**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





FORM
      10-KSB





þ
            Annual
                report under Section 13 or 15(d) of the Securities Exchange Act of
                1934
                for the fiscal year ended December 31,
                2007.





 ̈
            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 000-50739







(Exact
      name of small business issuer as specified in its charter)





**Nevada**
              (State
                or other jurisdiction of
              incorporation
                or organization)
            **20-1044677**
              (I.R.S.
                employer
              identification
                number)**6200
                E. Commerce Loop, Post Falls, ID 83854**
              (Address
                of principal executive offices and zip code)
              **(208)
                665-5553**
              (Registrant’s
                telephone number, including area
                code)





Securities
      registered pursuant to Section 12(b) of the Act: NONE





Securities
      registered pursuant to Section 12(g) of the Act:


Common
      Stock, $.001 par value





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act.  ̈





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





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





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


YES  ̈ NO þ





The
      issuer’s revenues for its fiscal year ended December 31, 2007 were
      $17,985





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates of the issuer, as of March 27, 2008 was $7,120,151.





Number
      of
      shares outstanding of the issuer’s common stock as of March 27, 2008: 29,697,276 shares.





Transitional
      Small Business Disclosure Format (Check one): Yes o; No x













**TABLE
      OF CONTENTS**


**Page****PART
                  I**Item
                  1.
              
              Description
                  of Business
              
              4Item
                  2.
              
              Description
                  of Property
              
              14Item
                  3.
              
              Legal
                  Proceedings
              
              14Item
                  4.
              
              Submission
                  of Matters to a Vote of Security Holders
              
              14**PART
                  II**Item
                  5.
              
              Market
                  for Common Equity and Related Stockholder
                  Matters
              
              15Item
                  6
              
              Management’s
                  Discussion and Analysis or Plan of Operation
              
              16Item
                  7.
              
              Financial
                  Statements
              
              28Item
                  8.
              
              Changes
                  in and Disagreements with Accountants on
                  Accounting and Financial Disclosure
              
              28Item
                  8A(T).
              
              Controls
                  and Procedures
              
              28Item
                  8B.
              
              Other
                  Information
              
              30**PART
                  III**Item
                  9.
              
              Directors,
                  Executive Officers of the Registrant; Compliance
                  with Section 16 (a) of the Securities Exchange Act
              
              31Item
                  10.
              
              Executive
                  Compensation
              
              34Item
                  11.
              
              Security
                  Ownership of Certain Beneficial Owners and
                  Management and Related Stockholder Matters
              
              36Item
                  12.
              
              Certain
                  Relationships and Related Transactions
              
              37Item
                  13.
              
              Exhibits
              
              38Item
                  14.
              
              Principal
                  Accountant Fees and Services
              
              38EXHIBIT
                  INDEX
              
              
              
              39SIGNATURES
              
              
              
              41







**FORWARD
      LOOKING STATEMENTS**





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





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




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




3


**PART
      I**





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





**TABLE
      OF CONTENTS**





**A.****Energenx
                - Introduction, Business Strategy**
            
            **4****B.****Energenx
                Research and Product Development Programs**
            
            **6****C.****Licensed
                Proprietary Technology**
            
            **9****D.****Out-Licensed
                Technology**
            
            **10****E.****Competition**
            
            **11****G.****Strategic
                Alliance**
            
            **12****H.****Marketing
                and Sales**
            
            **12****I.****Patents,
                Trademarks, and Copyrights**
            
            **13****J.****Employees**
            
            **14**




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





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





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





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





Our
      patented battery charger system is based on a solid state battery charger that
      uses a two phase method to charge batteries with pulsating current rather than
      with a constant charge current as is used with conventional battery chargers.
      This technology can be used to increase and preserve for a longer period of
      time
      the energy stored in the charged battery as compared to constant current battery
      chargers. We have utilized this solid state pulse battery charger technology
      in
      our lead product candidate, the Potential Battery Charger. We have also built
      and began field testing a prototype of a Battery Charge Control Unit for use
      with residential solar and wind powered electric systems. The Charge Control
      System is a 12 and 24 volt variation of the Potential Battery Charger that
      uses
      digital circuitry to monitor and switch between two banks of
      batteries.




4





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





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





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





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





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




5





Energenx’s
      fiscal year end is December 31.





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




We
      spent
      $215,469 and $209,913 respectively, in our fiscal years ending December 31,
      2007
      and 2006 on the development of the products described below.




**Solid
      State Pulse Battery Chargers**





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





**Battery
      Charger Products**





During
      2006 and early 2007 we completed development of a solid state pulse current
      battery charging system called the Potential Battery Charger, specifically
      designed to charge electric powered vehicles such as golf carts, ATVs, forklifts
      and back-up battery systems. This type of charger incorporated the use of our
      patented solid-state technology. Originally Energenx developed a 36 volt version
      of the Potential Battery Charger designed for use in certain golf carts and
      forklifts. The 36 volt Potential Battery Charger was submitted for the UL
      (Underwriter’s Laboratories) assessment and testing process by GTG Corp. in 2006
      and received a class A rating by UL for the US market in late 2006. In April
      2007 we **** delivered
      a forklift version of a 36/48 volt of our Potential Battery Charger to GTG
      Corp.
      for testing and potentially for further UL assessment, testing and
      certification. In mid 2007, we decided to discontinue the Potential Battery
      Chargers and replace them with a new set of battery charger products which
      are
      also battery rejuvenators, as described below.





**Battery
      Charger/Rejuvenators**





In
      the
      second quarter of 2007 we decided to shift our product development utilizing
      our
      pulse charging solid state battery charger system towards combination battery
      chargers and rejuvenators based on a new proprietary process using
      unidirectional wave impulses that could also rejuvenate batteries. The
      rejuvenation process systematically breaks through the sulfation associated
      with
      older batteries and return them to active material within the electro-chemical
      process. Once the sulfation becomes active material it then can be re-plated
      to
      the plates of the battery, which occurs through the charging process. This
      results in a denser charge capacity and improved battery performance. The net
      result of this is that the batteries become capable of delivering many more
      charge/discharge cycles than batteries charged conventionally. This extends
      the
      life of the batteries and reduces the cost of battery replacement. This can
      be
      the largest economic benefit because battery replacement is the most expensive
      unnecessary cost associated with running electric vehicles. The rejuvenation
      process requires more energy than conventional battery chargers in the
      rejuvenation process, but significantly increaces the amount of usable power
      over multiple charge and discharge cycles. With conventional battery charging,
      battery capacity degrades with each consecutive charge and discharge cycle.
      For
      this reason, the common practice is to place the battery on the charger more
      frequently and/or for longer periods of time. Less energy is required to just
      charge a battery, but the charging process alone will not break up the build
      up
      of sulfation that occurs during the charging/discharging cycles. On June 2,
      2007
      we delivered a new 36/48 volt golf cart charger/rejuvenator to GTG Corp. also
      for in-house testing and potentially for further UL assessment, testing and
      certification. If positive results from such testing are obtained, GTG may
      re-submit pre-production models of the newest charger/rejuvenator version of
      the
      36/48 volt battery charger for further UL assessment and certification.
      Currently the parties intend to manufacture the 36/48 volt charger/rejuvenator
      necessary for UL assessment and certification at Energenx premises. After full
      UL certification, GTG Corp. would then manufacture, market and sell the
      charger/rejuvenator products.




6




In
      addition, in May 2007 we completed development of a 12/24 volt battery
      charger/rejuvenator for retail sales for charging and rejuvenation of lead
      acid
      batteries. During 2007 we sold 139 of the 12 volt battery charger/rejuvenator
      units to Renaissance Charger LLC who are undertaking in-house testing and sample
      marketing of these battery charger/rejuvenator units, which resulted in the
      recognition of $17,985 of revenue for the fiscal year ending December 31, 2007.
      Renaissance has sold these battery charger/rejuvenator units to customers,
      many
      of whom have provided valuable feedback about their performance. Depending
      on
      the results of the in-house testing being undertaken by Renaissance Charger
      LLC,
      Energenx and Renaissance may enter into a joint venture
      relationship.




We
      are
      also developing the following charger/rejuvenator products which we will sell
      to
      Renaissance Charger for in-house testing and sample marketing:




·
            12
                volt charger/rejuvenator for lead-acid, gel-cell and AGM (Absorbed
                Glass
                Mat) batteries used in trucks, autos, motorcycles, marine craft and
                recreational vehicles to be marketed to repair shops and
                dealerships.


·
            universal
                battery charger/rejuvenator for nickel-cadmium and nickel-metial
                hydride ,
                lead acid primary cells, and tool batteries between 1.5 and 24 volts
                used
                in cordless power tools, phones, toys and back up UPS (uninterruptible
                power supply)supplies 
 ·
            72-144
                volt battery charger/rejuvenator for electric vehicles and
                hybrids 
 ·
            12/24
                volt Solar/Wind Charge Controller for use with lead-acid, gel-cell,
                nickel-metail hydride and AGM battery banks utilized in conjunction
                with
                solar and/or wind power


Of
      these
      products, the first two are covered by the GTG license agreement.




7





Once
      the
      development for the North American market for the battery charger/rejuvenators
      is sufficiently advanced, Energenx intends to seek licensees in other countries
      in order to cover other geographical regions.





**Battery
      Charge Control Unit for Renewable Energy System Storage
      Batteries.**





Using
      the
      same battery charging technology base as utilized in our battery chargers,
      in
      late 2006, we built and began field testing a prototype of a battery charge
      control unit for use with residential solar and wind powered electric systems,
      called the Solar Kick Radiant Charge Controller. This Solar Kick charge
      controller is a 12 and 24 volt variation of the proprietary Energenx battery
      chargers that uses digital circuitry to monitor and switch the charge between
      two banks of batteries. The system, in addition to all of the advantages
      associated with our battery charge systems described above, is able to deliver
      more of the available energy from the source (the solar panels or wind turbine
      generator) to the batteries than conventional chargers. Based on preliminary
      testing, this appears to result in an increase of performance in such systems
      when solar or wind conditions are less then optimal.





