**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM        10-QSB**

 

*(Mark        One)*

|   |   þ | Quarterly report under Section 13 or 15(d) of the Securities                        Exchange Act of 1934 for the quarterly period ended**December 31, 2007**. |
|--------|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | o | Transition report under Section 13 or 15(d) of the                        Securities Exchange Act of 1934 for the transition period                        from                                to                                   . |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Commission file number:**000-52017**

 

**HIGH END VENTURES, INC.**

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

 

 

| **COLORADO**

(State or other jurisdiction of

incorporation or organization) | **98-0219157**

(I.R.S. Employer

Identification No.) |
|-------------------------------------------------------------------------------|-------------------------------------------------------|

 

 

**2610-1066 West Hastings Street, Vancouver, British Columbia, Canada        V6E 3X2**

(Address        of principal executive office) (Zip Code)

 

**(604) 602-1717**

(Registrant’s telephone number)

 

Check        whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d)        of the Exchange Act during the past 12 months (or for such shorter period that the        registrant was required to file such reports), and (2) has been subject to such filing        requirements for the past 90 days.

 

Yes          þ Noo

 

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

 

Yes          þ Noo 

 

The        number of outstanding shares of the registrant’s common stock, $0.001 par value (the        only class of voting stock) as of February 14, 2008 was 15,850,000.

 

1

 

----

**TABLE OF CONTENTS**

**           **Page**    **PART I.**     **ITEM 1.                    FINANCIAL STATEMENTS**  3   Unaudited Balance Sheet as of December 31,                            2007   4   Unaudited  Statements of                            Operations for the three month period  ended Decemer 31, 2007                            and 2006 and the period from inception to December 31,                            2007   5   Unaudited Statements of Cash Flows for the                            nine months ended December 31, 2007 and 2006 and the period from                            inception to December 31, 2007   6   Notes to the Unaudited Financial                            Statements  7                 **ITEM 2. MANAGEMENT'S PLAN OF                            OPERATION**  12  **ITEM 3.                    CONTROLS AND PROCEDURES**  25 **PART II.**     **ITEM 1.                    LEGAL PROCEEDINGS**  25  **ITEM 2.                    UNREGISTERED SALES OF EQUITY SECURITIES**  25  **ITEM 3.                    DEFAULTS UPON SENIOR SECURITIES**  25  **ITEM 4.                    SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS**  25  **ITEM 5.                    OTHER INFORMATION**  26  **ITEM 6.                    EXHIBITS**  26  **SIGNATURES**  27 **INDEX TO                    EXHIBITS**  28 **
**            2        **

----

 

**PART        I**

 

| **ITEM 1.** | **FINANCIAL STATEMENTS** |
|-------------|--------------------------|

 

As used        herein, the terms “Company,” “we,” “our”, and        “us”, refer to High End Ventures, Inc., a Colorado corporation, unless        otherwise indicated. In the opinion of management, the accompanying unaudited financial        statements included in this Form 10-QSB reflect all adjustments (consisting only of normal        recurring accruals) necessary for a fair presentation of the results of operations for the        periods presented. The results of operations for the periods presented are not necessarily        indicative of the results to be expected for the full year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

----

 

 

| **HIGH END VENTURES, INC.**

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS |                                                                               |    |      |
|----------------------------------------------------------------------------|------------------------------------------------------------------------------------|---------|-----------|
|                                                                       |                                                                               |    |
|                                                                       |                                                                               |    |
|                                                                       |                                                                               |    |      |   |   |   |
|                                                                       |                                                                               |    |      |   |   |   |
|                                                                       |                                                                               |    |      | December 31, |   | September 30, |
|                                                                       |                                                                               |    |      | 2007 |   | 2007 |
|  

**ASSETS**                                                         |                                                                               |    |      |   |   |
|                                                                       |                                                                               |    |      |   |   |   |
| **Current assets**                                                         |                                                                               |    |      |   |
|                                                                       | Cash and cash equivalents                                                          | $       | 11,882    | $ | 11,412 |
|                                                                       | Loan receivable                                                                    |    | 271,411   |   | 266,503 |
|                                                                       | Prepaid expenses                                                                   |    | -         |   | - |
|                                                                       |                                                                               |    |      |   |   |   |
| **Total current assets**                                                   |                                                                               | 283,293 |      | 277,915 |
|                                                                       |                                                                               |    |      |   |   |   |
| **TOTAL ASSETS**                                                           | $                                                                                  | 283,293 | $         | 277,915 |
|                                                                       |                                                                               |    |      |   |   |   |
| **LIABILITIES AND STOCKHOLDERS' DEFICIT**                                  |                                                                               |    |      |   |
|                                                                       |                                                                               |    |      |   |   |   |
| **Current liabilities**                                                    |                                                                               |    |      |   |
|                                                                       | Accounts payable and accrued liabilities                                           | $       | 175,497   | $ | 132,331 |
|                                                                       | Accrued interest payable                                                           |    | 18,778    |   | 12,001 |
|                                                                       | Loans payable                                                                      |    | 315,107   |   | 295,107 |
|                                                                       |                                                                               |    |      |   |   |   |
| **Total current liabilities**                                              |                                                                               | 509,382 |      | 439,439 |
|                                                                       |                                                                               |    |      |   |   |   |
| **TOTAL LIABILITIES**                                                      |                                                                               | 509,382 |      | 439,439 |
|                                                                       |                                                                               |    |      |   |   |   |
| **Commitments and contingencies**                                          |                                                                               |    |      |   |
| **Stockholders' deficit**                                                  |                                                                               |    |      |   |
|                                                                       | Common stock                                                                       |    |      |   |   |
|                                                                       | 100,000,000 common shares authorized at $0.001 par                        value;   |    |      |   |
|                                                                       | 15,850,000 common shares issued and outstanding

(September 30, 2007 - 15,850,000) |    | 15,850    |   | 15,850 |
|                                                                       | Additional paid-in capital                                                         |    | 47,650    |   | 47,650 |
|                                                                       | Accumulated deficit                                                                |    | (289,589) |   | (225,024) |
|                                                                       |                                                                               |    |      |   |   |   |
| **Total stockholders' deficit**                                            |                                                                               |    | (226,089) |   | (161,524) |
|                                                                       |                                                                               |    |      |   |   |   |
| **TOTAL LIABILITIES AND STOCKHOLDERS'                        DEFICIT**     | $                                                                                  | 283,293 | $         | 277,915 |
|                                                                       |                                                                               |    |      |   |   |   |

 

 

 

|  

                         

                         

                         

                         

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

 

 

4

 

----

 

 

 

| **HIGH END VENTURES, INC.**

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS |
|--------------------------------------------------------------------------------------|
|                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |  

From January |
|                                                                                 |   |   |   |   |   |   |   | 19, 1999 |
|                                                                                 |   |   |   |   |   |   |   | (date of inception) |
|                                                                                 |   |   |   | For the three months ended |   | through |
|                                                                                 |   |   |   | December 31, |   | December 31, |
|                                                                                 |   |   |   | 2007 |   | 2006 |   | 2007 |
|                                                                                 |   |   |   |   |   |   |   |   |
| Revenue:                                                                             |   | $ | - | $ | - | $ | - |
|                                                                                 |   |   |   |   |   |   |   |   |
| Operating expenses                                                                   |   |   |   |   |   |   |
|                                                                                 | Exploration costs |   | - |   | - |   | 17,000 |
|                                                                                 | General & administrative |   | 63,661 |   | 13,976 |   | 271,000 |
| Total Operating expenses                                                             |   | 63,661 |   | 13,976 |   | 288,000 |
|                                                                                 |   |   |   |   |   |   |   |   |
| Net (Loss) from Operations                                                           | $ | (63,661) | $ | (13,976) | $ | (288,000) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Other income (expense)                                                               |   |   |   |   |   |   |
| Interest income                                                                      |   | 5,873 |   | - |   | 17,189 |
| Interest expense                                                                     |   | (6,777) |   | - |   | (18,778) |
| Total Other income (expense)                                                         |   | (904) |   | - |   | (1,589) |
|                                                                                 |   |   |   |   |   |   |   |   |
| NET (LOSS)                                                                           | $ | (64,565) | $ | (13,976) | $ | (289,589) |
|                                                                                 |   |   |   |   |   |   |   |   |
| **Weighted Average Shares Common Stock**

