U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-K





x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
      the fiscal year ended March 31,
      2010





 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
      the transition period from ________ to
_________





Commission
File Number 000-52376





PROFIRE ENERGY,
INC.


(Name of
registrant as specified in its charter)





Nevada
            
            20-0019425(State
      or other jurisdiction of
            
            (I.R.S.
      Employerincorporation
      or organization)
            
            Identification
      No.)321
      South 1250 West, # 3Lindon, Utah
            
            84042(Address
      of principal executive offices)
            
            (Zip
      code)(801) 796-5127(Registrant’s
      telephone number, including area code)Securities
      registered pursuant to section 12(b) of the Exchange Act:NoneSecurities
      registered pursuant to section 12(g) of the Exchange Act:Common,
      $0.001 par value







Indicate
      by check mark if the registrant is a well-known seasoned issuer, as
      defined in Rule405 of
      the Securities Act.
              Yeso
          NoxIndicate
      by check mark if the registrant is not required to file reports pursuant
      to Section 13 or15(d)
      of the Exchange Act.
              Yes
      o
          No xIndicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of
      the Securities Exchange Act of 1934 during the preceding 12 months (or for
      such shorter period that theregistrant
      was required to file such reports), and (2) has been subject to such
      filing requirements for the past 90 days.
              Yes
      x
          No oIndicate
      by check mark whether the registrant has submitted electronically and
      posted on its corporate Web site, if any, every Interactive Data File
      required to be submitted and posted pursuant to Rule 405 of Regulation S-T
      (§232.405 of this chapter) during the preceding 12 months (or for such
      shorter period that the registrant was required to submit and post such
      files.)
              Yes o  No
      o    
 Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K (§229.405 of this chapter)  is not contained
      herein, and will not 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-K or any amendment to this Form
      10-K.
                  xIndicate
      by check mark whether the registrant is a large accelerated filed, an
      accelerated filer, a non-accelerated filer or a smaller reporting company.
      See the definitions of “large accelerated
      filer,” “accelerated filer” and
      “smaller reporting
      company” in Rule 12b-2 of the Exchange
  Act.
  Large
      accelerated filer o
                  Accelerated
      filer oNon-accelerated
      filer o
                  Smaller
      reporting company x(Do
      not check if smaller reporting company)
 Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the ExchangeAct.
                Yeso
          NoxThe
      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 as of the last business day of the registrant’s most
      recently completed second fiscal quarter was
    $9,959,455.As
      of June 16, 2010, the registrant had 45,000,000 shares of common stock,
      par value $0.001, issued and outstanding.Documents
      Incorporated by
Reference:  None





Table
of Contents


PagePART
      IItem
      1.
            Business
            5Item
      1A.
            Risk
      Factors
            9Item
      1B.
            Unresolved
      Staff Comments
            12Item
      2.
            Properties
            12Item
      3.
            Legal
      Proceedings
            12Item
      4.
            [Removed
      and Reserved]
            12PART
      IIItem
      5.
            Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
            12Item
      6.
            Selected
      Financial Data
            13Item
      7.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            14Item
      7A.
            Quantitative
      and Qualitative Disclosures About Market Risk
            18Item
      8.
            Financial
      Statements and Supplementary Data
            18Item
      9.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
            18Item
      9A(T).
            Controls
      and Procedures
            18Item
      9B.
            Other
      Information
            20PART
      IIIItem
      10.
            Directors,
      Executive Officers and Corporate Governance
            20Item
      11.
            Executive
      Compensation
            25Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            29Item
      13.
            Certain
      Relationships and Related Transactions, and Director
      Independence
            31Item
      14.
            Principal
      Accounting Fees and Services
            31PART
      IVItem
      15.
            Exhibits,
      Financial Statement Schedules
            32SIGNATURES
            34















Information
Concerning Forward Looking Statements





This annual report on Form 10-K
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities and
Exchange Act of 1934, as amended.  For this purpose any statement
contained in this annual report that is that is not a statement of historical
fact may be deemed to be forward-looking.  These statements relate to
future events or future financial performance.  In some cases, you can
identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of
these terms or other comparable terminology. Such statements are based on
currently available financial and competitive information and are subject to
various risks and uncertainties that could cause actual results to differ
materially from historical experience and present expectations.  Undue
reliance should not be placed on such forward-looking statements as such
statements speak only as of the date on which they are made.  These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements.





Forward-looking statements are
predictions and not guarantees of future performance or events.  The
forward-looking statements are based on current industry, financial and economic
information, which we have assessed but which by its nature is dynamic and
subject to rapid and possibly abrupt changes.  Our actual results
could differ materially from those stated or implied by such forward-looking
statements due to risks and uncertainties associated with our
business.  We hereby qualify all our forward-looking statements by
these cautionary statements. We undertake no obligation to amend this report or
revise publicly these forward looking statements (other than pursuant to
reporting obligations imposed on registrants pursuant to the Securities Exchange
Act of 1934) to reflect subsequent events or circumstances.





These forward-looking statements speak
only as of their dates and should not be unduly relied upon.  We
undertake no obligation to amend this report or revise publicly these
forward-looking statements (other than pursuant to reporting obligations imposed
on registrants pursuant to the Securities Exchange Act of 1934) to reflect
subsequent events or circumstances, whether as the result of new information,
future events or otherwise.





Throughout
this report, unless otherwise indicated by the context, references herein to the
“Company”, “Profire”, “we”, our” or “us” means Profire Energy, Inc., a Nevada
corporation and its corporate subsidiaries and predecessors.





The following discussion should be read
in conjunction with our financial statements and the related notes contained
elsewhere in this report and in our other filings with the Securities and
Exchange Commission.










PART I





Item
1.                      Business





Overview





We originally incorporated under the
name The Flooring Zone, Inc. in the State of Nevada on May 5,
2003.  On September 30, 2008 the Flooring Zone, Inc. entered into an
Acquisition Agreement with Profire Combustion, Inc., an Alberta, Canada
corporation, under which The Flooring Zone, Inc. acquired 100% of the
outstanding common shares of Profire Combustion, Inc. in exchange for the
issuance of 35,000,000 common shares.





Following
closing of the exchange, the three Profire Combustion, Inc. shareholders held
78% of The Flooring Zone, Inc. common stock outstanding after the
transaction.  Therefore Profire Combustion, Inc. is considered the
acquirer for financial reporting purposes. Accordingly, the accompanying
financial statements are the financial statements of Profire Combustion, Inc.
for all periods presented.





On December 8, 2008 we amended our
Articles of Incorporation to change the name of the corporation to Profire
Energy, Inc.  The name change, and corresponding OTCBB trading symbol
change from FZON to PFIE, became effective on January 20, 2009.





Principal Products and
Services





We are a provider of safe and efficient
burner-management systems and services for use in oilfield
combustion.





In the oil and natural gas industry
there are numerous demands for heat generation and control.  The
product in pipelines and storage tanks must be kept sufficiently warm to flow
efficiently.  Equipment of all kinds, including line-heaters,
dehydrators, dewaterers, separators, treaters, amine reboilers, free-water
knockout systems, etc. require sources of heat to satisfy their various
functions.  In addition to the need for combustion products to meet
heating demands, there is also a need for skilled combustion
technicians.  Profire was founded to try to meet some of these
needs.





Initially, our primary focus was on
providing installation and maintenance services to service the products and
systems of other manufacturers.  Management soon determined, however,
that it would be in our best interest to also establish ourselves as a product
supplier.  Management also recognized the need to develop our own
proprietary burner-management systems to monitor and control
combustion.  Our principal developmental goal in building our own
system was to ensure that the system would meet or exceed the highest safety and
quality standards in the industry and that the system would be functional and
easily controlled by oilfield operators.  With this goal in mind, we
developed the Profire 1100 combustion-management system.  This system
has become widely popular in Western Canada, with sales to such companies as
Exxon-Mobil, Shell, ConocoPhillips, Devon Energy, Petro-Canada, Encana and many
others.  This system has also been sold and installed in various parts
of the world, including the United States, France, Italy, England, the Middle
East, Australia, China and Brazil.












In addition to the Profire 1100
combustion management system, we manufacture other systems and products for
sale, including a burner management system specific to incinerator systems,
called the Profire 1100i and “fuel-trains” or “valve-trains” to accompany system
installations.  These fuel-trains include piping, valves, controls,
etc., relating to the process of safely providing fuel to burners, as well as
having safety controllers to monitor operations.  We have also
developed and are currently testing a more advanced burner-management system
prototype that we believe will soon be market ready.





Principal Markets





Since inception, we have focused our
sales efforts primarily in Western Canada.  Given our success in that
market, we have determined to expand our sales efforts to other markets,
particularly the U.S. market.  At present, we believe the best way to
penetrate foreign markets is to retain well-established supply companies to
represent Profire products and market them to their existing
customers.  We hope to take advantage of those existing relationships
to rapidly establish market share in new markets.  We also believe
this strategy will be less costly than trying to establish our own in-house
sales force in each new market we wish to enter.  We are currently
contacting product supply houses in various new markets to represent our
products. We have also begun to look for sales personnel in the U.S. market who
would be primarily responsible for creating and establishing these
relationships.





Demand for Profire
Products





As government and industry continue to
heighten safety standards, demand for combustion safety controllers and
management systems, such as those we produce, continues to grow.  The
arena of mixing fire and gas is an area of obvious focus for safety
regulators.  Governing bodies have historically been reticent to
establish standards that were too demanding, as safety products and policing
capabilities were not readily available.  More recently, however,
regulators in the United States have begun enacting more stringent compliance
and efficiency requirements.  We have always focused on providing
products and services that exceed existing safety standards, therefore, we
believe demand for our products will increase as regulators continue to tighten
safety and efficiency standards in the industry.





In addition to satisfying regulatory
and safety requirements, we believe oil and gas companies are beginning to
recognize the significant increases in efficiency that can be realized through
the use of our burner management systems and products.





Suppliers and Availability
of Raw Materials





We have contracted with a third-party
manufacturer, to manufacture our burner management systems, specifically the
Profire 1100 and the Profire 1100i.  This has helped to improve
manufacturing efficiencies.  Under the direction of our product
engineer, the manufacturer is able to procure all electronic parts, specialty
cases and components, and from those, assemble the complete
system.  Using specialty equipment and processes provided by us, the
system is tested on-site by the manufacturer and if the finished product is
acceptable, it is shipped to us for distribution.  Orders to the
manufacturer are typically for 500 to 1,000 systems.  The shipments
are usually limited to 250 systems, so that in the event any one shipment is
lost or damaged, inventory levels are not seriously impacted.  The
entire process is typically completed within sixty days of issuing the purchase
order.












While we
have a contract in place with this manufacturer, should we lose its services,
for whatever reason, we believe we have adequate alternative manufacturing
sources available.  We do not have contracts in place with the parties
from whom we acquire parts and products.  We believe, however, there
are adequate alternative sources for parts and products available to us should
they be needed.  In the past, we have not experienced any sudden and
dramatic increases in the prices of the major components for our
systems.  Because the component parts we use are all low priced (none
are currently higher than $40), we do not anticipate that a sudden or dramatic
increase in the price of any particular component part would have a material
adverse effect on our results of operations or financial condition even if we
were unable to increase our sale prices proportionate to any such component
price increases.





Dependence upon Major
Customers





During the fiscal years ended March 31,
2010, 2009 and 2008, the following customers accounted for more than 10% of our
total revenues:





Year
      ended March 31,Customer
            
            2010
            
            2009
            
            2008Grit
      Industries/A-Fire Holdings Ltd.
            
