UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~December~~ March 31, ~~2011~~ 2012

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

For the transition period from _____________

Commission File No.

000-52865

	NUGEN HOLDINGS, INC. (Exact name of Registrant as specified in its charter)

Delaware	26-1946130
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
44645 Guilford Drive, Suite 201
Ashburn, VA	20147
(Address of principal executive offices)	(Zip Code)

(703) 858-0036

(Registrant’s telephone number, including area code)

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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No ¨

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. (Check one):

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨

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

Common stock outstanding ($.001 par value) as of ~~February~~May 1514, 2012: 57,081,702 shares.

NUGEN HOLDINGS, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements		3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		4
Item 3. Quantitative and Qualitative Disclosures About Market Risk		1011
Item 4. Controls and Procedures		1012
PART II -OTHER INFORMATION
Item 1. Legal Proceedings.		1012
Item 1A. Risk Factors		1112
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		1112
Item 3. Defaults Upon Senior Securities.		1112
Item 4. Removed and Reserved		11
Item 4. Mine Safety Disclosures		12
Item 5. Other Information		1112
Item 6. Exhibits		1112
SIGNATURES		12

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NUGEN HOLDINGS, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of ~~December~~March 31, ~~2011~~2012

(UNAUDITED)

Table of Contents

		Page #
FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS		F-1

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS		F-2

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT		F-3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS		F-4

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS		F-5

NUGEN HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,			September 30,
	March 31,			September 30,
	2011			2011
	2012			2011
	(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents	$	30122,~~445~~465		$	97,564
Accounts receivable, net of allowance for doubtful accounts of $109,901 and $109,901 at December 31, 2011 and September 30, 2011		192,329			95,237
Accounts receivable, net of allowance for doubtful accounts of $134,901 and $109,901 at March 31, 2012 and September 30, 2011		61,135			95,237
Prepaid expenses		123,~~452~~776			11,499
Inventories		~~102~~87,~~625~~061			118,761
Total current assets		~~337~~274,~~851~~437			323,061
Machinery & equipment, net		4440,~~106~~260			47,953
Other assets		12,960			12,960
	$	~~394~~327,~~917~~657		$	383,974
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current portion of long term liabilities	$	608,722		$	609,082
Notes payable	$	596,108		$	609,082
Convertible notes		7050,000			70,000
Demand note payable		3,500			-
Bridge notes payable		49,000			-
Accounts payable and accrued expenses		~~707~~799,~~366~~112			524,892
Customer deposits		1215,~~705~~314			475
Accounts payable and accrued expenses-related parties		~~497~~578,~~705~~033			408,272
Total current liabilities		12,~~948~~091,~~998~~067			1,612,721
Long-term notes payable		~~10,371~~-			13,036
Total liabilities		12,~~959~~091,~~369~~067			1,625,757
Commitments and contingencies		-			-
Stockholders' deficit
Preferred stock - $0.001 par value; 50,000,000 shares authorized, 14,645,000 designated as Series B, 35,355,000 undesignated shares:
Series B - 14,645,000 shares designated, 1,738,889 and 1,627,778 shares issued and outstanding		1,739			1,628
Common stock - $0.001 par value; 200,000,000 shares authorized, 56,966,564 and 56,966,564 shares issued and outstanding		56,967			56,967
Common stock - $0.001 par value; 200,000,000 shares authorized, 57,081,702 and 56,966,564 shares issued and outstanding		57,082			56,967
Additional paid-in capital		5,~~112~~137,~~138~~309			5,081,927
Accumulated deficit		(6,~~735~~959,~~296~~540	)		(6,382,305	)
Total stockholders' deficit		(1,~~564~~763,~~452~~410	)		(1,241,783	)
	$	~~394~~327,~~917~~657		$	383,974

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

F-1

NUGEN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended						For the Six Months Ended
	December 31,
	March 31,						March 31,
	2011			2010
	2012			2011			2012			2011
Revenues	$	~~183~~246,~~677~~206		$	~~690~~308,~~482~~712		$	429,883		$	999,194
Direct costs		2827,~~029~~613			~~419~~61,~~751~~772			55,642			481,523
Direct labor		~~200~~180,~~021~~457			~~289~~190,~~178~~512			380,478			479,690
Gross loss		(44,373	)		(18,447	)
Gross profit ( loss)		38,136			56,428			(6,237	)		37,981
Operating expenses
Compensation		~~188~~169,~~412~~054			~~218~~219,~~841~~929			357,466			438,770
Rent & office		4025,~~639~~643			4131,~~921~~812			66,282			73,733
Professional fees		259,~~998~~306			2044,~~462~~088			35,304			64,550
Travel expenses		229,~~739~~834			7940,~~191~~151			32,573			119,342
Other general and administrative expenses		19,209			31,637
Bad debt expense		25,000			-			25,000			-
Total operating expenses		296,997			392,052
Other general and administrative expenses		16,584			20,153			35,793			51,790
Net loss from operations		(341,370	)		(410,499	)
Total operating expenses		255,421			356,133			552,418			748,185
Other income (expense)
Net loss from operations		(217,285	)		(299,705	)		(558,655	)		(710,204	)
Interest income		3			154
Other income and (expense)
Interest expense		(11,624	)		(10,916	)
Interest income		3			25			6			179
Total other (expense)		(11,621	)		(10,762	)
Gain on debt extinguishment		6,566			-			6,566			-
Net loss		(352,991	)		(421,261	)
Interest expense		(13,528	)		(9,761	)		(25,152	)		(20,677	)
Preferred stock dividends		(5,987	)		-
Total other income and (expense)		(6,959	)		(9,736	)		(18,580	)		(20,498	)
Net loss available to common shareholders	$	(358,978	)	$	(421,261	)
Net loss		(224,244	)		(309,441	)		(577,235	)		(730,702	)
Net loss per share - basic and diluted	$	(0.01	)	$	(0.01	)
Preferred stock dividends		(2,374	)		-			(8,361	)		-
Weighted average number of shares outstanding during the period - basic and diluted		56,966,564			55,998,140
Net loss available to common shareholders	$	(226,618	)	$	(309,441	)	$	(585,596	)	$	(730,702	)
Net loss per share - basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
Weighted average number of shares outstanding during the period - basic and diluted		57,075,305			56,754,758			57,020,337			56,372,292

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

F-2

NUGEN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

FROM OCTOBER 1, 2011 TO ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

	Preferred Stock- Series B				Common Stock				Additional
	Number of Shares		Par Value		Number of Shares		Par Value		Paid-in Capital		Accumulated Deficit			Total
Balance at October 1, 2011		1,627,778	$	1,628		56,966,564	$	56,967	$	5,081,927	$	(6,382,305	)	$	(1,241,783	)
Issuance of preferred stock for cash		111,111		111						19,889					20,000
Vesting of stock options										10,322					10,322
Conversion of debt to common stock						115,138		115		20,610					20,725
Net loss from October 1, 2011 to December 31, 2011												(352,991	)		(352,991	)
Vesting of stock options										14,883					14,883
Balance at December 31, 2011		1,738,889	$	1,739		56,966,564	$	56,967	$	5,112,138	$	(6,735,296	)	$	(1,564,452	)
Net loss from October 1, 2011 to March 31, 2012												(577,235	)		(577,235	)
Balance at March 31, 2012		1,738,889	$	1,739		57,081,702	$	57,082	$	5,137,309	$	(6,959,540	)	$	(1,763,410	)

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

F-3

NUGEN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For Three Months Ended
	For Six Months Ended
	December 31,
	March 31,
	2011			2010
	2012			2011
Cash flows from operating activities:
Net loss	$	(~~352~~577,~~991~~235	)	$	(~~421~~730,~~261~~702	)
Adjustments to reconcile net loss to net cash used in operating activities:
Vesting of stock options		1014,~~322~~883			919,~~955~~910
Depreciation expense		37,~~847~~693			25,~~891~~782
Gain on debt extinguishment		(6,566	)		-
Bad debt expense		25,000			-
Changes in operating assets and liabilities:
Accounts receivable		~~(97~~9,~~092~~102	)		(~~213~~229,~~223~~924	)
Prepaid expenses		~~(953~~7,723	)		(331,~~359~~346	)
Inventories		1631,~~136~~700			7044,~~082~~499
Accounts payable and accrued expenses		~~182~~260,~~474~~528			(275,~~366~~430	)
Customer deposits		1214,~~230~~839			(~~123~~142,~~040~~328	)
Accounts payable and accrued expenses-related parties		89169,~~433~~761			-197,514
Net cash used in operating activities		(~~136~~42,~~594~~572	)		(~~705~~872,~~321~~025	)
Cash flows from investing activities:
Purchase of property and equipment		-			(16,677	)
Net cash used in investing activities		-			(16,677	)
Cash flows from financing activities:
Proceeds from sale of common stock		-			66116,~~000~~360
Proceeds from sale of preferred stock		20,000			-
Proceeds from issuance of notes		52,500			70,000
Principal payments on debt		(35,~~025~~027	)		(13,~~781~~597	)
Net cash provided by financing activities		6967,~~475~~473			~~134~~182,~~219~~763
Net decrease in cash and cash equivalents		(67,119	)		(587,779	)
Net increase (decrease) in cash and cash equivalents		24,901			(705,939	)
Cash and cash equivalents at beginning of period		97,564			863,876
Cash and cash equivalents at end of period	$	30122,~~445~~465		$	~~276~~157,~~097~~937
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	13,~~329~~874		$	716,~~638~~923
Cash paid during the period for taxes	$	-		$	-
Supplemental disclosure of non-cash investing and financing activities:
Conversion of debt to equity	$	20,000		$	-