**Outstanding**                            |   | 15,850,000 |   | 15,850,000 |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| **Net Loss Per Share (Basic and Fully                        Dilutive)**             | $ | (0.00) | $ | (0.00) |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |

 

 

|  

                         

                         

                         

                         

                         

                         

                         

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

 

5

 

----

 

 

| **HIGH END VENTURES, INC.**

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS |
|--------------------------------------------------------------------------------------|
|                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   | January 19, 1999 |
|                                                                                 |   |   |   |   |   |   |   | (inception) |
|                                                                                 |   |   |   | For the three months ended |   | through |
|                                                                                 |   |   |   | December 31, |   | December 31, |
|                                                                                 |   |   |   | 2007 |   | 2006 |   | 2007 |
|                                                                                 |   |   |   |   |   |   |   |   |
| **Cash flows from operating activities**                                             |   |   |   |   |   |   |
|                                                                                 | Net loss | $ | (64,565) | $ | (13,976) | $ | (289,589) |
|                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                 | Adjustments to reconcile net loss to net cash used in                        operations: |   |   |   |   |   |   |
|                                                                                 | Issuance of stock for services rendered |   | - |   | - |   | 500 |
|                                                                                 | Write off mineral claims |   | - |   | - |   | 12,000 |
|                                                                                 | Changes in: |   |   |   |   |   |   |
|                                                                                 | Loan receivable |   |   | (4,908) |   | - |   | (16,225) |
|                                                                                 | Accounts payable and accrued liabilities |   | 43,166 |   | - |   | 175,497 |
|                                                                                 | Accrued interest payable |   | 6,777 |   | - |   | 18,778 |
|                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                 | Net cash used in operating activities |   | (19,530) |   | (13,976) |   | (99,039) |
|                                                                                 |   |   |   |   |   |   |   |   |
| **Cash flows from investing activities**                                             |   |   |   |   |   |   |
|                                                                                 | Purchase mineral claims |   | - |   | - |   | - |
|                                                                                 | Loan receivable principal advance |   | - |   | - |   | (255,186) |
|                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                 | Net cash used in investing activities |   | - |   | - |   | (255,186) |
|                                                                                 |   |   |   |   |   |   |   |   |
| **Cash flows from financing activities**                                             |   |   |   |   |   |   |
|                                                                                 | Payment of stock subscription receivable |   | - |   | - |   | 24,000 |
|                                                                                 | Issuance of common stock for cash |   | - |   | - |   | 27,000 |
|                                                                                 | Proceeds from loans payable |   | 20,000 |   | - |   | 315,107 |
|                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                 | Net cash provided by financing activities |   | 20,000 |   | - |   | 366,107 |
|                                                                                 |   |   |   |   |   |   |   |   |
| **Increase (decrease) in cash and cash                        equivalents**          |   | 470 |   | (13,976) |   | 11,882 |
|                                                                                 |   |   |   |   |   |   |   |   |
| **Cash and cash equivalents, beginning of                        period**            |   | 11,412 |   | 13,976 |   | - |
|                                                                                 |   |   |   |   |   |   |   |   |
| **Cash and cash equivalents, end of period**                                         | $ | 11,882 | $ | - | $ | 11,882 |
|                                                                                 |   | target |   |   |   |   |   |   |
| **Supplementary information**                                                        |   |   |   |   |   |   |
|                                                                                 | Interest paid | $ | - | $ | - | $ | - |
|                                                                                 | Taxes Paid | $ | - | $ | - | $ | - |

 

 

 

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

 

6

 

----

 

**HIGH        END VENTURES, INC.**

(A        DEVELOPMENT STAGE COMPANY)

NOTES TO        INTERIM FINANCIAL STATEMENTS

AS AT        DECEMBER 31, 2007

 

**NOTE        1** **– BASIS OF        PRESENTATION**

 

The interim        financial statements of High End Ventures, Inc. (the “Company”) for the three        months ended December 31, 2007 and 2006 are not audited.  The financial statements are        prepared in accordance with the requirements for unaudited interim periods, and        consequently do not include all disclosures required to be in conformity with accounting        principles generally accepted in the United States of America.

 

In the        opinion of management, the accompanying financial statements contain all adjustments,        consisting only of normal recurring accruals, necessary for a fair presentation of the        Company’s financial position as of December 31, 2007 and the results of operations        and cash flows for the three months ended December 31, 2007 and 2006. The results of        operations for the three months ended December 31, 2007 and 2006 are not necessarily        indicative of the results for a full year period.

 

**NOTE 2        – NATURE AND PURPOSE OF BUSINESS**

 

The Company        was incorporated under the laws of the State of Colorado on January 19, 1999.  The        Company was previously engaged in exploration activities designed to identify economically        viable deposits of precious metals, which activities were unsuccessful and have since been        abandoned. During the final quarter of fiscal 2006 the Company decided to switch its        attention to alternative business opportunities.

 

On        September 21, 2006 the Company executed a letter of intent to acquire The Electrolinks        Corporation (“Electrolinks”), a Toronto, Ontario based development        stage-company intent on providing “smart grid” applications for power utilities        and buildings that will deliver Broadband over Power Line (BPL) services utilizing any form        of existing electrical infrastructure. The Company executed a formal Securities Exchange        Agreement and Plan of Exchange on October 23, 2006 to acquire 100% of the outstanding        ownership of Electrolinks. Due to legal considerations relevant to the structure of the        anticipated transaction, the Company and Electrolinks mutually agreed not to proceed with        the agreement on September 18, 2007.

         

On        September 18, 2007, the Company and Electrolinks executed a Business Combination Agreement        and an Amalgamation Agreement in order to transact the acquisition of Electrolinks through        the amalgamation of Power Grid Networks Ltd. (“Power Grid”) (a wholly owned        subsidiary of the Company) and Electrolinks.

 

The        Amalgamation Agreement provides for the following actions:

 

|   | (a) | to amalgamate Power Grid and Electrolinks; |
|--------|-----|--------------------------------------------|

|   | (b) | to exchange two Electrolinks shares for one share of the                        Company; |
|--------|-----|------------------------------------------------------------------------------------------|

|   | (c) | to exchange shares of Power Grid with the Company on a one                        for one basis for each share issued by the Company to acquire Electrolinks                        shares; and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | to continue the business of Electrolinks through Power                        Grid. |
|--------|-----|-------------------------------------------------------------------------------------|

 

7

 

----

 

**HIGH        END VENTURES, INC.**

(A        DEVELOPMENT STAGE COMPANY)

NOTES TO        INTERIM FINANCIAL STATEMENTS

AS AT        DECEMBER 31, 2007

 

**NOTE 2        – NATURE AND PURPOSE OF BUSINESS - continued**

 

The        agreement anticipates the amalgamation of Electrolinks and Power Grid, entitling each        stockholder of Electrolinks to one share of the common stock of the Company in exchange for        two shares of the common stock of Electrolinks up to an aggregate of 21,584,183 shares of        the Company for 43,168,366 shares of Electrolinks.

         

The        Electrolinks stockholders would acquire approximately 57.7% of the issued and outstanding        shares of common stock of the Company following the closing of the transaction. For        accounting purposes, the transaction would be treated as a reverse merger with Electrolinks        being the accounting acquirer and the go-forward financial statements would reflect        Electrolinks’ history from its inception. The closing of the transaction is expected        to take place as soon as is practicable subject to shareholder approval of the transaction        and full satisfaction of the disclosure requirements of the Securities Exchange Act of        1934, as amended. The transaction had not obtained the requisite shareholder approval as of        the date of this report.

 

The        Company has elected September 30 as the end of its fiscal year.

