





Impaired
      Asset Policy


The
      Company reviews its long-lived assets quarterly to determine if any events
      or
      changes in circumstances have transpired which indicate that the carrying value
      of its assets may not be recoverable. At December 31, 2005 and 2004, the Company
      determined that there were no impairments of long-lived assets.





Intangible
      Assets


The
      Company’s intangible assets are composed of a patent and license. They are
      amortized on a straight-line basis over ten and fifteen year lives,
      respectively.





Inventory


Inventories
      are stated at the lower of cost or market on a first-in, first-out basis. The
      Company’s inventory consists of the radiant modules (see Note 7) that are
      manufactured by an outside company. These are to be sold under the license
      agreement as describe in Note 7. At December 31, 2005, the Company had inventory
      with a cost of $3,595 on its balance sheet.





Provision
      for Taxes


Income
      taxes are provided based upon the liability method of accounting pursuant to
      Statement of Financial Accounting Standards No. 109, “Accounting for Income
      Taxes” (hereinafter “SFAS No. 109”). Under this approach, deferred income taxes
      are recorded to reflect the tax consequences in future years of differences
      between the tax basis of assets and liabilities and their financial reporting
      amounts at each year-end. A valuation allowance is recorded against deferred
      tax
      assets if management does not believe the Company has met the “more likely than
      not” standard imposed by SFAS No. 109 to allow recognition of such an asset. See
      Note 10.





F-11


Research
      and Development


Research
      and development expenses are charged to operations as incurred. The cost of
      intellectual property purchased from others that is immediately marketable
      or
      that has an alternative future use is capitalized and amortized as intangible
      assets. Capitalized costs are amortized using the straight-line method over
      the
      estimated economic life, typically 10 years, of the related asset. The Company
      periodically reviews its capitalized patent costs to assess recoverability
      based
      on the projected undiscounted cash flows from operations. Impairments are
      recognized in operating results when a permanent diminution in value
      occurs.





Revenue
      Recognition


The
      Company will recognize revenue from the sales of its patented hybrid module
      components. The Company will also recognize revenue from royalties its receives
      from the same licensee for all products marketed using the Company’s patented
      technology. See Note 7.





**NOTE
      3 - PREPAID EXPENSES**





Prepaid
      expenses at December 31, 2005 includes the prepayment of a commercial lease
      and
      an alarm system monitoring fees. See Note 14.





During
      the year ended December 31, 2004, the Company purchased a security system.
      The
      cost of the system included a prepayment of the related monitoring services,
      totaling $638.





F-12





**NOTE
      4 - PROPERTY AND EQUIPMENT**





Property
      and equipment are recorded at cost. Major additions and improvements are
      capitalized. Minor replacements, maintenance and repairs that do not increase
      the useful lives of the assets are expensed as incurred. Depreciation of
      property and equipment is calculated using the straight-line method over the
      expected useful lives of the assets of 5 to 7 years. Depreciation expense for
      the years ended December 31, 2005 and 2004 was $5,488 and $5,564,
      respectively.





Following
      is a summary of property, equipment, leasehold improvement, and accumulated
      depreciation:





December
                31,2005
            
            2004Machinery
            
            $
            29,019
            
            $
            17,811Office
                Furniture and Equipment
            
            
            13,591
            
            
            12,919Leasehold
                Improvements
            
            
            3,158
            
            
            2,89145,768
            
            
            33,621Less
                Accumulated Depreciation
            
            
            (26,095
            )
            
            (20,607
            )Property
                and Equipment - Net
            
            $
            19,673
            
            $
            13,014








**NOTE
      5 - PATENTS**





Costs
      relating to the development and approval of patents, other than research and
      development costs which are expensed, are capitalized and amortized using the
      straight-line method over ten years. The Company’s patents relate to the
      creation of an EMF
      permanent electromagnetic motor generator.





The
      following is a summary of the costs of patents and patents pending:





Cost
            
            
            Accumulated
                Amortization
            
            
            Net
                AmountBalance,
                December 31, 2003
            
            $
            68,500
            
            $
            12,226
            
            $
            56,2742004
                Activity
            
            
            —
            
            
            6,850
            
            
            —Balance,
                December 31, 2004
            
            
            68,500
            
            
            19,076
            
            
            49,4242005
                Activity
            
            
            —
            
            
            6,850
            
            
            —Balance,
                December 31, 2005
            
            $
            68,500
            
            $
            25,926
            
            $
            42,574





**NOTE
      6** - **TECHNOLOGY
      LICENSES**





On
      October 8, 1999, the Company acquired a technology license, which included
      all
      rights, title and interest in certain patent applications, improvements,
      proprietary information, trade secrets, technical and scientific information
      pertaining to several designs of the back EMF permanent electromagnetic motor
      generator from Mr. John C. Bedini, currently a director and officer of the
      Company. The Company acquired this license for a $50,000 note payable to Mr.
      Bedini, which was initially due on June 30, 2000. This note is unsecured and
      bears interest at the rate of 6% per annum. The payment due date for the note
      was extended until the completion of the Company’s second round of financing.
      See Note 7.