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

F-4

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Merger

On January 29, 2010, InovaChem, Inc., a Delaware corporation, completed the acquisition of NuGen Mobility, Inc., a Delaware corporation (“NuGen” or “NuGen Mobility”), pursuant to the Merger Agreement dated January 29, 2010 (the “Merger Agreement”), by and among InovaChem, Inc., NuGen and InovaChem Mergerco II, Inc., a wholly-owned subsidiary of InovaChem, Inc. Pursuant to the terms of the Merger Agreement, NuGen merged (the “Merger”) with and into InovaChem Mergerco II, and NuGen, as the surviving corporation, became a wholly(owned subsidiary of InovaChem, Inc. On February 26, 2010, the board of directors and stockholders approved an amendment to the Company’s Certificate of Incorporation changing the Company’s name from InovaChem, Inc. to NuGen Holdings, Inc. (the “Company” or “NuGen Holdings”). The Certificate of Amendment to the Certificate of Incorporation became effective on March 4, 2010.

Pursuant to the Merger Agreement, each issued and outstanding share of NuGen’s common stock was converted into 24,422.48 shares of NuGen Holdings’ common stock. As a result, an aggregate of 27,133,384 shares of NuGen Holdings’ common stock, par value $0.001 per share (“Common Stock”) were issued to the two shareholders of NuGen. Simultaneous with the closing of the Merger, 15,236,667 shares of Common Stock were redeemed by NuGen Holdings for a cash payment of $152. Following the redemption of these shares, the two shareholders of NuGen owned approximately 81% of NuGen Holdings.

The Merger is being accounted for as a reverse acquisition and recapitalization. NuGen is the acquirer for accounting purposes and NuGen Holdings is the acquiree. Accordingly, NuGen’s historical financial statements for periods prior to the acquisition become those of the acquirer retroactively restated for the equivalent number of shares received in the Merger. The accumulated deficit of NuGen is carried forward after the acquisition. Operations prior to the Merger are those of NuGen. Earnings per share for the period prior to the Merger are restated to reflect the equivalent number of shares outstanding.

Description of Business

The Company is engaged, through its wholly-owned subsidiary NuGen, in the research, development and sale of permanent magnet electric motors and the electronic controls for such motors. Our facility is located in Ashburn, Virginia. Our revenues are derived primarily from contract research and development engineering services. Our technology relates to specialty electric drive engines and related components. This technology is currently being sold directly to original equipment manufacturers (“OEMs”) pursuant to technical assistance agreements. The agreements generally provide for us to engineer our technology to run in various platforms (e.g. vehicles, electric generators and motors) and to be adapted to a customer’s particular application. We offer these services from our facility located in Virginia, to customers that require high-efficiency, reliable, compact permanent magnet electrical motor systems, controllers, vehicle interface modules (including energy storage, management and monitoring systems) and related software. Our technology is used primarily to convert electrical power into mechanical power so that mechanical power can be used to propel a vehicle or run a generator and may be used in markets ranging from electric/hybrid electric vehicles to materials handling equipment, distributive power, ground support equipment, motion control, and military systems.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position and results of operations. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.

F-5

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

For further information, refer to the audited financial statements and footnotes of the Company for the years ended September 30, 2011 and 2010, included in the Company's Form 10-K filed with the Securities and Exchange Commission on January 13, 2012.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of sales and expenses during the reporting period. Actual results may differ from those estimates. The significant estimates are allowance for doubtful accounts, allowance for inventory obsolescence and valuation of equity instruments.

Principles of Consolidation

The consolidated financial statements include the accounts of NuGen Holdings, Inc, and its wholly owned subsidiaries, NuGen Mobility, Inc., and Trinterprise, LLC. All significant inter-company balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

We consider cash on hand and investments ~~with~~ with original maturities of three months or less to be cash and cash equivalents. The Company at times has cash in banks in excess of of FDIC insurance limits. The Company’s cash balances did not exceed the FDIC insurance limits as of ~~December~~March 31, ~~2011~~2012 and September 30, 2011.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company has established an allowance for doubtful accounts which represents the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company evaluates the adequacy of its allowances for doubtful accounts each quarter performing evaluations of its customers and their ability to make payments. The Company determines the adequacy of the allowance based on length of time past due, historical experience and judgment of economic conditions. Account balances are charged off against the allowance after all options have been exhausted and recovery is considered unlikely. As these factors change, the Company’s allowances for doubtful accounts may change in subsequent periods. Historically, losses have been within management’s expectations and have not been significant.

The allowance for doubtful accounts amounted to $~~109~~134,901 and $109,901 at ~~December~~March 31, ~~2011~~2012 and September 30, 2011, respectively and is recorded as a reduction of accounts receivable.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or market, net of adjustments for estimated excess inventory and obsolescence based upon the Company’s best estimate of future product demand. Inventories consist of the following:

	December 31,		September 31,
	2011(UNAUDITED)		2011
Raw materials	$	102,097	$	118,642
Work in progress		528		119
Total	$	102,625	$	118,761

F-6

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

	March 31, 2012		September 31, 2011
	(UNAUDITED)
Raw materials	$	87,061	$	118,642
Work in progress		-		119
Total	$	87,061	$	118,761

Machinery and Equipment

Machinery and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is 5 years for computer equipment and 3 years for software. Maintenance and repairs are charged to expense as incurred. Depreciation expense for the ~~three~~six months ended ~~December~~March 31, ~~2011~~2012 and ~~2010~~2011 was $37,~~847~~693 and $25,~~891~~782, respectively.

Revenue and Cost Recognition

We currently generate revenue primarily from contract research and development services and may derive additional revenues in the future from the sale of our products to customers. Our products are specialty electric drive engines and related components. These products are a direct result of the services to design and build each unit, which each are built to each customer’s specifications. We account for the products sold as one unit. We intend in the future to derive revenue from sales of products and will recognize the sale at the time title to the goods and the benefits and risks of ownership passes to the customer which is typically when products are shipped based on the terms of the customer purchase agreement.

Some customers are asked to provide deposits prior to the Company accepting their orders. Customer Deposits are reflected on the balance sheet as a current liability and are reclassified to revenue at the time when title to the goods and the benefits and risks of ownership passes to the customer.

Revenue relating to long-term fixed price contracts is recognized using the percentage of completion method. Under the percentage of completion method, contract revenues and related costs are recognized based on the percentage that costs incurred to date bear to total estimated costs.

The Company has entered into Small Business Innovation Research contracts with both the US Army and the US Navy. The revenue under these contracts will be recognized in the same period as allowable and billable costs are incurred.

Changes in job performance, estimated profitability and final contract settlements may result in revisions to cost and revenue, and are recognized in the period in which the revisions are determined. Contract costs include all direct materials, subcontract and labor costs. Selling, general and administrative costs are charged to expense as incurred. At the time a loss on a contract becomes known, the entire amount of the estimated loss is accrued.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Tax. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The valuation of deferred tax assets may be reduced if future realization is not assured.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

Given the substantial net operating losses and the related valuation allowance established against such amounts, the Company has concluded that it does not have any uncertain tax positions. There have been no income tax related interest or penalties for the periods presented in these consolidated financial statements. In the normal course of business, the Company and its subsidiaries are subject to examination by Federal and state taxing authorities. The Company's income tax returns for years subsequent to fiscal 2006 are currently open, by statute, for review by authorities. However, there is no examinations currently in progress and the Company is not aware of any pending audits. The Company has filed all income tax returns.