            26%
            
            26%
            
            32%Heating
      Solutions International Inc.
            
            19%
            
            32%
            
            12%Guest
      Controls
            
            23%
            
            *
            
            **  Less
      than 10%.





Often our
customers, as is the case with Grit Industries Inc./A-Fire Holdings Ltd. and
Heating Solutions International Inc., are contractors for large oil companies
who specify the use of our equipment.  Typically, our customers bid
for the same jobs, so if one does not get the job, another
will.  Regardless, of who wins the contract, if the oil company
bidding out the job requires our equipment the winning bidder has to acquire the
equipment from us.  Of course, the loss of any one or more of these
major customers could have a material adverse effect on our business,
consolidated financial condition, results of operations and cash
flows.





Backlog





As of
March 31, 2010, there was no current backlog.  Sales backlog consists
of firm customer orders for which a purchase or work order has been received,
satisfactory credit or a financing arrangement exists, and delivery is
scheduled.  There can be no assurance, however, that the orders
representing such backlog will not be cancelled.












Competition





Based on our experience, we believe
most of the other companies in our industry are small one or two man service
companies or product retailers who sell products but have no service department
to support their products.  As we offer both product sales and
service, we believe we hold a competitive advantage over many of our
competitors.  We recognize, however, that the oilfield services
industry is highly competitive.  As this industry grows and matures we
expect other companies will seek to enter this market.  Many of these
companies may be more highly capitalized, more experienced, more recognized or
better situated to take advantage of market opportunities.





Research and Development





We place strong emphasis on
product-oriented research and development relating to the development of new or
improved products and systems.  During the years ended March 31, 2010
and March 31, 2009 we spent $73,722 and $151,036, respectively, on research and
development programs.  None of these research and development costs
were directly borne by our customers.





Patents, Trademarks and Other
Intellectual Property





We
believe that the success of our business depends more on the technical
competence, creativity and marketing abilities of our employees than on any
individual patent, trademark, or copyright.  Historically, the cost,
both in time and dollars, of seeking intellectual property protection has not
made sense for us.  Nevertheless, as part of our ongoing research,
development and manufacturing activities, we may, in the future, seek patents or
other appropriate intellectual property rights and
protections.





Effects of Compliance with Federal,
State and Local Laws





Our
business is affected by local, provincial, state, federal and foreign laws and
other regulations relating to the gas and electric safety standards and codes
presently extant in the oil and gas industry, as well as laws and regulations
relating to worker safety and potentially environmental
protection.  We cannot predict the level of enforcement of existing
laws and regulations or how such laws and regulations may be interpreted by
enforcement agencies or court rulings, whether additional laws and regulations
will be adopted, or the effect such changes may have on us, our business or
financial condition.





Additionally,
our customers are affected by laws and regulations relating to the exploration
for and production of natural resources such as oil and natural
gas.  These regulations are subject to change and new regulations may
curtail or eliminate customer activities in certain areas where we currently
operate.  We cannot determine the extent to which new legislation may
impact customer activity levels, and ultimately, the demand for our products and
services.





Government Contracts





No material portion of our business is
subject to renegotiation of profits or termination of contracts by the United
States or other governments.











Employees





As of March 31, 2010, we had
approximately 16 employees, including 15 full-time employees.





Available Information





We file annual, quarterly and current
reports, proxy statements and information statements and any amendments to those
reports or statements, with the United States Securities and Exchange Commission
(“SEC”).  The public may read and copy any materials we file with the
SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC
20549.  The public may obtain information on the operation of the
Public Reference Room by calling the SEC at
1-800-SEC-0330.  Alternatively, you may access these reports at the
SEC’s internet website: http://www.sec.gov/.





Item
1A.                   Risk
Factors





In addition to the risks discussed
under the heading “Business” we are subject to
the following risks.





Risks Relating to our
Business





Our
business and financial condition could be materially impacted if we lose the
services of certain employees.  During the fiscal year we
brought in additional employees and are working to cross train employees to
lessen our dependence on any particular individual.  We believe this
has decreased our dependence on any one individual.  We do not
currently maintain key-man insurance on any of our executive officers or
employees.  Although it would not solve the potential problem of a
loss of the services of any particular employee, we may seek key-man insurance
on these individuals, and perhaps others, to help in the case of such an
event




If we
are unable to attract and retain skilled workers that could impair our growth
potential and profitability.  Our ability to remain productive
and profitable depends substantially on our ability to attract and retain
skilled workers.  Our ability to expand our operations is in part
impacted by our ability to increase our labor force.  The demand for
skilled oilfield employees is high and the supply is very limited.  A
significant increase in the wages paid by competing employers could result in a
reduction in our skilled labor force, increases in the wage rates paid by us, or
both.  If either of these events were to occur, our capacity and
profitability could be diminished, and our growth potential could be
impaired.





The
concentration of our customers in one industry and one region may impact our
overall exposure to credit risk.  Substantially all of our
current customers operate in the energy industry in Western
Canada.  This concentration of customers in one industry and one
region may impact our overall exposure to credit risk, either positively or
negatively, in that customers may be similarly affected by changes in economic
and industry conditions.  We perform ongoing credit evaluations of our
customers and do not generally require collateral in support of our trade
receivables.











Our
business has potential liability for litigation, personal injury and property
damage claims assessments.  Our operations involve exposure to
inherent risks, including explosions and fires.  If any of these
events were to occur, it could result in liability for personal injury and
property damage, pollution or other environmental hazards or loss of
production.  Litigation may arise from a catastrophic occurrence at a
location where our equipment and services are used.  This litigation
could result in large claims for damages. The frequency and severity of such
incidents could affect our operating costs, insurability and relationships with
customers, employees and regulators.  These occurrences could have a
material adverse effect on Profire.  We maintain what we believe is
prudent insurance protection.  We cannot assure you that we will be
able to maintain adequate insurance in the future at rates we consider
reasonable or that our insurance coverage will be adequate to cover future
claims and assessments that may arise.





Some of
our products use equipment and materials that are available from a limited
number of suppliers.  We purchase equipment provided by a
limited number of manufacturers who specialize in combustion burner
equipment.  During periods of high demand these manufacturers may not
be able to meet our requests for timely delivery, resulting in delayed
deliveries of equipment and higher prices for equipment.  There are a
limited number of suppliers for certain materials used in burner management
systems, our largest product line.  While these materials are
generally available, supply disruptions can occur due to factors beyond our
control.  Such disruptions, delayed deliveries, and higher prices
could limit our ability to provide services or increase the costs of providing
services thus reducing revenues and profits.





If we
are unable to expand into new markets our ability to grow our business and
profitably as planned could be materially adversely
effected.  We intend to pursue an aggressive growth strategy
for the foreseeable future.  Projected future operating results will
depend largely upon our ability to expand to new markets and increase
sales.  To support this growth, we will increase our marketing
expenditures, add new employees and open additional offices.  There
can also be no assurance that we will be able to expand our market share in our
existing markets or successfully enter new or contiguous markets.  Nor
can there be any assurance that such expansion will not adversely affect our
profitability and results of operations.  If we are unable to manage
our growth effectively, our business, results of operations and financial
condition could be materially adversely affected.





If we
are unable to manage growth effectively our business, results of operations and
financial condition could be materially adversely
affected.  Our ability to successfully expand to new markets is
dependent on a number of factors including:






●
            our
      ability to hire, train and assimilate new employees;●
            the
      adequacy of our financial resources; and●
            our
      ability to correctly identify and exploit new geographical markets and to
      successfully compete in those
markets




There can be no assurance that we will
be able to achieve our planned expansion, that our products will gain access to
new markets or be accepted in new marketplaces, or that we will achieve planned
operating results or results comparable to those we experience in existing
markets in the new markets we enter.












Changes
in the level of capital spending by our customers could negatively impact our
business and financial condition. Our principal customers are oil and
natural gas exploration and production companies.  Our results of
operations are dependent on the level of capital spending by our
customers.  The energy industry’s level of capital spending is
substantially related to the prevailing commodity price of natural gas and crude
oil.  Low commodity prices have the potential to reduce the amount of
crude oil and natural gas that our customers can produce
economically.  While our products actually enhance the efficiency of
their wells, we believe a prolonged downturn in market price will lead to
reductions in the capital spending budgets of our clients and reductions in the
demand for our products and services.





Risks Relating to our
Stock





Liquidity
of Common Stock. Our common stock has limited trading volume on the
Over-the-Counter Bulletin Board and is not listed on a national
exchange.  Moreover, a significant percentage of the outstanding
common stock is “restricted” and therefore subject to the resale restrictions
set forth in Rule 144 of the rules and regulations promulgated by the SEC under
the Securities Act.  These factors could adversely affect the
liquidity, trading volume, price and transferability of our common
stock.





Our
management has a substantial ownership interest in our common stock and the
availability of our common stock to the investing public may be
limited.  Our management owns approximately 80% of our
outstanding common stock.  The availability of our common stock to the
investing public may be limited to those shares not held by our executive
officers, directors and their affiliates, which could negatively impact our
trading prices and affect the ability of our minority stockholders to sell their
shares.  Future sales by executive officers, directors and their
affiliates of all or a portion of their shares could also negatively affect the
trading price of our common stock.





You may
face significant restrictions on the resale of our common stock due to federal
regulations of penny stocks.  Once common stock is subject to
the requirements of Rule 15(g)9, promulgated under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), as long as the price of our common
stock is below $4.00 per share. Under such rule, broker-dealers who recommend
low-priced securities to persons other than established customers and accredited
investors must satisfy special sales practice requirements, including a
requirement that they make an individualized written suitability determination
for the purchaser and receive the purchaser's consent prior to the
transaction.  The Securities Enforcement Remedies and Penny Stock
Reform Act of 1990, also requires additional disclosure in connection with any
trades involving a stock defined as a penny stock.  Generally, the
Commission defines a penny stock as any equity security not traded on an
exchange or quoted on NASDAQ that has a market price of less than $4.00 per
share.  The required penny stock disclosures include the delivery,
prior to any transaction, of a disclosure schedule explaining the penny stock
market and the risks associated with it.  Such requirements could
severely limit the market liquidity of the securities and the ability of
purchasers to sell their securities in the secondary market.















Item
1B.                   Unresolved
Staff Comments





None.





Item
2.                      Properties





Our
principal operational offices are located at Bay 12, 55 Alberta Avenue, Spruce
Grove, Alberta, Canada where we own approximately 8,000 square feet of
office and warehouse space.  We anticipate this facility will be
suitable and adequate for our needs for the next twelve months.  If
the need arose, however, we believe we could secure additional space on
acceptable terms.





We also
own approximately 3,000 square feet of executive office and warehouse space
located at 321 South 1250 West, #3 in Lindon, Utah.  We anticipate
this facility will be suitable and adequate for our needs for the next twelve to
twenty four months.  If the need arose, however, we believe we could
secure additional space on acceptable terms.





Item
3.                      Legal
Proceedings





From
time to time, we may become involved in various lawsuits and legal proceedings
which arise in the ordinary course of business.  However, litigation
is subject to inherent uncertainties, and an adverse result in matters may arise
from time to time that may harm our business. We are not currently aware of any
legal proceedings or claims against the Company.





Item
4.                      [Removed
or Reserved]





PART II






Item
      5.                    
      Market for Common Equity, Related Stockholder Matters and Issuer Purchases
      of Equity Securities


Our
common shares trade on the Over-the-Counter Bulletin Board (“OTCBB”) under the
symbol “PFIE.OB.”





