---

---

Nevada	88-0169543
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7351-N Lockport Place, Lorton, VA	22079
(Address of principal executive offices)	(Zip Code)

 

 

PART I.  FINANCIAL INFORMATION	3
Item 1.  Financial Statements	3
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 3.  Quantitative and Qualitative Disclosures of Market Risk.	20
Item 4.  Controls and Procedures.	20
PART II.	20
Item 1.  Legal Proceedings.	20
Item 1A.  Risk Factors.	20
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.	21
Item 3.  Defaults Upon Senior Securities.	21
Item 4. (Removed and Reserved).	21
Item 5.  Other Information.	21
Item 6.  Exhibits.	21
SIGNATURES	22

 

 

 

		(unaudited)		(audited)
		September 30,		December 31,
		2011		2010
ASSETS
CURRENT ASSETS:
Cash and equivalents	$	13,470		$	-
Prepaid expenses and other current assets		17,245			32,530
Total current assets		30,715			32,530
OIL AND GAS PROPERTIES (FULL COST METHOD):
Mineral rights		30,269
Evaluated		500,000			-
Gross oil and gas properties		530,269			-
Less – accumulated depletion		-			-
Net oil and natural gas properties		530,269			-
OTHER ASSETS:
Note receivable – related party		136,425			130,795
Total other assets		136,425			130,795
TOTAL ASSETS	$	697,409		$	163,325
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	120,809		$	114,502
Accounts payable – related parties		184,083			-
Cash overdraft		-			93
Net assets available for disposal		-			397,029
Accrued expenses		44,847			534,295
Accrued interest payable		6,326			5,063
Derivative liability		50,000			77,945
Notes payable – current portion		238,000			-
Total current liabilities		644,065			1,128,927
Long term debt, less current maturities:
Accrued interest payable – related parties		10,685			30,772
Notes payable		-			600,000
Notes payable – related parties		500,000			-
Total long term liabilities		510,685			630,772
Total liabilities		1,154,750			1,881,754

 

 

 

 

DEFICIENCY IN STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share;  50,000,000 shares authorized, 32,069,433 and 10,969,433 shares issued and outstanding, respectively			323,694				109,694
Preferred stock Series A, $0.001 par value, 500,000
shares authorized, zero issued and outstanding			-				-
Preferred stock Series B, $0.001 par value, 500,000
Shares authorized, zero issued and outstanding			-				-
Stock subscription receivable			(92,000	)			(60,000	)
Additional paid in capital			11,620,555				9,735,444
Accumulated deficit			(12,309,590	)			(11,503,567	)
Total stockholders' equity			(457,341	)			(1,718,429	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	697,409			$	163,325

 

 

 

	Three months ended Sept. 30,
	2011		2010
OPERATING EXPENSES:
Administrative		196,282				113,477
Total operating expenses		196,282				113,477
(LOSS) FROM OPERATIONS		(196,782	)			(113,477	)
OTHER INCOME AND EXPENSES:
Loss on derivative adjustment		(50,000	)			-
Debt forgiveness		60,420				-
Interest expense, net		(5,979	)			(53,737	)
Total other income and expenses		4,441				(53,737	)
Net (loss)  before income taxes		(192,341	)			(167,214	)
Provision for income taxes		-				-
NET (LOSS) FROM CONTINUING OPERATIONS	$	(192,341	)		$	(167,214	)
(LOSS) FROM DISCONTINUED OPERATIONS		-				(84,129	)
NET INCOME/(LOSS)	$	(192,341	)			(251,343	)
Net income/(loss)  per common share-basic  (Note A)	$	(0.01	)		$	(12.99	)
Net income/(loss) per common stock-assuming fully diluted (Note A)		(see Note A	)		(see Note A		)
Weighted average number of common shares outstanding-basic		14,144,856				19,350
Weighted average number of common shares outstanding-fully diluted		(see Note A	)		(see Note A		)

 

 

 

	Nine months ended Sept. 30,
	2011		2010
OPERATING EXPENSES:
Administrative		754,273				203,232
Total operating expenses		754,273				203,232
(LOSS) FROM OPERATIONS		(754,273	)			(203,232	)
OTHER INCOME AND EXPENSES:
Gain on derivative adjustment		12,329				-
Debt forgiveness		60,420				-
Interest expense, net		(57,321	)			(53,737	)
Total other income and expenses		15,428				(53,737	)
Net (loss)  before income taxes		(738,845	)			(256,969	)
Provision for income taxes		-				-
NET (LOSS) FROM CONTINUING OPERATIONS	$	(738,845	)		$	(256,969	)
GAIN/(LOSS) FROM DISCONTINUED OPERATIONS		(67,178	)			1,723,454
NET INCOME/(LOSS)	$	(806,023	)			1,466,485
Net income/(loss)  per common share-basic  (Note A)	$	(0.06	)		$	60.18
Net Loss per common stock-assuming fully diluted (Note A)		(see Note A	)		$ 0.03
Weighted average number of common shares outstanding-basic		14,334,749				24,367
Weighted average number of common shares outstanding-fully diluted		(see Note A	)		51,797,513

 

 