 

**NOTE 3        – GOING CONCERN**

 

The        accompanying financial statements have been prepared in conformity with generally accepted        accounting principles that contemplate continuation of the Company as a going        concern.

 

The Company        has incurred losses since its inception and has not yet been successful in establishing        profitable operations. These factors raise considerable doubt about the ability of the        Company to continue as a going concern. Continuance of the Company as a going concern is        dependent upon receiving additional working capital through loans and/or additional sales        of the Company’s common stock. There is no assurance that the Company will succeed in        raising this additional capital or achieving profitable operations. The accompanying        financial statements do not include any adjustments that might result from the outcome of        these uncertainties.

 

**NOTE 4        – NATURE OF SIGNIFICANT ACCOUNTING POLICIES**

 

CASH AND        CASH EQUIVALENTS

 

The Company        considers all highly liquid debt instruments purchased with maturity of three months or        less to be cash equivalents.

 

USE OF        ESTIMATES

 

The        preparation of the Company’s financial statements requires management to make        estimates and assumptions that affect the amounts reported in the financial statements and        accompanying notes.  Actual results could differ from these estimates.

 

 

8

 

----

 

**HIGH        END VENTURES, INC.**

(A        DEVELOPMENT STAGE COMPANY)

NOTES TO        INTERIM FINANCIAL STATEMENTS

AS AT        DECEMBER 31, 2007

 

**NOTE 4        – NATURE OF SIGNIFICANT ACCOUNTING POLICIES - continued**

 

FAIR        VALUE OF FINANCIAL INSTRUMENTS

 

The        Company’s short-term financial instruments consist of cash and cash equivalents and        accounts payable.  The carrying amounts of these financial instruments approximate        fair value because of their short-term maturities.  Financial instruments that        potentially subject the Company to a concentration of credit risk consist principally of        cash.  During the year the Company did not maintain cash deposits at financial        institution in excess of the $100,000 limit covered by the Federal Deposit Insurance        Corporation.  The Company does not hold or issue financial instruments for trading        purposes nor does it hold or issue interest rate or leveraged derivative financial        instruments.

 

EARNINGS        PER SHARE

 

Basic        Earnings per Share (“EPS”) is computed by dividing net income available to        common stockholders by the weighted average number of common stock shares outstanding        during the year.  Diluted EPS is computed by dividing net income available to common        stockholders by the weighted-average number of common stock shares outstanding during the        year plus potential dilutive instruments such as stock options and warrant.  The        effect of stock options on diluted EPS is determined through the application of the        treasury stock method, whereby proceeds received by the Company based on assumed exercises        are hypothetically used to repurchase the Company’s common stock at the average        market price during the period.  Loss per share is unchanged on a diluted basis since        the assumed exercise of common stock equivalents would have an anti-dilutive effect. At        December 31 2007 and 2006 the Company did not have any potentially dilutive instruments        outstanding.

 

INCOME        TAXES

 

The Company        uses the asset and liability method of accounting for income taxes as required by SFAS No.        109 “Accounting for Income Taxes”.  SFAS 109 requires the recognition of        deferred tax assets and liabilities for the expected future tax consequences of temporary        differences between the carrying amounts and the tax basis of certain assets and        liabilities.  Deferred income tax assets and liabilities are computed annually for the        difference between the financial statement and tax bases of assets and liabilities that        will result in taxable or deductible amounts in the future, based on enacted tax laws and        rates applicable to the periods in which the differences are expected to affect taxable        income.  Valuation allowances are established when necessary to reduce deferred tax        assets to the amount expected to be realized.  Income tax expense is the tax payable        or refundable for the period, plus or minus the change during the period in deferred tax        assets and liabilities.

 

Deferred        income taxes may arise from temporary differences resulting from income and expense items        reported for financial accounting and tax purposes in different periods.  Deferred        taxes are classified as current or non-current, depending on the classification of the        assets and liabilities to which they relate.  Deferred taxes arising from temporary        differences that are not related to an asset or liability are classified as current or        non-current depending on the periods in which the temporary differences are expected to        reverse.  The Company had no significant deferred tax items arise during any of the        periods presented.

 

 

9

 

----

 

**HIGH        END VENTURES, INC.**

(A        DEVELOPMENT STAGE COMPANY)

NOTES TO        INTERIM FINANCIAL STATEMENTS

AS AT        DECEMBER 31, 2007

 

**NOTE 4        – NATURE OF SIGNIFICANT ACCOUNTING POLICIES - continued**

 

CONCENTRATION OF CREDIT RISK

 

The        financial instrument which potentially subjects the Company to concentration of credit risk        is cash. The Company maintains cash in bank accounts that, at times, may exceed federally        insured limits. As of December 31, 2007, the Company has not exceeded the federally insured        limit. The Company has not experienced any losses in such accounts and believes it is not        exposed to any significant risks on its cash in bank accounts.

 

RECENT        ACCOUNTING PRONOUNCEMENTS

 

In        February, 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial        Assets and Financial Liabilities”. SFAS No. 159 permits entities to choose to measure        many financial assets and financial liabilities at fair value. Unrealized gains and losses        on items for which the fair value option has been elected are reported in earnings. SFAS        No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is        currently assessing the impact of SFAS No. 159 on our financial position and results of        operations, but does not anticipate a material impact.

 

**NOTE 5        – LOAN RECEIVABLE**

 

The Company        has loaned Electrolinks $254,221 USD. This loan is secured and bears interest at a rate of        10% and is repayable upon demand. At December 31, 2007 interest of $17,190 had been accrued        on this loan.

 

**NOTE 6        – MINERAL CLAIM**

 

The Company        entered into an agreement on October 31, 2005 to acquire a 100% interest in a mineral claim        located in the Victoria Mining District in British Columbia, Canada.  The claim was        acquired for $5,000 in cash and 600,000 shares of common stock valued at $12,000.  The        purchase price of the claim approximated the historical cost basis of the previous owner of        the claim.  Management has made a determination that the cost of the mineral claim        will not be recovered and therefore the purchase price of $17,000 was charged to current        operations as exploration costs in 2006.

 

**NOTE        7– SHORT TERM LOANS PAYABLE – RELATED PARTY TRANSACTIONS**

 

The Company        borrowed $290,000 and $25,000 from third parties to assist with working capital needs. The        loan of $290,000 bears interest at a rate of 10%. At December 31, 2007 interest of $18,778        had been accrued on this loan. The loan of $25,000 is an interest free, unsecured, demand        loan. The Company also borrowed $107 from a shareholder as an interest free, unsecured,        demand loan.

 

 

 

 

10

 

----

 

**HIGH        END VENTURES, INC.**

(A        DEVELOPMENT STAGE COMPANY)

NOTES TO        INTERIM FINANCIAL STATEMENTS

AS AT        DECEMBER 31, 2007

 

**NOTE 8        – COMMON STOCK**

 

In October        of 2005, the Company issued 600,000 shares for the purchase of mineral claims at a value of        $.02 per share.

 

On April        10, 2006, the Company issued 320,000 shares of common stock valued at $.05 per share for        cash in the amount of $16,000.

 

On        September 2, 2006, management authorized a 5 for 1 forward split of the outstanding shares        of common stock.  This split has been applied retroactively in the financial        statements as if the split had occurred at inception of the Company.

 

**NOTE        9 – SUBSEQUENT EVENT**

 

On February        12, 2008 the Company convened a special stockholders meeting to consider whether to approve        the terms and conditions of the Business Combination Agreement and Amalgamation Agreement        that would cause it to acquire Electrolinks. However, rather than vote on the matters        presented due to quorum requirements, the Company moved to adjourn the special stockholders        meeting to March 7, 2008 in order to provide its stockholders with additional time to        consider the transaction.