The following table presents the high
and low bid quotations for the fiscal years ended March 31, 2010 and March 31,
2009.  The published high and low bid quotations were furnished to us
by the Pink OTC Markets, Inc.  These quotations represent prices
between dealers and do not include retail markup, markdown or
commissions.  In addition, these quotations do not represent actual
transactions and have not been adjusted for stock dividends or
splits.





BID
      PRICESHIGH
            
            LOWFiscal
      year ended March 31, 2010Fourth
      Quarter
            
            .31
            
            .18Third
      Quarter
            
            .27
            
            .10Second
      Quarter
            
            .27
            
            .25First
      Quarter
            
            .25
            
            .20














Fiscal
      year ended March 31, 2009Fourth
      Quarter
            
            .25
            
            .20Third
      Quarter
            
            .45
            
            .15Second
      Quarter
            
            .30
            
            .25First
      Quarter
            
            .35
            
            .30






Holders





As of June 16, 2010, we had
approximately 123 shareholders holding 45,000,000 shares of our common
stock.The number of
record shareholders was determined from the records of our stock transfer agent
and does not include beneficial owners of common stock whose shares are held in
the names of various security brokers, dealers and registered clearing
houses.





Dividends





We have
not declared a cash dividend on any class of common equity in the last two
fiscal years.  There are no restrictions on our ability to pay cash
dividends, other than any state law that may be applicable.  Our board
of directors does not anticipate paying any dividends in the foreseeable future;
it intends to retain the earnings that could be distributed, if any, for
operations.





Performance Graph





We are a smaller reporting company, as
defined in Rule 12b-2 promulgated under the Securities Exchange Act of
1934, and accordingly we are not required to provide this
information.





Recent Sales of Unregistered
Securities





During the fourth quarter of the year
ended March 31, 2010 we did not sell any equity securities that were not
registered under the Securities Act of 1933.





Purchases of Equity Securities by the
Issuer and Affiliated Purchasers





During the fourth quarter of the year
ended March 31, 2010 neither we, nor any affiliated purchasers, purchased any of
our equity securities.





Item
6.                      Selected
Financial Data





We are a smaller reporting company, as
defined in Rule 12b-2 promulgated under the Securities Exchange Act of
1934, and accordingly we are not required to provide this
information.














Item
7.                      Management's
Discussion and Analysis of Financial Condition and Results of Operations





For a complete understanding, this
Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the Consolidated Financial
Statements and Notes to the Consolidated Financial Statements contained in this
annual report on Form 10-K.





Some of
the statements set forth in this section are forward-looking statements relating
to our future results of operations.  Our actual results may vary from
the results anticipated by these statements.  Please see “Information Concerning
Forward-Looking Statements” on page 4.





Results of
Operations





Comparison of the years
ended March 31, 2010 and 2009.





Total
Revenues





Our total revenues during the year
ended March 31, 2010 decreased nearly 6% to $5,912,350 from $6,257,269 during
the year ended March 31, 2009.  Low oil prices during the first half
of 2010 and the weak worldwide economy decreased revenues significantly during
that period. However, the strong rebound in oil prices resulted in improved
sales during the second half of 2010. As a result of the higher oil prices
during the second half of 2010, sales of our products and services were almost
equal to 2009. We have worked to expand our operations by adding facilities in
the United States. We expect to realize significant U.S. based revenues during
the coming year.  During fiscal 2010, total sales decreased only 6%
however service revenue decreased 24%.  During the year ended March
31, 2010, product sales accounted for 89% of total revenues and service sales
accounted for 11% of total revenue.  During the year ended March 31,
2009 the mix of product and service sales was slightly more service oriented,
with product sales at 86% of total revenues and service sales accounting for the
remaining 14% of total revenue.  We believe the decrease in services
revenues as a percentage of total revenues is related to a shift in our business
model to focus our efforts to establishing ourselves as a product manufacturer
and retailer.  This shift, was somewhat offset by the seasonal nature
of our product sales, coupled with the effects of the economic slowdown, which
had some clients delaying product purchases during the first half of the
year.  We expect total revenues will grow as we continue to expand our
operations and due to higher oil prices. However with the general worldwide
economic slowdown, we expect revenue growth to be modest in the upcoming
year.





Cost of Goods
Sold




Cost of
goods sold during the year ended March 31, 2010 was $2,289,414 compared to
$3,277,877 during the year ended March 31, 2009.  While revenue
decreased 6%, cost of goods sold decreased by 30%.  Our gross margin
for 2010 was 61% compared to 48% in 2009. This reduction in cost of goods sold
and improvement in margin was principally the result of a surge in demand during
our third fiscal quarter.  In order to quickly meet the increased
demand, in some instances we utilized refurbished components that had been
returned and had previously been expensed and therefore had a very low impact on
our cost of goods sold.  We do not expect this to be a recurring
event.  Margins and cost of goods sold also improved as a result of
pricing volume discounts from certain suppliers that gave us incentives to buy
inventory in greater quantity during 2010 and more efficient assembly of
components before sale and installation.  We anticipate that as
product sales increase in the coming year cost of goods sold will also
increase.  However, with anticipated volume discounts and improved
efficiency we believe cost of goods sold, as a percentage of total revenues,
will not be significantly higher in fiscal 2011.












General and Administrative
Expenses





General and administrative expenses for
the year ended March 31, 2010 were $1,005,846, a 5% decrease compared to the
year ended March 31, 2009.  Much of the decrease can be attributed to
the general decrease in operational activity.  As sales and revenue
declined during the year we managed variable costs, as much as possible, to help
maintain profitability.





Payroll
Expense





Payroll expense during the year ended
March 31, 2010 increased 53% to $827,418 compared to $539,159 during the year
ended March 31, 2009.  Payroll expense increased as a result of hiring
additional personnel, including a part-time sales director, in anticipation of
expansion and growth in sales.  We anticipate payroll expense will
increase at a slower pace in the upcoming fiscal year as we continue efforts to
expand our sales force.





Depreciation
Expense





Depreciation expense during fiscal 2010
was $60,496, or 49% higher than fiscal 2009. Depreciation expense increased in
2010 primarily due to addition of production equipment as we expanded our
capacity.





Net
Income Before Income Tax





Net income before income taxes during
the 2010 fiscal year increased to $1,723,466 from $1,334,052 during fiscal
2009.  This 29% increase was the result of the 22% increase in gross
profit, which was only partially offset by a 16% increase in operating
expenses.





Income Tax
Expense





Income
tax expense decreased from $458,907 to $444,191.  The effective tax
rate  decreased from 34.4% in 2009 to 25.8% in 2010 due to a slight
decrease in the statutory rate from 29.2% in 2009 to 28.7% in 2010 and a
decrease in non-deductible expenses.  We expect the rate to be close
to the statutory rate in subsequent years.  We anticipate that as
revenues grow, our income tax expense will also be higher.  We have
exhausted our tax credits associated with the Canadian small business deductions
from prior years, thus we expect taxes as a percentage of revenue to be higher
than in prior periods in which we made a profit.





Foreign Currency Translation
Gain (Loss)





Our
consolidated financial statements are presented in U.S. dollars.  Our
functional currency is Canadian dollars.  Our financial statements
were translated to U.S. dollars using year-end exchange rates for the balance
sheet and weighted average exchange rates for the statements of
operations.  Equity transactions were translated using historical
rates.  Foreign currency translation gains or losses as a result of
fluctuations in the exchange rates are reflected in the statement of operations
and comprehensive income.












Therefore,
the translation adjustment in our consolidated financial statements represents
the translation differences from translation of our financial
statements.  As a result, the translation adjustment is commonly, but
not always, positive if the average exchange rates are lower than exchange rates
on the date of the financial statements and negative if the average exchange
rates are higher than exchange rates on the date of the financial
statements.





During the year ended March 31, 2010,
we recognized a foreign currency translation gain of $489,571 compared to
foreign currency translation loss of $288,746 during the year ended March 31,
2009.  This gain was the result of the strengthening of the Canadian
dollar versus the US dollar.





Total Comprehensive
Income





For the foregoing reasons, we realized
a total comprehensive income of $1,790,178, or $0.03 per share during the year
ended March 31, 2010 compared to total comprehensive income of $575,154, or
$0.02 per share during the year ended March 31, 2009.





Liquidity and Capital
Resources





Since inception, our operations have
been financed primarily from cash flows from operations and loans from Company
executives.  We have a $400,000 revolving credit line with a local
banking institution that we also use from time to time to satisfy short-term
fluctuations in cash flows.  At March 31, 2010 we had $-0- outstanding
on our line of credit.





As of March 31, 2010 we had current
assets of $3,656,626 and total assets of $4,215,952 including cash and cash
equivalents of $1,931,757.  At March 31, 2010 total liabilities were
$723,019, all of which were current liabilities.





During the year ended March 31, 2010
and 2009 cash was primarily used to fund operations.  See below for
additional discussion and analysis of cash flow.





Year
      ended
              March
      31, 2010
            
            Year
      ended
              March
      31, 2009Net
      cash provided by (used in) operating activities
            $
            1,713,279
            
            $
            477,175Net
      cash (used in) investing activities
            $
            (172,120)
            
            $
            (50,772)Net
      cash provided by (used in) financing activities
            $
            -
            
            $
            (205,972)Effect
      of exchange rate changes on cash
            $
            164,039
            
            $
            (26,969)NET
      INCREASE IN CASH
            $
            1,705,198
            
            $
            193,462














Net cash provided by our operating
activities increased by $1,236,104.  As discussed above, during the
year ended March 31, 2010 we realized a significant increase in net income which
was only partially offset by decreases in income taxes payable.  As
noted above, from time to time we may also draw down on our revolving credit
line to meet short-term cash needs.  Accounts receivable continue to
increase year to year and these could be factored if needed to provide cash
flow, but to date this has not been necessary.  We have no current
capital commitments outside of general operations and do not anticipate any in
the near future.





Our accounts receivables are higher due
to our increased sales in the second half of 2010.  Inventory may
fluctuate as we have opportunities to acquire inventory at favorable rates as we
buy in scale.  This may ebb and flow from quarter to
quarter.





During the year ended March 31, 2010 we
realized net cash of $1,705,198 due to a significant increase in revenue which
was partially offset by a decrease in income taxes payable and the purchase of
new fixed assets.





Summary of Material Contractual
Commitments




The following table lists our
significant commitments as of March 31, 2010.






Contractual Commitments
            Total
            Payments
      Due by Fiscal YearLess
      than 1 year
            1-3
      years
            3-5
              years
            More
      than
              5 yearsRevolving
      credit line
            $    -
            $    -
            $    -
            $    -
            $   -Short
      term debt-related parties
            $    -
            $    -
            $    -
            $    -
            $   -Total
            $    -
            $    -
            $    -
            $    -
            $   -





Inflation





We believe that inflation has not had a
significant impact on our operations since inception.





Seasonality





Activity of our customers will
sometimes be affected by weather and season.  As the majority of our
operations currently are in western Canada, sales may slow due to winter
conditions that may hamper the ability of our customers to build out new
locations or maintain and access current locations.  We typically have
our strongest revenue growth cycles in the non-winter months.





Off-Balance Sheet
Arrangements





As of March 31, 2010 and 2009 we had no
off-balance sheet arrangements.












Recently Issued Financial Accounting
Standards





For
details of applicable new accounting standards, please, refer to Recently Issued Accounting
Pronouncementsin Note 1of ourConsolidated Financial
Statements.





Item
7A.                   Quantitative
and Qualitative Disclosure about Market Risk





We are a smaller reporting company, as defined in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934, and accordingly we are not required
to provide the information required by this Item.