F-7

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

Research and Development

Costs of researching and developing new technology, or significantly altering existing technology, are expensed as incurred.

Stock-Based Compensation

In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation. Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718. FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.

Loss per Common Share

Basic earnings per share is computed by dividing the loss available to common stockholders by the weighted average number of common shares outstanding during the periods presented.

Diluted earnings per share are computed by dividing the loss available to common stockholders by all outstanding and potentially dilutive shares during the periods presented, unless the effect is anti-dilutive.

Potentially dilutive shares consist of the following:

	December 31 2011 (UNAUDITED)		September 30, 2011
Employee options outstanding to purchase the Company’s common stock		2,500,000		2,500,000
Series B-Preferred Stock and PIK dividends that provides for the conversion to common stock of the Company on a one to one ratio		1,772,153		1,647,967
Series B-Warrants that can be converted to shares of common stock		347,780		325,556
Bridge Notes payable - Warrants that can be converted to shares of common stock		24,500		-
Conversion of notes		402,989		388,889
Total potentially dilutive shares		5,047,422		4,862,412

F-8

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

Potentially dilutive shares consist of the following:

	March 31, 2012 (UNAUDITED)		March 31, 2011 (UNAUDITED)
Employee options outstanding to purchase the Company’s common stock		2,500,000		2,400,000

Series B - Preferred Stock and PIK dividends that provides for the conversion to common stock of the Company on a one to one ratio		1,785,337		-

Series B – Warrants that can be converted to shares of common stock		347,780		-

Bridge notes payable - Warrants that can be converted to shares of common stock		49,000		-

Conversion of notes		289,789		388,889

Total potentially dilutive shares		4,971,906		2,788,889

These options, warrants and convertible shares have not been included in the weighted average number of shares as their effect would have been anti-dilutive.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments including accounts receivable, accounts payable and accrued expenses, customer deposits, accounts payable and accrued expenses-related parties, notes payable and convertible notes and bridge note agreements approximate fair value due to the relatively short period to maturity for these instruments.

Recent Accounting Pronouncements

ASU No. 2011-03; Reconsideration of Effective Control for Repurchase Agreements. In April, 2011, the FASB issued ASU No. 2011-03. The amendments in this ASU remove from the assessment of effective control the criterion relating to the transferor’s ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee. The amendments in this ASU also eliminate the requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets.

~~The~~In ~~guidance~~April, in2011, ~~this~~the ~~ASU~~FASB isissued ~~effective~~ASU ~~for the~~No. ~~first~~2011-03. ~~interim~~The oramendments ~~annual~~in ~~period~~this ~~beginning~~ASU onremove orfrom ~~after~~the ~~December~~assessment ~~15,~~of ~~2011.~~effective ~~The~~control ~~guidance~~the ~~should~~criterion berelating ~~applied prospectively~~ to ~~transactions~~the transferor’s orability ~~modifications~~to ofrepurchase ~~existing~~or ~~transactions~~redeem ~~that~~financial ~~occur~~assets on orsubstantially ~~after~~ the ~~effective~~agreed ~~date.~~terms, ~~Early~~even ~~adoption~~in isthe ~~not~~event ~~permitted.~~of ~~The~~default ~~Company will~~by ~~adopt~~ the ~~methodologies~~transferee. The ~~prescribed~~amendments byin this ASU byalso eliminate the ~~date~~requirement ~~required,~~to ~~and~~demonstrate ~~does not anticipate~~ that the ~~ASU~~transferor ~~will~~possesses ~~have~~adequate acollateral ~~material~~to fund ~~effect~~substantially onall ~~its~~the ~~financial~~cost ~~position~~of orpurchasing ~~results~~replacement offinancial ~~operations~~assets.

~~ASU~~The ~~No.~~guidance ~~2011-04;~~in ~~Amendments~~this toASU ~~Achieve~~is ~~Common~~effective for ~~Fair~~the ~~Value~~first ~~Measurement~~interim ~~and~~or ~~Disclosure~~annual ~~Requirements~~period inbeginning ~~U.S.~~on ~~GAAP~~or ~~and~~after ~~IFRSs.~~December ~~In May~~15, 2011,. ~~the~~The ~~FASB~~guidance ~~issued~~should ~~ASU~~be ~~No.~~applied ~~2011-04.~~prospectively ~~The~~to ~~amendments~~transactions inor ~~this~~modifications ~~ASU generally represent clarifications~~ of ~~Topic~~existing ~~820,~~transactions ~~but~~that ~~also~~occur ~~include~~on ~~some instances where a particular principle~~ or ~~requirement for~~after ~~measuring~~the ~~fair~~effective ~~value~~date. orEarly ~~disclosing~~adoption ~~information~~is ~~about~~not ~~fair value measurements has changed~~permitted. ~~This~~The ~~ASU results in common principles~~Company ~~and~~has ~~requirements~~adopted ~~for~~the ~~measuring~~methodologies ~~fair~~prescribed ~~value~~by ~~and~~this ~~for~~ASU ~~disclosing information about fair value measurements in accordance with U.S. GAAP~~ and ~~IFRSs.~~the ~~The amendments in this~~ ASU ~~are~~did tonot behave ~~applied~~a ~~prospectively.~~material ~~For~~effect ~~public~~on ~~entities,~~its ~~the~~financial ~~amendments~~position ~~are~~or ~~effective during~~results ~~interim~~of ~~and annual periods beginning after December 15, 2011~~operations. ~~Early application by public entities is not permitted.~~

The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.

ASU No. 2011-05; Amendments to Topic 220, Comprehensive Income. In June, 2011, the FASB issued ASU No. 2011-05. Under the amendments in this ASU, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.

The amendments in this ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. Due to the recency of this pronouncement, the Company is evaluating its timing of adoption of ASU 2011-05, but will adopt the ASU retrospectively by the due date.

F-9

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

On September 15, 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other, which simplifies how an entity is required to test goodwill for impairment. This ASU would allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under the ASU, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The ASU includes a number of factors to consider in conducting the qualitative assessment. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. This standard is not expected to have a material impact on the Company’s reported results of operations or financial position.(UNAUDITED)

ASU No. 2011-04; Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs

In May, 2011, the FASB issued ASU No. 2011-04. The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The Company has adopted the methodologies prescribed by this ASU and the ASU did not have a material effect on its financial position or results of operations.

ASU No. 2011-05; Amendments to Topic 220, Comprehensive Income

In June, 2011, the FASB issued ASU No. 2011-05. Under the amendments in this ASU, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.

The amendments in this ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. The Company has adopted the methodologies prescribed by this ASU and the ASU did not have a material effect on its financial position or results of operations.

ASU 2011-08, Intangibles – Goodwill and Other

On September 15, 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other, which simplifies how an entity is required to test goodwill for impairment. This ASU would allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under the ASU, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The ASU includes a number of factors to consider in conducting the qualitative assessment. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company has adopted the methodologies prescribed by this ASU and the ASU did not have a material effect on its financial position or results of operations.

Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation.

NOTE B – GOING CONCERN

As reflected in the accompanying unaudited condensed financial statements, the Company has a working capital deficiency of $1,~~611~~816,~~147~~630, accumulated deficit of $6,~~735~~959,~~296~~540, net loss of $~~352~~577,~~991~~235 and negative cash flows from operations of $~~136~~42,~~594~~572 during the ~~three~~six months ended ~~December~~March 31, ~~2011~~2012. This ~~raises~~ raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is is dependent on the Company’s ability to generate additional revenues from operations, raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management believes that actions presently being taken to obtain additional revenues and funding, and to implement its strategic plans provide the opportunity for the Company to continue as a going concern. There can be no assurance that the Company will be able to raise such funds if and when it wishes to do so or on terms acceptable to us. Specifically, in the event that the Company is not successful at raising capital to a level sufficient to pay its expenditures, the Company will have to reduce administrative overhead and reduce marketing and public relations expenditures. If the Company is unable to cut expenses to earn profits or raise additional debt or equity capital the Company will have to discontinue operations.

NOTE C – DEBT

Short-term debt consists of:

	December 31, 2011 (UNAUDITED)		September 30, 2011
Convertible notes	$	70,000	$	70,000
Demand note payable		3,500		-
Bridge notes payable		49,000		-
Total short-term debt	$	122,500	$	70,000

F-10

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

NOTE C – DEBT

Short-term debt consists of:

	March 31, 2012 (UNAUDITED)		September 30, 2011
Convertible notes	$	50,000	$	70,000

Demand note payable		3,500		-

Bridge notes payable		49,000		-

Notes payable		596,108		609,082

Total short-term debt	$	698,608	$	679,082

Convertible notes

On October 22, 2010, the Company entered ~~into~~ into subscription agreements with two accredited investors pursuant to which the Company issued 3% convertible promissory notes (the “Notes”) in the aggregate principal amount of $70,000 ~~which is included on the Company’s Balance Sheet under convertible notes~~.