F-13


On
      May 1,
      2001, the Company acquired a second license, accompanied by similar rights
      as
      the aforementioned license, from Mr. Bedini in exchange for 5,140,326 shares
      of
      the Company’s common stock. The second license was recorded at $58,000 and is
      for certain technology referred to as Monopole Energy Delivery System (“MEDS”).
      MEDS is an energy producing system designed to use a magnetic monopole motor
      configuration and produce electrical energy.





See
      Note
      7 regarding royalty agreements on aforementioned licenses.





**NOTE
      7 - LICENSE AGREEMENT WITH AFFILIATED COMPANY**





On
      December 1, 2004, the Company entered into an exclusive technology license
      agreement with a corporation that is mainly controlled by a member of the board
      of directors. Pursuant to that agreement, the Company granted an exclusive
      license in North America to proprietary Energenx technology relating to a
      battery charging system, known as the Potential Battery Charger, for charging
      battery operated vehicles, excluding automobiles. The license granted includes
      a
      license under existing patents rights owned by Energenx and to any
      patent **** applications
      to be filed to the extent that it relates to the proprietary Energenx technology
      involving a battery charging system utilized for charging battery operated
      vehicles other than automobiles. The license shall exclusive for a period of
      ten
      years, with an option to extend the exclusivity for an additional ten years.
      There was no right to sublicense granted in the agreement.





The
      licensee agrees to pay royalties equal to five percent of the gross sales price
      of all products sold which utilize the licensed proprietary technology to
      Energenx. A de minimus up front license fee of $1 was paid for the
      license.





As
      condition to entering into the exclusive technology license agreement, the
      licensee agreed to purchase all of Energenx’s proprietary hybrid module
      components to be installed in the Potential Battery Chargers, named “Radiant
      modules” in the agreement, but now referred to as “Potential modules” between
      the parties, on a cost plus basis at a base price of $50 per module. Under
      the
      agreement, the Company is obligated to pay all patent filing, prosecution and
      maintenance costs.





While
      either party can terminate the exclusive technology license agreement if the
      other party defaults in the performance of any obligation under the agreement
      or
      is adjudged bankrupt, the license formally terminates upon expiration of the
      last to expire of the licensed patents or patents to be filed in the future
      concerning the proprietary Energenx technology.





F-14


**NOTE
      8 - RELATED PARTY TRANSACTIONS**





At
      December 31, 2003, unpaid loans from several shareholders totaled $147,455.
      These loans, with interest ranging from 6% to 8% per annum, were unsecured
      and
      fully paid by December 31, 2004. The majority of the outstanding principal
      and
      accrued interest at year end 2003 was converted into common stock during
      2004.





During
      the years ended December 31, 2005 and 2004, the Company paid expenses on behalf
      of Bedini Electronics, Inc., a company privately owned by two officers of
      Energenx. At the same time, Bedini Electronics, Inc. paid some of the expenses
      of the Company. This was done as the two companies shared joint office space
      and
      split certain expenses. The net amount owing from Bedini Electronics at December
      31, 2005 and 2004 is $10,176 and $12,202, respectively. In April 2005, the
      Company loaned Bedini Electronics $4,000 in cash for operations. This related
      loan, which bears interest of 6%, is payable in monthly installments of $352.
      At
      December 31, 2005, the unpaid loan balance included from Bedini Electronics
      included in notes receivable - related parties is $2,037.





During
      the years ended December 31, 2002, the Company loaned to two of its officers
      a
      total of $4,900. At the time, the Company was not paying salaries. Because
      the
      transactions occurred while the Company was still private, it was not subject
      to
      the Sarbanes-Oxley Act of 2002, and therefore, was not prohibited. During the
      year ended December 31, 2005, the officers repaid the amounts through a salary
      reduction.





For
      additional related party transactions, see Notes 6, 7,9 and 14.





**NOTE
      9 - NOTES PAYABLE**





In
      addition to the notes referenced in Note 8, the Company also received loans
      from
      outside parties in 2002 totaling $44,500. These notes were unsecured and
      interest was payable at 6% per annum. During the year ended December 31, 2004
      the Company converted the outstanding principal and accrued interest into
      925,375 shares of common stock. Accrued interest at December 31, 2005 and 2004
      was $2,674 which is the remaining balance of interest not converted. See Note
      12.