Item
8.                      Financial
Statements and Supplementary Data





See
Consolidated Financial Statements listed in the accompanying index to the
Consolidated Financial Statements on Page F-1 herein.




Item
9.                    
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure




During
the fiscal year ended March 31, 2010 there were no changes in or disagreements
with our independent registered public accounting firm on accounting and
financial disclosure.





Item
9A(T).              Controls
and Procedures





Evaluation of Disclosure
Controls and Procedures







As of the
end of the period covered by this annual report, management performed, with the
participation of our Chief Executive Officer and our Chief Financial Officer, an
evaluation of the effectiveness of our disclosure controls and procedures as
defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure
controls and procedures are designed to ensure that information required to be
disclosed in the reports we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and our Chief Financial
Officer, to allow timely decisions regarding required disclosures. Based on the
evaluation and the identification of the material weaknesses in internal control
over financial reporting described below our Chief Executive Officer and our
Chief Financial Officer concluded that, as of March 31, 2010, our
disclosure controls and procedures were not effective.





Management’s Report on
Internal Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Exchange Act as a process designed by, or under the supervision of, the
company’s principal executive officer and principal financial officer and
effected by our board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:












·
            pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of the assets of the
      company;


·
            provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the company
      are being made only in accordance with authorizations of management and
      directors of the company; and


·
            provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the company’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.





As of March 31, 2010 we conducted an
evaluation, under the supervision and with the participation of our principal
executive officer and principal financial officer, of the effectiveness of our
internal control over financial reporting based on the criteria for effective
internal control over financial reporting established in “Internal
Control — Integrated Framework,” issued by the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission. Based upon this assessment, we
determined that there are material weaknesses affecting our internal control
over financial reporting.





The
matters involving internal controls and procedures that our management considers
to be material weaknesses under COSO and SEC rules are: (1) lack of a
functioning audit committee and lack of independent directors on our board of
directors, resulting in potentially ineffective oversight in the establishment
and monitoring of required internal controls and procedures; (2) inadequate
segregation of duties consistent with control objectives; (3) insufficient
written policies and procedures for accounting and financial reporting with
respect to the requirements and application of US GAAP and SEC disclosure
requirements; and (4) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned potential material weaknesses were
identified by our Chief Financial Officer in connection with the preparation of
our financial statements as of March 31, 2010 who communicated the matters to
our management and board of directors.





Management
believes that the material weaknesses set forth in items (2), (3) and (4) above
did not have an affect on our financial results. However, the lack of a
functioning audit committee and lack of a majority of independent directors on
our board of directors, resulting in potentially ineffective oversight in the
establishment and monitoring of required internal controls and procedures, can
impact our financial statements.











Management’s
Remediation Initiatives





Although
we are unable to meet the standards under COSO because of the limited funds
available to a company of our size, we are committed to improving our financial
organization. As funds become available, we will undertake to: (1) create a
position to segregate duties consistent with control objectives, (2) increase
our personnel resources and technical accounting expertise within the accounting
function (3) appoint one or more outside directors to our board of directors who
shall be appointed to a Company audit committee resulting in a fully functioning
audit committee who will undertake the oversight in the establishment and
monitoring of required internal controls and procedures; and (4) prepare and
implement sufficient written policies and checklists which will set forth
procedures for accounting and financial reporting with respect to the
requirements and application of US GAAP and SEC disclosure requirements.





We will
continue to monitor and evaluate the effectiveness of our internal controls and
procedures and our internal control over financial reporting on an ongoing basis
and are committed to taking further action and implementing additional
enhancements or improvements, as necessary and as funds allow.  However,
because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that misstatements due to error or fraud
will not occur or that all control issues and instances of fraud, if any, within
the Company have been detected.  These inherent limitations include the
realities that judgments in decision making can be faulty and that breakdowns
can occur because of simple error or mistake. The design of any system of
controls is based in part on certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions.  Projections of any
evaluation of controls effectiveness to future periods are subject to risks.





Item
9B.                  Other
Information





None.





PART  III




Item
10.                  
Directors, Executive Officers, Promoters, Control Persons and Corporate
Governance; Compliance with Section 16(a) of the Exchange Act




The following table sets forth our
directors, nominees and executive officers, their ages, and all offices and
positions held.  Directors are elected for a period of one year and
thereafter serve until their successors are duly elected by the
stockholders.  Officers and other employees serve at the will of the
board of directors.





Name
      of Director or
              Executive
      Officer
            
            Age
            
            Positions
      with
              the
      Company
            
            Director
      Since
            
            Officer
      SinceBrenton
      W. Hatch
            
            59
            
            Chief
      Executive Officer, President and Director
            
            November
      2008
            
            October
      2008Harold
      Albert
            
            47
            
            Chief
      Operating Officer and Director
            
            November
      2008
            
            October
      2008Andrew
      Limpert
            
            40
            
            Chief
      Financial Officer and Director
            
            November
      2007
            
            November
      2007












The above individuals serve as
executive officers and/or directors.  A brief description of their
positions, proposed duties and their background and business experience
follows:





Brenton W.
Hatch.  Mr. Hatch co-founded Profire Combustion, Inc. in
2002.  Since that time he has served as the Chief Executive Officer
and General Manager of the Company.  Mr. Hatch has been responsible
for the day-to-day operations of Profire Combustion since its
inception.  Prior to founding Profire Combustion, between 2001 and
2002 Mr. Hatch was a Management Consultant and General Manager of Titan
Technologies, Inc., an oilfield service and distribution company in Edmonton,
Alberta, Canada.  In this position, Mr. Hatch performed an in-depth
analysis of the operations and management of all divisions of Titan
Technologies.  Based on his analysis, Mr. Hatch implemented
company-wide operational changes to improve company performance.  From
1989 to 2000 Mr. Hatch served as President and Chief Executive Officer of Keaton
International, Inc., an educational services company based in Edmonton, Alberta,
Canada.  Mr. Hatch managed all executive functions of the company and
particularly focused on the development and management of the company’s
educational services.  During his time at Keaton International, Mr.
Hatch led corporate networking and marketing campaigns
world-wide.  Mr. Hatch earned a Bachelor’s Degree in Education from
the University of Alberta in 1974.  Mr. Hatch is not, nor has he in
the past five years been a nominee or director of any other SEC
registrant.





Harold Albert.  Mr.
Albert co-founded Profire Combustion, Inc. in 2002.  He has served as
the President and Chief Operating Officer of Profire Combustion since that
time.  Mr. Albert is responsible for research and development of new
products and services.  He oversees our Canadian
operations.  Prior to founding Profire Combustion, Mr. Albert worked
in the oil services industry for Titan Technologies, Inc. from 1996 to
2002.  During that time Mr. Albert served as an Associate Manager
overseeing the company’s burner division.  From 1993 to 1996 Mr.
Albert was employed with Natco Canada doing start up and commissioning of oil
and gas facilities in both Canada and Russia.  Mr. Albert is not, nor
has he in the past five years been, a nominee or director of any other SEC
registrant.


Andrew Limpert.  Mr.
Limpert graduated from the University of Utah with a Bachelors of Science degree
in Finance in 1994.  He earned a Masters of Business Administration
with an emphasis in Finance from Westminster College in 1998.  Mr.
Limpert joined The Flooring Zone, Inc. in November 2007.  From 1998 to
2008, Mr. Limpert was an investment advisor with Belsen Getty, LLC, providing
wealth management direction and strategic and financial advice for several
investment banks.  For the past 15 years he has founded, consulted on and
funded numerous businesses in the private and public arenas.  In 2007 he
became the chairman of the board of directors of Nine Mile Software Inc. a
rebalancing and mutual fund trading software developer.  Nine Mile
Software became an SEC registrant during 2008.  During the past five
years Mr. Limpert has also served as a director of Ohr Pharmaceutical Inc., a
New York based biotech incubator.  Ohr Pharmaceutical is also an SEC
registrant. Mr. Limpert resigned as an officer and director of Ohr
Pharmaceutical in April 2010.










When
determining whether it is appropriate for a director to serve on the board of
directors, the Company focuses primarily on the information provided in each of
the director’s individual biographies set forth above and its knowledge of the
character and strengths of the sitting directors. With regard to Mr. Hatch, the
Company considered his experience as a founder and as the principal executive
officer of Profire Combustion, as well as his previous management and
operational oversight experience.  With regard to Mr. Albert, the
Company considered his experience as founder and principal operating officer of
Profire Combustion, combined with his previous management and operational
experience.  With regard to Mr. Limpert, the Company considered his
extensive investment experience and his related finance background.





Board Leadership Structure and Risk
Oversight





The board
of directors has chosen to combine the principal executive officer and board
chairman positions and has not appointed a separate lead
director.  Mr. Brenton Hatch has served as the principal executive
officer since October 2008 and chairman of the board of directors since November
2008.  At the present time, the board of directors believes that Mr.
Hatch’s in-depth knowledge of our operations and vision for its development make
him the best-qualified director to serve as Chairman.





The board
of directors is responsible for consideration and oversight of risks facing the
Company, and is responsible for ensuring that material risks are identified and
managed appropriately.  The board of directors administers its
oversight functions by reviewing the operations of the Company, by overseeing
the executive officers’ management of the Company, and also oversees related
party transactions, requiring pre-approval of any such transactions with the
Company.





Family Relationships





There are no family relationships among
any of our directors or executive officers.





Involvement in Certain Legal
Proceedings





During
the past ten years none of our executive officers, directors or persons
nominated to become a director has been involved in any of the following events
that could be material to an evaluation of his ability or integrity,
including:




(1) Any
bankruptcy petition filed by or against any business of which such person was a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time.




(2) Any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);




(3) Being
subject to any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining him from, or otherwise limiting the following activities:











(i)  Acting
      as a futures commission merchant, introducing broker, commodity trading
      advisor, commodity poll operator, floor broker, leverage transaction
      merchant, and other person regulated by the Commodity Futures Trading
      Commission (“CFTC”), or an associated person of any of the foregoing, or
      as an investment adviser, underwriter, broker or dealer in securities, or
      as an affiliate person, director or employee of any investment company,
      bank savings and loan association or insurance company, or engaging in or
      continuing any conduct or practice in connection with such
      activity;(ii)  Engaging
      in any type of business practice; or(iii)
      Engaging in any activity in connection with the purchase or sale of any
      security or commodity or in connection with any violation of Federal or
      State securities laws or Federal commodities
  laws.




(4)  Being
subject to any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any Federal or State authority barring, suspending or otherwise
limiting for more than 60 days the rights of such person to engage in any
activity described in (3)(i) above, or to be associated with persons engaged in
any such activity.




(5)  Being
found by a court of competent jurisdiction in a civil action or by the
Securities and Exchange Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by the
Commission has not be subsequently reversed, suspended or vacated.




(6)  Being
found by a court of competent jurisdiction in a civil action or by the Commodity
Futures Trading Commission to have violated any Federal commodities law, and the
judgment in such civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended, or
vacated.





(7)  Being the subject of, or
a party to any Federal or State judicial or administrative order, judgment,
decree or finding, not subsequently reversed, suspended or vacated, relating to
an alleged violation of:





(i)  Any
      Federal or State securities or commodities law or regulations;
      or(ii)
      Any law or regulation respecting financial institutions or insurance
      companies including, but not limited to, a temporary or permanent
      injunction, order of disgorgement or restitution, civil money penalty or
      temporary or permanent cease-and-desist order, or removal or prohibition
      order;  or(iii)
      Any law or regulation prohibiting mail or wire fraud or fraud in
      connection with any business entity;
or





(8)  Being the subject of, or
a party to, any sanction or order, not subsequently reversed, suspended or
vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of
the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in
Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any
equivalent exchange, association, entity or organization that has disciplinary
authority over its members or persons associated with a member.