The Notes were offered and sold in reliance on the exemption from registration afforded by Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933, as amended. The Notes have a one-year term and are convertible by the Company into Common Stock at a price of $0.18 per share, subject to adjustment if the Company effects a stock split or issues a stock dividend. If the Company effects a merger, sale of all or substantially all of its assets or any person acquires 50% of its stock, then the Note will be convertible into such number and kind of shares as would have been issuable on account of such transaction. The Company may prepay all or a portion of the outstanding principal and interest under the Notes upon 3 business days’ notice and may repay any accrued interest in cash or additional shares of Common Stock. The amount due under the Notes will become immediately due and payable if the Company fails to pay unpaid principal on the maturity date which failure continues for 10 days, any representation or warranty made by the Company is false, incorrect, incomplete or misleading, or the Company dissolves, liquidates, ceases operations, is unable to pay its debts when due, a receiver or trustee is appointed or bankruptcy proceedings are instituted.

As of December 31, 2011, the Company was in default of these agreements because it did not convert the promissory notes and accrued interest into common stock or repay the debt within the one year period. One note in the amount of $50,000 plus accrued interest was renewed on January 6, 2012 for an additional one year term expiring January 6, 2013 under the same terms and conditions as provided for in the previous note agreement. ~~One note in the amount of $20,000 plus accrued interest was converted to 115,138 shares of common stock on January 31, 2012.~~

One note in the amount of $20,000 plus accrued interest of $725 was converted to 115,138 shares of common stock on January 6, 2012.

Demand note payable

On December 12, 2011, the Company entered into an unsecured demand loan agreement in the amount of $3,500 with an “accredited investor.” Interest accrues on this loan at a rate of 10% per annum and is as payable upon demand.

Bridge notes payable

On November 25, 2011 and December 29, 2011, the Company entered into a Bridge Note Payable Agreement with two related parties and one “accredited investor” totaling $49,000. Interest is payable at an annual rate 20%. The full amount of principle and interest is due 180 days from date of execution. In addition, these investors will receive warrants to acquire the Company’s common stock at a strike price of $0.20 per common stock share equivalent to 10% of the then outstanding Principal amount of the Note for every ninety (90) day period and or portion thereof from date of Note until the principal of the Note is paid in full. These warrants were valued using Black-Scholes option-pricing model and amortized over the life of the notes.

F-11

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

Bridge notes payable

Long-term debt consists of:

	December 31, 2011 (UNAUDITED)		September 30, 2011
	March 31, 2012 (UNAUDITED)		September 30, 2011
Promissory note dated August 23, 2007	$	596,108	$	596,108
Other		~~22,985~~-		26,010
		619,093		622,118
		596,108		622,118
Less: current portion		~~608~~596,~~722~~108		609,082
Total long-term debt	$	~~10,371~~-	$	13,036

Promissory note dated August 23, 2007

Pursuant to the Promissory Note dated August 23, 2007, the Company accrues interest on the loan at the rate of 6% per annum. Quarterly payments are made based on a formula that multiplies the revenue of NuGen’s gross revenues by 2% for calendar year 2007, 3% for calendar year 2008, 4% for calendar year 2009, 5% for calendar year 2010 and 6% for calendar year 2011 and for all subsequent years until the loan is paid in full. In all years NuGen is required to pay a minimum of $7,500 per quarter and any payment made that exceeds the amount that would be due under the formula shall be treated as an advance against subsequent quarterly amounts due in excess of the $7,500 minimum payment.

As of ~~December~~March 31, ~~2011~~2012 and September 30, 2011, no payments of principal have been made as NuGen’s quarterly revenues, multiplied by the appropriate percentage and ~~reduced~~ reduced by advanced payments have not exceeded the $7,500 minimum payment The payments made have gone towards accrued interest only. Additionally, further revenue contingent payments may be owed, in the future (see Note E – Commitments and Contingencies below).

The Company is delinquent in its quarterly payments due August 15, 2011, ~~and~~ November 15, 2011 and February 15, 2012. On January 6, 2012, New Generation Motors granted a waiver to defer these quarterly payments until March 7, 2012. On March 21, 2012, New Generation Motors extended this waiver until May 12, 2012.

~~In November 2007, the Company purchased computer equipment and issued a four year note payable, included in “~~Other” on the above table. The balance due at December 31, 2011 and September 30, 2011 amounted to $0 and $272, respectively. The Company accrues interest on this loan at the rate of 18.45% per annum and makes monthly fixed payments of interest and principal.

In ~~August~~November ~~2010~~2007, the Company purchased ~~computer~~ computer equipment and issued a ~~three~~four year note ~~payable,~~with ~~included~~fixed inmonthly ~~“Other”~~payments onof ~~the~~principal ~~above~~and ~~table.~~interest at an annual rate of 18.45%. The balance due at ~~December~~ March 31, ~~2011~~2012 and September 30, 2011 amounted to $~~6,474~~0 and $7272,~~548,~~ respectively. ~~The Company accrues interest on this loan at the rate of 0.38% per annum and makes monthly fixed payments of interest and principal.~~

In ~~October~~August 2010, the Company ~~converted~~purchased ~~certain~~computer ~~past~~equipment ~~due~~and ~~amounts~~issued ~~for~~a ~~rent~~three ~~pursuant~~year tonote ~~the~~payable ~~Asset~~with ~~Purchase~~fixed ~~Agreement~~monthly ~~dated~~payments ~~August~~of ~~23,~~principal ~~2007~~ and ~~certain~~interest ~~other~~at ~~past~~an ~~due~~annual ~~rent,~~rate ~~charges~~of 0.38%. ~~and~~The ~~late~~Company ~~fees~~negotiated ~~owed~~a tosettlement with the ~~landlord~~lender ~~incurred~~to ~~after~~satisfy ~~August~~this ~~23,~~debt ~~2007~~in tofull aand ~~term~~recorded ~~loan~~a ~~and~~gain ison ~~included~~debt extinguishment in the ~~“Other”~~amount onof ~~the above table~~$6,566. The balance due at ~~December~~March 31, ~~2011~~2012 and September 30, ~~2011amounted~~2011 amounted to $~~16,511~~0 and $187,~~190~~548, respectively. ~~The Company accrues interest on this loan at the rate of 9.22% per annum and makes monthly fixed payments of interest and principal.~~

F-12

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

In October 2010, the Company converted certain past due amounts for rent pursuant to the Asset Purchase Agreement dated August 23, 2007 and certain other past due rent, charges and late fees owed to the landlord incurred after August 23, 2007 to a term loan at the rate of 9.22% per annum and makes monthly fixed payments of interest and principal as part of the monthly lease payment. In March, 2012, the Company negotiated a settlement with the landlord to satisfy this debt, terminated the lease and the unpaid rent accrued as part of this loan was forgiven as part of the settlement. The Company recorded $15,123 as a reduction of rent expense. The balance due at March 31, 2012 and September 30, 2011 amounted to $0 and $18,190, respectively.

NOTE D - RELATED PARTY TRANSACTIONS

Related Parties

On September 29, 2010, December 5, 2010 and March 30, 2011, the Company entered into subscription agreements with four foreign investors pursuant to which, among other things, the Company issued an aggregate of 6,225,000 shares of its common stock, par value $0.001 per share, at a purchase price of $0.16 per share, for total cash proceeds of $996,000 and paid offering costs of $5,645. Such issuances were made in reliance on an exemption from registration under Regulation S promulgated under the Securities Act. Pursuant to the Subscription Agreements each investor executed and delivered to the Company (i) an irrevocable proxy appointing the Company’s Chief Executive Officer as his proxy to vote his shares, and (ii) a lock-up agreement pursuant to which each investor agreed not to transfer, dispose of or encumber any of the Company’s securities for a nine-month period.

On October 28, 2011, the Company entered ~~into~~ into a subscription agreement with one related party accredited investor pursuant to which ~~we issued~~ an aggregate of 111,111 Series B convertible preferred shares, par value $0.001 per share were issued, at a purchase price of $0.18 per share, for gross proceeds of $20,000. This related investor also received two-year warrants to purchase common stock in an amount equal to 20% of the number of shares of Series B Preferred Stock purchased by the investor.

