PFO Global, Inc. - FORM 10-Q

Attached files

file	filename
EX-31.01 - EXHIBIT 31.01 - PFO Global, Inc.	ex3101.htm
EX-32.01 - EXHIBIT 32.01 - PFO Global, Inc.	ex3201.htm
EX-31.02 - EXHIBIT 31.02 - PFO Global, Inc.	ex3102.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended March 31, 2011

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

For the Transition Period from _________ to _________

Commission file number: 333-167380

ENERGY TELECOM, INC.

(Exact name of registrant as specified in its charter)

Florida	65-0434332
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3501-B N. Ponce de Leon Blvd., #393

St. Augustine, Florida 32084

(Address of principal executive offices) (zip code)

(904) 819-8995

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x.

As of May 4, 2011, there were 6,970,471 shares of the registrant’s common stock outstanding.

ENERGY TELECOM, INC.

INDEX

PART I.	FINANCIAL INFORMATION

	ITEM 1	Financial Statements
		Balance sheets as of March 31, 2011 (unaudited) and December 31, 2010	3

		Statements of operations for the three months ended March 31, 2011 and 2010 and cumulative from inception of development stage (August 22, 2000) through March 31, 2011 (unaudited)	4

		Statements of changes in stockholders’ equity (deficiency) cumulative from inception of development stage (August 22, 2000) through March 31, 2011 (unaudited)	5

		Statements of cash flows for the three months ended March 31, 2011 and 2010 and cumulative from inception of development stage (August 22, 2000) through March 31, 2011 (unaudited)	11

		Notes to financial statements (unaudited)	12-15

	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16-20

	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	20

	ITEM 4.	Controls and Procedures	21

PART II.	OTHER INFORMATION

	ITEM 1.	Legal Proceedings	22
	ITEM 1A.	Risk Factors	22
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
	ITEM 3.	Defaults Upon Senior Securities	22
	ITEM 4.	(Reserved)	22
	ITEM 5.	Other Information	22
	ITEM 6.	Exhibits	22

	SIGNATURES		23

ENERGY TELECOM, INC.
(a development stage company)
CONDENSED BALANCE SHEETS

	March 31,			December 31,
	2011			2010
	(unaudited)
ASSETS

CURRENT ASSETS
Cash	$	197,983		$	87,643

Total assets	$	197,983		$	87,643

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	50,075		$	51,676
Stockholder notes payable		18,486			38,486

Total current liabilities		68,561			90,162

STOCKHOLDERS' EQUITY (DEFICIENCY)
Class A common stock, $0.0001 par value, 200,000,000 shares authorized, 6,927,665 and 6,282,239 shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively		693			628
Class B common stock, no par value, 10,000,000 shares authorized, 200,000 shares issued and outstanding as of March 31, 2011 and December 31, 2010		-			-
Additional paid in capital		4,670,130			4,444,637
Deficit accumulated prior to inception of development stage		(508,248	)		(508,248	)
Deficit accumulated during development stage		(4,033,153	)		(3,939,536	)
Total stockholders' equity (deficiency)		129,422			(2,519	)

Total liabilities and stockholders' equity (deficiency)	$	197,983		$	87,643

The accompany notes are an integral part of these unaudited condensed financial statements

ENERGY TELECOM, INC.
(a development stage company)
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)

							Cumulative from
							Inception of development
							Stage (August 22, 2000)
	Three months ended March 31,						Through
	2011			2010			March 31, 2011
REVENUE	$	950		$	-		$	4,652

COST OF GOODS SOLD		-			-			3,693

Gross profit		950			-			959

OPERATING EXPENSES:
Selling, general and administrative expenses		93,292			68,963			3,879,819

Loss from operations		(92,342	)		(68,963	)		(3,878,860	)

OTHER INCOME (EXPENSE):
Interest income		80			188			4,202
Interest expense		(1,355	)		(4,977	)		(105,198	)
Loss from change in derivative liability		-			(4,568	)		(41,443	)

Total other income (expense):		(1,275	)		(9,357	)		(142,439	)

Net loss before provision for income taxes		(93,617	)		(78,320	)		(4,021,299	)

PROVISION FOR INCOME TAXES
Income tax (benefit)		-			-			-

Net loss before cumulative effect of change in accounting principle		(93,617	)		(78,320	)		(4,021,299	)

Cumulative effect of change in accounting principle		-			-			(11,854	)

NET LOSS	$	(93,617	)	$	(78,320	)	$	(4,033,153	)

Net loss per common share, basic and fully diluted	$	(0.01	)	$	(0.02	)

Weighted average number of common shares outstanding, basic and fully diluted		6,678,841			5,333,713

The accompany notes are an integral part of these unaudited condensed financial statements

ENERGY TELECOM, INC.
(a development stage company)
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
CUMULATIVE FROM INCEPTION OF DEVELOPMENT STAGE (AUGUST 22,2000) THROUGH MARCH 31, 2011
(unaudited)