Committees of the Board of
Directors





Audit
Committee





We do not currently have a standing
audit committee or other committee performing similar functions, nor have we
adopted an audit committee charter.  Given our size, our available
resources and the fact that our common stock is not listed on any exchange or
automated quotation system that requires us to have an audit committee, our
board of directors has determined that it is in our best interest to have the
full board fulfill the functions that would be performed by the audit committee,
including selection, review and oversight of our independent accountants, the
approval of all audit, review and attest services provided by the independent
accountants, the integrity of our reporting practices and the evaluation of our
internal controls and accounting procedures.  The board is also
responsible for the pre-approval of all non-audit services provided by its
independent auditors.  Non-audit services are only provided by our
independent accountants to the extent permitted by law.  Pre-approval
is required unless a “de minimus” exception is met.  To qualify for
the “de minimus” exception, the aggregate amount of all such non-audit services
provided to us must constitute not more than 5% of the total amount of revenues
paid by us to our independent auditors during the fiscal year in which the
non-audit services are provided; such services were not recognized by us at the
time of the engagement to be non-audit services; and the non-audit services are
promptly brought to the attention of the board and approved prior to the
completion of the audit by the board or by one or more members of the board to
whom authority to grant such approval has been delegated.





As we do not currently have a standing
audit committee, we do not, at this time have an “audit committee financial
expert” as defined under the rules of the Securities and Exchange
Commission.





Nominating
Committee





Given the
small size of the Company, we do not have a standing nominating committee or
nominating committee charter.  Instead, the full board of directors
performs the functions that would be performed by a nominating
committee.




The
procedures by which our security holders may recommend nominees to the Company’s
board of directors have not materially changed during the current fiscal year
and are the same as reported in our revised definitive proxy statement filed
with the SEC on November 10, 2009.





Board Diversity




While we
do not have a formal policy regarding the consideration of diversity in
identifying and evaluating potential director candidates, the board considers
the interplay of a candidate’s knowledge, expertise, skills and experience with
that of the other members of the board of directors in order to build a board of
directors that is effective, collegial and responsive to the needs of the
Company.  We believe this analysis results in a board of directors
that is diverse in knowledge, expertise, skills, experience and
viewpoint.












Our board may establish committees from
time to time to facilitate our management.





Compliance with Section 16(a) of the
Exchange Act





Directors, executive officers and
holders of more than 10% of our outstanding common stock are required to comply
with Section 16(a) of the Securities Exchange Act of 1934, which requires
generally that such persons file reports regarding ownership of and transactions
in securities of the Company on Forms 3, 4, and 5.  Based solely on
management’s review of these reports during the year ended March 31, 2010, it
appears that all reports were timely filed during the fiscal year.





Code of Ethics





Our board
of directors has adopted a code of ethics that applies to our principal
executive officer, principal financial officer and principal accounting officer
or controller and to persons performing similar functions. The code of ethics is
designed to deter wrongdoing and to promote honest and ethical conduct, full,
fair, accurate, timely and understandable disclosure, compliance with applicable
laws, rules and regulations, prompt internal reporting of violations of the code
and accountability for adherence to the code.  We will provide a copy
of our code of ethics, without charge, to any person upon receipt of written
request for such delivered to our corporate headquarters.  All such
requests should be sent care of Profire Energy, Inc., Attn. Corporate Secretary,
321 South 1250 West, #3  Lindon Utah 84042.





Item
11.                    Executive
Compensation





The following table summarizes the
total compensation paid to the person serving as our principal executive officer
and our two most highly compensated executive officers other than our principal
executive officer (the “named executive officers.”)  Other than as
disclosed herein, none of our employees were paid in excess of $100,000 during
the fiscal year ended March 31, 2009.




Summary
Compensation Table





Name
      and
              Principal
      Position
            Year
            Salary
              ($)
            Bonus
              ($)
            Stock
              Awards
              ($)
            Option
              Awards
              ($)
            All
      Other
              Compensation
              ($)
            Total
              ($)Brenton
      W. Hatch
            2010
            206,600
            5,000
            -0-
            -0-
            19,400(1)
            231,000CEO
            2009
            125,418
            -0-
            -0-
            -0-
            -0-
            125,4182008
            86,500
            200,113
            -0-
            -0-
            11,784
            298,397Andrew
      Limpert
            2010
            120,000
            5,000
            -0-
            -0-
            16,800(2)
            141,800CFO
      and Former CEO
            2009
            21,400
            -0-
            -0-
            -0-
            -0-
            21,4002008
            -0-
            -0-
            -0-
            -0-
            -0-
            -0-Harold
      Albert
            2010
            211,846
            5,000
            -0-
            -0-
            20,874(3)
            237,720COO
            2009
            202,783
            -0-
            -0-
            -0-
            -0-
            202,7832008
            86,500
            200,005
            -0-
            -0-
            11,320
            297,825






(1)
            
            Includes
      $6,500 in fuel, maintenance and other vehicle related costs, $3,300 in
      cell phone usage and $9,600 for medical insurance
    premiums.(2)
            
            Includes
      $9,600 in automobile allowance and $7,200 for medical insurance
      premiums.(3)
            
            Includes
      $8,115 in fuel, maintenance and other vehicle related costs, $4,420 in
      cell phone usage and $8,339 for medical insurance
  premiums.
















We do not
have a standing compensation committee, rather our Chief Executive Officer
(“CEO”) evaluates officer and employee compensation issues subject to the
approval of our board of directors.  Our CEO makes recommendations to
the board of directors as to employee benefit programs and officer and employee
compensation.  In the past, our CEO has made recommendations to the
board of directors regarding his own compensation and we have no policy
prohibiting the CEO from doing so. Our board of directors may seek input from
the CEO as to his compensation, but CEO compensation must be approved by a
majority of our board of directors.





Salary





Salary
is used to recognize the experience, skills, knowledge and responsibilities
required of all our employees, including our named executive
officers.  The salary for each named executive officer is typically
set at the time the individual is hired based on the factors discussed in the
preceding sentence and the negotiation process between the Company and the named
executive officer.  Thereafter, changes to annual salary, if any, are
determined based on several factors, including evaluation of performance,
anticipated financial performance, economic condition and local market and labor
conditions.  The employment agreements of Mr. Hatch and Mr. Albert
provide for a monthly salary of $17,000 per month.  During fiscal
2009, Mr. Hatch agreed to accept less than his full salary to help the Company
reduce debts and insure adequate cash flow.  Given the improved
financial and operating condition of the Company at the beginning of fiscal
2010, Mr. Hatch began receiving the full monthly salary provided for under his
employment agreement.  Beginning in March 2009, Mr. Limpert increased
the amount of time he is dedicating to Company business from part-time as needed
to half-time.  As a result, he realized an increase in salary during
fiscal 2010.  We anticipate that as the board determines that Mr.
Limpert’s job duties require additional time, his salary will increase
accordingly.  The board did not approve salary increases for the
upcoming fiscal year for any of the named executive officers at the beginning of
fiscal 2011.





Non-Equity
Incentive Compensation





From time to time, we may make cash
awards to our named executive officers.  Such awards may be designed
to incentivize them over a specified period of time pursuant to pre-established,
performance-based criteria, the accomplishment of which is substantially
uncertain at the time the criteria is established.  In the event this
type of cash award were made, it would be reflected in the “Summary Compensation Table”
under a separate column entitled “Non-Equity Incentive Plan
Compensation.”  The criteria for earning such non-equity
incentive bonuses may be based on corporate financial performance measures that
would be developed by our board of directors at the time the non-equity
incentive compensation plan is established.  It is within the
discretion of our board of directors to determine the applicable performance
measures and the appropriate weighting of such measures at the time it
establishes any non-equity incentive plan.  The board of directors did
not establish non-equity incentive compensation during fiscal 2010 and no
non-equity incentive compensation was awarded during the year.










Bonuses





We may
also make cash awards to our named executive officers and employees that are not
part of any pre-established, performance-based criteria.  Awards of
this type are completely discretionary and subjectively determined by our board
of directors at the time they are awarded.  In the event this type of
cash award is made, it is reflected in the “Summary Compensation Table”
under a separate column entitled “Bonus.”  During the
2010 fiscal year, the board of directors, of its own discretion, awarded
Christmas bonuses of $5,000 cash to each of Mr. Hatch, Mr. Albert and Mr.
Limpert.  The bonuses were not awarded pursuant to any
pre-established, performance-based criteria set by the compensation
committee.  Rather, the bonuses were awarded in recognition of the
efforts of the named executive officers to control costs and expenses and
improve Company profitability during a year when revenues were
declining.  The Company was under no obligation to award the cash
bonuses and is under no obligation to award future cash bonuses.





Equity
Incentive Compensation





From time to time, we may also make
equity incentive awards to our named executive officers in the form of stock
options, restricted stock grants or some other form of equity
award.  Equity incentive awards would be reflected in the “Summary Compensation Table”
under the columns entitled “Stock Awards” or “Option Awards” as
appropriate.  Our board of directors did not award equity incentive
compensation to any of our named executive officers during fiscal 2010, and is
under no contractual obligation to award equity incentive compensation in the
future.





While our board of directors did not
award equity incentive compensation in fiscal 2010 and is under no obligation to
make any such awards in the future, that does not mean the board of directors
may not, as it deems appropriate, award equity incentive compensation in the
future.





Employer
Benefit Plans





At the current time, we do not provide
any retirement, pension, or other benefit plans to our named executive
officers; however, the board of directors may adopt plans as it deems reasonable
under the circumstances.





Employment
Agreements





We have
entered into employment agreements with each of the named executive
officers.  The employment agreements provide for employment for a
period of three calendar years from the date of the agreements, unless
terminated in accordance with the terms of the agreement. The agreements shall
be self-renewing for additional one year periods for ten years unless terminated
in accordance with the terms of the agreements.




The
employment agreements of Mr. Hatch and Mr. Albert provide that they will devote,
on a full-time basis, their best ability and talents to the business of the
Company. The agreements prohibit the individuals from providing consulting
services or accepting employment with any other party unless pre-approved by the
Company.  Mr. Limpert’s employment agreement provided that he would
initially be employed on a part-time, as needed basis.











In
addition to a monthly salary, the employment agreements provide for
reimbursement of all reasonable and necessary out-of-pocket personal expenses up
to $3,000 per month for Mr. Hatch and Mr. Albert and up to $2,000 per month for
Mr. Limpert. Expense items exceeding these limits must receive Company approval.
The agreements provide for an $800 per month auto allowance for Mr. Hatch and
Mr. Albert.  Mr. Limpert’s agreement provides that he is entitled to
receive an $800 per month auto allowance so long as he maintains at least
half-time employment with the Company.


The
employment agreements provide that each of the named executive officers will be
entitled to equal treatment with other principal officers of the Company with
regard to medical and dental plans and benefits, retirement or similar plans,
life insurance, sick leave, vacation or disability.  The Company will
provide $1,000 per month for health/dental premiums and $1,000 per month
matching retirement benefits when the Company establishes such a
plan.





The
employment agreements also contain confidentiality, non-disclosure, non-compete,
non-solicitation and intellectual property assignment provisions.





Termination
and Change in Control





The
employment agreements of the named executive officers provide for the following
payments in the event of termination of employment.





●
            The
      individual may be terminated without cause by the Company upon 90 days
      prior written notice. If terminated without cause, the individual shall be
      entitled to six months salary and health and other
    benefits.