On November 25, 2011, the Company entered into bridge note payable agreements with two related parties totaling $29,000 (see Note C).

At ~~December~~March 31, ~~2011~~2012 and September 30, 2011, the Company had accounts payable and accrued expenses - related parties of $~~497~~578,~~705~~033 and $408,272, respectively which includes unpaid salaries, reimbursable travel expenses and miscellaneous fees and expenses owed to corporate officers of the Company.

NOTE E - COMMITMENTS AND CONTINGENCIES

In August 2007, our subsidiary, NuGen Mobility entered into an asset purchase agreement pursuant to which it acquired substantially all of the assets, and specified liabilities of New Generation Motors Corporation, a Delaware corporation. The agreement requires the payment to New Generation Motors of $1,000,000 pursuant to a promissory note, which bears simple interest at the rate of six percent. The principal amount of this note was reduced to $596,108 by the application of $403,892 in credits. These credits consist of (i) an aggregate of $273,741 in operational loans made by our principal shareholders to New Generation Motors to allow them to continue operations prior to August 2007, (ii) $101,804 in customer deposits that they retained though we were responsible for fulfilling such customer orders, and (iii) $29,068 in amounts we agreed to pay to New Generation Motors’s landlord for back rent.

The principal and interest on the loan is to be repaid, on a quarterly basis, until all amounts due thereon have been paid. The amount of each payment is equal to the greater of (i) $7,500 and (ii) the product obtained by multiplying our Gross Revenues (as defined) for the quarter by the applicable percentage rate. The applicable percentage rate increases by one percentage point per year beginning at 2% for 2007 increasing to 6% for 2011 and all subsequent years. The payment is first applied to the accrued interest on the loan and the remainder, if any, to the principal amount owed. As of the date hereof, an aggregate of $97,500 has been paid - 13 quarterly payments of $7,500 per quarter) and all of the payments have been applied to accrued interest. Accordingly, the principal balance of the loan has been $596,108 since August 2007.

In addition, if prior to July 13, 2014 we have paid this note in full, we are also required to pay until July 13, 2014, on a quarterly basis, the product obtained by multiplying 2.5% by the Gross Revenues in the applicable quarter. Gross Revenues is defined as (i) all fees and other revenue that NuGen Mobility receives from any source, (ii) the then(current fair market value of (x) the assets purchased from New Generation Motors, or (y) the business (as a going concern) or portion thereof sold or otherwise transferred to our affiliate, and (iii) the proceeds from the sale or other disposition by NuGen Mobility to any other third party of all or any portion of (x) the assets and/or (y) the business as a going concern. To date, we have not been required to make any such payments.

F-13

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

As part of the asset purchase agreement in August 2007, NuGen also agreed to assume the commitment, entered into by New Generation Motors, for a conditional grant of $700,000 from an Indian export bank, which is only required to be paid back once the Indian manufacturer begins paying licensing fees. NuGen does not have a written assignment from the Indian export bank regarding its assumption of this commitment. NuGen will then be obligated to pay the Indian export bank a royalty received from the Indian manufacturer until $1,400,000 is repaid based on a schedule in the agreement. Since the dates provided for in the schedule to the agreement have passed, the agreement provides that if the actual sales deviate substantially, the royalty schedule will have to be changed. To date, the parties have not updated the schedule of royalty payments. Additionally, the Indian export bank also provided a loan of $500,000 to New Generation Motors. In connection with this asset purchase agreement, NuGen assumed this $500,000 loan on the condition that the loan would be converted to a conditional grant (~~similar to the $700,000 conditional grant~~UNAUDITED). In 2006, both New Generation Motors and the Indian export bank agreed to convert this second $500,000 loan to a conditional grant under the same terms and conditions as the previous agreement. However the Agreement was never signed and NuGen has treated the amount as a conditional grant due to New Generation Motors in accordance with the terms of the asset purchase agreement. Currently, no demand has been made to NuGen for payment; accordingly, it is not reflected as a liability on the Company’s balance sheet but rather it is included under “Commitments and Contingencies”. As of December 31, 2011, no payments are owed to the Indian export bank, as the Indian manufacturer is not actively marketing the product at present and no payments are required until sales from this product are generated.

As part of the asset purchase agreement in August 2007, NuGen also agreed to assume the commitment, entered into by New Generation Motors, for a conditional grant of $700,000 from an Indian export bank, which is only required to be paid back once the Indian manufacturer begins paying licensing fees. NuGen does not have a written assignment from the Indian export bank regarding its assumption of this commitment. NuGen will then be obligated to pay the Indian export bank a royalty received from the Indian manufacturer until $1,400,000 is repaid based on a schedule in the agreement. Since the dates provided for in the schedule to the agreement have passed, the agreement provides that if the actual sales deviate substantially, the royalty schedule will have to be changed. To date, the parties have not updated the schedule of royalty payments. Additionally, the Indian export bank also provided a loan of $500,000 to New Generation Motors. In connection with this asset purchase agreement, NuGen assumed this $500,000 loan on the condition that the loan would be converted to a conditional grant (similar to the $700,000 conditional grant). In 2006, both New Generation Motors and the Indian export bank agreed to convert this second $500,000 loan to a conditional grant under the same terms and conditions as the previous agreement. However the Agreement was never signed and NuGen has treated the amount as a conditional grant due to New Generation Motors in accordance with the terms of the asset purchase agreement. Subsequent to March 31, 2012, Nugen received a letter demanding payment (see Note H). As of March 31, 2012, the Company does not believe that payments are owed to the Indian export bank, as the Indian manufacturer is not actively marketing the product at present and no payments are required until sales from this product are generated. Accordingly, it is not reflected as a liability on the Company’s balance sheet but rather it is included under “Commitments and Contingencies”.

Lease Commitments

We ~~lease~~ leased office/warehouse space located at ~~44645~~21641 ~~Guilford~~Beaumeade ~~Drive~~Circle, Suite ~~201~~314, Ashburn, Virginia under a ~~one~~three-year operating lease ~~agreement~~ agreement that ~~expired~~expires on ~~September~~October 3031, ~~2011~~2013. WeOn ~~are~~March ~~currently~~6, ~~leasing~~2012, ~~this~~the ~~space~~lease onagreement awas ~~month-to-month~~terminated ~~basis.~~effective ~~Rent~~February ~~expense~~29, ~~pursuant~~2012. As toa ~~this~~condition ~~agreement~~of ~~for~~the lease termination, the ~~three~~Company ~~months~~agreed ~~ended~~to ~~December~~pay ~~31,~~all ~~2011~~past ~~and~~due ~~2010~~amounts ~~amounted~~in totwelve equal monthly installments of $183,~~627~~848. No ~~and~~further ~~$19~~payments are due for periods after February 29,~~214,~~ ~~respectively~~2012.

WeOn ~~lease office/warehouse~~December ~~space~~2, ~~located~~2011, atwe ~~21641~~received ~~Beaumeade~~a ~~Circle,~~“Notice of ~~Suite~~Event ~~314~~of Default” from CIT Guilford Drive, ~~Ashburn~~LLC, ~~Virginia~~our ~~under~~landlord athrough ~~three-year~~September ~~operating~~30, ~~lease~~2011. ~~agreement~~ This notice requests that ~~expires~~we pay onour ~~October~~past ~~31,~~due ~~2013.~~balance ~~Rent~~in ~~expense~~the ~~pursuant~~amount toof ~~this~~$30,119.34 ~~agreement~~for past due rent for the ~~three~~period ~~months~~August ~~December 31~~1, 2011 ~~and~~to ~~2010~~September 30, 2011 for ~~amounted~~properties tolocated ~~$17~~at 44645 Guilford Drive,~~493~~ Suite 201, Ashburn, Virginia and ~~$17~~21641 Beaumeade Circle,~~839~~ Suite 314, ~~respectively~~Ashburn, Virginia within 10 days of receipt. ~~The~~We ~~total~~are ~~future~~in ~~minimum~~negotiations ~~lease~~with ~~rentals~~CIT ~~under~~Guilford ~~this~~Drive, ~~agreement~~LLC ~~are~~and ~~scheduled~~expect to bereach a satisfactory settlement. This ~~paid~~amount has been recorded as ~~follows:~~accounts payable at March 31, 2012.

Year ending December 31:
2012	$	69,676
2013		71,736
Total future minimum lease payments	$	141,412

On December 2, 2011, we received a “Notice of Event of Default” from CIT Guilford Drive, LLC, our landlord through December 31, 2011. This notice requests that we pay our past due balance in the amount of $30,119.34 for past due rent for the period August 1, 2011 to December 31, 2011 for properties located at 44645 Gilford Drive, Suite 201, Ashburn, Virginia and 21641 Beaumeade Circle, Suite 314, Ashburn, Virginia within 10 days of receipt. We are in negotiations with CIT Guilford Drive, LLC and expect to reach a satisfactory settlement.