												Deficit			Deficit
												Accumulated			Accumulated			Total
									Additional			Prior to			During the			Stockholders'
	Class A Common Stock				Class B Common Stock				Paid in			Development			Development			Equity
	Shares		Amount		Shares		Amount		Capital			Stage			Stage			(Deficiency)
Balance, August 22, 2000 (inception of development stage)		677,914	$	68		-	$	-	$	494,562		$	(508,248	)	$	-		$	(13,618	)
Common stock issued		9,297		1		-		-		29,999			-			-			30,000
Common stock issued in connection with patent acquisitions		166,667		16		-		-		(16	)		-			-			-
Net loss		-		-		-		-		-			-			(14,289	)		(14,289	)
Balance, December 31, 2000		853,878		85		-		-		524,545			(508,248	)		(14,289	)		2,093
Common stock issued		16,667		2		-		-		21,571			-			-			21,573
Common stock issued for services rendered		60,295		6		-		-		27,540			-			-			27,546
Net loss		-		-		-		-		-			-			(45,957	)		(45,957	)
Balance, December 31, 2001		930,840		93		-		-		573,656			(508,248	)		(60,246	)		5,255
Common stock issued		169,356		17		-		-		30,434			-			-			30,451
Common stock issued for services rendered		138,825		14		-		-		306,430			-			-			306,444
Common stock issued in connection with patent acquisitions		416,667		42		-		-		(42	)		-			-			-
Net loss		-		-		-		-		-			-			(353,172	)		(353,172	)
Balance, December 31, 2002		1,655,688	$	166		-	$	-	$	910,478		$	(508,248	)	$	(413,418	)	$	(11,022	)

ENERGY TELECOM, INC.
(a development stage company)
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
CUMULATIVE FROM INCEPTION OF DEVELOPMENT STAGE (AUGUST 22,2000) THROUGH MARCH 31, 2011
(unaudited)

												Deficit			Deficit
												Accumulated			Accumulated			Total
									Additional			Prior to			During the			Stockholders'
	Class A Common Stock				Class B Common Stock				Paid in			Development			Development			Equity
	Shares		Amount		Shares		Amount		Capital			Stage			Stage			(Deficiency)
Balance, December 31, 2002		1,655,688	$	166		-	$	-	$	910,478		$	(508,248	)	$	(413,418	)	$	(11,022	)
Common stock issued		9,763		1		-		-		31,860			-			-			31,861
Common stock issued for services rendered		16,107		1		-		-		32,310			-			-			32,311
Net loss		-		-		-		-		-			-			(55,639	)		(55,639	)
Balance, December 31, 2003		1,681,558		168		-		-		974,648			(508,248	)		(469,057	)		(2,489	)
Common stock issued		8,237		1		-		-		29,999			-			-			30,000
Common stock issued for services rendered		465,400		46		-		-		1,455,755			-			-			1,455,801
Common stock issued in connection with patent acquisitions		250,000		25		-		-		(25	)		-			-			-
Net loss		-		-		-		-		-			-			(1,499,196	)		(1,499,196	)
Balance, December 31, 2004		2,405,195		240		-		-		2,460,377			(508,248	)		(1,968,253	)		(15,884	)
Common stock issued		70,000		7		-		-		39,993			-			-			40,000
Common stock issued for services rendered		55,902		6		-		-		40,855			-			-			40,861
Common stock issued in connection with patent acquisitions		11,111		1		-		-		(1	)		-			-			-
Net loss		-		-		-		-		-			-			(116,697	)		(116,697	)
Balance, December 31, 2005		2,542,208	$	254		-	$	-	$	2,541,224		$	(508,248	)	$	(2,084,950	)	$	(51,720	)

ENERGY TELECOM, INC.
(a development stage company)
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
CUMULATIVE FROM INCEPTION OF DEVELOPMENT STAGE (AUGUST 22,2000) THROUGH MARCH 31, 2011
(unaudited)

												Deficit			Deficit
												Accumulated			Accumulated			Total
									Additional			Prior to			During the			Stockholders'
	Class A Common Stock				Class B Common Stock				Paid in			Development			Development			Equity
	Shares		Amount		Shares		Amount		Capital			Stage			Stage			(Deficiency)
Balance, December 31, 2005		2,542,208	$	254		-	$	-	$	2,541,224		$	(508,248	)	$	(2,084,950	)	$	(51,720	)
Common stock issued		20,833		2		-		-		9,998			-			-			10,000
Common stock issued for services rendered		108,074		11		-		-		40,865			-			-			40,876
Common stock issued in connection with patent acquisitions		266,667		27		-		-		(27	)		-			-			-
Net loss		-		-		-		-		-			-			(77,889	)		(77,889	)
Balance, December 31, 2006		2,937,782		294		-		-		2,592,060			(508,248	)		(2,162,839	)		(78,733	)
Common stock issued		471,375		47		-		-		189,939			-			-			189,986
Common stock issued for services rendered		55,333		5		-		-		27,279			-			-			27,284
Common stock issued in connection with patent acquisitions		366,667		37		-		-		(37	)		-			-			-
Share based compensation		200,000		20		-		-		53,369			-			-			53,389
Net loss		-		-		-		-		-			-			(228,463	)		(228,463	)
Balance, December 31, 2007		4,031,157		403		-		-		2,862,610			(508,248	)		(2,391,302	)		(36,537	)
Common stock issued		397,164		40		-		-		200,506			-			-			200,546
Common stock issued pursuant to stockholder anti-dilution provision		6,240		-		-		-		-			-			-			-
Common stock issued for services rendered		60,000		6		-		-		27,656			-			-			27,662
Common stock issued in connection with patent acquisitions		200,000		20		200,000		-		(20	)		-			-			-
Share based compensation		-		-		-		-		30,538			-			-			30,538
Net loss		-		-		-		-		-			-			(243,713	)		(243,713	)
Balance, December 31, 2008, before cumulative effect of change in accounting principle		4,694,561	$	469		200,000	$	-	$	3,121,290		$	(508,248	)	$	(2,635,015	)	$	(21,504	)