●
            For
      cause upon prior written notice. If terminated for cause the individual
      shall be entitled to his salary and any employee rights or compensation
      which would vest in the month of termination pro-rated through the date of
      termination.





●
            By
      resignation. If the individual resigns, he shall be entitled to receive
      his current monthly salary and other compensation. In the event of a
      resignation, employment shall terminate on the earlier of, 30 days
      following its tender and the date the resignation is accepted by the
      Company.





●
            For
      disability or death. The Company shall have the option to terminate the
      agreement should the individual no longer be able to perform his essential
      functions. In the event of termination for death or disability the
      individual shall be entitled to the same compensation and benefits as if
      the agreement had been terminated without
cause.





We do not have agreements, plans or
arrangements, written or unwritten, with any of our named executive officers
that would provide for payments or other benefits to any of our named executive
officers in the event of a change in control of the Company or a change in the
responsibilities of any named executive officer following a change in control of
the Company.













Grants
of Plan-Based Awards





The board of directors did not grant
any plan-based equity awards to any of the named executive officers during the
2010 fiscal year.





OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END





None of the named executive officers
held outstanding equity awards at our fiscal year end.





DIRECTOR
COMPENSATION





Each of our directors is also a named
executive officer and employee of the Company.  All compensation
earned by Mr. Hatch, Mr. Albert and Mr. Limpert was compensation for services
rendered in their capacity as employees of the Company.  They received
no compensation for serving on our board of directors during the 2010 fiscal
year.  For details regarding the compensation received by each of our
directors please see the Summary Compensation Table on
page 25 of this annual report.




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




The following table sets forth as of
June 16, 2010 the name and the number of shares of our common stock, par value
of $0.001 per share, held of record or beneficially by each person who held of
record, or was known by us to own beneficially, more than 5% of the 45,000,000
issued and outstanding shares of our common stock, and the name and
shareholdings of each director and of all officers and directors as
group.





Type of Security
            Name and Address
            Amount & Nature of Beneficial
      Ownership
            % of ClassCommon
            Brenton
      W. Hatch(1)
            15,750,000
            35%321
      South 1250 West, #3Lindon,
      Utah 84042Common
            Harold
      Albert(1)
            15,750,000
            35%Bay
      12, 55 Alberta Ave.Spruce
      Grove, Alberta, Canada T7X 3A6Common
            Andrew
      Limpert(1)
            4,655,150
            10%321
      South 1250 West, #3Lindon,
      Utah 84042Common
            Shelly
      Nichol & Timothy Paul Nichol
            3,500,000
            8%Bay
      12, 55 Alberta Ave.Spruce
      Grove, Alberta, Canada T7X 3A6All
      executive officers and directors as a group (3 persons)
            
            36,155,150
            80%TOTAL
            39,655,150
            88%




(1)Mr.
      Hatch, Mr. Albert and Mr. Limpert are executive officers and directors of
      the Company.












Change
in Control





To the knowledge of the management,
there are no present arrangements or pledges of our securities that may result
in a change in control of the Company.





Securities
Authorized for Issuance under Equity Compensation Plans








Plan
      category
            Number
      of securities
              to
      be issued  upon
              exercise
      of
              outstanding
      options,
              warrants
      and rights
              
              (a)
            Weighted-average
              exercise
      price of
              outstanding
              options,
      warrants
              and
      rights
              
              (b)
            Number
      of securities
              remaining
      available for future issuance under equity
              compensation
      plans
              (excluding
      securities reflected in columns (a))
              
              (c)Equity
      compensation plans approved by security holders
            410,000
            $0.40
            45,000Equity
      compensation plans not approved by security holders
            -0-
            $0.00
            -0-Total
            410,000
            $0.40
            45,000





The
Flooring Zone, Inc., 2003 Stock Incentive Plan (the “Plan”) was adopted on May
13, 2003.  The Plan allows us to grant options to our key employees,
officers, directors, consultants, advisors and sales representatives to purchase
up to 500,000 shares of its $.001 par value restricted common stock at an
exercise price to be determined by the Stock Option Committee of the board at
the time of grant.





On May 13, 2003 we adopted The Flooring
Zone, Inc., 2003 Stock Incentive Plan (the “2003 Plan”).  The 2003
Plan allows the Company to grant options to its key employees, officers,
directors, consultants, advisors and sales representatives to purchase up to
500,000 shares of its $.001 par value restricted common stock at an exercise
price to be determined by the board of directors at the time of
grant.  In 2003 the Company granted 45,000 options, none of which were
granted to any of the named executive officers.  These options vested
immediately and were exercised in 2003.












In
September 2009 our board of directors approved grants of options to purchase up
to 410,000 shares under the 2003 Plan to six individuals, none of whom are
executive officers or directors of our Company.  The options are
exercisable at a price of $0.40, the closing price of our common stock on the
OTCBB on the grant date. The options expire five years from the grant date. The
options vest equally over three years with vesting occurring on the grant
anniversary date.





As of the
date of this report there are currently 45,000 shares available for award under
the 2003 Plan.


In
November 2009 our shareholders approved the adoption of the Profire Energy,
Inc., 2010 Equity Incentive Plan (the “2010 Plan”).  Under the 2010
Plan our key employees, officers, directors and other individuals or entities
may be awarded stock options or granted shares of our common stock. The term of
the 2010 Plan is 10 years.  The 2010 Plan permits the granting of up
to a maximum of 4,000,000 shares of common stock.  The aggregate
number of shares of common stock that may be issued to any individual or entity
under the 2010 Plan shall not exceed twenty percent (20%) of the aggregate
number of shares referred to in the preceding sentence.  The total
number of shares issuable upon exercise of all outstanding options shall not
exceed a number of shares which is equal to thirty percent (30%) of the then
outstanding shares of the Company.





As of the date of this report no awards
have been made under the 2010 Plan.





Item
13.                    Certain
Relationships and Related Transactions and Director Independence





Related
Party Transactions





In June 2007, Brent Hatch and Harold
Albert loaned Profire $50,000 Canadian dollars, and in August 2007 Brent Hatch
and Harold Albert loaned Profire $150,000 Canadian dollars, which in total was
the equivalent of $194,571 in U.S. dollars based on conversion rates at March
31, 2008, by way of an unsecured promissory notes.  The promissory
notes are non-interest bearing and are due March 31, 2009.  These
notes were fully repaid by March 31, 2009.





Director
Independence





The board
has determined that none of the current directors would qualify as an
independent director as that term is defined in the listing standards of the
NYSE Amex.  Such independence definition includes a series of
objective tests, including that the director is not an employee of the company
and has not engaged in various types of business dealings with the
company.  As each of the directors is also employed by the Company,
the board of directors has determined that none of our directors is currently
independent.





Item
14.                    Principal
Accountant Fees and Services





During
each of our last two fiscal years we were billed the following fees for
professional services rendered by our principal accountants:












Fiscal
      2010
              
              Fiscal
      2009Audit
              $
              48,597
              
              $
              $63,070Audit
      related
              
              -0-
              
              
              -0-Tax
              
              -0-
              
              
              -0-All
      other
              
              -0-
              
              
              -0-Total
              $
              $48,597
              
              $
              $63,070









Audit Fees.  Audit
fees were for professional services rendered in connection with the audit of our
annual financial statements, review of financial statements included in our
quarterly reports on Form 10-Q and for services that are normally provided by
principal accountants in connection with statutory and regulatory filings or
engagements.





Board of Directors Pre-Approval
Policies and Procedures.  At its regularly scheduled and
special meetings, our board of directors, in lieu of an established audit
committee, considers and pre-approves any audit and non-audit services to be
performed by our independent registered public accounting firm.  Our
board of directors has the authority to grant pre-approvals of non-audit
services.





Our board
of directors has not, as of the time of filing this annual report on Form 10-K
with the Securities and Exchange Commission, adopted policies and procedures for
pre-approving audit or permissible non-audit services performed by our
independent auditors. Instead, the board of directors as a whole has
pre-approved all such services. In the future, our board of directors may
approve the services of our independent registered public accounting firm
pursuant to pre-approval policies and procedures adopted by the board of
directors, provided the policies and procedures are detailed as to the
particular service, the board of directors is informed of each service, and such
policies and procedures do not include delegation of the board of director’s
responsibilities to our management.




The board
of directors has determined that the services provided by its independent
registered public accounting firms described above are compatible with
maintaining independence as our independent registered public accounting
firm.


Item
15.                  
Exhibits and Financial Statement Schedules


(a)
            The following documents are filed
      as part of this report:





Financial Statements





The
      following financial statements of the registrant are included in response
      to Item 8 of this annual report:Report
      of Independent Registered Public Accounting Firm.Consolidated
      Balance Sheets at March 31, 2010 and 2009.Consolidated
      Statements of Operations and Other Comprehensive Income (Loss) for the
      years ended March 31, 2010 and 2009.Consolidated
      Statements of Changes in Stockholders’ Equity for the years ended March
      31, 2010 and 2009.Consolidated
      Statements of Cash Flows for the years ended March 31, 2010 and
      2009.Notes
      to Consolidated Financial
Statements.












Financial Statement
Schedules





Financial statement schedules are
omitted because the required information is either inapplicable or presented in
the consolidated financial statement or related notes.





Exhibits





Exhibit
      No.
            
            Exhibit
      Description2.1
            
            Acquisition
      Agreement among The Flooring Zone, Inc. and Profire Combustion, Inc. and
      the Shareholders of Profire Combustion, Inc.(1)3.1
            
            Articles
      of Incorporation(2)3.2
            
            Articles
      of Amendment to the Articles of Incorporation(3)3.3
            
            Bylaws
      of The Flooring Zone, Inc.(2)3.4
            
            Bylaws
      of The Flooring Zone, Inc. (as amended through October 8, 2008)(1)4.1
            
            2003
      Stock Incentive Plan(2)4.2
            
            Profire
      Energy, Inc. 2010 Equity Incentive Plan(9)10.1
            
            Promissory
      Note dated October 1, 2001(4)10.2
            
            Exchange
      Agreement between The Flooring Zone, Inc. and Michael Carroll dated June
      30, 2008(5)10.3
            
            Employment
      Agreement of Brenton Hatch(6)10.4
            
            Employment
      Agreement of Harold Albert(6)10.5
            
            Employment
      Agreement of Andrew Limpert(7)14.1
            
            Code
      of Ethics(8)21.1
            
            Subsidiaries*31.1
            
            Certification
      of Principal Executive Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002*31.2
            
            Certification
      of Principal Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002*32.1
            
            Certification
      of Principal Executive Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002*32.2
            
            Certification
      of Principal Financial Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002*





*  Filed
herewith.


(1)  Incorporated
by reference to Registrant’s Current Report on Form 8-K filed with the
Commission on October 14, 2008.


(2)  Incorporated
by reference to the Registration Statement of the Registrant on Form SB-2 filed
with the Securities and Exchange Commission (“Commission”) on September 24,
2004.


(3)  Incorporated
by reference to Registrant’s Quarterly Report on Form 10-Q filed with the
Commission on February 13, 2009.


(4)  Incorporated
by reference to the Registration Statement of the Registrant on Form SB-2/A No.1
filed with the Commission on December 1, 2004.


(5)  Incorporated
by reference to Registrant’s Current Report on Form 8-K filed with the
Commission on July 8, 2008.


(6)  Incorporated
by reference to Registrant’s Quarterly Report on Form 10-Q filed with the
Commission on November 14, 2008.


(7)  Incorporated
by reference to Registrant’s Current Report on Form 8-K filed with the
Commission on January 14, 2009.