Energenx
      plans to build and test further prototypes for application with solar and wind
      systems, initially for small power supply units for individual buildings. Since
      the same principles are applicable for larger systems, the product spectrum
      could subsequently be extended into those areas. The intent is to provide the
      market with systems with higher efficiency than existing on the market today,
      resulting in a higher energy output from the same primary energy
      source.





Upon
      the
      successful conclusion of a testing period of the charge control system, Energenx
      intends to seek to license out this technology for the manufacturing and sales
      of the Charge Control units in the United States, Canada, and Mexico. We plan
      to
      work with such future licensee to finalize the development of a Charge Control
      System, assist in industrializing the product line, and obtaining UL
      certification.





**Electromagnetic
      Motor/Generator Battery Energy System**





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





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




8





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





**Bedini
      Exclusive Technology License Agreements**





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





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





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




9




Under
        the
        2001 License Agreement Energenx agreed to pay an up front license fee of
        $58,000. John Bedini was issued 5,140,326 shares of common stock of Energenx
        in
        lieu of payment of the license fee. In addition Energenx must pay a royalty
        of
        five percent of the net selling price per unit of any licensed product sold
        by
        Energenx. Energenx was granted the right to enter into exclusive sublicenses
        concerning the licensed technology upon written authorization from John
        Bedini. **** Energenx
        must pay to John Bedini a three percent royalty on all product royalty income
        per unit received by Energenx from a sub-licensee. In addition, Energenx
        undertakes to pay to John Bedini fifty percent of any license fee paid as
        part
        of a sub-license agreement.


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





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





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





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





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





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




10





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





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





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





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





**E.**  **Competition**





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




11





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





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





Pursuant
      to the Exclusive Technology License Agreement entered into in December 2004,
      the
      licensee GTG Corp. intends to test the sublicensed prototype battery charger
      known as the Potential Battery Charger. If positive results from such testing
      are obtained, GTG intends to manufacture, market and sell charger/rejuvenator
      products. As part of the Exclusive Technology License Agreement GTG agreed
      to
      purchase all proprietary hybrid modules on a cost plus basis at a base price
      of
      $50.00 per module. Each charger/rejuvenators will require installation of this
      hybrid module into its electronic circuitry prior to becoming operational.
      We
      intend to develop other versions of the charger/rejuvenators with varying
      voltage levels. GTG Corp. will have the right to manufacture and sell these
      newer versions of the charger/rejuvenators under the same terms and conditions
      as the original Potential Battery Charger. Currently the parties intend to
      manufacture the 36 volt charger/rejuvenators for UL assessment and testing
      purposes only at Energenx premises.





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





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




12





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





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





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





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





**Patent
      Application**





U.S.
      Patent Application No. 11/592,633 filed November 3, 2006 entitled Circuits
      and
      Related Methods for Charging Battery.





**Issued
      Patents**





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





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




13





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





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





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





**J.**  **Employees**





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





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





Our
      operations are conducted from our offices in Post Falls, Idaho. On March 31,
      2006 we renewed our lease on approximately 5,000 square feet of office and
      research and development space in Post Falls on a two year renewable basis
      at a
      rental rate of $2,400 per month. We have prepaid for the full two year period
      of
      the lease, in the amount of $57,600.





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





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





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





Energenx
      did not submit any matters to a vote of its stockholders in the fourth quarter
      of 2007.


14




**PART
      II**





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




Our
      common stock began to be traded in the Over-The-Counter Bulletin Board (“OTCBB”)
      on June 21, 2007 under the stock symbol EENX.OB.




The
      market represented by the OTCBB is limited and the price for our common stock
      quoted on the OTCBB is not necessarily a reliable indication of the value of
      our
      common stock. The following table sets forth the high and low closing prices
      for
      shares of our common stock for the periods noted, as reported on the OTCBB.
      Quotations reflect inter-dealer prices, without retail mark-up, mark-down or
      commission and may not represent actual transactions.




**YEAR**
            
            **PERIOD**
            
            **HIGH**
            
            **LOW**Fiscal
                Year 2007
            
            
            Second
                Quarter
            
            $
            0.70
            
            $
            0.65Third
                Quarter
            
            $
            0.75
            
            $
            0.54Fourth
                Quarter
            
            $
            0.90
            
            $
            0.75





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





As
      of
      March 25, 2008 there were approximately 177 holders of record of Energenx’s
      common stock, of which 29,697,276 were issued and outstanding.





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


15





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





THE
      FOLLOWING PLAN OF OPERATIONS SECTION SHOULD BE READ IN CONJUNCTION WITH OUR
      FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ON PAGES F-1 THROUGH F-18
      FOLLOWING THE SIGNATURE PAGES OF THIS ANNUAL REPORT. ALL STATEMENTS IN THIS
      ANNUAL REPORT RELATED TO ENERGENX’S CHANGING FINANCIAL OPERATIONS AND EXPECTED
      FUTURE OPERATIONAL PLANS CONSTITUTE FORWARD-LOOKING STATEMENTS. THE ACTUAL
      RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED OR EXPRESSED IN SUCH
      STATEMENTS.





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





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





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





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





Our
      current plan of operation for the next 12 months primarily involves meeting
      any
      demand for our battery charger/rejuvenator products from Renaissance Charger,
      LLC and GTG Corp., and research and development activities on battery
      charger/rejuvenator and charge control unit products.




Concerning
      the battery charger/rejuvenators, product research will continue on improving
      efficiency. We will continue our development of variations of the
      charger/rejuvenators for specific markets to accommodate various
      volt****applications
      with a wide range of capacity requirements. On June 2, 2007 we delivered a
      new
      golf cart version of the 36/48 volt of our battery charger/rejuvenator to GTG
      Corp. also for in-house testing and potentially for further UL assessment,
      testing and certification. In addition, in May 2007 we completed development
      of
      a 12 volt battery charger. During 2007 we sold 139 of the 12 volt battery
      charger units to Renaissance Charger LLC who are undertaking in-house testing
      and sample marketing of these battery charger units, which resulted in the
      recognition of $17,985 of revenue for the year ending December 31, 2007.
      Depending on the results of the in-house testing being undertaken by Renaissance
      Charger LLC, Energenx and Renaissance may enter into a joint venture
      relationship involving the sale and market testing of other charger/rejuvenators
      and solar/wind charge control units.




We
      may
      generate revenues pursuant to our Exclusive Technology License Agreement with
      GTG Corp. if they order battery charger/rejuvenators. As mentioned above, we
      did
      generate revenues from the sale of 25 of our 12 volt battery charger units
      to
      Renaissance Charger LLC during the second quarter of 2007, but this was a one
      time purchase. We cannot assure you that GTG Corp. will order any
      charger/rejuvenators from us in 2008 or ever, that licensed battery charger
      products will ever reach the market giving rise to royalty payments or that
      additional revenues from patent licensing will be generated.




16





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





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





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





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





As
        of
        December 31, 2007, we had $532,545 in cash and cash equivalents. We do not
        have
        any available lines of credit. Since inception we have financed our operations
        from private placements of equity securities and loans from
        shareholders.
  Net
        cash used in operating activities during the fiscal year ended December 31,
        2007
        was $449,446 resulting in a net loss of $802,417.


Net
      cash
      from financing activities for the fiscal year ended December 31, 2007 was
      $498,340, with proceeds of $500,000 from sale of common stock offset by $1,660
      for payment of notes payable in 2007. This funding came entirely from $500,000
      received on January 23, 2007 from Marvin Redenius, one of our directors,
      representing the final tranche of a private placement pursuant to a Subscription
      Agreement signed on September 30, 2005, in which Mr. Redenius subscribed for
      3,000,000 shares of common stock of Energenx for $1,500,000.





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





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




17




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




·
              revenues
                  from sale of chargers to Renaissance Charge, LLC, if
                  any;


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





·
            through
                future private placement financing.




As
      mentioned above, we may generate additional revenues from GTG Corp. if they
      order Potential hybrid modules under our license agreement, or if Renaissance
      Charge purchases more of our chargers. We cannot at this time assure you that
      those orders will occur or revenues will be generated in fiscal year 2008,
      if at
      all.




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





We
      are
      pursuing potential equity financing, sub-licensing and other collaborative
      arrangements that may generate additional capital for us. We may need to raise
      additional capital or generate additional revenue to complete our development
      of
      product variations on our Potential Battery Charger and our hybrid
      electromagnetic motor/generator product candidate. We cannot assure you that
      we
      will generate sufficient additional capital or revenues, if any, to fund our
      operations beyond the twelve month period ending March 31, 2008, that any future
      equity financings will be successful, or that other potential financings through
      bank borrowings, debt or equity offerings, or otherwise, will be available
      on
      acceptable terms or at all.





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





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





**Revenue
      recognition** *:* Royalties will be recognized as revenue when the amounts are contractually
      earned, fixed and determinable, and there is substantial probability of
      collection.




18





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





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





**Intangible
      Assets.** Energenx’ intangible assets are composed of a patent and license. They are
      amortized on a straight-line basis over ten and fifteen year lives,
      respectively.





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





**RISKS
      AND UNCERTAINTIES**





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





**Risks
      Related to Our Business**





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





We
          have a
          limited operating history upon which investors may base an evaluation of
          our
          likely future performance. Since we began operations in 1999 we have been
          engaged in developing our research programs, recruiting outside directors
          and
          key consultants. We have generated only nominal revenue to date other than
          interest income. Our only income other than equity financings has been
          revenue
          in the amount of $17,985 in 2007 from sales of products to Rennaisance
          Charge,
          and a modest amount of interest income. As of December 31, 2007, we had
          an
          accumulated deficit of $3,052,576 and our operating losses are
          continuing.


**We
        have only limited products currently available for sale and we may never
        be
        successful in developing products suitable for
        commercialization.**


Some
        of
        our product candidates are at an early stage of development and all of our
        product candidates will require expensive and lengthy testing and regulatory
        clearances. None of our product candidates have been approved by regulatory
        authorities. We have only a few products available for sale online via
        Renaissance Charge, LLC for sample marketing purposes only. There can be
        no
        assurance that our research and these limited marketing trials will lead
        to
        commercially viable battery chargers or power generation devices. There are
        many
        reasons that we may fail in our efforts to develop commercially viable product
        candidates, including that:


·
            our
                product candidates will be
                ineffective,




19







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


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


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


·
            third
                parties will market equivalent or superior
                products.