ENERGY TELECOM, INC.
(a development stage company)
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
CUMULATIVE FROM INCEPTION OF DEVELOPMENT STAGE (AUGUST 22,2000) THROUGH MARCH 31, 2011
(unaudited)

												Deficit			Deficit
												Accumulated			Accumulated			Total
									Additional			Prior to			During the			Stockholders'
	Class A Common Stock				Class B Common Stock				Paid in			Development			Development			Equity
	Shares		Amount		Shares		Amount		Capital			Stage			Stage			(Deficiency)

Balance, December 31, 2008, before cumulative effect of change in accounting principle		4,694,561	$	469		200,000	$	-	$	3,121,290		$	(508,248	)	$	(2,635,015	)	$	(21,504	)
Cumulative effect of change in accounting principle		-		-		-		-		(32,426	)		-			(11,854	)		(44,280	)
Balance, January 1, 2009, after cumulative effect of change in accounting principle		4,694,561		469		200,000		-		3,088,864			(508,248	)		(2,646,869	)		(65,784	)
Common stock issued		274,192		28		-		-		157,472			-			-			157,500
Common stock issued pursuant to stockholder anti-dilution provision		117,192		12		-		-		46,166			-			-			46,178
Common stock issued for services rendered		1,200		-		-		-		600			-			-			600
Common shares to be issued for services rendered		-		-		-		-		1,300			-			-			1,300
Share based compensation		-		-		-		-		(23,088	)		-			-			(23,088	)
Net loss		-		-		-		-		-			-			(183,759	)		(183,759	)
Balance, December 31, 2009		5,087,145	$	509		200,000	$	-	$	3,271,314		$	(508,248	)	$	(2,830,628	)	$	(67,053	)

ENERGY TELECOM, INC.
(a development stage company)
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
CUMULATIVE FROM INCEPTION OF DEVELOPMENT STAGE (AUGUST 22,2000) THROUGH MARCH 31, 2011
(unaudited)

												Deficit			Deficit
												Accumulated			Accumulated			Total
									Additional			Prior to			During the			Stockholders'
	Class A Common Stock				Class B Common Stock				Paid in			Development			Development			Equity
	Shares		Amount		Shares		Amount		Capital			Stage			Stage			(Deficiency)
Balance, December 31, 2009		5,087,145	$	509		200,000	$	-	$	3,271,314		$	(508,248	)	$	(2,830,628	)	$	(67,053	)
Common stock issued		636,212		64		-		-		294,036			-			-			294,100
Common stock issued for services rendered		145,564		14		-		-		126,973			-			-			126,987
Increase in derivative liability under anti-dilution agreement		-		-		-		-		(159,901	)		-			-			(159,901	)
Mark to market of derivative instrument		-		-		-		-		39,545			-			-			39,545
Common stock issued previously classified to be issued		2,000		-		-		-		-			-			-			-
Common stock issued in connection with assumption of debt by shareholder		186,114		19		-		-		93,038			-			-			93,057
Common stock issued pursuant to stockholder anti-dilution provision		225,204		22		-		-		159,879			-			-			159,901
Share based compensation		-		-		-		-		619,753			-			-			619,753
Net loss		-		-		-		-		-			-			(1,108,908	)		(1,108,908	)
Balance, December 31, 2010		6,282,239	$	628		200,000	$	-	$	4,444,637		$	(508,248	)	$	(3,939,536	)	$	(2,519	)

ENERGY TELECOM, INC.
(a development stage company)
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
CUMULATIVE FROM INCEPTION OF DEVELOPMENT STAGE (AUGUST 22,2000) THROUGH MARCH 31, 2011
(unaudited)

											Deficit			Deficit
											Accumulated			Accumulated			Total
									Additional		Prior to			During the			Stockholders'
	Class A Common Stock				Class B Common Stock				Paid in		Development			Development			Equity
	Shares		Amount		Shares		Amount		Capital		Stage			Stage			(Deficiency)
Balance, December 31, 2010		6,282,239	$	628		200,000	$	-	$	4,444,637	$	(508,248	)	$	(3,939,536	)	$	(2,519	)
Common stock issued		617,426		62		-		-		209,896		-			-			209,958
Common stock issued for services rendered		28,000		3		-		-		15,597		-			-			15,600
Net loss		-		-		-		-		-		-			(93,617	)		(93,617	)
Balance, March 31, 2011		6,927,665	$	693		200,000	$	-	$	4,670,130	$	(508,248	)	$	(4,033,153	)	$	129,422

The accompany notes are an integral part of these unaudited condensed financial statements

ENERGY TELECOM, INC.
(a development stage company)
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)

							Cumulative from
							Inception of development
							Stage (August 22, 2000)
	Three months ended March 31,						Through
	2011			2010			March 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(93,617	)	$	(78,320	)	$	(4,033,153	)
Adjustments to reconcile net loss to net cash used in operating activities:
Cumulative effect of change in accounting principle		-			-			11,854
Common stock issued for services rendered		15,600			3,188			2,103,272
Change in fair value of derivative liability		-			4,568			41,443
Share based compensation		-			-			680,592
Changes in operating assets and liabilities:
(Decrease) increase in accounts payable and accrued expenses		(1,601	)		4,977			125,296
Net cash used in operating activities		(79,618	)		(65,587	)		(1,070,696	)