 

 

 

 

11

 

----

 

**ITEM        2.**         **MANAGEMENT’S PLAN OF OPERATION**

 

This*Management's Plan of Operation*and*Results of Operations*and other parts of this report contain forward-looking statements that        involve risks and uncertainties. Forward-looking statements can also be identified by words        such as “anticipates,” “expects,” “believes,”        “plans,” “predicts,” and similar terms. Forward-looking statements        are not guarantees of future performance and our actual results may differ significantly        from the results discussed in the forward-looking statements. Factors that might cause such        differences include, but are not limited to, those discussed in the subsections        entitled*Forward-Looking Statements and Factors That May Affect        Future Results and Financial Condition*. The following discussion        should be read in conjunction with our financial statements and notes thereto included in        this information statement. All information presented herein is based on our period ended        December 31, 2007. Our fiscal year end is September 30.

 

***General***

 

Our plan of        operation over the next year, subject to stockholder approval of our intent to acquire the        business of The Electrolinks Corporation (“Electrolinks”), is to focus on        Electrolinks’ business model. Electrolinks intends to provide “smart        grid” applications for power utilities and buildings in addition to delivering        broadband over power line (BPL) services over any form of existing electrical        infrastructure.

 

The        Electrolinks business model would require that we raise up to $5 million through private        debt or equity placements to fund the development of Electrolinks’ BPL products,        services and network. There can be no assurance that this funding would be available to us.        Should our stockholders not approve the acquisition of Electrolinks, our plan of operation        for the coming year will be to identify and acquire an alternative business opportunity. We        will not limit our options to any particular industry, but will evaluate each opportunity        on its own merits.

 

***The        Company’s Intended Business Strategy***

 

Electrolinks is in the business development stage and is yet to earn        important revenues from operations. Electrolinks may experience fluctuations in operating        results in future periods due to a variety of factors including, but not limited        to:  

 

| **•** | market acceptance of the Internet and power line                        communication technologies as a medium for customers to purchase                        Electrolinks’ products, |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **•** | Electrolinks’ ability to acquire and deliver high                        quality products at a price lower than currently available to                        consumers, |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **•** | Electrolinks’ ability to obtain additional financing                        in a timely manner on terms favorable to Electrolinks, |
|------------|------------------------------------------------------------------------------------------------------------------------------------------|

| **•** | Electrolinks’ ability to successfully attract                        customers at a steady rate and maintain customer satisfaction, |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| **•** | Electrolinks promotions, branding and sales                        programs, |
|------------|------------------------------------------------------------------------------|

| **•** | the amount and timing of operating costs and capital                        expenditures relating to the expansion of Electrolinks’ business,                        operations and infrastructure, and the implementation of marketing                        programs, |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **•** | key agreements and strategic alliances, |
|------------|-----------------------------------------|

| **•** | the number of products offered by Electrolinks, |
|------------|-------------------------------------------------|

| **•** | the number of returns experienced by Electrolinks,                        and |
|------------|-------------------------------------------------------------------------------|

| **•** | general economic conditions specific to the Internet,                        power-line communications, and the communications industry. |
|------------|------------------------------------------------------------------------------------------------------------------------------------------|

 

12

 

----

 

Given the        unique nature of the BPL technology and its limited market penetration to date in North        America, there is a need to establish a strong commercial presence and associated branding.        As such, Electrolinks has established a multi-tiered market entry and growth plan        incorporating the following key        actions:                                 

 

***1.        Establish an Initial BPL Foothold***

 

It is        critical to gain a commercial presence for BPL in North America and, in particular, a        presence associated with Electrolinks. Currently, Electrolinks is leveraging several        existing relationships in the hospitality market to deploy a commercial BPL installation        (at minimum) in the next three months. In addition, Electrolinks is working with hydro        utilities and native reservations to implement BPL as a demonstration        technology.    

 

***2.******Establish Electrolinks’        BPL Center of Excellence***

 

A key        element of Electrolinks’ strategy is to establish a North American BPL Center of        Excellence. The Center of Excellence will focus on the following functions:

 

| **•** | Testing and qualifying facility for the North American use                        of BPL technology, |
|------------|------------------------------------------------------------------------------------------------------|

| **•** | Demonstration lab for the presentation of BPL to customers,                        government and the media, and |
|------------|------------------------------------------------------------------------------------------------------------------|

| **•** | Training center for BPL for North America. |
|------------|--------------------------------------------|

In        addition, Electrolinks is working with the U.S. based BPL Association in an effort to help        establish a

BPL        Association of Canada with Electrolinks as one of the founding members. These actions are        intended to establish Electrolinks as a key player and thought leader in the evolving North        American BPL        market.                                                                                                                                                                                                            

***3.******Build out Utilities        Partnership***

 

A        relationship model with Canadian utilities is essential for success in rural regions.        Electrolinks is currently working with a number of key members of several hydro utilities        to define a business model that will enable broadband to BPL rural customers while also        providing a new revenue stream to the hydro utilities themselves. Electrolinks expects to        have several models in place within the next few months.

 

Canadian        governments, at both the federal level and the provincial level, have set aside funding to        ensure that all Canadians have access to high speed internet services. Electrolinks is        currently working with both levels of government on how to best bring BPL technology to        those regions that are currently not served. Electrolinks is also reviewing the first set        of rural region requests for proposal developed by community co-ops in preparation for the        planned offering for these rural co-ops.

 

***4.******Develop the Electrolinks Sales        Channel and Business Partner model***

 

Electrolinks’ initial market entry is through key utilities, but over        time the goal is to establish partner channels to enable the significant sales volume that        is expected as BPL technology gains North American momentum.

 

Electrolinks is establishing three major categories for partners:

 

| **•** | Utility business partners – A joint marketing and                        revenue sharing partner structure specifically with hydro utilities for the                        rural Canada market. |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

13

 

----

 

| **•** | Technology extender partners – A program to establish                        partnerships with other technology providers that extend the value                        proposition of BPL. These include existing partnerships, as well as future                        needs in potential areas such as wireless and long range fiber. |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **•** | Sales channel partners – Electrolinks will establish a                        partner sales channel to leverage the potential of the large number of                        companies that are currently marketing solutions to the hospitality and                        multi-commercial unit markets. Electrolinks will provide a partner friendly                        integrated solution product that sales partners will be able to market and                        deploy to customers. |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Electrolinks anticipates executing on this market entry strategic plan over        a period of approximately nine to twelve months.

 

***Results of Operations***

 

During the        period ended December 31, 2007, our operations were limited to finalizing those agreements        pertaining to the intended acquisition of Electrolinks and satisfying continuous public        disclosure requirements. Since Electrolinks is in the development stage with no history of        generating substantial revenue, we cannot determine whether the Company will ever generate        revenues from operations.

 

***Revenues***

 

The Company        has not generated any revenues to date. We do not expect to receive revenues within the        next twelve months sufficient to fund our operations, even in the event that the        acquisition of Electrolinks is approved and completed. Electrolinks has only recently        initiated the commercial application of its technology and has realized limited revenue to        date.

 

***Net        Loss***

 

For the        period from inception January 19, 1999 to December 31, 2007, the Company recorded an        operating loss of $289,589. Net losses for the three month period ended December 31, 2007        were $64,565 as compared to $13,976 for the three months ended December 31, 2006. The        Company’s operating losses in the current three month period are attributable to        general and administrative expenses including accounting costs and consulting fees.        Expenses in prior periods have also included exploration costs directly related to our        former precious metals exploration program. The Company has not generated any revenues        since inception.

 

The Company        expects to continue to operate at a loss through fiscal 2008 and due to the nature of our        intended acquisition of Electrolinks or alternatively our search for another business        opportunity cannot determine whether we will ever generate revenues from        operations.

 

***Income Tax Expense (Benefit)***

         

The Company        has a prospective income tax benefit resulting from a net operating loss carryforward and        start up costs that might offset any future operating profit.

 

***Impact of Inflation***

         

The Company        believes that inflation has had a negligible effect on operations over the past three        years.

 

14

 

----

 

***Capital Expenditures***

 

The Company        expended no amounts on capital expenditures for the period from inception to December 31,        2007.