F-15





**NOTE
      10 - PROVISION FOR TAXES**





At
      December 31, 2005 the Company had net deferred tax assets calculated at an
      expected rate of 34% of approximately $501,000 principally arising from net
      operating loss carryforwards for income tax purposes. As management of the
      Company cannot determine that it is more likely than not that the Company will
      realize the benefit of the net deferred tax asset, a valuation allowance equal
      to the net deferred tax asset has been established at December 31, 2005. The
      significant components of the deferred tax asset at December 31, 2005 and 2004
      were as follows:





December
                31,
              2005
            
            December
                31,
              2004Net
                operating loss carryforward****
            
            $
            1,470,000
            
            $
            970,000Deferred
                tax asset
            
            $
            501,000
            
            $
            331,000Deferred
                tax asset valuation allowance
            
            
            (501,000
            )
            
            (331,000
            )Net
                deferred tax asset
            
            $
            —
            
            $
            —





At
      December 31, 2005, the Company has net operating loss carryforwards of
      approximately $1,470,000, which expire in the years 2019 through 2025. In 2003
      the Company recognized approximately $260,000 of losses from the issuance of
      common stock for services and license fees which were not deductible for tax
      purposes and are not included in the above calculation of deferred tax assets.
      The change in the allowance account from December 31, 2004 to December 31,
      2005
      was $170,000.





**NOTE
      11 - ACQUISITION OF EDWARD II, INC.**





On
      December 23, 2004, the Company acquired all of the outstanding common stock
      (430,000 shares) of Edward II, Inc. from its sole shareholder by paying $4,300
      in cash. The acquired shares were subsequently retired. The Company re-issued
      its outstanding common shares to its shareholders of record in compliance with
      a
      transaction pursuant to Rule 12g-3 of the Securities and Exchange Commission.
      For accounting purposes, the acquisition has been treated as a recapitalization
      of Energenx, with Energenx as the acquirer (reverse acquisition). The historical
      financial statements prior to December 23, 2004 are those of Energenx while
      the
      legal structure of Edward II, Inc. remains in place. Edward, II, Inc. had no
      assets or liabilities at the time of the acquisition.





**NOTE
      12 - COMMON STOCK**





During
      the initial period ended December 31, 1999, the Company issued 7,836,168 shares
      of its common stock at par, for cash.





During
      the year ended December 31, 2000, the Company issued 195,060 shares for
      convertible debt of $60,010. The Company also issued 9,750 shares for equipment
      valued at $3,250 and 330,000 shares for cash of $0.33 per share, or
      $110,000.





F-16


During
      the year ended December 31, 2001, the Company issued 453,000 shares of common
      stock for cash of $151,000, or $0.33 per share. The Company also issued 160,886
      share of common stock for services totaling $55,366, 1,086 shares of common
      stock to purchase equipment totaling $362, and 5,140,326 shares of common stock
      in payment of a technology license with a value of $58,000. See Note
      6.





On
      May 4,
      2001, the Company executed a 1 for 6 forward split to all shareholders of record
      as of May 1, 2001. The financial records have been restated to reflect this
      stock split in the accompanying financial statements.





During
      the year ended December 31, 2002, the Company issued 24,000 shares of its common
      stock for cash of $1.00 per share, or $24,000. The Company also issued 20,000
      shares of common stock in payment of debt of $20,000.





During
      the year ended December 31, 2003, the Company issued 3,200,000 shares of common
      stock to board members and other consultants at $0.05 per share, or $160,000. Also
      during the year ended December 31, 2003, the Company issued 2,000,000 shares
      of
      common stock to Mr. John Bedini as a supplement to the licensing agreement.
      The
      Company valued these shares at $0.05 per share, or $100,000.





During
      the year ended December 31, 2004, the Company issued 2,527,000 shares of common
      stock at $0.05 per share in payment of outstanding loans and interest totaling
      $126,350. In
      addition, the Company issued 2,400,000 shares of common stock and options to
      purchase an additional 2,400,000 shares of common stock for $0.21 per share
      for
      cash of $500,000. The stock options were issued with the stock in consideration
      of the stock purchase, and were valued at $0.03 per share, or $72,000 which
      was
      treated as a proration of additional paid-in capital upon the completion of
      this
      transaction. Furthermore, during 2004, this individual then exercised these
      options and purchased the 2,400,000 shares of common stock for $0.21 per share
      for an additional $500,000. See Note 13.