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





We
      expect
      to incur substantial operating losses for at least the next several years.
      We
      currently have sufficient capital resources to fund our operations, with
      necessary adjustments to our general and administrative budget, at least through
      March 2008. We currently have no sources of revenue and we cannot assure you
      that we will be able to develop other revenue sources or that our operations
      will become profitable, even if we are able to commercialize any products.
      If we
      do not generate significant increases in revenue, at some point in the future
      we
      may not be in a position to continue operations and investors could lose their
      entire investment.





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





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





·
            the
                progress and magnitude of our product development
                programs,


·
            the
                scope and results of product development
                testing,


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


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


·
            the
                rate of technological advances,


·
            the
                commercial potential of our product
                candidates,


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


·
            the
                costs of establishing third party arrangements for
                manufacturing.


·
            the
                amount of revenues we may generate from supplying hybrid modules
                to GTG
                Corp..





We
      have
      incurred negative cash flow from operations since we incorporated and we may
      not
      generate positive cash flow from our operations within the next several years.
      Therefore, depending the amount of revenues we generate in 2008 from supplying
      GTG Corp., we may need additional future financings in order to carry out our
      plan of operations beyond the next twelve months.




20





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





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





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





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





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





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





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




21





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





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





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





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





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




22





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





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





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





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





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




23





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





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





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





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





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





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





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





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





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





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




As
        of
        March 27, 2008, our directors and executive officers beneficially owned
        approximately 60% **** of
        our
        outstanding common stock. As a result, our controlling stockholders are able
        to
        control all matters requiring stockholder approval, including the election
        of
        directors and the approval of significant corporate transactions. This
        concentration of ownership could also delay or prevent a change in control
        of
        Energenx that may be favored by other stockholders.




24




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





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





**Risks
      Related to Our Industry**





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





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





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





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





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




25





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





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




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


**Other
      Risks**





**Our
      common stock is traded on the OTCBB, our stock price is highly volatile, and
      you
      may not be able to sell your shares of our common stock at a price greater
      than
      or equal to the price you paid for such shares.**





In
      May
      2007 our shares of common stock began trading on the Over the Counter Bulletin
      Board, or OTCBB. Stocks traded on the OTCBB generally have limited trading
      volume and exhibit a wide spread between bid and ask quotations. The market
      price of our common stock is volatile. The trading volume in our shares since
      initiation of trading in May 2007 is very small, with average daily of
      approximately 3,000 shares. Moreover, during that period, our common stock
      traded as low as $0.54 per share and as high as $0.90 per share. This may impact
      an investor’s decision to buy or sell our common stock. Factors affecting our
      stock price include:





·
            our
                financial results;·
            fluctuations
                in our operating results;




26




·
            announcements
                of technological innovations or new commercial battery charger, charge
                control or energy generation products by us or our
                competitors;·
            government
                regulation;·
            developments
                in patents or other intellectual property rights;·
            developments
                in our relationships with customers and potential customers;
                and·
            general
                market conditions.





Furthermore,
      volatility in the stock price of other companies has often led to securities
      class action litigation against those companies. Any such securities litigation
      against us could result in substantial costs and divert management’s attention
      and resources, which could seriously harm our business and financial
      condition.





**Our
      common stock may be subject to “penny stock” rules which may be detrimental to
      investors.**





Our
      common stock may be, or may become, subject to the regulations promulgated
      by
      the SEC for “penny stock.” SEC regulation relating to penny stock is presently
      evolving, and the OTCBB may react to such evolving regulation in a way that
      adversely affects the market liquidity of our common stock. Penny stock
      currently includes any non-NASDAQ equity security that has a market price of
      less than $5.00 per share, subject to certain exceptions. The regulations
      require that prior to any non-exempt buy/sell transaction in a penny stock,
      a
      disclosure schedule set forth by the SEC relating to the penny stock market
      must
      be delivered to the purchaser of such penny stock. This disclosure must include
      the amount of commissions payable to both the broker-dealer and the registered
      representative and current price quotations for the common stock. The
      regulations also require that monthly statements be sent to holders of penny
      stock that disclose recent price information for the penny stock and information
      of the limited market for penny stocks. These requirements may adversely affect
      the market liquidity of our common stock.





**Sales
      of our common stock may require broker-dealers to make special suitability
      determinations regarding prospective purchasers.**





Our
      common stock may be, or may become, subject to Rule 15g-1 through 15g-9 under
      the Exchange Act, which imposes certain sales practice requirements on
      broker-dealers which sell our common stock to persons other than established
      customers and “accredited investors” (generally, individuals with a net worth in
      excess of $1,000,000 or an annual income exceeding $200,000 (or $300,000
      together with their spouses)). For transactions covered by this rule, a
      broker-dealer must make a special suitability determination for the purchaser
      and have received the purchaser’s written consent to the transaction prior to
      the sale. Applicability of this rule would adversely affect the ability of
      broker-dealers to sell our common stock and purchasers of our common stock
      to
      sell their shares of such common stock. Accordingly, the market for our common
      stock may be limited and the value negatively impacted.





**We
      do not pay cash dividends.**




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




27




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





The
      Audited Financial Statements for this Form 10-KSB appear on pages F-1 through
      F-18 following the signature page below.





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





None.





**ITEM
      8A(T).**  **CONTROLS
      AND PROCEDURES**





**Evaluation
      of Disclosure Controls and Procedures** .





Our
      management, including our principal executive officer and our principal
      financial officer, has evaluated the effectiveness of our “disclosure controls
      and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the
      United States Securities Exchange Act of 1934, as amended), as of December
      31,
      2007. As described below in the Management’s Report on Internal Control over
      Financial Reporting, management has reported material weaknesses in the internal
      control over financial reporting as of December 31, 2007. Based on that
      evaluation, our principal executive officer and our principal financial officer
      have concluded that our disclosure controls and procedures were not effective
      as
      of December 31, 2007 due to the reported material weakness.





**Management’s
      Report on Internal Control over Financial Reporting**





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 Securities Exchange Act of
      1934, as amended, as a process designed by, or under the supervision of, a
      company’s principal executive and principal financial officers and effected by a
      company’s board of directors, management and other personnel, to provide
      reasonable assurance regarding the reliability of financial reporting and the
      preparation of financial statements for external purposes in accordance with
      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




28




·
            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.





All
      internal control systems, no matter how well designed, have inherent limitations
      and can provide only reasonable, not absolute, assurance that the objectives
      of
      the control system are met. Further, the design of a control system must reflect
      the fact that there are resource constraints, and the benefits of controls
      must
      be considered relative to their costs. Because of the inherent limitations
      in
      all control systems, no evaluation of controls can provide absolute assurance
      that all control issues and instances of fraud, if any, within our company
      have
      been detected. Therefore, even those systems determined to be effective can
      provide only reasonable assurance with respect to financial statement
      preparation and presentation.




Our
      management, with the participation of our Chief Executive Officer and Chief
      Financial Officer, assessed the effectiveness of our internal control over
      financial reporting as of December 31, 2007. In making this assessment, our
      management used the criteria set forth by the Committee of Sponsoring
      Organizations of the Treadway Commission (COSO) in *Internal
      Control - Integrated Framework* and *Internal
      Control over Financial Reporting-Guidance for Smaller Public
      Companies.*




A material weakness
      is a deficiency, or a combination of deficiencies, in internal control over
      financial reporting, such that there is a reasonable possibility that a material
      misstatement of our annual or interim financial statements will not be prevented
      or detected on a timely basis.




We
      identified a material weakness in our internal control over financial reporting
      as of December 31, 2007 because fundamental elements of an effective
      control environment were not present as of December 31, 2007, including a code
      of conduct or ethics, independent oversight and review of financial reporting,
      the financial reporting processes and procedures and internal control procedures
      by the Board of Directorsas
      we
      have not established an audit committee and our full board has not been
      adequately performing those functions.There
      exists a significant overlap between management and the Board of Directors,
      with
      three of the six Directors being members of management. Specifically, we do
      not
      currently have the ability to objectively monitor the processes and procedures
      of financial reporting as the individuals responsible for financial reporting
      are also members of the Board of Directors.Additionally,
      due
      to
      insufficient staffing and lack of full-time personnel, it was not possible
      to
      ensure appropriate segregation of duties between incompatible functions and
      formalized monitoring procedures have not been established or implemented.
      In
      the course of our assessment, we also identified that there were control
      deficiencies which were the result of our not maintaining a sufficient
      complement of personnel to ensure that financial information (both routine
      and
      non-routine) is adequately analyzed and reviewed on a timely basis to detect
      misstatements. These deficiencies resulted in identification by the auditors
      of
      required material adjustments to accruals of payables and expenses, as well
      as
      appropriate recognition of expenses.




Based
      on
      this assessment and the material weakness described above, management has
      concluded that internal control over financial reporting was not effective
      as of
      December 31, 2007.




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


29




We
      intend
      to take the following steps as soon as practicable to remediate the material
      weakness we identified as follows:





·
            We
                will segregate incompatible functions using existing personnel where
                possible or, given sufficient capital resources, we will hire additional
                personnel to perform those functions.


·
            We
                will increase the oversight and review procedures of the board of
                directors with regard to financial reporting, financial reporting
                processes and procedures and internal control
                procedures.


·
            To
                the extent we can attract outside directors, we will nominate an
                audit
                committee to review and assist the Board with its oversight
                responsibilities.


·
            We
                will adopt a code of conduct and
                ethics




**Changes
      in Internal Control Over Financial Reporting**





There
      has
      been no change in our internal control over financial reporting that occurred
      during our most recent fiscal quarter that has materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting.





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





None.