Next Generation Energy Corporation Statements of Stockholders’ Equity
										Stock				Additional
		Common Stock								Sub.				Paid In				Accum.
		Shares				Amount				Rec.				Capital				Deficit				Total
Balance December 31, 2010			10,969,433			$	109,694			$	(60,000	)		$	9,735,444			$	(11,503,567	)		$	(1,718,429	)
Shares issued for   compensation			10,500,000				105,000				-				641,500				-				746,500
Shares issued to consultants			900,000				9,000				(32,000	)			263,000				-				240,000
Stock options issued			-				-				-				16,403				-				16,403
Gain on disposal of subsidiary			-				-				-				464,207				-				464,207
Shares issued for payment of notes payable			10,000,000				100,000				-				500,000				-				600,000
Net loss			-				-				-				-				(806,023	)			(1,079,079	)
Balance Sept. 30, 2011			32,369,433			$	323,694			$	(92,000	)		$	11,620,554			$	(12,309,590	)		$	(457,341	)

 

 

 

Next Generation Energy Corporation Statements of Cash Flows For The Nine Month Periods Ended September 30, 2011 and 2010
		(Unaudited)				(Unaudited)
		2011				2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	(806,023	)		$	1,466,485
Disposal of subsidiary			67,179				(1,572,271	)
Derivative adjustment			(27,945	)			-
Shares issued for compensation			146,500				35,000
Shares issued to consultants			240,000				-
Issuance of stock options			16,403				-
Adjustments to reconcile net income to net cash           Provided by operating activities:
Increase (decrease) in assets
Prepaid expenses and other current assets			15,285				-
Increase (decrease) in liabilities
Accounts payable			6,307				82,041
Accounts payable - related			184,083				-
Cash overdraft			(93	)			-
Accrued interest			1,263				68,903
Accrued interest – related parties			(20,087	)			-
Accrued expenses			110,552				-
Net cash flows provided (used) by operating activities			(66,576	)			60,158
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of oil and natural gas properties			(30,269	)			(40,000	)
Net cash flows (used) by investing activities			(30,269	)			(40,000	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes receivable			(5,630	)			-
Notes payable			115,945				-
Net cash flows provided by financing activities			110,315				-
NET INCREASE (DECREASE) IN CASH			13,470				20,158
CASH, BEGINNING OF PERIOD			-				509
CASH, END OF PERIOD		$	13,470			$	20,667
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest		$	-			$	-
Shares issued to settle note payable		$	600,000			$	-
Shares issued to settle accrued expenses		$	600,000			$	35,000

 

Furniture and fixtures	5 years
Office equipment	3 to 5 years
Manufacturing equipment	3 to 10 years
Buildings	40 years

 

 

 

 

 

			Sept. 30, 2011			December 31, 2010 (1)
Note payable-Forge, LLC, bearing interest at 18.00% per annum, the loan is payable at maturity in July 2012 plus accrued interest.  The note is convertible to common stock and is shown net of debt discount.  The note is secured by certain oil and gas rights owned by Knox Gas, LLC, a subsidiary of the Company.			150,000			122,055
Note payable – Asher Enterprises, bearing interest at 8.00% per annum, all principle and accrued interest is payable at maturity in March 2012.			35,000			-
Note payable – Asher Enterprises, bearing interest at 8.00% per annum, all principle and accrued interest is payable at maturity in May 2012.			53,000			-
Note payable-Knox County, LLC, bearing interest at 6.00% per annum, all principle and accrued interest is payable at maturity in March 2015			-			600,000
Notes payable-Joel Sens and Barbara Reed, bearing interest at 6% per annum, all principle and accrued interest is payable at maturity on February 21, 2016,			500,000			-
Total notes payable			738,000			722,055
Less: current maturities			238,000			122,055
Long term portion		$	500,000		$	600,000

 

 

Date of Issuance		Number of Options/Warrants				Exercise Price			Contractual Life		Weighted Average Remaining Contractual Life (Years)
January 29, 2002			300				500.00		10 years			0.33
October 22, 2010			800,000				0.30		5 years			4.00
March 30, 2011			200,000				0.30		5 years			4.50
			1,000,300									4.20

		Number of Shares				Weighted Average Price Per Share
Outstanding at December 31, 2010			800,480			$	0.41
Granted			200,000				0.30
Exercised			-				-
Canceled or expired			180			$	500.00
Outstanding at September 30, 2011			1,000,300			$	0.30

Significant assumptions (weighted-average):
Risk-free interest rate	0.72%
Expected stock price volatility	56.03%
Expected dividend payout	0%
Expected option life (in years)	4.2 years
Common share price	$0.30

 

 

●	10,000,000 shares of common stock to Darryl Reed, our chief executive officer, in satisfaction of $600,000 of accrued compensation;

●	900,000 shares to consultants valued at $240,000;

●	10,000,000 shares to Seawright Holdings, Inc. in satisfaction of a note payable to Seawright in the original principal amount of $600,000.

 

 

 

 

 

 

 

 

 

 

 

·	10,500,000 shares of common stock to Darryl Reed, our chief executive officer, in satisfaction of $746,500 of accrued compensation;

·	10,000,000 shares to Seawright Holdings, Inc. in satisfaction of a note payable to Seawright in the original principal amount of $600,000.

31*	Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer and Chief Financial Officer
32*	Certification by 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

 

	NEXT GENERATION ENERGY CORP.
Date: November 21, 2011	/s/ Darryl Reed
	By: Darryl Reed, Chief Executive Officer (principal executive officer and principal financial and accounting officer)