On December 7, 2011, we received a “Notice to Pay or Quit” from DBT-Data Beaumeade Corporate Center LLC., our landlord from October 1, 2011. This notice requests that we pay our past due balance for the period October 1, 2011 to December 31, 2011 in the amount of $38,576.37 for past due rent for properties located at 44645 Gilford Drive, Suite 201, Ashburn, Virginia and 21641 Beaumeade Circle, Suite 314, Ashburn, Virginia within 10 days of receipt. We are in negotiations with DBT-Data Beaumeade Corporate Center LLC and expect to reach a satisfactory settlement.

F-14

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

Employment Agreements

Effective July 1, 2011, we entered into employment agreement with Marshall G Webb to replace Alan Pritzker as our CFO. This agreement provides for an annual salary of $120,000 which the board of directors may periodically increase but not decrease, and an annual bonus at the discretion of the Board, currently anticipated at 25% of the base salary. Mr. Webb is entitled to a special bonus of $15,000 for each $1,000,000 raised or 1.5% of any amount raised less than $1,000,000 raised following the current Series B financing effort underway. Further, in the event CFO is directly involved in a Series B financing, a bonus calculated in the aforementioned manner, i.e., fifteen thousand US Dollars (US $15,000) for each one million US Dollars (US $1,000,000) raised, or one and one-half percent (1.5%) of any amount less than one million US Dollars (US $1,000,000) raised shall be paid. The Employment Agreement also provides for the grant of a ten-year option to purchase 250,000 shares of the Company’s common stock at an exercise price of $0.45 per share which will vest as to 125,000 shares upon the execution of the Agreement (July 1, 2011) and as to the balance ratably over a 12-month period beginning on July 31, 2011. All options will immediately vest and become exercisable upon a change of control, sale of substantially all of the Company’s assets, a merger in which the Company is not the surviving company, the Company replaces Mr. Webb for other than cause, or Mr. Webb is replaced by Series B investors. The option will immediately terminate if Mr. Webb is terminated for cause and in 90 days if Mr. Webb resigns other than for good reason.

In the event Mr. Webb is terminated due to a material breach of the Employment Agreement which remains uncured for 30 days, the Company will be obligated to pay Mr. Webb’s base salary for three months from the date of termination. If the Company terminates Mr. Webb’s employment without cause, or Mr. Webb resigns for good reason, the Company will be obligated to pay Mr. Webb’s base salary for the longer of (i) the remaining term of the Employment Agreement or (ii) four months from the date of termination (“Termination Payments”) and any outstanding options will immediately vest and become exercisable. If Mr. Webb is terminated without cause or resigns for good reason, he will be entitled to a pro rata share of his annual bonus and to outplacement services for so long as he receives Termination Payments.

Pursuant to the Employment Agreement, Mr. Webb agreed not to compete with the Company during his term of employment and any period he is receiving Termination Payments and for one year thereafter (“Non-Compete Period”) and not to solicit or interfere with the Company’s employees, customers, suppliers or other business relationships for twelve months after the termination of his employment.

Unless terminated for cause, Mr. Webb and his family will be entitled to continued life, medical, health and death insurance coverage during any Non-Compete Period but only so long as Mr. Webb receives Termination Payments.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of trade receivables. The risk in trade accounts receivable is mitigated by the credit worthiness of the companies comprising the Company’s customer base. At ~~December~~March 31, ~~2011~~2012, ~~the~~one customer ~~Company~~totaled ~~does~~$31,778 ~~not believe it had any significant credit risks~~ which ~~are~~was ~~not~~$36% ~~provided~~of ~~for~~net ~~in the allowance for doubtful~~ accounts receivable.

We derive significant revenues from a few ~~key~~ key customers. Revenues infor ~~three~~the six months ended ~~December~~March 31, ~~2011~~2012 from one customer totaled $~~165~~352,~~256~~456 which was 9082.0% of our ~~2011~~ 2012 revenues. Revenues for ~~three~~the six months ended ~~December~~March 31, ~~2010~~2011 from one customer totaled $~~553~~705,~~585~~265 which was 8070.6% of our ~~2010~~2011 revenues.

F-15

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

NOTE F – STOCKHOLDERS’ DEFICIT

On September 29, 2010, December 5, 2010 and March 30, 2011, the Company entered into subscription agreements (the “Subscription Agreements”) with four “accredited investors” pursuant to which the Company issued 5,500,000 shares, 412,500 shares and 312,500 shares, respectively, of common stock at a purchase price of $0.16 per share, for gross proceeds of $880,000, net of offering costs of $5,645, $66,000 and $50,000 respectively. Such issuances were made in reliance on an exemption from registration under Regulation D and/or S promulgated under the Securities Act. The investor also executed and delivered to the Company (i) an irrevocable proxy appointing the Company’s Chief Executive Officer, as her proxy to vote her shares, and (ii) a lock-up agreement pursuant to which the investor agreed not to transfer, dispose of or encumber any of the Company’s securities for a nine-month period.

On October 22, 2010, the Company entered into subscription agreements with two accredited investors pursuant to which the Company issued 3% convertible promissory notes (the “Notes”) in the aggregate principal amount of $70,000. The Notes were offered and sold in reliance on the exemption from registration afforded by Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933, as amended.

The Notes have a one-year term and are convertible by the Company into Common Stock at a price of $0.18 per share, subject to adjustment if the Company effects a stock split or issues a stock dividend. If the Company effects a merger, sale of all or substantially all of its assets or any person acquires 50% of its stock, then the Note will be convertible into such number and kind of shares as would have been issuable on account of such transaction. The Company may prepay all or a portion of the outstanding principal and interest under the Notes upon 3 business days’ notice and may repay any accrued interest in cash or additional shares of Common Stock. The amount due under the Notes will become immediately due and payable if the Company fails to pay unpaid principal on the maturity date which failure continues for 10 days, any representation or warranty made by the Company is false, incorrect, incomplete or misleading, or the Company dissolves, liquidates, ceases operations, is unable to pay its debts when due, a receiver or trustee is appointed or bankruptcy proceeding are instituted.

At December 31, 2011, the Company was in default of these agreements because it did not convert the promissory notes and accrued interest into common stock or repay the debt within the one year period. One note in the amount of $50,000 plus accrued interest was renewed on January 6, 2012 for an additional one year term expiring January 6, 2013 under the same terms and conditions as provided for in the previous note agreement. One note in the amount of $20,000 plus accrued interest was converted to 115,138 shares of common stock on January 316, 2012.

Debt Conversion

In connection with the Merger, holders of an aggregate of $915,475 of outstanding indebtedness of NuGen converted their promissory notes (based on a $0.15 per share conversion price) into an aggregate of 6,103,167 shares of common stock (“Debt Conversion”). Included in this amount was $465,476 of indebtedness owed Ronald Takamura, brother of the Chairman and CEO and $57,938 of indebtedness owed to Four M International. Henry Toh, Vice Chairman of our board of directors and an officer of our company is an officer and director of Four M International.

Preferred Stock

The Company is authorized to issue up to 50,000,000 shares of preferred stock at $0.001 par value. As of ~~December~~March 31, ~~2011~~2012, no shares of Class A preferred stock have ~~been~~ been issued; however, 1,738,889 shares of Series B Preferred Stock have been issued. Additional series of preferred stock may be ~~designated~~ designated and the related rights and preferences fixed by action of the Company’s Board of Directors.