 

***Capital Resources and Liquidity***

 

The Company        had current assets of $283,293 and total assets of $283,293 as of the three month period        ended December 31, 2007, consisting of cash on hand of $11,882 and expected proceeds from a        loan receivable of $271,411. Net stockholders' deficiency in the Company was $226,089 at        December 31, 2007. The Company is in the development stage and, since inception, has        experienced significant changes in liquidity, capital resources, and shareholders’        equity.

 

Cash flow        used in operating activities was $99,039 for the period from inception to December 31,        2007. Cash flow used in operating activities for the three month period ended December 31,        2007 was $19,530 as compared to $13,976 in cash flow used in operating activities for the        three months ended December 31, 2006. Cash flow used in operating activities in the current        three month period can be attributed to accounting costs and consulting        expenses.

 

Cash flow        provided from financing activities was $366,107 for the period from inception to December        31, 2007. Cash flow provided by financing activities for the three month period ended        December 31, 2007 was $20,000 as compared to $0 for the three months ended December 31,        2006.

 

Cash flows        used in investing activities was $255,186 for the period from inception to December 31,        2007. There were no cash flows used in investing activities for the three month periods        ended December 31, 2007 and 2006.

 

The        Company’s current assets may not be sufficient to conduct its plan of operation over        the next twelve (12) months and it will have to realize debt or equity financing to fund        operations. The Company has no current commitments or arrangements with respect to, or        immediate sources of funding. Further, no assurances can be given that funding, if needed,        would be available or available to the Company on acceptable terms. Therefore, the        Company’s stockholders would be the most likely source of new funding in the form of        loans or equity placements though none have made any commitment for future investment and        we have no agreement formal or otherwise. The Company’s inability to obtain funding        would have a material adverse affect on its plan of operation.

 

The Company        had no formal long term lines or credit or other bank financing arrangements as of December        31, 2007.

 

Since        earnings, if any, will be reinvested in operations, the Company does not expect to pay cash        dividends in the foreseeable future.

 

The Company        has no defined benefit plan or contractual commitment with any of its officers or        directors.

 

The Company        has no current plans for any significant purchase or sale of any plant or        equipment.

 

 

 

 

15

 

----

 

***Off        Balance Sheet Arrangements***

 

As of        December 31, 2007, the Company has no significant off-balance sheet arrangements that have        or are reasonably likely to have a current or future effect on our financial condition,        changes in financial condition, revenues or expenses, results of operations, liquidity,        capital expenditures, or capital resources that is material to stockholders.

 

***Critical Accounting Policies***

 

In the        notes to the audited financial statements for the year ended September 30, 2007 included in        the Company’s Form 10-KSB, the Company discusses those accounting policies that are        considered to be significant in determining the results of operations and its financial        position. The Company believes that the accounting principles utilized by us conform to        accounting principles generally accepted in the United States of America.

 

The        preparation of financial statements requires Company management to make significant        estimates and judgments that affect the reported amounts of assets, liabilities, revenues        and expenses. By their nature, these judgments are subject to an inherent degree of        uncertainty. The Company bases its estimates on historical experience and other facts and        circumstances that are believed to be reasonable, and the results form the basis for making        judgments about the carrying value of assets and liabilities. The actual results may differ        from these estimates under different assumptions or conditions.

 

***Stock-Based Compensation***

 

On January        1, 2006, we adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), Share-Based Payment, which        addresses the accounting for stock-based payment transactions in which an enterprise        receives employee services in exchange for (a) equity instruments of the enterprise or (b)        liabilities that are based on the fair value of the enterprise’s equity instruments        or that may be settled by the issuance of such equity instruments. In January 2005, the        Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107,        which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R        eliminates the ability to account for stock-based compensation transactions using the        intrinsic value method under Accounting Principles Board (APB) Opinion No. 25, Accounting        for Stock Issued to Employees, and instead generally requires that such transactions be        accounted for using a fair-value-based method. We use the Black-Scholes-Merton        (“BSM”) option-pricing model to determine the fair-value of stock-based awards        under SFAS No. 123R, consistent with that used for pro forma disclosures under SFAS No.        123, Accounting for Stock-Based Compensation. We have elected the modified prospective        transition method as permitted by SFAS No. 123R and accordingly prior periods have not been        restated to reflect the impact of SFAS No. 123R. The modified prospective transition method        requires that stock-based compensation expense be recorded for all new and unvested stock        options, restricted stock, restricted stock units, and employee stock purchase plan shares        that are ultimately expected to vest as the requisite service is rendered beginning on        January 1, 2006, the first day of our fiscal year 2006. Stock-based compensation expense        for awards granted prior to January 1, 2006 is based on the grant date fair-value as        determined under the pro forma provisions of SFAS No. 123.

 

Prior to        the adoption of SFAS No. 123R, we measured compensation expense for our employee        stock-based compensation plans using the intrinsic value method prescribed by APB Opinion        No. 25. We applied the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148,        Accounting for Stock-Based Compensation – Transition and Disclosure, as if the        fair-value-based method had been applied in measuring compensation expense. Under APB        Opinion No. 25, when the exercise price of the Company’s employee stock options was        equal to the market price of the underlying stock on the date of the grant, no compensation        expense was recognized.

 

16

 

----

 

We account        for equity instruments issued in exchange for the receipt of goods or services from other        than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging        Issues Task Force (“EITF”) in Issue No. 96-18. Costs are measured at the        estimated fair market value of the consideration received or the estimated fair value of        the equity instruments issued, whichever is more reliably measurable. The value of equity        instruments issued for consideration other than employee services is determined on the        earliest of a performance commitment or completion of performance by the provider of goods        or services as defined by EITF 96-18

 

***Recent Accounting Pronouncements***

 

In February        2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial        Instruments-an amendment of FASB Statements No. 133 and 140”, to simplify and make        more consistent the accounting for certain financial instruments. SFAS No. 155 amends SFAS        No. 133, “Accounting for Derivative Instruments and Hedging Activities” to        permit fair value remeasurement for any hybrid financial instrument with an embedded        derivative that otherwise would require bifurcation, provided that the whole instrument is        accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, “Accounting        for the Impairment or Disposal of Long-Lived Assets”, to allow a qualifying        special-purpose entity to hold a derivative financial instrument that pertains to a        beneficial interest other than another derivative financial instrument. SFAS No. 155        applies to all financial instruments acquired or issued after the beginning of an entity's        first fiscal year that begins after September 15, 2006, with earlier application allowed.        This standard is not expected to have a significant effect on the Company’s future        reported financial position or results of operations.

 

In March        2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets, an        amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial        Assets and Extinguishments of Liabilities”. This statement requires all separately        recognized servicing assets and servicing liabilities be initially measured at fair value,        if practicable, and permits for subsequent measurement using either fair value measurement        with changes in fair value reflected in earnings or the amortization and impairment        requirements of Statement No. 140. The subsequent measurement of separately recognized        servicing assets and servicing liabilities at fair value eliminates the necessity for        entities that manage the risks inherent in servicing assets and servicing liabilities with        derivatives to qualify for hedge accounting treatment and eliminates the characterization        of declines in fair value as impairments or direct write-downs. SFAS No. 156 is effective        for an entity's first fiscal year beginning after September 15, 2006. This adoption of this        statement is not expected to have a significant effect on the Company’s future        reported financial position or results of operations.

 

In        September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” The        objective of SFAS 157 is to increase consistency and comparability in fair value        measurements and to expand disclosures about fair value measurements. SFAS 157 defines fair        value, establishes a framework for measuring fair value in generally accepted accounting        principles, and expands disclosures about fair value measurements. SFAS 157 applies under        other accounting pronouncements that require or permit fair value measurements and does not        require any new fair value measurements. The provisions of SFAS No. 157 are effective for        fair value measurements made in fiscal years beginning after November 15, 2007. The        adoption of this statement is not expected to have a material effect on the Company's        future reported financial position or results of operations.

 

 

 

17

 

----

 

In        September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for        Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB        Statements No. 87, 88, 106, and 132(R)” This statement requires employers to        recognize the overfunded or underfunded status 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 provisions of SFAS No. 158 are effective for        employers with publicly traded equity securities as of the end of the fiscal year ending        after December 15, 2006. The adoption of this statement is not expected to have a material        effect on the Company's future reported financial position or results of        operations.