30


**PART
      III**





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





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





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


**Name**
              
              **Age**
              
              **Position**Gary
                  A. Bedini
              
              55
              
              President
                  & Chief Executive Officer,DirectorRick
                  M. Street
              
              50
              
              Chief
                  Financial Officer, Secretary,Treasurer,
                  DirectorJohn
                  C. Bedini
              
              58
              
              Vice
                  President of Research andDevelopment,
                  DirectorThomas
                  E. Bearden, Ph.D.
              
              79
              
              DirectorMarvin
                  Redenius
              
              43
              
              DirectorHans
                  Werner Huss
              
              65
              
              Director





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





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





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




31





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





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





**Thomas
      E. Bearden, Ph.D.** Thomas
      Bearden has served as a director of Energenx since June 2001. Thomas Bearden
      is
      a member of the Scientific Advisory Board of Energenx. Tom Bearden is a research
      scientist, inventor, consultant, and holds a Ph.D. (Trinity University) in
      Science, a M.S. (Georgia Tech) in Nuclear Engineering, and a B.S. (Northeast
      Louisiana State) in mathematics. Dr. Bearden is a Director of the Association
      of
      Distinguished American Scientists (ADAS), a Fellow Emeritus of the Alpha
      Foundation's Institute for Advanced Study (AIAS), CEO of CTEC, Inc., a private
      research and development company based in Huntsville, Alabama and serves as
      a
      member on the board of directors of two private companies.




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




32




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




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





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




A
      report
      on Form 4 filed on behalf of Marvin Redenius, Director, was filed late during
      January 2007 concerning the receipt of a subscription receivable pursuant to
      a
      Subscription Agreement between Energenx and Marvin Redenius dated September
      30,
      2005. A report on Form 4 filed on behalf of Rick Street, Chief Financial Officer
      and director, was filed one day late concerning the granting of stock options
      in
      November 2007.




**Code
      of Ethics**





We
      have
      not adopted a code of ethics that applies to our President and CEO (principal
      executive officer), or our Chief Financial Officer (principal accounting
      officer). As we have recently become a reporting company required to file
      periodic reports with the SEC and as we are not a “listed company” under SEC
      rules, we have not yet dealt with this issue, but we intend to do so in the
      future.




33





**Audit
      Committee and Audit Committee Financial Expert**




We
      are
      not a “listed company” under SEC rules and are therefore not required to have an
      audit committee comprised of independent directors. As we are a development
      stage company with minimal revenues from operations, few employees, and
      relatively simple financial statements, we have not, at this stage, constituted
      any board committees, including an audit committee. We do intend to constitute
      an audit committee in the near future. We do not have an audit committee
      financial expert who is an outside director. As our business grows and our
      financial statements become more complicated, we intend to seek an outside
      director who can qualify as an audit committee financial expert.




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





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





The
      table
      below sets forth the aggregate annual and long-term compensation paid by us
      during our last two fiscal years ended December 31, 2006 and December 31, 2007
      to our Chief Executive Officer, and our Chief Financial Officer (collectively
      the “Named Executive Officers”). Other
      than as set forth below, no executive officer’s salary and bonus exceeded
      $100,000 for the fiscal year 2007.





Name
                and
              Principal
              Position
              (a)
            
            Year
              (b)
            
            Salary
              ($)
              (c)
            
            Bonus
              ($)
              (d)
            
            Stock
              Awards
              ($)
              (e)
            
            Option
                Awards
              ($)
              (f)
            
            Non-Equity
                Incentive Plan Compensation ($)
              (g)
            
            Non-Qualified
                Deferred Compen-sation Earnings ($)
              (h)
            
            All
                other Compen-sation
              ($)
              (i)
            
            Total
              ($)
              (j)Gary
                A. Bedini
              Pres.
                & CEO, Dir.
            
            
            2007
            
            
            83,784
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            83,7842006
            
            
            123,214
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            123,214Rick
                Street
              CFO,
                Dir.
            
            
            2007
            
            
            0
            
            
            0
            
            
            0
            
            
            263,440
            
            
            0
            
            
            0
            
            
            0
            
            
            263,4402006
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0





**B.** **Narrative
          Disclosure to Summary Compensation Table**





Neither
      Gary Bedini, or Rick Street have entered into formal written employment
      agreements with Energenx. Each is employed on an at will basis with a base
      salary but with any bonus or option compensation at the discretion of the
      uninterested members of the board of directors. To date no bonus or option
      compensation has been granted to our Named Executive Officers with the exception
      of the grant of an option to purchase 400,000 shares of common stock to Rick
      Street on November 8, 2007. In 2006 Gary Bedini’s annual salary was set at
      $132,306, but was revised downward to $81,602 in November 2006, resulting in
      actual salary compensation received in 2006 of $123,214. In 2007, Gary Bedini’s
      annual salary was adjusted to $80,000. He received one payroll payment of $3,378
      for services rendered in 2006 in 2007.




34





**C.** **Outstanding
          Equity Awards at Fiscal Year End**


Option
                Awards
            
            Stock
                AwardsName
                  (a)
            
            Number
                              of
                            Securities
                            Underlying
                            Unexercised
                            Options
                            (#)
                            Exercisable
                            (b)
            
            Number
                            of
                          Securities
                          Underlying
                          Unexercised
                          Options
                          (#)
                          Unexercisable
                          (c)
            
            Equity
                                    Incentive
                                    Plan
                                    Awards
                                    Number
                                      of
                                    Securities
                                    Underlying
                                    Unexercised
                                    Unearned
                                    Options
                                    (#)
                                    (d)
            
            Option
                    Exercise
                    Price
                    ($)
                    (e)
            
            Option
                    Expiration
                    Date
                    (f)
            
            Number
                            of
                              Shares
                            or
                              Units of
                            Stock
                            That
                            Have
                              Not
                            Vested
                            (#)
                            (g)
            
            Market
                            Value
                              of
                            Shares
                              of
                            Units
                              of
                            Stock
                              That
                            Have
                              Not
                            Vested
                            ($)
                            (h)
            
            Equity
                                      Incentive
                                      Plan
                                      Awards:
                                      Number
                                        of
                                      Unearned
                                      Shares,
                                      Units
                                        or
                                      Other
                                      Rights
                                        That
                                      Have
                                        Not
                                      Vested
                                      (#)
                                      (i)
            
            Equity
                                      Incentive
                                      Plan
                                      Awards:
                                      Market
                                        or
                                      Payout
                                      Value
                                        of
                                      Unearned
                                      Shares
                                      Units
                                        or
                                      Other
                                      Rights
                                      That
                                        Have
                                      Not
                                        Vested
                                      ($)
                                      (j)G.
                Bedini
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0R.
                Street
            
            
            200,000
            
            
            200,000
            
            
            200,000
            
            $
            0.75
            
            
            11/8/2017
            
            
            200,000
            
            
            160,000
            
            
            0
            
            
            0





On
      November 8, 2007 Rick Street was granted an option to purchase 400,000 shares
      of
      common stock at $0.75, with 200,000 shares vesting immediately and 25,000
      vesting every three months between 2/9/08 and 11/9/09. There were no other
      option grants to our Named Executive Officers in 2007. Other than the 2007
      grant
      to Rick Street, no option grants have been made to any of our named executive
      officers under the Energenx 1999 Stock Option Plan, or outside of that Plan,
      to
      date.





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





**No
                compensation was paid to directors for their director services in
                2007.**




35





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





The
      following table sets forth certain information regarding beneficial ownership
      of
      our common stock as of March 27, 2008 (a) by each person known by us to own
      beneficially 5% or more of any class of our common stock, (b) by each of our
      executive officers and directors and (c) by all executive officers and directors
      of Energenx as a group. As of March 27, 2008 there were 29,697,276 shares of
      our
      common stock issued and outstanding. The numbers of shares beneficially owned
      include shares of common stock which the listed beneficial owners have the
      right
      to acquire within 60 days of March 27, 2008 upon the exercise of all options
      and
      other rights beneficially owned on that date. Unless otherwise noted, we believe
      that all persons named in the table have sole voting and investment power with
      respect to all the shares beneficially owned by them.


**Name
                  and, as Appropriate,**
                **Address
                  of****Beneficial
                  Owner (1)**
            
            **Amount
                    and**
                  **Nature
                    of**
                  **Beneficial**
                  **Owner**
            
            **Percent
                  of**
                **Common
                  Stock**Gary
                A. Bedini (2)
            
            
            3,592,000
            
            
            12.10
            %John
                C. Bedini (3)
            
            
            5,658,000
            
            
            19.05
            %Rick
                M. Street (4)
            
            
            475,000
            
            
            1.60
            %Marvin
                Redenius (5)
            
            
            7,800,000
            
            
            26.27
            %Thomas
                E. Bearden (6)
            
            
            320,402
            
            
            1.08
            %Hans
                Werner Huss (7)
            
            
            200,000
            
            
            *All
                directors and executive officers (six persons) as a group
            
            
            18,070,402
            
            
            60.31
            %Thomas
                G. Walsh (8)
              1027
                Sherman Avenue
              Coeur
                D’Alene, Idaho 83814
            
            
            1,867,638
            
            
            6.29
            %Frank
                & Judith Ten Thy (9)
              3605
                Broken Arrow Road
              Coeur
                D’Alene, Idaho 83815
            
            
            1,632,588
            
            
            5.50
            %





*  Less
      than
      1%.





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




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




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




36




(4)
            Rick
                M. Street. Includes 250,000 shares of common stock held by Rick Street
                and
                vested options to purchase 225,000 shares at $0.75 per
                share.




**(5)**
            Marvin
                Redenius. Includes 7,800,000 shares of common stock held by Marvin
                Redenius.




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




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




(8)
            Thomas
                G. Walsh. Includes 1,867,638 shares of common stock held by Thomas
                G.
                Walsh.




(9)
            Frank
                and Judith Ten Thy. Includes 1,632,588 shares of common stock held
                in the
                name of the Frank Ten Thy and Judith Ten Thy Family Trust.




**Equity
      Compensation Plan Information**





The
      following table sets forth information about the common stock available for
      issuance under compensatory plans and arrangements as of December 31,
      2007.





(a)
            
            (b)
            
            (c)Plan
                Category
            
            Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights.
            