F-16

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

Class A Preferred Stock

The Company entered into an agreement with a representative of eleven accredited investors confirming that such investors have the right, but not the obligation, to purchase, in the aggregate, a minimum of $500,000 and a maximum of $700,000 of our Class A Preferred Stock (the “Preferred Stock”) at a price of $0.15 per share. On March 8, 2011, we entered into an option agreement (the “Option Agreement”) with such investors which replaced and superseded the prior agreement. The Option Agreement provides that the option to purchase the preferred stock terminates upon the earlier of (i) December 31, 2011, (ii) 180 days after the effective date of the Amended Registration Statement or (iii) if the Company demands that the investors exercise their option in the event that the Company enters into an agreement with respect to at least $2,500,000 at no less than $0.30 per share and the investors do not so exercise their right of first refusal to purchase such shares. We had also issued the representative of such investors one-year warrants to acquire 360,000 shares of our common stock at an exercise price of $0.001 per share; said person fully exercised his warrant on March 1, 2011. If the investors exercise their option to purchase the preferred stock, they will be entitled to convert said preferred stock at their option at any time into one share of common stock, subject to adjustment for issuances of securities to third parties at a price less than $0.15 per share on a “full-ratchet basis” (i.e., so that we shall issue, free of charge to each holder of such preferred stock, such additional shares of Preferred Stock so that the total number of shares held by the such holder equals that number that would have been issued at the lower price) during the 6 months following issuance and on a "weighted average" basis for 42 months following said 6(month period. The “weighted average” anti-dilution protection uses a formula that adjusts the rate at which preferred stock converts into common stock based upon (i) the amount of money previously raised by the Company and the price per share at which it was raised and (ii) the amount of money being raised by the Company in the subsequent dilutive financing and the price per share at which such new money is being raised. This weighted average price (which will always be lower than the original purchase price following a dilutive financing) is then divided into the original purchase price in order to determine the number of shares of common stock into which each share of preferred stock is then convertible, which will be greater than one. Thus, a new reduced conversion price for the preferred stock is obtained, which results in an increased conversion rate for the preferred stock when converting to common stock. So long as the investors hold at least 5% of our outstanding capital stock in the aggregate, the holders of the preferred stock will also have pre-emptive rights, subject to certain exemptions for issuances under option plans or to strategic investors under certain circumstances. The holders of the preferred stock will also have the right to designate one person to serve as a member of our board of directors until the effectiveness of this prospectus. If we would ever grant certain rights to shareholders holding a prescribed percentage of our stock, the holders of the preferred shares would have the right to accumulate their shareholdings to determine if they are entitled to such rights. For example, if we would ever provide that more than 70% of the holders of our shares could require us to file a registration statement on their behalf, the holders of the preferred shares could aggregate their holdings to be part of that group. The investors will also be entitled to warrants to purchase the amount of shares of common stock equal to 10% of the total value of the investment in the preferred stock. The exercise price of the common share to be provided for in the warrant, which expires 12 months after it is issued, is $0.001 per share.

We have not yet filed a certificate of designation designating this Preferred Stock.

If and when the preferred shares are purchased, each investor will also have the right for 18 months to purchase shares of common stock from the Company’s CEO for an exercise price of $0.50 per share.

Series B Preferred Stock

The Company filed a Certificate of Designations, Preference and Rights of Series B Convertible Preferred Stock in Delaware. The Certificate of Designation provides for the conversion of the Series B Preferred Stock to common stock of the Company on a one to one ratio. Cumulative dividends will accrue at the rate of $0.0054 per annum to be paid annually in shares of Series B Preferred Stock at a $.18 per share conversion rate with the first payment due on July 1, 2012. The Series B Preferred Stock has a liquidation preference over capital stock of the Company ranking junior to the Series B Preferred Stock. The Series B Preferred Stock will be junior and subordinate to the Series A preferred stock, if and when an option to purchase such Series A preferred stock is exercised and Series A preferred stock is issued by the Company. The Series B Preferred Stock holders have voting rights equal to the number of shares of common stock into which such Series B Preferred Stock are convertible. The Series B Preferred Stock will vote together as a single class on all matters. The initial conversion price of $0.18 is subject to adjustment in the event of dividends, distributions, stock splits, or other occurrences, as set forth and in accordance with the formula in the Certificate of Designation. Any Series B Preferred Stock outstanding on December 31, 2012 is mandatorily convertible into common stock. The Series B Preferred Stock holders also have registration rights with respect to the shares of common stock into which such Series B Preferred Stock are convertible.

F-17

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

(UNAUDITED)

The Company is offering a maximum of 13,888,889 shares of Series B Preferred Stock at a purchase price of $0.18 per share and 2,777,778 Warrants; the investor is to receive Warrants equal to 20% of the number of shares of Preferred Stock purchased. Such issuances were made in reliance on an exemption from registration under the Securities Act, which the Series B Preferred Stock will be issued on the basis of the statutory exemption provided by Section 4(2) of the Securities Act or Regulation D promulgated there under. The Company has entered into subscription agreements with nine accredited investors to purchase an aggregate of 1,738,889 Series B convertible preferred shares, par value $0.001 per share at a purchase price of $0.18 per share, for aggregate gross proceeds of $313,000. Each investor also received two-year warrants to purchase in the aggregate 347,780 shares of common stock, par value $0.001 per share, of the Company. 111,111 of these shares were issued to a related party in the amount of $20,000.

Dividends accrued to the Series B B Preferred Stock holders for the ~~three~~six months ended ~~December~~March 31, ~~2011~~2012 and 2011amounted to $58,~~987~~361 and $0, respectively.

Valuation of Stock-Based Awards, Common Stock and Warrants

Stock-Based Compensation

The fair value of stock-based awards to officers and employees is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. We adopted the fair value method of accounting for our stock options granted to employees which requires us to measure the cost of employee services received in exchange for the stock options, based on the grant date fair value of the award. The resulting cost is recognized on a straight-line basis, which we believe better reflects the level of service to be provided by our employees over the vesting period of the awards, which is generally two years.

The Black-Scholes option-pricing model requires inputs such as the risk-free interest rate, expected term and expected volatility. Further, the forfeiture rate also affects the amount of aggregate compensation. These inputs are subjective and generally require significant judgment.

The risk-free interest rate that we use is based on the United States Treasury yield in effect at the time of grant for zero coupon United States Treasury notes with maturities approximating each grant’s expected life.

The expected term of options granted is calculated by using the SAB 107 “simplified method” of estimating the expected term which is derived by taking the average of the time to vesting and the full term of the option.

Our expected volatility is derived from the historical volatilities of several unrelated public companies within industries related to our business, including the automotive OEM and battery technology industries, because we have no trading history on our common stock. When making the selections of our peer companies within industries related to our business to be used in the volatility calculation, we also considered the stage of development, size and financial leverage of potential comparable companies. Our historical volatility is weighted based on certain qualitative factors and combined to produce a single volatility factor.

A forfeiture rate has not been estimated as these are the first options granted by us after our merger in January 2010.

F-18

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

The fair values of all stock options granted during the three months ended ended December 31, 2011 for the year ended September 30, 2011 were estimated on the date of grant using the following range of assumptions:(UNAUDITED)

	For the Three Months Ended December 31, 2011			For the Year Ended September 30, 2011
Risk(free interest rate)		.5	%		.5	%
Expected term (in years)		2			2
Expected volatility		72	%		72	%
Dividend yield		0	%		0	%

The fair values of all stock options granted during the six months ended March 31, 2012 and for the year ended September 30, 2011 were estimated on the date of grant using the following range of assumptions:

	For the Six Months Ended March 31, 2012			For the Year Ended September 30, 2011
Risk(free interest rate)		.5	%		.5	%
Expected term (in years)		2			2
Expected volatility		72	%		72	%
Dividend yield		0	%		0	%

We account for stock options issued to nonemployees also based on their estimated fair value determined using the Black-Scholes option-pricing model. However, the fair value of the equity awards granted to nonemployees is re-measured as the awards vest, and the resulting increase in value, if any, is recognized as expense during the period the related services are rendered.

Stock-based compensation expense for the ~~years~~ years ended ~~December~~March 31, ~~2011~~2012 and ~~2010~~2011 was $1014,~~322~~883 and $919,~~955~~910, respectively.

Common Stock Valuation

We granted stock options with exercise prices equal or greater than the fair value of our common stock as determined at the date of grant by our Board of Directors. Because there has been no public market for our common stock, our Board of Directors has determined the fair value of our common stock by considering a number of objective and subjective factors, including the following:

• arm’s length, third-party sales of our stock;

• our operating and financial performance; and

• the lack of liquidity of our capital stock.