 

In        September 2006, the SEC issued Staff Accounting Bulletin        (“SAB”) No. 108, “Considering the Effects of Prior Year        Misstatements when Quantifying Misstatements in Current Year Financial Statements.”        SAB No. 108 addresses how the effects of prior year uncorrected misstatements should        be considered when quantifying misstatements in current year financial statements. SAB        No. 108 requires companies to quantify misstatements using a balance sheet and income        statement approach and to evaluate whether either approach results in quantifying an error        that is material in light of relevant quantitative and qualitative factors. SAB No. 108 is        effective for periods ending after November 15, 2006. The Company is currently        evaluating the impact of adopting SAB No. 108 but does not expect that it will have a        material effect on our financial position and results of operations.

 

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

 

***Forward Looking Statements and Factors That May Affect Future Results        and Financial Condition***

 

The        statements contained in the section titled*Management’s**Plan of        Operation*and other sections, with the exception of historical        facts, are forward looking statements within the meaning of Section 27A of the Securities        Act. A safe-harbor provision may not be applicable to the forward looking statements made        in this Form 10-QSB because of certain exclusions under Section 27A (b). Forward looking        statements reflect our current expectations and beliefs regarding our future results of        operations, performance, and achievements. These statements are subject to risks and        uncertainties and are based upon assumptions and beliefs that may or may not materialize.        These statements include, but are not limited to, statements concerning:

 

|   | **•** | our anticipated financial performance and business                        plan; |
|--------|------------|---------------------------------------------------------------------------------|

|   | **•** | the sufficiency of existing capital resources; |
|--------|------------|------------------------------------------------|

|   | **•** | our ability to raise additional capital to fund cash                        requirements for future operations; |
|--------|------------|-----------------------------------------------------------------------------------------------------------------|

|   | **•** | uncertainties related to the Company’s future business                        prospects; |
|--------|------------|------------------------------------------------------------------------------------------------|

|   | **•** | the ability of the Company to generate revenues to fund                        future operations; |
|--------|------------|---------------------------------------------------------------------------------------------------|

|   | **•** | the volatility of the stock market and; |
|--------|------------|-----------------------------------------|

|   | **•** | general economic conditions. |
|--------|------------|------------------------------|

 

 

18

 

----

 

We wish to        caution readers that the Company’s operating results are subject to various risks and        uncertainties that could cause our actual results to differ materially from those discussed        or anticipated including the factors set forth in the section entitled*Risk Factors*below. We also wish to advise        readers not to place any undue reliance on the forward looking statements contained in this        report, which reflect our beliefs and expectations only as of the date of this report. We        assume no obligation to update or revise these forward looking statements to reflect new        events or circumstances or any changes in our beliefs or expectations, other than is        required by law.

 

***Risks        Factors***

 

Our future        operating results are highly uncertain. Before deciding to invest in us or to maintain or        increase your investment, you should carefully consider the risks described below, in        addition to the other information contained in our annual report. If any of these risks        actually occur, our business, financial condition or results of operations could be        seriously harmed. In that event, the market price for our common stock could decline and        you may lose all or part of your investment.

 

RISKS        RELATED TO THE COMPANY’S BUSINESS

 

*We have        a history of significant operating losses and such losses may continue in the        future.*

 

Since        inception, our expenses have substantially exceeded our income, resulting in continuing        losses and an accumulated deficit of $289,589 at December 31, 2007. During the quarter        ended December 31, 2007, we recorded a net loss of $64,565. The Company has never realized        revenue from operations. We will continue to incur operating losses as we pursue our        intention to acquire Electrolinks and satisfy our ongoing disclosure requirements with the        Securities and Exchange Commission (“Commission”). Our only expectation of        future profitability is dependent upon our ability to acquire Electrolinks and develop        Electrolinks’ business to a point that will produce revenue, which objectives can in        no way be assured.

 

*The        Company’s limited financial resources cast severe doubt on our ability to        successfully fund the business development of Electrolinks.*

 

One of the        conditions of the agreements to acquire Electrolinks is the representation that the Company        would use its best efforts to fund the business development of Electrolinks up to five        million dollars ($5,000,000) within twelve months of closing. Since our business plan is        currently dependent on the intended acquisition of Electrolinks, the prospect of satisfying        this funding commitment is immediate and doubtful. We currently have insufficient capital        to meet this condition and would have to rely on debt or equity offerings to meet this        funding obligation. Should we be unable to realize this funding within one year of closing        the transaction the successful development of the Electrolinks business plan may be called        into doubt due to financial constraints which may ultimately force the Company to curtail        or abandon operations.

 

*Terms        determined in the agreements to acquire Electrolinks would result in a change of control of        the Company.*

 

The        issuance of common shares to the stockholders of Electrolinks would dilute the voting power        and ownership percentage of our existing stockholders that would cause a change in control        of the Company. The terms of the agreements require us to issue 21,584,183 new shares that        would result in a dilution of approximately 57.7% to our existing stockholders. Further,        the agreements require the stockholders of the Company to elect two new members to the        board of directors, thus changing control of management. The change in control of the        Company could have a negative impact on our stockholders.

 

19

 

----

 

*The        Company might not realize the anticipated benefits from the acquisition of        Electrolinks.*

We may not        achieve the benefits we are seeking from the intended acquisition of Electrolinks.        Electrolinks may not be successful in its efforts focused on offering “Smart        Grid” applications of BPL products to power utilities and to buildings with multiple        dwelling units. As a result, our operations and financial results may be less rewarding        than anticipated, which may cause the market price of our common stock to        decline.

*The        intended acquisition of Electrolinks could decrease the value of your stock.*

 

Electrolinks is a development stage company with a limited history of        realizing revenue and a record of net losses, about which Electrolinks’ auditors have        expressed a going concern opinion. Additionally, Electrolinks expects losses in the future        and its current assets are insufficient to conduct business operations over the next 12        months. Given these facts, the intended acquisition of Electrolinks could result in        significant losses for the Company which could decrease the value of your stock.

 

*We might        not be successful in integrating the business operations of Electrolinks into our own        operations, stifling growth and hindering the realization of a profit.*

The        acquisition of Electrolinks would involve the integration of companies that have previously        operated independently. A successful integration of Electrolinks’ operations        would depend on our ability to consolidate operations and to integrate Electrolinks’        management team. If we are unable to do so, we may not realize the anticipated        potential benefits of the acquisition, our business development could be stifled, and        results of operations might not produce a profit.  Difficulties could include the loss        of key employees, the disruption of Electrolinks’ ongoing businesses, and possible        inconsistencies in standards, controls, procedures and policies. 

RISKS        RELATED TO THE BUSINESS OF ELECTROLINKS

 

*Electrolinks’ limited operating history; anticipated losses;        uncertainly of future results.*

 

Since        Electrolinks has only recently commenced business operations there is limited information        on which to adequately evaluate its business and future prospects. Therefore,        Electrolinks’ future prospects should be considered with a view to the risks        encountered by a company in an early stage of development, particularly in light of the        uncertainties relating to customer acceptance of Electrolinks’ intended        services.

 

Electrolinks will continue to incur costs to develop and market BPL        solutions, to establish marketing relationships, and to build an administrative        organization. We can offer no certainty that Electrolinks will be profitable on a quarterly        or annual basis. In addition, as Electrolinks expands its business network and marketing        operations it will likely need to increase its operating expenses to broaden customer        support capabilities and increase administrative resources. To the extent that such        increased expenses are not supported by commensurate revenues, Electrolinks’        business, results of operations and financial condition would be adversely        affected.