            Weighted-average
                exercise price of outstanding options, warrants, and
                rights
            
            Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column
                (a))Equity
                compensation plan approved by security holders (1)
            
            
            460,000
            
            $
            0.75
            
            
            1,340,000Equity
                compensation plans not approved by security holders
            
            
            0
            
            $
            0Total
            
            
            0
            
            $
            0.75
            
            
            1,340,000





(1)
            On
                October 7, 1999 the shareholders of Energenx adopted the 1999 Stock
                Option
                Plan with 300,000 shares of common stock reserved for issuance under
                the
                Plan (increased to 1,800,000 shares pursuant to the 6:1 forward stock
                split on April 20, 2001) under which the board of directors may grant
                incentive or non-statutory stock options to officers, directors,
                employees, consultants and advisors of
                Energenx.





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





On
      September 30, 2005, Energenx entered into a Subscription Agreement with Marvin
      Redenius., a member of the Board of Directors of Energenx. Pursuant to the
      Subscription Agreement Marvin Redenius agreed to purchase 3,000,000 shares
      of
      common stock of Energenx for a purchase price of $1,500,000. The purchase of
      the
      3,000,000 shares was completed on January 23, 2007 with the receipt of the
      final
      $500,000 of the purchase price from Marvin Redenius. The purchase price of
      the
      shares was set by the board of directors, excluding Marvin Redenius, pursuant
      to
      the recommendation of management. The purchase price of the shares is higher
      than that obtained by Energenx in its most recent private placements. Marvin
      Redenius largely owns and controls GTG Corp., an Iowa based corporation that
      signed an Exclusive Technology License Agreement on December 1, 2004 with
      Energenx, pursuant to which Energenx granted GTG Corp. an exclusive license
      in
      the area of North America (the United States, Canada and Mexico) to proprietary
      Energenx technology relating to a battery charging system, known as the
      Potential Battery Charger, for charging battery operated vehicles, excluding
      automobiles.




37





**Director
      Independence**




The
      Board
      of Directors has determined that **** three
      of
      its members are currently “independent directors” as that term is defined in
      Rule 4200(a)(15 **)** of
      the
      Marketplace Rules of the National Association of Securities Dealers. Our
      independent directors include: Thomas Bearden, Marvin Redenius and Hans Werner
      Huss.





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





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





See
      Exhibit Index - page 39.





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




*Audit
        Fees.* Aggregate
        fees billed for professional services rendered by Williams & Webster, P.S.
        in connection with its audit of Energenx’s financial statements as of and for
        the years ended December 31, 2006, and 2007, its reviews of Energenx’s unaudited
        condensed consolidated interim financial statements, and for SEC consultations
        and filings were $20,226 and $25,025, respectively.


*Tax
      Fees* - We
      paid Williams & Webster, P.S. $450 and $0 for the fiscal years 2006 and 2007
      respectively for professional services rendered for tax compliance.





*All
      Other Fees* - We did
      not incur any other fees and expenses **** from
      Williams & Webster, P.S. for the fiscal years 2006 and 2007 annual
      audits.





38





**ENERGENX
      INC.**


**INDEX
      TO EXHIBITS**


Exhibits
              
              Description
                  of Document2.1
              
              Acquisition
                  Agreement and Plan of Merger between Energenx Inc. and Edward II,
                  Inc.
                  dated December 27, 2004 (Incorporated by reference to the corresponding
                  exhibit to the Form 8-K previously filed by Energenx on December
                  30, 2004
                  (File No. 000-50739)) (the “December 30 Form 8-K”)2.2
              
              Articles
                  of Merger (Nevada) dated December 28, 2004 (Incorporated by reference
                  to
                  exhibit 2.1 to the December 30 Form 8-K)3.1
              
              Restated
                  Articles of Incorporation dated December 29, 2004 (Incorporated
                  by
                  reference to the corresponding exhibit to the Form 10-KSB previously
                  filed
                  by Energenx on April 15, 2005 (File No. 000-50739))3.2
              
              By-Laws
                  (Incorporated by reference to the corresponding exhibit to the
                  Form 10-
                  KSB previously filed by Energenx on April 15, 2005 (File No.
                  000-50739))10.1
              
              1999
                  Stock Option Plan (Incorporated by reference to exhibit 10.2 to
                  the Form
                  10-KSB previously filed by Energenx on April 15, 2005 (File No.
                  000-50739))10.2
              
              Exclusive
                  Technology License Agreement and Right to Purchase Patents between
                  Bedini
                  Technology, Inc. and John C. Bedini, dated October 8, 1999. (Incorporated
                  by reference to exhibit 10.3 to the Form 10-KSB previously filed
                  by
                  Energenx on April 15, 2005 (File No. 000-50739))10.3
              
              Exclusive
                  Technology License Agreement and Right to Purchase Patents between
                  Bedini
                  Technology, Inc. and John C. Bedini, dated May 1, 2001 (Incorporated
                  by
                  reference to exhibit 10.4 to the Form 10-KSB previously filed by
                  Energenx
                  on April 15, 2005 (File No. 000-50739))10.4
              
              Exclusive
                  Technology License Agreement between Energenx, Inc. and GTG Corp.
                  dated
                  December 1, 2004. (Incorporated by reference to exhibit 10.5 to
                  the Form
                  10-KSB previously filed by Energenx on April 15, 2005 (File No.
                  000-
                  50739))10.5
              
              Commercial
                  Lease Agreement between Energenx Inc. and Powderhorn Properties,
                  LLC dated
                  March 31, 2004. (Incorporated by reference to exhibit 10.6 to the
                  Form
                  10-KSB previously filed by Energenx on April 15, 2005 (File No.
                  000-50739))10.6
              
              Stock
                  Purchase Agreement between Energenx, Inc. and Marvin Redenius dated
                  March
                  18, 2004. (Incorporated by reference to exhibit 10.7 to the Form
                  10-KSB
                  previously filed by Energenx on April 15, 2005 (File No.
                  000-50739))
  39


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




40





**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act of 1934, as amended,
      the
      registrant caused this Annual Report on Form 10-KSB to be signed on its behalf
      by the undersigned, thereunto duly authorized, in the City of Post Falls, Idaho
      on this 31th day of March, 2008.


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


In
      accordance with Section 13 or 15(d) of the Exchange Act of 1934, as amended,
      this Annual Report on Form 10-KSB has been signed below by the following persons
      on behalf of the registrant in the capacities indicated below on this 31th
      of
      March, 2008.


**Signature**
              
              **Title**/s/
                  Gary A. Bedini
              
              Director,
                  President & Chief Executive OfficerGary
                  A. Bedini
              
              (Principal
                  Executive Officer)/s/
                  Rick M. Street
              
              Director,
                  Chief Financial Officer,Rick
                  M. Street
              
              Secretary,
                  Treasurer(Principal
                  Financial and Accounting Officer)/s/
                  John C. Bedini
              
              Director,
                  Vice President for Research andJohn
                  C. Bedini
              
              Development/s/
                  Thomas E. Bearden
              
              DirectorThomas
                  E. Bearden/s/
                Hans Werner Huss
              
              DirectorHans
                Werner
                Huss/s/
                Marvin Redenius
              
              DirectorMarvin
                Redenius
   41









F-1






**ENERGENX,
                  INC.****(A
                  Development Stage Company)****BALANCE
                  SHEET**
 
 December
                  312007
              
              2006**ASSETS****CURRENT
                ASSETS**Cash
              
              $532,545
              
              $499,235Notes
                  receivable
              
              
              1,509
              
              
              11,229Prepaid
                  expense
              
              
              7,614
              
              
              38,401Total
                  Current Assets
              
              
              541,668
              
              
              548,865**PROPERTY
                  AND EQUIPMENT, NET**
              
              
              18,130
              
              
              20,470**OTHER
                  ASSETS**License,
                  net of accumulated amortization
              
              
              54,400
              
              
              61,600Patents,
                  net of accumulated amortization
              
              
              38,404
              
              
              37,117Total
                  Other Assets
              
              
              92,804
              
              
              98,717**TOTAL
                  ASSETS**
              
              $
              652,602
              
              $
              668,052**LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)****CURRENT
                  LIABILITIES**Accounts
                  payable
              
              $
              8,101
              
              $
              8,890Accounts
                  payable - related party
              
              
              1,040
              
              
              —Interest
                  payable
              
              
              —
              
              
              2,674Interest
                  payable-related party
              
              
              —
              
              
              2,607Deposit
                  on license
              
              
              5,000
              
              
              5,000Deposit
                  on common stock
              
              
              —
              
              
              600,000Payroll
                  taxes payable
              
              
              4,024
              
              
              37,216Notes
                  payable
              
              
              —
              
              
              1,660Accrued
                  payroll
              
              
              —
              
              
              56,950Unclaimed
                  property
              
              
              6,599
              
              
              —Total
                  Current Liabilities
              
              
              24,764
              
              
              714,997**COMMITMENTS
                  AND CONTINGENCIES**
              
              
              —
              
              
              —**STOCKHOLDERS'
                  EQUITY (DEFICIT)**Preferred
                  stock, $.001 par value; 5,000,000 shares authorized,no
                  shares issued or outstanding
              
              
              —
              
              
              —Common
                  stock, $.001 par value; 50,000,000 shares authorized,29,697,276
                  and 27,497,276 shares issued and oustanding,respectively
              
              
              29,697
              
              
              27,497Additional
                  paid-in capital
              
              
              3,650,717
              
              
              2,175,717Deficit
                  accumulated during development stage
              
              
              (3,052,576
              )
              
              (2,250,159
              )Total
                  Stockholders' Equity (Deficit)
              
              
              627,838
              
              
              (46,945
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**
              
              $
              652,602
              
              $
              668,052


The
        accompanying notes are an integral part of these financial
        statements.
  F-2




**ENERGENX,
                  INC.****(A
                  Development Stage Company)****STATEMENT
                  OF OPERATIONS**
 