(8)  Incorporated
by reference to Registrant’s Annual Report on Form 10-KSB filed with the
Commission on April 17, 2007.


(9)  Incorporated
by reference to Registrant’s Revised Definitive Proxy Statement on Schedule 14A
filed with the Commission on November 10, 2009.











SIGNATURES





Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed by the undersigned, thereunto duly
authorized.





PROFIRE
      ENERGY, INC.Date:  June
      29, 2010
            
            By:
            /s/ Brenton
      W. HatchBrenton
      W. HatchChief
      Executive Officer(Duly
      Authorized Representative)








Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dated indicated.





Signatures
            
            Title
            
            Date/s/ Brent W. Hatch
            
            Chief
      Executive Officer and
            
            June
      29, 2010Brenton
      W. Hatch
            
            Chairman
      of the Board of Directors/s/ Andrew Limpert
            
            Chief
      Financial Officer and Director
            
            June
      29, 2010Andrew
      Limpert/s/ Harold Albert
            
            Director
            
            June
      29, 2010Harold
      Albert


























CONSOLIDATED
      FINANCIAL STATEMENTS


FOR
      THE YEARS ENDED MARCH 31, 2010 AND
2009




















Table
of Contents





PageReport
      of Independent Registered Public Accounting Firm –  Child, Van
      Wagoner & Bradshaw, PLLC
            F-1Consolidated
      Balance Sheets as of March 31, 2010 and 2009
            F-2Consolidated
      Statements of Operations and Other Comprehensive Income for the years
      ended March 31, 2010 and 2009
            F-4Consolidated
      Statements of Stockholders’ Equity for the years ended March 31, 2010 and
      2009
            F-5Consolidated
      Statements of Cash Flows for the years ended March 31, 2010 and
      2009
            F-6Notes
      to the Consolidated Financial Statements for the years ended March 31,
      2010 and 2009
            F-7





F-1
 
 PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Consolidated
Balance Sheets


ASSETSMarch
      31,
            
            March
      31,2010
            
            2009CURRENT
      ASSETSCash
      and cash equivalents
            
            $
            1,931,757
            
            $
            226,559Accounts
      receivable, net
            
            
            1,092,037
            
            
            989,313Marketable
      securities-available for sale
            
            
            7,154
            
            
            3,110Inventories
            
            
            624,679
            
            
            691,900Prepaid
      expenses
            
            
            999
            
            
            812Total
      Current Assets
            
            
            3,656,626
            
            
            1,911,694PROPERTY
      AND EQUIPMENT, net
            
            
            559,326
            
            
            357,613TOTAL
      ASSETS
            
            $
            4,215,952
            
            $
            2,269,307LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIESAccounts
      payable
            
            $
            216,904
            
            $
            147,552Accrued
      liabilities
            
            
            25,454
            
            
            26,926Income
      taxes payable
            
            
            494,321
            
            
            413,862Total
      Current Liabilities
            
            
            736,679
            
            
            588,340TOTAL
      LIABILITIES
            
            
            736,679
            
            
            588,340STOCKHOLDERS'
      EQUITYPreferred
      shares: $0.001 par value,10,000,000
      shares authorized: no sharesissues
      and outstanding
            
            
            -
            
            
            -Common
      shares: $0.001 par value,100,000,000
      shares authorized: 45,000,000shares
      issues and outstanding
            
            
            45,000
            
            
            45,000Additional
      paid-in capital
            
            
            (51,449)
            
            
            (73,237)Accumulated
      other comprehensive income
            
            
            272,416
            
            
            (224,828)Retained
      earnings
            
            
            3,213,306
            
            
            1,934,032Total
      Stockholders' Equity
            
            
            3,479,273
            
            
            1,680,967TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
            
            $
            4,215,952
            
            $
            2,269,307





F-2
 
 PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Consolidated
Statements of Operations and Other Comprehensive
Income


For
      the Year EndedMarch
      31,2010
            
            2009REVENUESSales
      of goods, net
            $
            5,264,686
            
            $
            5,403,848Sales
      of services, net
            
            647,664
            
            
            853,421Total
      Revenues
            
            5,912,350
            
            
            6,257,269COST
      OF SALESCost
      of goods sold
            
            2,289,414
            
            
            3,277,877GROSS
      PROFIT
            
            3,622,936
            
            
            2,979,392OPERATING
      EXPENSESGeneral
      and administrative expenses
            
            1,005,846
            
            
            1,058,574Payroll
      expenses
            
            827,418
            
            
            539,159Depreciation
      expense
            
            60,496
            
            
            40,655Total
      Operating Expenses
            
            1,893,760
            
            
            1,638,388INCOME
      FROM OPERATIONS
            
            1,729,176
            
            
            1,341,004OTHER
      INCOME (EXPENSE)(Loss)
      gain on sale of fixed assets
            
            -
            
            
            (950)Interest
      expense
            
            (6,281)
            
            
            (6,034)Interest
      income
            
            571
            
            
            32Total
      Other Income (Expense)
            
            (5,710)
            
            
            (6,952)NET
      INCOME BEFORE INCOME TAXES
            
            1,723,466
            
            
            1,334,052INCOME
      TAX EXPENSE
            
            444,191
            
            
            458,907NET
      INCOME
            $
            1,279,274
            
            $
            875,145UNREALIZED
      HOLDING LOSSON
      AVAILABLE FOR SALE SECURITIES
            $
            8,440
            
            $
            (11,245)FOREIGN
      CURRENCY TRANSLATION GAIN (LOSS)
            
            488,804
            
            
            (288,746)TOTAL
      COMPREHENSIVE INCOME
            $
            1,776,519
            
            $
            575,154BASIC
      EARNINGS PER SHARE
            $
            0.03
            
            $
            0.02FULLY
      DILUTED EARNINGS PER SHARE
            $
            0.03
            
            $
            0.02BASIC
      WEIGHTED AVERAGE NUMBEROF
      SHARES OUTSTANDING
            
            45,000,000
            
            
            40,013,699FULLY
      DILUTED WEIGHTED AVERAGE NUMBEROF
      SHARES OUTSTANDING
            
            45,116,800
            
            
            40,013,699


F-3
 
 PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Consolidated
Statements of Changes in Stockholders' Equity


Additional
            
            Other
            
            
            
            TotalCommon
      Stock
            
            Paid-In
            
            Comprehensive
            
            Retained
            
            Stockholders'Shares
            
            Amount
            
            Capital
            
            Income
      (Loss)
            
            Earnings
            
            EquityBalance,
      March 31, 2008
            
            35,000,000
            
            $
            35,000
            
            $
            (34,827)
            
            $
            75,163
            
            $
            1,058,887
            
            $
            1,134,223Recapitalization
            
            10,000,000
            
            
            10,000
            
            
            (38,410)
            
            
            -
            
            
            -
            
            
            (28,410)Unrealized
      holding gains (losses) on
            -
            
            
            -
            
            
            -
            
            
            (11,245)
            
            
            -
            
            
            (11,245)available
      for sale securitiesForeign
      currency translation
            
            -
            
            
            -
            
            
            -
            
            
            (288,746)
            
            
            -
            
            
            (288,746)Net
      income for the yearended
      March 31, 2009
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            875,145
            
            
            875,145Balance,
      March 31, 2009
            
            45,000,000
            
            
            45,000
            
            
            (73,237)
            
            
            (224,828)
            
            
            1,934,032
            
            
            1,680,967Unrealized
      holding gains (losses) on
            -
            
            
            -
            
            
            -
            
            
            8,440
            
            
            -
            
            
            8,440available
      for sale securitiesForeign
      currency translation
            
            -
            
            
            -
            
            
            -
            
            
            488,804
            
            
            -
            
            
            488,804Fair
      value of options vested
            
            -
            
            
            -
            
            
            21,788
            
            
            -
            
            
            -
            
            
            21,788Net
      income for the yearended
      March 31, 2010
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,279,274
            
            
            1,279,274Balance,
      March 31, 2010
            
            45,000,000
            
            $
            45,000
            
            $
            (51,449)
            
            $
            273,183
            
            $
            3,213,306
            
            $
            3,479,273


F-4
 
 PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Consolidated
Statements of Cash Flows


For
      the Year EndedMarch
      31,2010
            
            2009CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income
            $
            1,279,274
            
            $
            875,145Adjustments
      to reconcile net income tonet
      cash provided by operating activities:Depreciation
      expense
            
            60,496
            
            
            40,655Loss
      (gain) on sale of equipment
            
            -
            
            
            749Bad
      debt expense
            
            4,869
            
            
            1,953Stock
      options issued for services
            
            21,788
            
            
            -Changes
      in operating assets and liabilities:Changes
      in accounts receivable
            
            112,482
            
            
            95,640Changes
      in inventories
            
            212,233
            
            
            (369,545)Changes
      in prepaid expenses
            
            -
            
            
            (536)Changes
      in income taxes payable
            
            (13,898)
            
            
            405,306Changes
      in accounts payable and accrued liabilities
            
            36,035
            
            
            (572,192)Net
      Cash Provided by (Used in) Operating Activities
            
            1,713,279
            
            
            477,175CASH
      FLOWS FROM INVESTING ACTIVITIESProceeds
      from sale of equipment
            
            -
            
            
            4,261Purchase
      of available for sale securities
            
            -
            
            
            (1,598)Disposals
      of property and equipment
            
            -
            
            
            9,169Purchase
      of fixed assets
            
            (172,120)
            
            
            (62,604)Net
      Cash Used in Investing Activities
            
            (172,120)
            
            
            (50,772)CASH
      FLOWS FROM FINANCING ACTIVITIESBusiness
      acquisition
            
            -
            
            
            (28,410)Repayment
      of related party payables
            
            -
            
            
            (177,562)Net
      Cash Provided by Financing Activities
            
            -
            
            
            (205,972)Effect
      of exchange rate changes on cash
            
            164,039
            
            
            (26,969)NET
      INCREASE (DECREASE) IN CASH
            
            1,705,198
            
            
            193,462CASH
      AT BEGINNING OF YEAR
            
            226,559
            
            
            33,097CASH
      AT END OF YEAR
            $
            1,931,757
            
            $
            226,559SUPPLEMENTAL
      DISCLOSURES OF CASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
            $
            3,749
            
            $
            6,001Income
      taxes
            $
            454,163
            
            $
            84,304





F-5
 
 PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Notes to
the consolidared financial Statements






NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




This
summary of significant accounting policies of Profire Energy, Inc. and
Subsidiary (“the Company”) is presented to assist in understanding the Company’s
financial statements. The Company’s accounting policies conform to accounting
principles generally accepted in the United States of America (US GAAP). On
September 30, 2008, The Flooring Zone, Inc. (“the Parent”) entered into an
Acquisition Agreement with Profire Combustion, Inc. and the Shareholders of
Profire Combustion, Inc. (“the Subsidiary”), subject to customary closing
conditions. All conditions for closing were satisfied or waived and the
transaction closed on October 9, 2008.





Pursuant
to the terms and conditions of the Acquisition Agreement, 35,000,000 shares of
restricted common stock of the Company were issued to the three shareholders of
Profire Combustion, Inc., in exchange for all of the issued and outstanding
shares of the Subsidiary. As a result of the transaction, Profire Combustion,
Inc. became a wholly-owned subsidiary of the Parent and the shareholders of the
Subsidiary became the controlling shareholders of the Company. For accounting
purposes, the Subsidiary is considered the accounting acquirer, and the
historical Balance Sheets, Statements of Operations and Other Comprehensive
Income, and Statement of Cash Flow of the Subsidiary are presented as those of
the Company.  The historical equity information is that of Profire
Combustion, Inc., the accounting acquire.  The recapitalization
required pursuant to this merger resulted in a negative additional paid-in
capital balance.