CASH FLOWS FROM INVESTING ACTIVITIES:		-			-			-

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock		209,958			109,600			1,245,975
Proceeds from issuance of shareholder loans		-			-			91,615
Repayments of shareholder loans		(20,000	)		(3,000	)		(73,129	)
Net cash provided by financing activities		189,958			106,600			1,264,461

Net Increase (decrease) in cash and cash equivalents		110,340			41,013			193,765

Cash and cash equivalents, beginning of period		87,643			82,355			4,218
Cash and cash equivalents, end of period	$	197,983		$	123,368		$	197,983

Supplemental disclosures of cash flow information:
Interest paid	$	-		$	-		$	-
Taxes paid	$	-		$	-		$	-

Non cash financial activities
Common stock issued to shareholder on assumption of debt obligation	$	-		$	93,057		$	93,057

The accompany notes are an integral part of these unaudited condensed financial statements

ENERGY TELECOM, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2011 AND 2010

(unaudited)

NOTE 1 — NATURE OF OPERATIONS/BASIS OF PRESENTATION

Energy Telecom, Inc. (a development stage company) (the “Company”), formerly The Energy Corp., is an intellectual property exploitation company planning to provide patent protection to its manufacturing business partners so the Company may manufacture, market, distribute and sell worldwide a family of eyewear products delivering a full range of audio and optical information to mobile workers and recreational eyewear users. The Company also manages and coordinates the process of its manufacturing business partners in manufacturing the product. The Company’s Class A common stock trades from time to time on the over-the-counter-bulletin-board ("OTCBB") under the symbol “ENRG.OB”.

The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim condensed financial information and Rule 8-03 of Regulation S-X. Accordingly, these interim financial statements do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements.

All adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included in these unaudited interim condensed financial statements. Operating results for the three month period presented are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The balance sheet at December 31, 2010 has been derived from audited financial statements. The unaudited interim condensed financial statements should be read in conjunction with the financial statements and footnotes thereto for the year ended December 31, 2010 and cumulative from inception of development stage (August 22, 2000) through December 31, 2010.

NOTE 2 — GOING CONCERN

The accompanying unaudited interim condensed financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As shown in the accompanying financial statements, the Company has earned minimal revenues, has had recurring net losses, and has a deficit accumulated during development stage (August 22, 2000) through March 31, 2011 totaling $4,033,153. In addition, the Company’s notes payable to its officer/director are due on demand. If the notes were to be called, the Company may be unable to meet these obligations. Also, the Company is in a position where its current cash on hand may not be adequate to cover all of its operating expenses. Further, no assurance can be given that the Company will maintain its cost structure as presently contemplated or raise additional capital on satisfactory terms. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The unaudited interim condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company plans on issuing the remaining authorized but unissued shares to the extent available and to obtain debt financing to generate cash to cover short-falls in working capital as it continues to develop its products and operations. The Company expects that when it emerges from its development stage, operations will generate working capital sufficient to allow it to continue as a going concern.

NOTE 3 — SIGNIFICANT ACCOUNTING POLICIES

DEVELOPMENT STAGE COMPANY

Effective August 22, 2000, the Company is considered a development stage company as defined by ASC 915 “Development Stage Entities,” as its operations from the inception of the development stage (August 22, 2000) have been devoted primarily to strategic planning, raising capital and developing revenue-generating opportunities through the acquisition and development of its patents. In July 2010 the Company’s principal sales operations commenced with the sale of a limited supply of the Company’s protective eyewear, but the Company has recognized no significant revenues therefrom.

USE OF ESTIMATES

The preparation of these unaudited interim condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures in the financial statements. Accordingly, actual results could differ from these estimates

ENERGY TELECOM, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2011 AND 2010

(unaudited)

NOTE 3 — SIGNIFICANT ACCOUNTING POLICIES (Continued)

CASH AND CASH EQUIVALENTS

The Company considers financial instruments with an original maturity date of three months or less to be cash equivalents. The Company had no cash equivalents at March 31, 2011 and December 31, 2010.

REVENUE RECOGNITION

The Company recognizes revenue on four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (4) is based on management’s judgments regarding the fixed nature of the fee charged for services rendered and products delivered and the collectability of those fees. Revenue is generally recognized upon shipment. Revenue recognized in the three months ended March 31, 2011 relate to sales of product which had previously been expensed and used as sample units; therefore, there is no cost of goods associated with these sales.

SHARE-BASED COMPENSATION

Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees using the stock price observed in the arms-length private placement transaction nearest the measurement date (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete.

NET LOSS PER COMMON SHARE

Basic loss per share (“EPS”) is computed by dividing the net loss attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted loss per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock, such as stock options and warrants (using the “treasury stock” method), unless their effect on net loss per share is antidilutive. The effect of computing diluted loss per share is antidilutive and, as such, basic and diluted loss per share is the same for the three months ended March 31, 2011 and 2010.