 FromSeptember
                  29,1999Years
                  Ended
              
              (Inception)
                  toDecember
                  31
              
              December
                  302007
              
              2006
              
              2007**REVENUES**
              
              $
              17,985
              
              
              —
              
              $
              17,985**COST
                  OF GOODS SOLD**
              
              
              1,683
              
              
              —
              
              
              1,683**GROSS
                  PROFIT**
              
              
              16,302
              
              
              —
              
              
              16,302**OPERATING
                  EXPENSES**Amortization
                  and depreciation
              
              
              23,816
              
              
              20,815
              
              
              135,834Board
                  of directors fees
              
              
              328,000
              
              
              —
              
              
              388,000Consulting
              
              
              —
              
              
              4,500
              
              
              316,029General
                  and administrative
              
              
              63,568
              
              
              63,863
              
              
              266,570Legal
                  and accounting
              
              
              56,345
              
              
              51,788
              
              
              214,753License
                  and fees
              
              
              15
              
              
              —
              
              
              107,539Marketing
              
              
              —
              
              
              —
              
              
              19,464Rent
              
              
              28,800
              
              
              28,200
              
              
              216,868Research
                  and development
              
              
              215,469
              
              
              209,913
              
              
              643,715Salaries
                  and benefits
              
              
              106,504
              
              
              134,367
              
              
              730,359Travel
              
              
              —
              
              
              —
              
              
              1,580**TOTAL
                  OPERATING EXPENSES**
              
              
              822,517
              
              
              513,446
              
              
              3,040,711**LOSS
                  FROM OPERATIONS**
              
              
              (806,215
              )
              
              (513,446
              )
              
              (3,024,409
              )**OTHER
                  INCOME (EXPENSES)**Interest
                  income
              
              
              2,076
              
              
              31
              
              
              2,268Other
                  Income
              
              
              743
              
              
              110
              
              
              853Interest
                  expense
              
              
              —
              
              
              —
              
              
              (34,877
              )Loss
                  on disposal of asset
              
              
              (21
              )
              
              —
              
              
              (1,730
              )Gain
                  on forgiveness of debt
              
              
              1,000
              
              
              —
              
              
              5,319**TOTAL
                  OTHER INCOME (EXPENSES)**
              
              
              #3,798
              
              
              141
              
              
              #(28,167
              )**LOSS
                  BEFORE TAXES**
              
              
              (802,417
              )
              
              (513,305
              )
              
              (3,052,576
              )**INCOME
                  TAXES**
              
              
              —
              
              
              
              
              
              —**NET
                  LOSS**
              
              $
              (802,417
              )
              
              (513,305
              )
              $
              (3,052,576
              )NET
                  LOSS PER COMMON SHARE,BASIC
                  AND DILUTED
              
              $
              (0.03
              )
              
              (0.02
              )WEIGHTED
                  AVERAGE NUMBER OFCOMMON
                  STOCK SHARESOUTSTANDING,
                  BASIC AND DILUTED
              
              
              29,697,276
              
              
              27,397,276


The
        accompanying notes are an integral part of these financial
        statements.
  F-3




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


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




F-4




**ENERGENX,
                  INC.****(A
                  Development Stage Company)****STATEMENT
                  OF STOCKHOLDERS' EQUITY
                  (DEFICIT)**
 
 DeficitAccumulatedAdditional
              
              
              
              DuringCommon
                  Stock
              
              Paid-in
              
              Subscription
              
              DevelopmentShares
              
              Amount
              
              Capital
              
              Receivable
              
              Stage
              
              TotalsBalance,
                  December 31, 2001 (restated)
              
              
              14,126,276
              
              $
              14,126
              
              $
              413,038
              
              
              
              
              $
              (373,072
              )
              $
              54,092Common
                  stock issued for cash at $1.00per
                  share
              
              
              24,000
              
              
              24
              
              
              23,976
              
              
              
              
              
              —
              
              
              24,000Common
                  stock issued for loans payableat
                  $1.00 per share
              
              
              20,000
              
              
              20
              
              
              19,980
              
              
              
              
              
              —
              
              
              20,000Net
                  loss for year ending December 31, 2002 (restated)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (141,307
              )
              
              (141,307
              )Balance,
                  December 31, 2002 (restated)
              
              
              14,170,276
              
              
              14,170
              
              
              456,994
              
              
              
              
              
              (514,379
              )
              
              (43,215
              )Common
                  stock issued for board of directorsfees
                  at $0.05 per share
              
              
              1,000,000
              
              
              1,000
              
              
              49,000
              
              
              
              
              
              —
              
              
              50,000Common
                  stock issued for consulting feesat
                  $0.05 per share
              
              
              2,200,000
              
              
              2,200
              
              
              107,800
              
              
              
              
              
              —
              
              
              110,000Common
                  stock issued for licensing feesat
                  $0.05 per share
              
              
              2,000,000
              
              
              2,000
              
              
              98,000
              
              
              
              
              
              —
              
              
              100,000Loss
                  for year ending December 31, 2003
              
              
              —
              
              
              —
              
              
              —
              
              
              
              
              
              (310,189
              )
              
              (310,189
              )Balance,
                  December 31, 2003
              
              
              19,370,276
              
              
              19,370
              
              
              711,794
              
              
              
              
              
              (824,568
              )
              
              (93,404
              )Common
                  stock issued for cash at$0.21
                  per share
              
              
              2,400,000
              
              
              2,400
              
              
              497,600
              
              
              
              
              
              —
              
              
              500,000Stock
                  offering costs
              
              
              —
              
              
              —
              
              
              (50,000
              )
              
              
              
              
              —
              
              
              (50,000
              )Issuance
                  of common stock for immediate exerciseof
                  options for cash of $0.21 per share
              
              
              2,400,000
              
              
              2,400
              
              
              497,600
              
              
              
              
              
              —
              
              
              500,000Common
                  stock issued for loans payableat
                  $0.05 per share
              
              
              2,527,000
              
              
              2,527
              
              
              123,823
              
              
              
              
              
              —
              
              
              126,350Merger
                  and recapitalization of Company
              
              
              —
              
              
              —
              
              
              (4,300
              )
              
              
              
              
              —
              
              
              (4,300
              )Net
                  loss for year ending December 31, 2004
              
              
              —
              
              
              —
              
              
              —
              
              
              
              
              
              (408,074
              )
              
              (408,074
              )Balance,
                  December 31, 2004
              
              
              26,697,276
              
              $
              26,697
              
              $
              1,776,517
              
              
              
              
              $
              (1,232,642
              )
              $
              570,572Common
                  stock issued for receivable at $0.50 per share
              
              
              400,000
              
              
              400
              
              
              199,600
              
              
              
              
              
              
              
              
              200,000Net
                  loss for year ending December 31, 2005
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (504,212
              )
              
              (504,212
              )Balance,
                  December 31, 2005
              
              
              27,097,276
              
              
              27,097
              
              
              1,976,117
              
              
              —
              
              
              (1,736,854
              )
              
              266,360Common
                  stock issued for receivable at $0.50 per share
              
              
              400,000
              
              
              400
              
              
              199,600
              
              
              
              
              
              
              
              
              200,000Net
                  loss for year ending December 31, 2006
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (513,305
              )
              
              (513,305
              )Balance,
                  December 31, 2006
              
              
              27,497,276
              
              
              27,497
              
              
              2,175,717
              
              
              —
              
              
              (2,250,159
              )
              
              (46,945
              )Common
                  stock issued for receivable at $0.50 per share
              
              
              2,200,000
              
              
              2,200
              
              
              1,097,800
              
              
              
              
              
              
              
              
              1,100,000Stock
                  options granted
              
              
              
              
              
              
              
              
              377,200
              
              
              
              
              
              
              
              
              377,200Net
                  loss for year ending December 31, 2007
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (802,417
              )
              
              (802,417
              )Balance,
                  December 31, 2007
              
              
              29,697,276
              
              
              29,697
              
              
              3,650,717
              
              
              —
              
              
              (3,052,576
              )
              
              627,838


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




F-5




**ENERGENX,
                  INC.****(A
                  Development Stage Company)****STATEMENTS
                  OF CASH FLOWS**
 
 FromSeptember
                  29,1999Years
                  Ended
              
              (Inception)
                  toDecember
                  31,
              
              December
                  31,2007
              
              2006
              
              2007**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (802,417
              )
              $
              (513,305
              )
              $
              (3,052,576
              )Stock
                  and options issued for directors fees
              
              
              328,000
              
              
              —
              
              
              378,000Stock
                  issued for consulting fees
              
              
              
              
              
              —
              
              
              110,000Stock
                  issued for services
              
              
              49,200
              
              
              —
              
              
              104,566Stock
                  issued for licensing fees
              
              
              
              
              
              —
              
              
              100,000Stock
                  issued for payment of interest
              
              
              
              
              
              —
              
              
              8,300Gain
                  on debt forgiveness
              
              
              
              
              
              —
              
              
              (4,319
              )Loss
                  on disposal of asset
              
              
              21
              
              
              —
              
              
              1,827Amortization
                  and depreciation
              
              
              23,816
              
              
              20,815
              
              
              135,838Adjustments
                  to reconcile net (loss) to net cashprovided
                  (used) by operating activities:Decrease
                  (increase) in note receivable
              
              
              9,720
              
              
              975
              
              
              (1,509
              )Decrease
                  (increase) in accounts receivable
              
              
              —
              
              
              —
              
              
              —Decrease
                  (increase) in prepaids
              
              
              30,788
              
              
              (31,478
              )
              
              (7,614
              )Decrease
                  in deposits
              
              
              —
              
              
              5,000
              
              
              5,000Increase
                  (decrease) in interest payable
              
              
              (5,282
              )
              
              —
              
              
              —Increase
                  (decrease) in accounts payable
              
              
              250
              
              
              4,766
              
              
              13,454Increase
                  (decrease) in accrued payroll
              
              
              (56,950
              )
              
              20,600
              
              
              —Increase
                  (decrease) in payroll taxes payable
              
              
              (33,191
              )
              
              27,771
              
              
              4,025Increase
                  (decrease) in inventory
              
              
              
              
              
              3,595
              
              
              —Increase
                  (decrease) in unclaimed property
              
              
              6,599
              
              
              —
              
              
              6,599Net
                  cash used by operating activities
              
              
              (449,446
              )
              