During
      the year ended December 31, 2005, the Company issued 400,000 shares of common
      stock at $0.50 per share for cash of $200,000. These shares were issued under
      an
      existing subscription agreement as part of a stock subscription plan and
      commitment for a total of $1,500,000 for 3,000,000 shares. As of December 31,
      2005, this commitment had $1,300,000 remaining for a future commitment of
      $2,600,000 shares of common stock. The Company is issuing the shares as the
      money is received.





**NOTE
      13 - STOCK OPTION PLAN**





Statement
      of Financial Accounting Standards No. 123, “Accounting for Stock-Based
      Compensation” (hereinafter SFAS No. 123), defines a fair value-based method of
      accounting for stock options and other equity instruments. The Company has
      adopted this method, which measures compensation costs based on the estimated
      fair value of the award and recognizes that cost over the service period. In
      2004, the Company adopted the changes to SFAS No. 123 as prescribed by SFAS
      No.
      123(R).





F-17


The
      Company’s board of directors approved the adoption of the “1999 Non-Qualified
      Stock Option and Stock Appreciation Rights Plan” by unanimous consent on October
      7, 1999. The plan was initiated to encourage and enable officers, directors,
      consultants, advisors and other key employees of the Company to acquire and
      retain a proprietary interest in the Company by ownership of its common stock.
      Up to 300,000 shares of common stock can be issued under the plan. No options
      have been issued under the plan through the date of this report.





During
      the year ended December 31, 2004, the Company granted 2,400,000 non-qualified
      options to an individual in consideration of purchasing an initial 2,400,000
      shares of common stock at a total unit price of $0.21 per unit. The purchase
      price of these units was allocated $0.18 per share and $0.03 per stock option.
      The options were valued using the Black-Scholes option pricing model using
      the
      following assumptions as required under SFAS No. 123): risk-free interest rate
      of 4%; volatility of 50%; no dividends; an expected life of no more than 1
      year;
      and an expected exercise price of $0.21 for six months changing to $0.40 for
      a
      further six months. The 2,400,000 options were exercised within the first six
      months of the grant for a cash payment of $500,000. Because the options were
      granted in consideration of a capital investment, they are treated for
      accounting purposes as warrants attached to the stock.




The
      following is a summary of stock option activity:





Number
              of
              Shares
            
            Weighted
              Average
              Exercise
              PriceOutstanding
                at January 1, 2004
            
            
            —
            
            $
            —Granted
            
            
            2,400,000
            
            
            0.21Exercised
            
            
            (2,400,000
            )
            
            0.21Outstanding
                at December 31, 2004
            
            
            —
            
            $
            —Granted
            
            
            —
            
            
            —Exercised
            
            
            —
            
            
            —Outstanding
                at December 31, 2005
            
            
            —
            
            $
            —Options
                Exercisable at December 31, 2005
            
            
            —
            
            $
            —Fair
                Market Value Per Share of Options Granted in 2005
            
            
            
            
            $
            —








**NOTE
      14 - COMMITMENTS AND CONTINGENCIES**





Leases


In
      2003,
      the Company abandoned its leased commercial space and moved to a different
      location. Accrued lease payments of $24,760 were included in accounts payable
      in
      the financial statements at December 31, 2003. In January 2004, the Company
      came
      to an agreement and paid $21,506 which was accepted by the landlord in full
      payment of the note. The remaining balance was written off as a gain on debt
      forgiveness in the financial statements.





F-18


On
      March
      31, 2004, the Company entered into a new two-year lease for office space. In
      lieu of a security deposit, the Company in 2004 prepaid the entire amount of
      the
      lease, $52,800, which was then included in prepaid expenses in the financial
      statements. The unamortized prepaid balance at December 31, 2005 was
      $6,600.





Royalty
      Agreements


The
      Company has a royalty agreement with Mr. John Bedini as part of its EMF license.
      Mr. Bedini is entitled to royalties of 3% of the net selling price of all
      products covered by the EMF license and 3% of any gross rent or lease income
      associated with the license.





The
      Company also has a royalty agreement with Mr. Bedini regarding the MEDS license
      for Mr. Bedini to receive 5% of the net selling price of all products covered
      by
      the MEDS license and 5% of any gross rent or lease income associated with the
      license. The agreement also provides that a 3% royalty shall be paid on any
      sub-licensee income derived from the MEDS license.





No
      royalties have been earned or paid under either agreement at December 31, 2005
      or 2004.





**NOTE
      15 - SUBSEQUENT EVENTS**





Subsequent
      to the date of the financials, the Company issued an additional 400,000 shares
      of common stock for cash of $200,000 under the subscription agreement described
      in note 12.


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