 

 

 

 

20

 

----

 

*Electrolinks has a historical record of losses which may        continue.*

 

Electrolinks reported operating losses for the fiscal year ended December        31, 2006 of $1,248,239 and operating losses for the nine months ended September 30, 2007 of        $1,067,891. The historical record indicates that Electrolinks has not realized sufficient        revenue from its efforts to provide us with any certainty that revenue is forthcoming or        that revenue will be sufficient to support operations. The sum of these indicators creates        uncertainty as to whether Electrolinks will ever transition from losses to profits. Should        Electrolinks continue to incur losses it would be unable to meet its working capital        requirements which inability would stifle operations.

 

*Need for        additional financing.*

 

Electrolinks has no significant revenue from operations and therefore is not        able to meet operating costs. As such, the Company would need to raise capital within the        next twelve months to implement Electrolinks’ plan of operation. However, there can        be no assurance that the Company would be able to raise the required capital or that any        capital raised would be obtained on favourable terms. Failure to obtain adequate capital        would significantly curtail Electrolinks’ business.

 

*Unpredictability of future revenues.*

 

Due to        Electrolinks’ lack of operating history and the emerging nature of the market in        which it competes, it is unable to forecast its revenues or expenses with any degree of        certainty. Electrolinks’ projected expenses and revenue are based largely on internal        estimates. Operating results will depend on the volume of orders for services or products        offered, the ability to obtain and retain customers, and revenues generated offset by the        expenses incurred in obtaining those results. Projections, by their very nature, difficult        to forecast and should not be relied on to provide a reliable indicator of future operating        results.

 

*Dependence on key personnel.*

 

Electrolinks’ performance and operating results are substantially        dependent on the continued service and performance of its managers, officers, and        directors. Electrolinks intends to hire additional managerial personnel as they move        forward with their business model. Competition for such personnel is intense, and there can        be no assurance that Electrolinks can retain its key management employees, or that it will        be able to attract or retain highly qualified technical personnel in the future. The loss        of the services of Hari Rao, Wayne Owens, or any of Electrolinks’ other key employees        or the inability to attract and retain the necessary management personnel could have a        material adverse effect upon its business.

 

*Electrolinks growth is dependent upon the availability and successful        hire of independent contractors.*

 

Electrolinks’ continued growth and success depend to a significant        extent on the successful hire of qualified independent contractors. Competition for        highly-skilled business, product development, technical and other personnel is intense due        to skill shortages and the variety of companies that offer equity incentives. Accordingly,        Electrolinks expects to experience increased compensation costs to engage independent        contractors which costs may not be offset by improved productivity or increased revenues.        Further, there can be no assurances that Electrolinks will be successful in continuously        recruiting the necessary independent contractors. Failure to obtain the right personnel to        develop Electrolinks’ business model could have a material adverse effect on        Electrolinks’ growth.

 

 

 

21

 

----

 

*Unproven        acceptance of Electrolinks’ services and products.*

 

Electrolinks is still in the development stage and cannot provide any        certainty as to whether its services and products will be accepted by prospective        customers. Should Electrolinks’ services and products prove to be unsuccessful with        prospective customers, such failure would adversely affect its financial condition,        operating results, and cash flows.

 

*Electrolinks competes with larger and better financed        corporations.*

 

Competition        within the international BPL products market is intense. While Electrolinks believes that        its products will be distinguished by next-generation innovations that are more        sophisticated, flexible and cost effective than many competitive products currently in the        market place, a number of entities offer BPL products, and new competitors may enter the        market in the future. Some of BPL’s existing and potential competitors have longer        operating histories, greater name recognition, larger customer bases and significantly        greater financial, technical and marketing resources than Electrolinks does, including well        known multi-national corporations like Bell, Rogers and Primus.

 

*Electrolinks has no proprietary or intellectual property        rights.*

 

Despite        being a technology based business, Electrolinks has no proprietary or intellectual property        rights associated with the provision of BPL services. Rather, Electrolinks is dependent on        technology that it intends to license from third parties. The absence of proprietary and        intellectual property rights makes Electrolinks vulnerable to unauthorized third parties,        including competitors, who may copy its business plan effectively offering the same type of        services that Electrolinks intends to offer. A multitude of competitors using the same        technology to offer the same products as Electrolinks could have an adverse effect on        future growth.

 

*Dependence on licensed technology and third party service        providers.*

 

Electrolinks relies on a limited number of manufacturers as well as service        providers to offer BPL services, which reliance reduces the level of control we have over        our operations and exposes it to significant risks such as inadequate capacity, late        delivery, substandard quality and higher prices, all of which could adversely affect        business. If Electrolinks’ suppliers or services providers are unable to provide        products or services in the volumes needed or at an acceptable price, Electrolinks would        have to identify and qualify acceptable replacements from alternative sources of supply. If        Electrolinks was unable to obtain products or services in a timely fashion, it would likely        not be able to meet customer demand. Any disruption of either product procurement or        services could adversely affect Electrolinks’ operations.

 

22

 

----

 

RISKS        RELATED TO THE COMPANY’S STOCK

 

*The        Company’s stockholders may face significant restrictions on their        stock.*

 

The        Company’s stock differs from many stocks in that it is a “penny stock.”        The Commission has adopted a number of rules to regulate “penny stocks”        including, but not limited to, those rules from the Securities Act as follows:

 

|   | 3a51-1 | which defines penny stock as, generally speaking, those                        securities which are not listed on either NASDAQ or a national securities                        exchange and are priced under $5, excluding securities of issuers that have                        net tangible assets greater than $2 million if they have been in operation                        at least three years, greater than $5 million if in operation less than                        three years, or average revenue of at least $6 million for the last three                        years; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-1 | which outlines transactions by broker/dealers which are                        exempt from 15g-2 through 15g-6 as those whose commissions from traders are                        lower than 5% total commissions; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-2 | which details that brokers must disclose risks of penny                        stock on Schedule 15G; |
|--------|-------|-------------------------------------------------------------------------------------------------------|

|   | 15g-3 | which details that broker/dealers must disclose quotes and                        other info relating to the penny stock market; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-4 | which explains that compensation of broker/dealers must be                        disclosed; |
|--------|-------|----------------------------------------------------------------------------------------------|

|   | 15g-5 | which explains that compensation of persons associated in                        connection with penny stock sales must be disclosed; |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-6 | which outlines that broker/dealers must send out monthly                        account statements; and |
|--------|-------|---------------------------------------------------------------------------------------------------------|

|   | 15g-9 | which defines sales practice requirements. |
|--------|-------|--------------------------------------------|

Since our        securities constitute a “penny stock” within the meaning of the rules, the        rules would apply to us and our securities. Because these rules provide regulatory burdens        upon broker-dealers, they may affect the ability of stockholders to sell their securities        in any market that may develop; the rules themselves may limit the market for penny stocks.        Additionally, the market among dealers may not be active. Investors in penny stock often        are unable to sell stock back to the dealer that sold them the stock. The mark-ups or        commissions charged by the broker-dealers may be greater than any profit a seller may make.        Because of large dealer spreads, investors may be unable to sell the stock immediately back        to the dealer at the same price the dealer sold the stock to the investor. In some cases,        the stock may fall quickly in value. Investors may be unable to reap any profit from any        sale of the stock, if they can sell it at all.

Stockholders should be aware that, according to Commission Release No.        34-29093 dated April 17, 1991, the market for penny stocks has suffered from patterns        of fraud and abuse. These patterns include:

 

|   | **•** | control of the market for the security by one or a few                        broker-dealers that are often related to the promoter or issuer; |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | manipulation of prices through prearranged matching of                        purchases and sales and false and misleading press releases; |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | “boiler room” practices involving high pressure                        sales tactics and unrealistic price projections by inexperienced sales                        persons; |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | excessive and undisclosed bid-ask differentials and markups                        by selling broker-dealers; and |
|--------|------------|-------------------------------------------------------------------------------------------------------------------|

|   | **•** | the wholesale dumping of the same securities by promoters                        and broker-dealers after prices have been manipulated to a desired level,                        along with the inevitable collapse of those prices with consequent investor                        losses. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

23

 

----

 

*The        market for our stock is limited and our stock price may be volatile.*

 

The market        for our common stock has been limited due to low trading volume and the small number of        brokerage firms acting as market makers. Because of the limitations of our market and        volatility of the market price of our stock, investors may face difficulties in selling        shares at attractive prices when they want to. The average daily trading volume for our        stock has varied significantly from week to week and from month to month, and the trading        volume often varies widely from day to day.