              (461,261
              )
              
              (2,198,409
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES:**Cash
                  paid for patent
              
              
              (9,201
              )
              
              (1,450
              )
              
              (79,151
              )Cash
                  paid for equipment purchased
              
              
              (6,383
              )
              
              (5,371
              )
              
              (51,116
              )Cash
                  paid for leasehold improvements
              
              
              —
              
              
              (2,134
              )
              
              (6,733
              )Net
                  cash used by investing activities
              
              
              (15,584
              )
              
              (8,955
              )
              
              (137,000
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Cash
                  paid for stock offering costs
              
              
              
              
              
              —
              
              
              (62,130
              )Merger
                  and recapitalization costs
              
              
              
              
              
              —
              
              
              (4,300
              )Proceeds
                  from issuance of convertible debt
              
              
              
              
              
              —
              
              
              60,010Proceeds
                  from notes payable
              
              
              
              
              
              —
              
              
              199,610Payment
                  of notes payable
              
              
              (1,660
              )
              
              —
              
              
              (111,542
              )Increase
                  in deposit on common stock
              
              
              
              
              
              600,000
              
              
              600,000Proceeds
                  from sale of common stock
              
              
              500,000
              
              
              200,000
              
              
              2,186,306Net
                  cash provided by financing activities
              
              
              498,340
              
              
              800,000
              
              
              2,867,954Change
                  in cash
              
              
              33,310
              
              
              329,784
              
              
              532,545**Cash,
                  beginning of period**
              
              
              499,235
              
              
              169,451
              
              
              —**Cash,
                  end of period**
              
              $
              532,545
              
              $
              499,235
              
              $
              532,545**SUPPLEMENTAL
                  CASH FLOW INFORMATION:**Interest
                  paid
              
              $
              
              
              $
              —
              
              $Income
                  taxes paid
              
              $
              —
              
              $
              —
              
              $**NON-CASH
                  INVESTING AND FINANCING ACTIVITIES:**Common
                  stock issued for equipment
              
              $
              —
              
              $
              —
              
              $
              3,612Common
                  stock issued for debt
              
              $
              —
              
              $
              —
              
              $
              198,060Common
                  stock issued for technology license
              
              $
              —
              
              $
              —
              
              $
              58,000






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




F-6




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


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





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




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




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




**NOTE
      2 - SIGNIFICANT ACCOUNTING POLICIES**




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




Accounting
      Method


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




Accounting
      Pronouncements


In
      December 2007, the FASB issued Statement of Financial Accounting Standards
      No.
      160 ("SFAS 160"), “Noncontrolling Interests in Consolidated Financial
      Statements”, this statement requires that the ownership interests in
      subsidiaries held by parties other than the parent be clearly identified,
      labeled, and presented in the consolidated statement of financial position
      within equity, but separate from the parent’s equity. The amount of consolidated
      net income attributable to the parent and to the noncontrolling interest be
      clearly identified and presented on the face of the consolidated statement
      of
      income. Changes in a parent’s ownership interest while the parent retains its
      controlling financial interest in its subsidiary be accounted for consistently.
      A parent’s ownership interest in a subsidiary changes if the parent purchases
      additional ownership interests in its subsidiary or if the parent sells some
      of
      its ownership interests in its subsidiary. It also changes if the





F-7




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


subsidiary
      reacquires some of its ownership interests or the subsidiary issues additional
      ownership interests. All of those transactions are economically similar, and
      this Statement requires that they be accounted for similarly, as equity
      transactions. When a subsidiary is deconsolidated, any retained noncontrolling
      equity investment in the former subsidiary be initially measured at fair value.
      The gain or loss on the deconsolidation of the subsidiary is measured using
      the
      fair value of any noncontrolling equity investment rather than the carrying
      amount of that retained investment. Entities provide sufficient disclosures
      that
      clearly identify and distinguish between the interests of the parent and the
      interests of the noncontrolling owners . This
      Statement is effective for fiscal years, and interim periods within those fiscal
      years, beginning on or after December 15, 2008 (that is, January 1, 2009, for
      entities with calendar year-ends). Earlier adoption is prohibited. The effective
      date of this Statement is the same as that of the related Statement
      141(R)




In
      December 2007, the FASB issued Statement of Financial Accounting Standards
      No.
      141R, “Business Combinations”, (SFAS No. 141R”). This statement changes the
      accounting for business combinations. Under this statement, an acquiring entity
      is required to recognize all the assets acquired and liabilities assumed in
      a
      transaction at the acquisition-date fair value with limited exceptions. This
      statement changes the accounting treatment and disclosure for certain specific
      items in a business combination. This statement applies prospectively to
      business combinations for which the acquisition date is on or after the
      beginning of the first annual reporting period beginning on or after December
      15, 2008. Accordingly, any business combinations we engage in will be recorded
      and disclosed following existing generally accepted accounting principles (GAAP)
      until January 1, 2009. We expect SFAS No. 141R will have an impact on accounting
      for business combinations once adopted but the effect is dependent upon
      acquisitions at that time.




In
      February 2007, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 159, “The Fair Value Option for Financial
      Assets and Financial Liabilities - Including an amendment of FASB Statement
      No.
      115” SFAS No. 159). This statement permits entities to choose to measure many
      financial instruments and certain other items at fair value. The objective
      is to
      improve financial reporting by providing entities with the opportunity to
      mitigate volatility in reported earnings caused by measuring related assets
      and
      liabilities differently without having to apply complex hedge accounting
      provisions. This statement is expected to expand the use of fair value
      measurement, which is consistent with the Board’s long-term measurement
      objectives for accounting for financial instruments. This statement is effective
      as of the beginning of an entity’s first fiscal year that begins after November
      15, 2007, although earlier adoption is permitted. Management has not determined
      the effect that adopting this statement would have on the Company’s financial
      condition or results of operations.




In
      September 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements
      No. 87, 88,





F-8




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


106,
      and
      132(R)” (SFAS No. 158). This statement requires an employer to recognize the
      overfunded or underfunded statues of a defined benefit postretirement plan
      (other than a multiemployer plan) as an asset or liability in its statement
      of
      financial position and to recognize changes in that funded status in the year
      in
      which the changes occur through comprehensive income of a business entity or
      changes in unrestricted net assets of a not for profit organization. This
      statement also requires an employer to measure the funded status of a plan
      as of
      the date of its year end statement of financial position, with limited
      exceptions. The adoption of this statement had no immediate material effect
      on
      the Company’s financial condition or results of operations.




In
      September 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 157, "Fair Value Measurements," (SFAS No.
      157) which defines fair value, establishes a framework for measuring fair value
      in GAAP, and expands disclosures about fair value measurements. Where
      applicable, SFAS No. 157 simplifies and codifies related guidance within GAAP
      and does not require any new fair value measurements. SFAS
      No.
      157 is effective for  financial
      statements issued **** for
      fiscal years beginning after November
      15, 2007, and interim periods within those fiscal years. Earlier adoption is
      encouraged. The Company does not expect the adoption of SFAS No. 157 to have
      a
      significant immediate effect on its financial position or results of
      operation.




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





F-9




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


statement
      is effective for fiscal years beginning after September 15, 2006, with early
      adoption permitted as of the beginning of an entity’s fiscal year. Management
      believes the adoption of this statement will have no impact on the Company’s
      financial condition or results of operations.




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




Accounting
      for Stock Options and Warrants Granted to Employees and
      Nonemployees


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




Cash
      Equivalents


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




Compensated
      Absences


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




F-10




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


Concentration
      of Credit Risk


The
      Company maintains its cash in one commercial account at a major financial
      institution. Although the financial institution is considered creditworthy
      and
      has not experienced any losses on its deposits, at December 31, 2007 and 2006
      the Company’s cash balance exceeded Federal Deposit Insurance Corporation (FDIC)
      limits by $433,281 and $399,235, respectively.




Derivative
      Instruments


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




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




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




At
      December 31, 2007 and 2006, the Company has not engaged in any transactions
      that
      would be considered derivative instruments or hedging activities.




Development
      Stage


The
      Company is in the development stage however, the Company has had limited sales
      in 2007.




Earnings
      Per Share


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





F-11




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


share
      in
      the earnings of an entity. Diluted net income (loss) per share is the same
      as
      basic net income (loss) per share as there are no common stock equivalents
      outstanding.




Estimates


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




Fair
      Value of Financial Instruments


The
      Company's financial instruments as defined by Statement of Financial Accounting
      Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
      include cash, notes receivable, accounts payable, accrued expenses and
      short-term borrowings. All instruments are accounted for on a historical cost
      basis, which, due to the short maturity of these financial instruments,
      approximates fair value at December 31, 2007 and 2006.




Going
      Concern


As
      shown
      in the accompanying financial statements, the Company has incurred an
      accumulated deficit of $3,052,576 through December 31, 2007 and has a history
      of
      recurring losses. The Company is currently putting technology in place which
      will, if successful, mitigate these factors which raise substantial doubt about
      the Company’s ability to continue as a going concern. The financial statements
      do not include any adjustments relating to the recoverability and classification
      of recorded assets, or the amounts and classification of liabilities that might
      be necessary in the event the Company cannot continue in existence. Management
      has developed technology that if proven will result in a marketable product.
      Management intends to seek additional capital from new equity securities
      offerings that will provide funds needed to increase liquidity, fund internal
      growth and fully implement its business plan.




Management
      believes $500,000 is needed to finance the plan of operation for at least the
      next twelve months. The timing and amount of capital requirements will depend
      on
      a number of factors, including demand for products and services and the
      availability of opportunities for international expansion through affiliations
      and other business relationships.




Impaired
      Asset Policy


The
      Company reviews its long-lived assets quarterly to determine if any events
      or
      changes in circumstances have transpired which indicate that the carrying value
      of its assets may not be recoverable. At December 31, 2007 and 2006, the Company
      determined that there were no impairments of long-lived assets.