RECENT ACCOUNTING PRONOUNCEMENTS

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

NOTE 4 — FINANCIAL INSTRUMENTS

CONCENTRATIONS OF CREDIT RISK

The Company’s financial instrument that is exposed to a concentration of credit risk is cash. Effective December 31, 2010 and extending through December 31, 2012, all non-interest-bearing transaction accounts are fully insured by the Federal Deposit Insurance Corporation (FDIC), regardless of the balance of the account. Generally, the Company’s cash and cash equivalents in interest-bearing accounts exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management.

ENERGY TELECOM, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2011 AND 2010

(unaudited)

NOTE 5 — STOCKHOLDER NOTES PAYABLE

The Company has received financing from the Company’s founder, Chief Executive Officer, President and majority stockholder (the “officer/director”). The stockholder notes bear interest of 10% per annum, compounding annually and are due on demand.

The following table summarizes stockholder notes payable as of March 31, 2011 (unaudited) and December 31, 2010:

	March 31, 2011		December 31, 2010
Notes payable, due on demand, interest at 10%	$	18,486	$	38,486
Accrued interest		29,717		28,362
	$	48,203	$	66,848

The Company recognized interest expense associated with the notes of $1,355 and $1,529 for the three months ended March 31, 2011 and 2010, respectively, and $29,717 for the period from inception of development stage (August 22, 2000) through March 31, 2010.

NOTE 6 — STOCKHOLDERS’ EQUITY

PRIVATE PLACEMENTS

During the three month period ended March 31, 2011 the Company completed private placements of 617,426 shares of Class A common stock and has received proceeds totaling $209,958.

SHARES ISSUED TO CONSULTANTS

During the three month period ended March 31, 2011, the Company issued an aggregate of 28,000 shares of Class A common stock to consultants in exchange for services rendered with a fair value totaling $15,600.

NOTE 7 — COMMITMENTS AND CONTINGENCIES

LITIGATION

The Company may, from time to time, become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.

NOTE 8— RELATED PARTY TRANSACTIONS

The Company has an operating lease agreement for office space with the Company's Chief Executive Officer and director who has agreed to sublet space to the Company for a fixed fee of $1,750 on a month-to-month basis. Total rent expense for each of the three months ended March 31, 2011 and 2010 was $5,250.

As discussed in Note 5 above, the Company has received financing from the Company’s Chief Executive Officer, director, founder and majority stockholder. The stockholder loans bear interest of 10% per annum, compounding annually and are due on demand. During the three months ended March 31, 2011, the Company paid an aggregate of $20,000 as partial payment against the note.

ENERGY TELECOM, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2011 AND 2010

(unaudited)

NOTE 9 — DEPENDENCY ON KEY MANAGEMENT

The future success or failure of the Company is dependent primarily upon the continued services and efforts of its Chief Executive Officer, director and founder. The ability of the Company to pursue its business strategy effectively will also depend upon, among other factors, the successful recruitment and retention of additional highly skilled and experienced managerial, marketing, engineering and technical personnel. There can be no assurance that the company will be able to retain or recruit such personnel.

NOTE 10 — SUBSEQUENT EVENTS

On April 15, 2011, the Company issued an aggregate of 17,000 shares of its Series A common stock to consultants in exchange for services rendered valued at $16,320.

On April 15, 2011 the Company completed a private placement of 12,903 shares of Class A common stock and has received proceeds totaling $10,000.

On April 28, 2011 the Company completed a private placement of 12,903 shares of Class A common stock and has received proceeds totaling $10,000.

On May 3, 2011, the Company entered into a one year employment agreement with Tom Rickards, Chief Executive Officer, director and founder whereby an annual compensation of $36,000, which may be increased up to $50, 000 by mutual agreement and dependent on the financial strength of the company. In addition, Mr. Rickards is to receive 200,000 shares of series A common stock payable in equal installments at the end of each calendar quarter and a $600 per month car allowance.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management's current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of our management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for materials, and competition.

Overview

We were incorporated on September 7, 1993 under the laws of the State of Florida as The Energy Corp. On April 24, 2004, we changed our name to Energy Telecom, Inc.

We hold U.S. and foreign patents allowing for the manufacture, marketing and distribution of a hands-free, wireless communication eyewear providing quality sound and noise attenuation.

We are a development stage entity under ASC 915. ASC 915 defines a development stage entity as an entity devoting substantially all of its efforts to establishing a new business and for which either of the following conditions exists: a. planned principal operations have not commenced, or b. planned principal operations have commenced, but there has been no significant revenue there from. ASC 915 further states, a development stage entity will typically be devoting most of its efforts to activities such as the following: a. financial planning, b. raising capital, c. exploring for natural resources, d. developing natural resources, e. research and development, f. establishing sources of supply, g. acquiring property, plant, equipment, or other operating assets, h. recruiting and training personnel, i. developing markets, j. starting up production. Although certain aspects of the Company’s planned principal operations have commenced, they have been limited to the activities specified by ASC 915 as those typical of development stage entities. Further, these activities have generated minimal revenues since inception of the development stage.

Development took an extraordinary time, as we found that the integrated circuits (Bluetooth chips in particular), and the energy density of batteries in the early 2000's, did not permit construction of an eyewear small enough, and light enough to be found acceptable in the marketplace. When those components proved small and light enough (about 2006-2007), development of the eyewear itself began. The period from the early 2000's to that time were spent in broadening our patent portfolio by adding five European countries in which our claims are protected (Great Britain, France, Italy, Spain, and Germany), and, developing the protocols that could be used in each new version of the Bluetooth specification. During the time from 2000 to 2010, the design was continually evolved by extensive testing and field trials on various iterations of prototypes, as they became smaller, lighter, and more comfortable. Those findings were incorporated in the design used in our eyewear at this time.