In
connection with the acquisition of Subsidiary, the Parent changed its fiscal
year end to March 31 to coincide with the Subsidiary’s fiscal year
end.





Organization and Line of
Business


The
Parent was incorporated on May 5, 2003 in the State of Nevada. The Subsidiary
was incorporated on March 6, 2002 in the province of Alberta, Canada.





The
Company provides products and services for burners and heaters for the oil and
gas extraction industry in the Canadian and US markets.





Use of
Estimates


The
preparation of financial statements in accordance 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 reportable amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.





Basic Earnings Per
Share


The
computation of basic earnings per share of common stock is based on the weighted
average number of shares outstanding during the periods presented. The
computation of fully diluted earnings per share includes common stock
equivalents outstanding at the balance sheet date. The Company had 133,333 stock
options included in the fully diluted earnings per share as of March 31, 2010
and no common stock equivalents outstanding as of March 31, 2009, respectively.
Basic earnings per share for the years ended March 31, 2010 and 2009 are as
follows:





Years
      ended March 31,2010
            
            2009Net
      income applicable to common shareholders
            $
            1,292,167
            
            $
            875,145Weighted
      average shares outstanding
            
            45,000,000
            
            
            40,013,699Basic
      earnings per share
            $
            0.03
            
            $
            0.02Fully
      diluted earnings per share
            $
            0.03
            
            $
            0.02
















PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Notes to
the consolidared financial Statements




NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Foreign Currency and
Comprehensive Income


The
Company’s functional currency is the Canadian Dollar (CAD). The financial
statements of the Company were translated to U.S. Dollars (USD) using year-end
exchange rates for the balance sheet, and average exchange rates for the
statements of operations.  Equity transactions were translated using
historical rates.  The period-end exchange rates of 1.0188 and 1.2538
were used to convert the Company’s March 31, 2010 and 2009 balance sheets,
respectively, and the statements of operations used weighted average rates of
1.0884 and 1.0327 for the years ended March 31, 2010 and 2009, respectively. All
amounts in the financial statements and footnotes are presumed to be stated in
USD, unless otherwise identified. Foreign currency translation gains or losses
as a result of fluctuations in the exchange rates are reflected in the Statement
of Operations and Comprehensive Income.





Accounting Method and Fiscal
Year


The
Company’s financial statements are prepared using the accrual method of
accounting.  The Company has elected a fiscal year ending on March
31.





Revenue
Recognition


The
Company records sales when a firm sales agreement is in place, delivery has
occurred or services have been rendered, and collectability of the fixed or
determinable sales price is reasonably assured.  If customer
acceptance of products is not assured, the Company records sales only upon
formal customer acceptance.





Income
Taxes


The
Parent is subject to US income taxes on a stand-alone basis.  The
Parent and its Subsidiary file separate stand-alone tax returns in each
jurisdiction in which they  operate.  The Subsidiary is a
corporation operating in Canada and is subject to Canadian income taxes on its
stand-alone taxable income.  The effective rates of income tax are
25.8% and 34.4% for years ended March 31, 2010 and 2009,
respectively.





Accounts
Receivable


Receivables
from the sale of goods and services are stated at net realizable value. This
value includes an appropriate allowance for estimated uncollectible accounts.
 The allowance is calculated based on past collectability and customer
relationships.  The Company recorded an allowance for doubtful accounts of
$7,361 and $1,953 for the years ended March 31, 2010 and 2009,
respectively.





Cash and Cash
Equivalents


For
purposes of the statement of cash flows, cash and cash equivalents include cash
and all debt securities with an original maturity of 90 days or less. As of
March 31, 2010 and 2009, book balances totaled $1,931,757 and $226,559,
respectively. These deposits were insured entirely by insurance accounts held by
the Company’s banks guaranteed by the Province of Alberta, Canada.





F-7




PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Notes to
the consolidared financial Statements
  NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


Inventory


In
accordance with ARB No. 43 “Inventory Pricing,” the
Company’s inventory is valued at the lower of cost (the purchase price,
including additional fees) or market based on using the entire value of
inventory.  Inventories are determined based on the first-in first-out
(FIFO) basis.  Inventory consists of finished goods (>1%) held for
sale and work in progress (53%). As of March 31 inventory consisted of the
following:





2010
            
            2009Raw
      materials
            $
            612,599
            
            $
            342,934Finished
      goods
            
            53,527
            
            
            5,168Work
      in process
            
            5,432
            
            
            386,868Subtotal
            
            671,558
            
            
            734,970Reserve
      for Obsolescence
            
            (46,879)
            
            
            (43,070)Total
            $
            624,679
            
            $
            691,900





Shipping and handling fees
and costs


The
Company records all amounts billed to customers related to shipping and handling
fees as revenue.  The Company classifies expenses for shipping and
handling costs as general and administrative expenses.  The Company
incurred shipping and handling costs of $31,329 and $45,777 during the years
ended March 31, 2010 and 2009, respectively.





Advertising
costs


The
Company classifies expenses for advertising as general and administrative
expenses.  The Company incurred advertising costs of $11,249 and
$14,055 during the years ended March 31, 2010 and 2009,
respectively.





Financial
Instruments


For
accounts receivable, accounts payable, accrued liabilities, current portion of
long-term debt and long-term debt, the carrying amounts of these financial
instruments approximates their fair value.  Unless otherwise noted, it
is management’s opinion that the Company is not exposed to significant interest,
currency or credit risks arising from these financial instruments.





Recently Issued Accounting
Pronouncements


The
Company has evaluated recent accounting pronouncements and their adoption has
not had or is not expected to have a material impact on the Company’s financial
position, or statements.




NOTE
2 – PROPERTY AND EQUIPMENT




Property
and equipment is stated at cost.  Depreciation on property and equipment is
computed using the diminishing balance method over the estimated useful lives of
the assets.  The estimated useful lives of the assets are as
follows:








Assets
            Estimated useful
      lifeFurniture and
      fixtures
            5
    YearsMachinery and
      equipment
            5
    YearsBuildings
            25
    Years




F-8


PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Notes to
the consolidared financial Statements
 
 
 NOTE
2 – PROPERTY AND EQUIPMENT (CONTINUED)




Property
and equipment consisted of the following as of March 31, 2010 and
2009:





2010
            
            2009Office
      Furniture & Equipment
            $
            79,926
            
            $
            56,188Service
      and Shop Equipment
            
            184,034
            
            
            110,625Autos
            
            123,097
            
            
            100,033Land
      and Buildings
            
            439,288
            
            
            255,232Total
      Property and Equipment
            
            826,345
            
            
            522,078Accumulated
      Depreciation
            
            (267,019)
            
            
            (164,465)Net
      Property and Equipment
            $
            559,326
            
            $
            357,613





Depreciation
expense for the years ended March 31, 2010 and 2009 are as follows:




Depreciation
      ExpenseYears
      ended March 31,2010
            
            2009Cost
      of goods sold
            $
            6,050
            
            $
            4,684General
      & administrative
            
            54,446
            
            
            41,408Total
            $
            60,496
            
            $
            46,092






NOTE
3 – DEBT




In 2008,
two of the Company’s stockholders lent funds of $200,000 CAD  by way
of an unsecured promissory note, which was non-interest bearing and was due
March 30, 2009. This balance was paid in full as of March 31,
2009.  Imputed interest was calculated on the shareholder loans as of
the dates of the balance sheets using the prime rate in effect as of the date of
the note and was determined by management to have an immaterial impact on the
financial statements.




NOTE
4 – STOCKHOLDERS’ EQUITY




The
Company had the following $0.001 par value authorized stock:




Preferred
Stock 10,000,000 shares.


Common
Stock 100,000,000 shares.





As of
March 31, 2010 and 2009, the Company had issued 45,000,000 shares of common
stock, respectively.








F-9


PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Notes to
the consolidared financial Statements






NOTE
5 – PROVISION FOR INCOME TAXES


Reconciliation
of US Federal/Canadian Statutory Income Tax Rate to Effective Income Tax
Rate:






March
      31, 2010
              
              March
      31,2009United
      States statutory income tax rate
              35.0%
              
              35.0%Increase
      in valuation allowance
              1.8
              
              (0.0)Decrease
      in rate on income subject to Canadian income tax rates
              (6.3)
              
              (5.8)Increase
      (decrease) in rate resulting from non-deductible expenses and deductible
      adjustments
              (4.7)
              
              5.2(9.2)
              
              (0.6)Effective
      income tax rate
              25.8%
              
              34.4%






Components
      of Income Tax Expense
            March
      31,  2010
            
            March
      31,2009Federal
      U.S. Income Taxes-Current
            $               -
            
            $               --Deferred
            -
            
            -Foreign
      (Canadian and Provincial) Income Taxes
            444,191
            
            458,907State
      Income Taxes-Current
            -
            
            --Deferred
            -
            
            -Total
      Income Tax Expense
            $    444,191
            
            $      458,907








The
following are temporary items:  non-deductible write-down of
marketable securities, increase or decrease in rate resulting from depreciation
and loss on equipment for book purposes in excess of depreciation for income tax
purposes.  These temporary differences are insignificant, for 2010 and
2009.


The
Company adopted the provisions of ASC 740, Accounting for Uncertainty in Income
Taxes, on January 1, 2007.  As a result of the implementation of ASC 740,
the Company recognized approximately no increase in the liability for
unrecognized tax benefits.





The
Company has no tax positions at March 31, 2010 and 2009 for which
the ultimate deductibility is highly certain but for which there is uncertainty
about the timing of such deductibility.





The
Company recognizes interest accrued related to unrecognized tax benefits in
interest expense and penalties in operating expenses.  During the years
ended March 31, 2010 and 2009, the Company recognized no interest and
penalties.  The Company had no accruals for interest and penalties
at March 31, 2010 and 2009.




Deferred
tax assets arising from net operating losses generated by the Parent on its
stand-alone tax returns of $242,000 have been offset completely by a valuation
totaling $84,685 due to the uncertainty of their realization.


F-10


PROFIRE
ENERGY, INC. AND SUBSIDIARY
 Notes to
the consolidared financial Statements








NOTE
6 – AVAILABLE FOR SALE SECURITIES




The
following table sets forth the available for sale securities held by the Company
as of March 31, 2010:




Company
      name
            Symbol
            Shares
            Market
      value (USD) as of 3/31/10
            Fair
      market value (USD)Copper
      King Mining Corporation
            CPRK
            50,000
            $            0.003
            $                  147Deep
      Blue Marine Inc.
            DPBE
            1,200,000
            0.006
            7,040Total
      value of trading securities
            
            
            
            $              7,154





The
following table sets forth the available for sale securities held by the Company
as of March 31, 2009:





Company
      name
            Symbol
            Shares
            Market
      value (USD) as of 3/31/09
            Fair
      market value (USD)Copper
      King Mining Corporation
            CPRK
            50,000
            $             0.019
            $                  950Deep
      Blue Marine Inc.
            DPBE
            1,200,000
            0.002
            2,160Total
      value of trading securities
            
            
            
            $               3,110




NOTE
7 – COMMITMENTS AND CONTINGENCIES




The
Company has a $400,000 revolving credit line with a local banking institution
that it uses from time to time to satisfy short-term fluctuations in cash flows.
At March 31, 2010 and 2009 the Company had $-0- outstanding on the line of
credit.




NOTE
8 – SUBSEQUENT EVENTS




In
accordance with ASC 855, management evaluated the subsequent events through the
date the financial statements were issued and has no material events to
report.


F-11