F-12




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


Intangible
      Assets


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




Provision
      for Taxes


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




Effective
      November 1, 2007, the Company adopted the Financial Accounting Standards
      Board (“FASB”) Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes—an interpretation of FASB Statement
      No. 109* (“FIN
      48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
      in an enterprise’s financial statements in accordance with FASB Statement
      No. 109, *Accounting
      for Income Taxes* .
      FIN 48
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. Additionally, FIN 48 provides guidance on derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosure, and transition. The adoption of FIN 48 did not have a material
      impact on the Company’s financial position, results of operation or liquidity.
      The current Company policy classifies any interest recognized on an underpayment
      of income taxes as interest expense and classifies any statutory penalties
      recognized on a tax position taken as selling, general and administrative
      expense.




The
      Company has not taken a tax position that, if challenged, would have a material
      effect on the financial statements for the twelve-months ended December 31,
      2007, or during the prior three years applicable under FIN 48.




As
      a
      result of the adoption of FIN 48, we did not recognize any adjustment to
      the liability for uncertain tax position and therefore did not record any
      adjustment to the beginning balance of accumulated deficit on the consolidated
      balance sheet.




Research
      and Development


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






F-13




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


Impairments
      are recognized in operating results when a permanent diminution in value occurs.
       Research and development expenses for the year ended December 31, 2007 and
      2006 were $215,469 and $209,913, respectively. Salaries for those employees
      directly involved in research and development are included in research and
      development expense.




Revenue
      Recognition


Revenue
      is recorded when products are shipped and the Company has no significant
      remaining obligations, persuasive evidence of an arrangement exists, the price
      to the buyer is fixed or determinable, and collectability is reasonably assured
      or probable. Product sales revenue is recognized when title and risk of loss
      have passed to the buyer. According to the Company’s terms of sale, title and
      risk of loss pass to the customer upon delivery to the carrier.




Royalties
      will be recognized as revenue when the amounts are contractually earned, fixed
      and determinable, and there is substantial probability of
      collection.




**NOTE
      3 - PROPERTY AND EQUIPMENT**




Property
      and equipment are recorded at cost. Major additions and improvements are
      capitalized. Minor replacements, maintenance and repairs that do not increase
      the useful lives of the assets are expensed as incurred. Depreciation of
      property and equipment is calculated using the straight-line method over the
      expected useful lives of the assets of 5 to 7 years. Depreciation expense for
      the years ended December 31, 2007 and 2006 was $7,501 and $5,852,
      respectively.




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




December
                31,2007
            
            2006Machinery
            
            $
            35,379
            
            $
            34,085Office
                Furniture and Equipment
            
            
            18,963
            
            
            13,591Leasehold
                Improvements
            
            
            5,292
            
            
            5,29259,634
            
            
            53,273Less
                Accumulated Depreciation
            
            
            (41,504
            )
            
            (32,803
            )Property
                and Equipment - Net
            
            $
            18,130
            
            $
            20,470




**NOTE
      4 - PATENTS**




Costs
      relating to the development and approval of patents, other than research and
      development costs which are expensed, are capitalized and amortized using the
      straight





F-14




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


line
      method over ten years. The Company’s patents relate to the creation of an EMF
      permanent electromagnetic motor generator.




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




Cost
            
            Accumulated
              Amortization
            
            Net
                AmountBalance,
                December 31, 2004
            
            $
            68500
            
            $
            19,076
            
            $
            49,4242005
                Activity
            
            
            —
            
            
            6,850
            
            
            —Balance,
                December 31, 2005
            
            
            68,500
            
            
            25,926
            
            
            42,5742006
                Activity
            
            
            1,450
            
            
            6,907
            
            
            —Balance,
                December 31, 2006
            
            $
            69,950
            
            $
            32,833
            
            $
            37,1172007
                Activity
            
            
            9,201
            
            
            7,915Balance,
                December 31, 2007
            
            
            79,151
            
            
            40,748
            
            
            38,404




**NOTE
      5** - **TECHNOLOGY
      LICENSES**




On
      October 8, 1999, the Company acquired a technology license, which included
      all
      rights, title and interest in certain patent applications, improvements,
      proprietary information, trade secrets, technical and scientific information
      pertaining to several designs of the back EMF permanent electromagnetic motor
      generator from Mr. John C. Bedini, currently a director and officer of the
      Company.




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




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




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





F-15




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


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




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




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




**NOTE
      7 - RELATED PARTY TRANSACTIONS**




During
      the year ended 2006, the Company paid expenses on behalf of Bedini Electronics,
      Inc., a company privately owned by two officers of Energenx. During the years
      ended December 31, 2007 and 2006, Bedini Electronics, Inc. paid some of the
      expenses of the Company. This was done as the two companies shared joint office
      space and split certain expenses. Bedini Electronics Inc paid all outstanding
      monies owed at December 20, 2007. The net amount owing from Bedini Electronics
      at December 31, 2007 and 2006 is $0 and $11,229, respectively. In April 2005,
      the Company loaned Bedini Electronics $4,000 in cash for operations. This
      related loan, which bears interest of 6%, is payable in monthly installments
      of
      $352. As of December 31, 2007 the loan has been paid in full.




During
      the year ended December 31, 2007, the company purchased a piece of testing
      equipment in the amount of approximately $1,500, for which it will be reimbursed
      by GTG Corporation. The principal shareholder of GTG is also a director of
      the
      Company.




For
      additional related party transactions, see Notes 5 and 6.




**NOTE
      8 - PROVISION FOR TAXES**




At
      December 31, 2007 the Company had net deferred tax assets calculated at an
      expected rate of 34% of approximately $949,000 principally arising from net
      operating loss carryforwards for income tax purposes. As management of the
      Company cannot determine that it is more likely than not that the Company will
      realize the benefit of the net deferred tax asset, a valuation allowance equal
      to the net deferred tax asset has been





F-16




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


established
      at December 31, 2007. The significant components of the deferred tax asset
      at
      December 31, 2007 and 2006 were as follows:




December
                31,
              2007
            
            December
                31,
              2006Net
                operating loss carryforward
            
            $
            2,793,000
            
            $
            1,990,000Deferred
                tax asset
            
            $
            949,000
            
            $
            677,000Deferred
                tax asset valuation allowance
            
            
            (949,000
            )
            
            (677,000
            )Net
                deferred tax asset
            
            $
            —
            
            $
            —




At
      December 31, 2007, the Company has net operating loss carryforwards of
      approximately $2,793,000, which expire in the years 2019 through 2027. In 2003
      the Company recognized approximately $260,000 of losses from the issuance of
      common stock for services and license fees which were not deductible for tax
      purposes and are not included in the above calculation of deferred tax assets.
      The change in the allowance account from December 31, 2006 to December 31,
      2007
      was $272,000.




**NOTE
      9 - CAPITAL STOCK**




Preferred
      Stock


The
      Company is authorized to issue 5,000,000 shares of preferred stock with a par
      value of $0.001. As of December 31, 2007 and 2006, the Company has not issued
      any preferred stock.




Common
      Stock


The
      Company is authorized to issue 50,000,000 shares of common stock with a par
      value of $0.001. All shares have equal voting rights, are non-assessable and
      have one vote per share.




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




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




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






F-17




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


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




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




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




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




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




During
      the year ended December 31, 2006, the Company issued 400,000 shares of common
      stock at $0.50 per share for cash of $200,000.




During
      the year ended December 31, 2007, the Company issued 2,200,000 shares of common
      stock at $0.50 per share for cash of $1,100,000.




**NOTE
      10 - STOCK OPTION PLAN**




Statement
      of Financial Accounting Standards No. 123, “Accounting for Stock-Based
      Compensation” (SFAS No. 123), defines a fair value-based method of accounting
      for stock options and other equity instruments. The Company has adopted this
      method,






F-18




**ENERGENX,
      INC.**


**(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2007 AND 2006**


which
      measures compensation costs based on the estimated fair value of the award
      and
      recognizes that cost over the service period. In 2004, the Company adopted
      the
      changes to SFAS No. 123 as prescribed by SFAS No. 123(R).




The
      Company’s board of directors approved the adoption of the “1999 Non-Qualified
      Stock Option and Stock Appreciation Rights Plan” by unanimous consent on October
      7, 1999. The plan was initiated to encourage and enable officers, directors,
      consultants, advisors and other key employees of the Company to acquire and
      retain a proprietary interest in the Company by ownership of its common stock.
      Up to 1,800,000 shares of common stock can be issued under the plan. During
      the
      year ended December 31, 2007, the Company granted 460,000 non-qualified options
      to an officer and director and employees. The options were valued using the
      Black-Scholes option pricing model using the following assumptions as required
      under SFAS No. 123: risk-free interest rate of 4.28%; volatility of 127.32%;
      no
      dividends; an expected life of 10 years; and an expected exercise price of
      $0.85. The Black-Scholes value was $0.82.




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




The
      following is a summary of stock option activity:




Number
              of
              Shares
            
            Weighted
              Average
              Exercise
              PriceOutstanding
                at January 1, 2005
            
            
            —
            
            $
            —Granted
            
            
            2,400,000
            
            
            0.21Exercised
            
            
            (2,400,000
            )
            
            0.21Outstanding
                at December 31, 2005
            
            
            —
            
            $
            —Granted
            
            
            —
            
            
            —Exercised
            
            
            —
            
            
            —Outstanding
                at December 31, 2006
            
            
            —
            
            $
            —Granted
            
            
            460,000
            
            
            .85Exercised
            
            
            —
            
            
            —Outstanding
                at December 31, 2007
            
            
            460,000
            
            
            .85Options
                exercisable at December 31, 2007
            
            
            235,000
            
            
            .85Fair
                Market Value Per Share of Options Granted in 2007
            
            
            
            
            $
            377,200




**NOTE
      11 - COMMITMENTS AND CONTINGENCIES**




Leases


On
      March
      13, 2006, the Company entered into a new two-year lease for office space. In
      lieu of a security deposit, the Company in 2006 prepaid the entire amount of
      the
      lease, $57,600, which was then included in prepaid expenses in the financial
      statements. The unamortized prepaid balance at December 31, 2007 was
      $7,200.




Royalty
      Agreements


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




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




No
      royalties have been earned or paid under either agreement at December 31, 2007
      or 2006.






F-19