We are hoping to exit the development stage as we are transitioning to production since we have begun to sell our product. We have produced the world's first hands-free two-way, sound attenuating wireless telecommunication eyewear, intended for use by police, fire, rescue, military and security personnel as well as bio-hazard, construction and heavy-manufacturing workers. Additionally, the eyewear will be used by those on cell and smart phones for consumer and commercial (business-to-business) markets. In conjunction with our manufacturing partner, Samsin USA, we have obtained safety lenses made by UVEX (a division of Honeywell Safety Products) and ear plugs produced by Howard Leight, to create our telecom eyewear. In June 2010, we began to receive orders for our telecom eyewear, which revenue was not realized until the product was shipped in July 2010.

After further testing and feedback from our initial purchasers, we intend to market the eyewear to police, fire, rescue, military and security personnel, as well as companies in bio-hazardous, mining, construction and heavy manufacturing that utilize VHF and UHF radio communication. We believe our eyewear will also be in demand by those using cellular and smart phones for voice communication, and for listening to high-fidelity streaming stereo.

Current Operating Trends and Financial Highlights

Management currently considers the following events, trends and uncertainties to be important in understanding our results of operations and financial condition during the current fiscal year:

	·	During the year ended December 31, 2010, we initiated a trial program of purchasing and sales of our eyewear, which was done through a merchant account on Amazon.com. After conducting sufficient testing of pricing and consumer reviews, we closed the merchant account and intend to no longer stock inventory, with all future sales to be handled by distributors.
	·	Qmadix presented our eyewear at the Consumer Electronics Show in Las Vegas, Nevada in January 2011 and will do also present at the International CTIA Wireless convention in Orlando, Florida in March 2011. At the show, Qmadix will be presenting the final review eyewear to various cellular network and cellular retail suppliers which expressed interest in sell the eyewear for business-to-business commercial customers.
	·	Our partners have developed samples of polarized and 3D eyewear lenses for use with our telecom eyewear. These new lenses would be able to be secured into place and removed at the user’s convenience. Samples of both lenses have been submitted for testing. If testing is completed and they are ready for sale, we intend to display the prototypes at the International CTIA Wireless convention.
	·	We expect that purchase orders for the telecom eyewear will be received in the next few months as Qmadix continues to feature the eyewear and discussions with interested retailers are completed.
	·	During the next six months, we will continue to expand our potential markets through patent filings, including a filing that will protect our product for potential sales in Japan and South Korea;
	·	Recent research has indicated that there may be long-term health hazards from radiation relating to the use of cellular telephones. We intend to aggressively market our product as an alternative to cell phone usage as our product produces between 1/100th and 1/200th of the radiation of typical cell phones; and
	·	Escalating tensions between North Korea and South Korea could disrupt our operations. The telecommunication eyewear frames are manufactured by Samsin Innotec, which has plants in South Korea. In addition, all the components are shipped to South Korea, where they are assembled and tested, and then shipped out as a product ready for sale.

Results of Operations

The following discussion of the financial condition and results of operations should be read in conjunction with the financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.

Three months ended March 31, 2011 compared to the three months ended March 31, 2010

Revenue

We generated $950 in revenue for the three months ended March 31, 2011 compared to $0 for the three months ended March 31, 2010. Sales for the three months ended March 31, 2011 were primarily direct sales made to consumers on a limited trial basis. We expect to have a significant increase in revenue in 2011 as we have completed our primary research and development, the product is ready for sale, and we have received eight significant requests about our product from national marketers that have expressed interest in making purchase orders. In addition, we continue to seek distributors for our product, and have an informal relationship with Qmadix that we anticipate will be memorialized in writing in the near future. Our cost of sales was $-0- since our limited sales were from our sample/ product testing supplies previously expensed, netting gross profit of $950.

Expenses

For the three months ended March 31, 2011 and 2010, selling, general and administrative expenses totaled $93,292 and $68,963, respectively.

A summary comparison for the three months ended March 31, 2011 and 2010 is as follows:

	2011		2010
Professional fees	$	55,253	$	14,382
Office and utilities		12,570		17,057
Travel and promotion		5.971		6,659
Salaries and related taxes		9,817		9,974
Patents and trademarks		6,651		19,284
Other		3,030		1,607
Total	$	93,292	$	68,963

The primary increase in selling, general and administrative are due to our incurred professional costs for the three months ended March 31, 2011 of $55,253 as compared to $14,382 for the same period last year, a $40,871 increase. The increase is due to the timing of our annual audit, SEC counsel legal fees and non cash accounting consulting services.

Other Income and Expenses

For the three months ended March 31, 2011, we incurred $1,355 in interest expense which was offset by $80 in interest income compared to $4,977 in interest expense and $4,568 in derivative instrument expense, which was offset by $188 in interest income for three months ended March 31, 2010.

Interest expense decreased by $3,622 primarily due to reduction in notes payable settled in 2010. The decrease in derivative instrument expense during 2010 was a result of the adjustments in our past obligation under a shareholder anti-dilution agreement, which we were required to treat as a derivative instrument and which has since been settled. During the fourth quarter of 2010, we issued 225,204 shares of our common stock in full and final settlement of our obligation under the anti-dilution agreement.