 

*We may        incur significant expenses as a result of being quoted on the Over the Counter Bulletin        Board, which may negatively impact our financial performance.*

 

We may        incur significant legal, accounting and other expenses as a result of being listed on the        Over the Counter Bulletin Board. The Sarbanes-Oxley Act of 2002, as well as related rules        implemented by the Commission has required changes in corporate governance practices of        public companies. We expect that compliance with these laws, rules and regulations,        including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the        following risk factor, may substantially increase our expenses, including our legal and        accounting costs, and make some activities more time-consuming and costly. As a result,        there may be a substantial increase in legal, accounting and certain other expenses in the        future, which would negatively impact our financial performance and could have a material        adverse effect on our results of operations and financial condition.

 

*Our        internal controls over financial reporting may not be considered effective, which could        result in a loss of investor confidence in our financial reports and in turn have an        adverse effect on our stock price.*

 

Pursuant to        Section 404 of the Sarbanes-Oxley Act of 2002, beginning with our annual report for the        year ending September 30, 2008, we may be required to furnish a report by our management on        our internal controls over financial reporting. Such report will contain, among other        matters, an assessment of the effectiveness of our internal controls over financial        reporting as of the end of the year, including a statement as to whether or not our        internal controls over financial reporting are effective. This assessment must include        disclosure of any material weaknesses in our internal controls over financial reporting        identified by management. If we are unable to assert that our internal controls are        effective as of September 30, 2008, investors could lose confidence in the accuracy and        completeness of our financial reports, which in turn could cause our stock price to        decline.

 

***Going        Concern***

 

The        Company’s auditors have noted substantial doubt as to the Company’s ability to        continue as a going concern as a result of an accumulated deficit of $289,589 as of        December 31, 2007. The Company’s ability to continue as a going concern is subject to        the ability of the Company to realize a profit and /or obtain funding from outside sources.        Management’s plan to address the Company’s ability to continue as a going        concern includes: (1) obtaining funding from private placement sources; (2) obtaining        additional funding from the sale of the Company’s securities; (3) establishing        revenues from developing Electrolinks’ business plan; and (4) obtaining loans and        grants from various financial institutions where possible. Although management believes        that it will be able to obtain the necessary funding to allow the Company to remain a going        concern through the methods discussed above, there can be no assurances that such methods        will prove successful.

 

24

 

----

 

**ITEM        3.**      **CONTROLS AND PROCEDURES**

 

The        Company’s president acts both as the Company’s chief executive officer and        chief financial officer and is responsible for establishing and maintaining disclosure        controls and procedures for the Company.

 

| ***(a)*** | ***Evaluation of Disclosure Controls and                        Procedures*** |
|-----------|-------------------------------------------------------------------------------|

 

Under the        supervision and with the participation of our management, including our principal executive        officer and principal financial officer, we evaluated the effectiveness of the design and        operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and        15d-15(e) under the Exchange Act, as of December 31, 2007. Based on this evaluation, our        principal executive officer and our principal financial officer concluded that, as of the        end of the period covered by this report, our disclosure controls and procedures were        effective and adequately designed to ensure that the information required to be disclosed        by us in the reports we submit under the Exchange Act is recorded, processed, summarized        and reported within the time periods specified in the applicable rules and forms and that        such information was accumulated and communicated to our chief executive officer and chief        financial officer, in a manner that allowed for timely decisions regarding        disclosure.

 

| ***(b)*** | ***Changes in Internal Controls*** |
|-----------|------------------------------------|

 

During the        period ended December 31, 2007, there has been no change in internal control over financial        reporting that has materially affected, or is reasonably likely to materially affect our        internal control over financial reporting.

 

**PART        II**

 

| **ITEM 1.** | **LEGAL PROCEEDINGS** |
|-------------|-----------------------|

 

None.

 

| **ITEM 2.** | **UNREGISTERED SALES OF EQUITY SECURITIES** |
|-------------|---------------------------------------------|

 

None.

 

| **ITEM 3.** | **DEFAULTS ON SENIOR SECURITIES** |
|-------------|-----------------------------------|

 

None.

 

| **ITEM 4.** | **SUBMISSION OF MATTERS TO A VOTE OF SECURITY                        HOLDERS** |
|-------------|--------------------------------------------------------------------------------|

 

On February        12, 2008 the Company convened a special meeting of its stockholders that was subsequently        adjourned based on quorum requirements to conduct business.

 

Stockholders were to consider (i) a proposal to change the name of the        company to “Electrolinks International Corp.”; (ii) a proposal to approve the        execution of the Business Combination Agreement, as amended, and the Amalgamation        Agreement, both dated September 18, 2007, that would cause the Company to acquire        Electrolinks; and (iii) a proposal to elect two individuals to the Company’s board of        directors.

 

The special        meeting of stockholders is scheduled to reconvene on March 7, 2008. Voting will remain open        during the adjournment.

 

25

 

----

 

| **ITEM 5.** | **OTHER INFORMATION** |
|-------------|-----------------------|

 

None.

 

| **ITEM 6.** | **EXHIBITS** |
|-------------|--------------|

 

Exhibits        required to be attached by Item 601 of Regulation S-B are listed in the Index to Exhibits        on page 28 of this Form 10-QSB, and are incorporated herein by this reference.

 

26

 

----

 

**SIGNATURES**

 

In        accordance with the requirements of the Securities Exchange Act of 1934, the registrant        caused this report to be signed on its behalf by the undersigned, hereunto duly authorized,        this 14th day of February, 2008.

 

***High        End Ventures, Inc.***

 

 

| /s/ Nadir Walji |
|-----------------|

| Nadir Walji |
|-------------|

Chief        Executive Officer, Chief Financial Officer, Principal Accounting Officer, and        Director

 

 

 

 

 

27

 

----

 

**INDEX        TO EXHIBITS**

 

| ***Exhibit*** | ***Page*** |
|---------------|------------|

| ***No.*** | ***No.*** | ***Description*** |
|-----------|-----------|-------------------|

 

| 3(i) | * Articles of Incorporation of the Company                        (incorporated herein by reference from Exhibit No. 3(i) of the                        Company’s Form SB-2 filed with the Commission on May 9,                        2006). |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 3(ii) | * By-laws of the Company (incorporated herein by                        reference from Exhibit No. 3(ii) of the Company's Form SB-2 as filed with                        the Commission on May 9, 2006). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| 10(i) | * Mineral Property Purchase Agreement (incorporated                        herein by reference from Exhibit No. 10(i) of the Company’s Form SB-2                        filed with the Commission on May 9, 2006). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 10(ii) | * Securities Exchange Agreement and Plan of Exchange                        (incorporated herein by reference from Exhibit No. 10 of the                        Company’s Form 8-K filed with the Commission on October 27,                        2006). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 10(iii) | * Business Combination Agreement among the Company,                        Electrolinks, and Power Grid, dated September 18, 2007 (with the                        accompanying Amalgamation Agreement attached as Exhibit A) (incorporated by                        reference from the Form 8-K filed with the Commission on September 25,                        2007). |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 14 | * Code of Ethics, adopted as of December 21, 2007                        (incorporated by reference from the Form 10-KSB filed with the Commission                        on December 26, 2007). |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 31 | Attached            Certification                        of the Chief Executive Officer and Chief Financial Officer pursuant to                        Section 302 of the Sarbanes-Oxley Act of 2002. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 32 | Attached            Certification                        of the Chief Executive Officer and Chief Financial Officer pursuant to 18                        U.S.C. Section 1350 as adopted pursuant to Section 906 of the                        Sarbanes-Oxley Act of 2002. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| * | Incorporated by reference from previous filings of the                        Company. |
|---|----------------------------------------------------------------------------------------|

         

         

***28***

*** ***

----

*** ***