Net Loss

For the three months ended March 31, 2011, we incurred a net loss of $93,617 ($0.01 per share of common stock) as a result of the foregoing, compared to a net loss of $78,320 ($0.02 per share of common stock) for the three months ended March 31, 2010.

Liquidity and Capital Resources

As of March 31, 2011, we had working capital of $129,422. For the three months ended March 31, 2011, we used $79,618 in cash in operating activities. Cash provided by financing activities totaled $189,958 primarily from the sale of common stock, net of repayments of shareholder loans of $20,000. From time to time since our formation in 1993, we have sold shares to investors in private placement transactions. For the three months ended March 31, 2011, we sold an aggregate of 617,426 shares of our common stock for $209,958 in nine different transactions. Except for anti-dilution protection provided to one shareholder in connection with investments made in 2007 and 2008, our financing transactions have not contained additional equity components (such as warrants) nor provide the investors with rights (such as piggyback or demand registration rights).

We expect to incur expenditures during the next 12 months, contingent upon raising capital. These anticipated expenditures are for marketing, advertising, inventory, equipment and overhead. We believe that we have sufficient funds to conduct our proposed operations for approximately three months, depending on revenues, but not for 12 months or more. If we are unable to raise any additional funds, we have sufficient capital for about six months of operation. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. However, based on years of experience of financing operations through the sale of securities, we believe we will generate sufficient capital to meet our needs for the next 12 months.

Although there are no assurances that we will be able to raise additional funds through the sale of securities, in the first three months of 2011 we raised approximately $210,000 (or 92%) more than from the sale of securities that we achieved for the for the same period last year. In addition, as we move from development to actual operations, we believe it is more likely that investors will be willing to fund operations in the short-term. The private placements that occurred since January 2011 were with accredited investors that contacted us, either because they previously invested with us or were referred to us by word of mouth from existing investors, with approximately 50% of the investors in that period representing investors who had previously invested in our company. For each private placement, we negotiate the price per share with such potential investor, based upon the amount of money the potential investor desires to invest, recent trading activity and the current price of our common stock. Other than one significant investor who previously received anti-dilution protection, we have not granted any investors any sort of different terms in our private placements.

Other than possible family relationships between the existing and new investors, we are not aware of any material relationships between new and existing investors. We have not engaged in any sort of solicitation of potential investors. None of our advisors or consultants have been involved in any sort of fundraising activities on our behalf.

In addition, we are not relying upon future revenues to provide us the liquidity necessary to continue operations.

We do not currently have a sufficient amount of cash to cover our proposed operating costs. Our fixed operating expenses have been and are expected to continue to outpace revenue resulting in additional losses in the near term. By adjusting our operations to our current level of capitalization, we believe we have sufficient capital resources to meet projected cash flow deficits for at least 3 months. However, if during that period, or thereafter, we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations, liquidity and financial condition.

As of March 31, 2011, we had working capital of $129,422. At our current rate, we use about $26,500 per month for continuing operations, which includes general operating expenses (office lease, utilities, salary and insurance), promotion and marketing (travel, entertainment, meals and website development), prototype development (parts, engineering and testing), and professional services (accounting, legal, professional and state fees and intellectual property fees). We expect that our burn rate will increase to $30,000 per month by the end of the 2011, as we anticipate increased promotion and marketing expenses as we promote and market our products, including the attendance at approximately three to five industry trade shows and events.

If we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, it could have a material adverse effect on our business, results of operations, liquidity and financial condition.

We presently do not have any available credit, bank financing or other external sources of liquidity. Due to our brief history and historical operating losses, our operations have not been a source of liquidity. We will need to obtain additional capital in order to develop operations and become profitable. In order to obtain capital, we may need to sell additional shares of common stock or borrow funds from private lenders pursuant to instruments which are junior to our outstanding secured debt instruments. There can be no assurance that we will be successful in obtaining additional funding.

We will still need additional financing in order to continue operations. Additional financings are being sought, but we cannot guarantee that we will be able to obtain such financings. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the low trading price of our common stock and a downturn in the U.S. stock and debt markets is likely to make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail or cease our operations

Our independent registered public accounting firm, in their report dated March 10, 2011 on our financial statements as of and for the year ended December 31, 2010, have included an emphasis of matter paragraph with respect to our ability to continue as a going concern. The existence of such a report may adversely affect our stock price and our ability to raise capital.

Loans Payable to Related Party

From time to time, we have received financing from Thomas Rickards, our Chief Executive Officer and sole Director. The stockholder loans bear interest of 10% per annum, compounding annually and are due on demand.

Critical Accounting Policies

The accounting policies identified as critical are as follows:

Development Stage Company

Effective August 22, 2000, we are considered a development stage company as defined by Accounting Standards Codification ("ASC") subtopic 915 “Development Stage Entities,” as our operations from the inception of the development stage (August 22, 2000) have been devoted primarily to strategic planning, raising capital and developing revenue-generating opportunities through the acquisition and development of its patents. In July 2010, our principal sales operations commenced with the sale of a limited supply of our protective eyewear, but we recognized no significant revenues therefrom.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Revenue Recognition

We recognize revenue on four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (4) is based on management’s judgments regarding the fixed nature of the fee charged for services rendered and products delivered and the collectability of those fees. Revenue is generally recognized upon shipment. Revenue recognized in the three months ended March 31, 2011 relate to sales of product which had previously been expensed and used as sample units.

Cash and Cash Equivalents

We consider financial instruments with an original maturity date of three months or less to be cash equivalents.

Share-Based Compensation

Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. We measure the fair value of the share-based compensation issued to non-employees using the stock price observed in the arms-length private placement transaction nearest the measurement date (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete.

Net Loss per Common Share

Basic loss per share computed by dividing the net loss attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted loss per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock, such as stock options and warrants (using the “treasury stock” method), unless their effect on net loss per share is antidilutive. The effect of computing diluted loss per share is antidilutive and, as such, basic and diluted loss per share is the same for the three months ended March 31, 2011 and 2010.

Recently Issued Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our financial position, results of operations or cash flows.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required under Regulation S-K for “smaller reporting companies.”

ITEM 4 - CONTROLS AND PROCEDURES

a) Evaluation of disclosure controls and procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as of March 31, 2011. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our chief executive officer and chief financial officer concluded that, as a result of the material weaknesses described below, as of March 31, 2011, our disclosure controls and procedures are not designed at a reasonable assurance level and are ineffective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. The material weaknesses, which relate to internal control over financial reporting, that were identified are:

a)	We did not have sufficient personnel in our accounting and financial reporting functions. As a result we were not able to achieve adequate separation of duties and were not able to provide for adequate reviewing of the financial statements. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis; and

b)	We did not maintain sufficient personnel with an appropriate level of technical accounting knowledge, experience, and training in the application of U.S. GAAP commensurate with out complexity and our financial accounting and reporting requirements. This control deficiency is pervasive in nature. Further, there is a reasonable possibility that material misstatements of the financial statements including disclosures will not be prevented or detected on a timely basis as a result.

We are committed to improving our accounting and financial reporting functions. As part of this commitment, we will create a segregation of duties consistent with control objectives and will look to increase our personnel resources and technical accounting expertise within the accounting function by the end of fiscal 2011 to appropriately address non-routine or complex accounting matters. In addition, we have engaged an outside accounting firm and a new consultant to provide additional knowledgeable personnel with technical accounting expertise to further support the current accounting personnel at the Company.

Management believes that hiring additional knowledgeable personnel with technical accounting expertise will remedy the following material weaknesses: (A) lack of sufficient personnel in our accounting and financial reporting functions to achieve adequate segregation of duties; and (B) insufficient personnel with an appropriate level of technical accounting knowledge, experience, and training in the application of US GAAP commensurate with our complexity and our financial accounting and reporting requirements.

Management believes that the hiring of additional personnel who have the technical expertise and knowledge with the non-routine or technical issues we have encountered in the past will result in both proper recording of these transactions and a much more knowledgeable finance department as a whole. Due to the fact that our accounting staff consists of a Chief Financial Officer and an accounting clerk, additional personnel will also ensure the proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support us if personnel turnover issues within the department occur. We believe this will greatly decrease any control and procedure issues we may encounter in the future.

We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

(b) Changes in internal control over financial reporting.

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

Effective January 1, 2011, we entered into a one-year consulting agreement with Steve Chaussy to provide accounting and auditing services in connection with our public reporting obligations. Mr. Chaussy is a certified public accountant and a former chief financial officer for a publicly-traded company. We believe Mr. Chaussy has an extensive knowledge and experience with U.S. GAAP financial accounting required for a publicly traded company and also provides an independent level of review and check on the current accounting personnel. Other than the engagement of Mr. Chaussy, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are currently not a party to any material legal proceedings or claims.

Item 1A. Risk Factors

Not required under Regulation S-K for “smaller reporting companies.”

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On January 7, 2011, we issued 88,889 shares of our common stock to one accredited investor for $20,000. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act of 1933, as amended.

On January 27, 2011, we issued 186,666 shares of our common stock to three accredited investors for $70,000. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act of 1933, as amended.

On February 9, 2011, we issued 233,300 shares of our common stock to three accredited investors for $84,958. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act of 1933, as amended.

On February 25, 2011, we issued 108,571 shares of our common stock to two accredited investors for $35,000. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act of 1933, as amended.

During the three month period ended March 31, 2011, we issued an aggregate of 28,000 shares of Class A common stock to consultants in exchange for services rendered with a fair value totaling $15,600. The securities were issued in transactions pursuant to Section 4(2) and/or Regulation D under the Securities Act of 1933, as amended.

* All of the above offerings and sales were deemed to be exempt under either rule 506 of Regulation D and Section 4(2) or Rule 902 of Regulation S of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of Energy Telecom or executive officers of Energy Telecom, and transfer was restricted by Energy Telecom in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment. Except as expressly set forth above, the individuals and entities to whom we issued securities as indicated in this section are unaffiliated with us.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Reserved

Item 5. Other Information.

None.

Item 6. Exhibits

31.01

Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02

Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.01

Certifications of 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.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ENERGY TELECOM, INC.

Date: May 5, 2011	By:	/s/ THOMAS RICKARDS
		Thomas Rickards
		Chief Executive Officer (Principal Executive Officer)


Date: May 5, 2011	By:	/s/ RONNY HALPERIN
		Ronny Halperin
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

PFO Global, Inc. - FORM 10-Q - May 5, 2011

Attached files

PFO Global, Inc. Reports