Equity Awards

The following tables summarize all stock ~~option~~ option grants to employees and consultants at ~~December~~March 31, ~~2011~~2012 and the related changes during these periods are presented below:

Stock Options	Number of Options		Weighted Average Exercise Price
Balance at September 30, 2011		2,500,000	$	0.40
Granted		-
Exercised		-
Forfeited		-
Balance at December 31, 2011		2,500,000	$	0.40
Balance at March 31, 2012		2,500,000	$	0.40

F-19

NUGEN HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF ~~DECEMBER~~MARCH 31, ~~2011~~2012

~~The following table summarizes information about stock options and warrants for the Company as of December 31, 2011:~~(UNAUDITED)

Options Outstanding								Options Exercisable
Range of Exercise Price		Number Outstanding at December 31, 2011		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2011		Weighted Average ExercisePrice
$	0.15		400,000		8.09 years	$	0.15		383,334	$	0.15
$	0.45		2,100,000		8.40 years	$	0.45		1,939,583	$	0.45

The following table summarizes information about stock options for the Company as of March 31, 2012:

Options Outstanding							Options Exercisable
Range of Exercise Price		Number Outstanding at March 31, 2012		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable at March 31, 2012		Weighted Average Exercise Price
$	0.15		400,000	7.84 years	$	0.15		400,000	$	0.15
$	0.45		2,100,000	8.15 years	$	0.45		2,068,750	$	0.45

NOTE H – SUBSEQUENT EVENTS

~~One~~We ~~convertible~~received ~~note~~a incorrespondence from Puranik and Company, the attorneys for ICICI Bank Limited. This letter was dated March 4, 2012 but was received by us on April 3, 2012. This letter was addressed to New Generation Motors, Inc., NuGen Mobility, Inc and Bajaj Auto Ltd. The letter requests that (1) New Generation Motors pay the amount of $501,400,000 pursuant to the $700,000 Conditional Grant Agreement dated October 30, 2001; ~~plus~~(2) ~~accrued~~New ~~interest~~Generation ~~was~~Motors ~~renewed~~pay onthe ~~January~~amount 6$962,763 ~~2012~~pursuant ~~for~~to ana ~~additional~~$500,000 ~~one~~loan ~~year~~outlined ~~term~~in ~~expiring~~the ~~January~~Foreign 6Currency Facility Agreement dated March 3, ~~2013~~2003; ~~under~~(3) NuGen Mobility terminate the ~~same~~Asset ~~terms~~Purchase Agreement between New Generation Motors and NuGen Mobility and; ~~conditions~~(4) asrequests ~~provided~~the ~~for~~status infrom Bajaj Auto, Ltd of the ~~previous~~Master ~~convertible~~License ~~note~~Agreement ~~agreement~~dated December 17, 2005.

~~One~~As ~~convertible~~discussed ~~note~~ in Note E, as of March 31, 2012, no payments are owed to ICICI, as Bajaj is not actively marketing the ~~amount~~product at present and no payments are required until sales from this product are generated. When we closed on the Asset Purchase Agreement and acquired substantially all of the assets of New Generation Motors, we agreed to assume New Generation Motor’s commitment to reimburse a conditional grant of $20700,000 ~~plus~~that ~~accrued~~it ~~interest~~had ~~was~~received ~~converted~~from ICICI. We do not have a written assignment from ICICI regarding the assumption of this commitment. This conditional grant is only required to ~~115~~be paid back in the form of royalties up to a maximum of $1,~~138~~400,000 ~~shares~~to ICICI once Bajaj begins paying licensing fees. As of ~~common~~the ~~stock~~date of this report, Bajaj has not performed on ~~January~~its 31agreement, ~~2012~~therefore no licensing fees from Bajaj have been earned and no licensing fee royalties have been paid to ICICI.

ICICI also provided a loan of $500,000 to New Generation Motors in March of 2003 to help finance New Generation Motors support of the Bajaj program. NuGen Mobility assumed this $500,000 liability on the condition that the loan is converted to a conditional grant (similar to the conditional grant executed by New Generation Motors and ICICI in 2001). In 2006, both New Generation Motors and ICICI agreed to convert this $500,000 loan to a conditional grant under the same terms and conditions as the previous 2001 agreement. This conditional grant is only required to be paid back in the form of royalties to ICICI once Bajaj begins paying licensing fees. As of the date of this report, Bajaj has not performed on its agreement, therefore no licensing fees from Bajaj have been earned and no licensing fee royalties have been paid to ICICI.

Consequently, NuGen believes that ICICI’s position is without merit and will vigorously defend itself if and when legal proceedings are initiated.

F-20

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q for ~~the~~ the quarter ended ~~December~~March 31, ~~2011~~2012 (this "Report") contains "forward-looking statements" within the meaning of the securities laws. You should not place undue reliance on these statements. Certain of these factors are discussed in this report and in our Annual Report on Form 10-K for the year ended September 30, 2011. Forward-looking statements include information concerning our liquidity and our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," or similar expressions. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. As you read and consider this Report, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Many factors could affect our actual financial results and could cause actual results to differ materially from those expressed in the forward-looking statements. Some important factors include:

general economic conditions

our ability to evaluate and predict our future operations and expenses,

the possibility of future product-related liability claims,

our future capital needs and our ability to obtain financing,

our ability to protect our intellectual property and trade secrets, both domestically and abroad,

expenses involved in protecting our intellectual property and trade secrets,

our ability to attract and retain key management, technical, and research and development personnel,

our ability to research and develop new technology and design and manufacturing techniques,

technological advances, technology for new and competing products, and new design and manufacturing techniques developed by our competitors,

anticipated and unanticipated trends and conditions in our industry,

our ability to predict consumer preferences,

changes in the costs of operation,

our ability to compete,

our ability to manage growth and carry out growth strategies, including international expansion,

possible necessity of obtaining government approvals for both new and continuing operations,

risks, expenses and requirements involved in operating in various foreign markets, including India and China,

exposure to foreign currency risk and interest rate risk,

possible foreign import controls and United States-imposed embargoes,

possible disruption in commercial activities due to terrorist activity, armed conflict and government instability, and

other factors set forth in this 10-Q.

In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this Report might not prove accurate. You should not place undue reliance upon them. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this Report, and we undertake no obligation to update or revise publicly any forward-looking statements, whether to reflect new information, future events or for any other reason otherwise.

OTHER PERTINENT INFORMATION

When used in this report, the terms “NuGen,” "we," "our," and "us" refers to NuGen Holdings, Inc., a Delaware corporation. When used in this report, “fiscal ~~2011~~2012” means the ~~quarter~~six months ended ~~December~~March 31, ~~2011~~2012 and "fiscal ~~2010~~2011" ~~quarter~~means ~~ended~~the ~~December~~six months March 31, ~~2010~~2011.

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

Recent Developments

We currently generate revenue primarily from contract research and development services and may derive additional revenues in the future from the sale or license of our technology to customers. Our technology is related to specialty electric drive engines and related components. This technology is currently being sold directly to OEMs pursuant to technical assistance agreements. The agreements generally provide for us to engineer our products to run in various platforms (e.g. vehicles, electric generators and motors). Our technology is used primarily to convert electrical power into mechanical power so that mechanical power can be used to propel a vehicle or run a generator. As our technology can be adapted for a particular application, our services utilizing our technology is customarily included in an engineering service component. Accordingly, the Company reflects its revenue in one line on its financial statements.

Future cash commitments

The Company estimates the need for capital to run new production facilities. The exact amount will be determined based on both the market demand for the Company’s products and the time needed for these facilities to run at full capacity. The Company will carefully review its financial condition and consider financing with internally generated cash, bank loans or additional equity.

Results of Operations

Comparison of Fiscal Quarters ~~ending~~ended ~~December~~March 31, ~~2011~~2012 and ~~2010~~2011

Net Sales:

Net sales by customer for the quarter ended ~~December~~March 31, ~~2011~~2012 as compared to the quarter ended ~~December~~March 31, ~~2010~~2011 is as follows:

	2011					2010
	2012					2011
Customer	Amount		% of Total			Amount		% of Total			$ Change
Hefei	$	08,500		03.05	%	$	~~553~~151,~~585~~680		8049.1	%	$	(~~553~~143,~~585~~180	)
Department of Defense (Army SBIR) – Phase 2 - Innovative Motor and Generator Technologies		~~165~~187,~~256~~200		9076.0	%		5746,~~043~~677		815.31	%		~~108~~140,~~213~~523
Department of Defense (Navy SBIR) - Advanced Marine Generator for Combatant Craft		0		0.0	%		79,854		11.6	%		(79,854	)
Hivron, Inc		11,214		4.6	%		-		-	%		11,214
Mahindra & Mahindra		132,~~575~~540		71.40	%		-74,819		-24.2	%		13(72,~~575~~279	)
Solar car participants		436,~~846~~752		214.69	%		-35,536		-11.6	%		41,~~846~~216
Total	$	~~183~~246,~~677~~206		100.0	%	$	~~690~~308,~~482~~712		100.0	%	$	(~~506~~62,~~805~~506	)

Revenues from Army SBIR increased by $~~108~~140,~~213~~523 to $~~165~~187,~~256~~200 and amounted to 9076.0% of our total revenues in fiscal ~~2011~~2012. ~~There~~Revenues ~~were no revenues~~ from ~~the~~Hefei ~~Navy SBIR~~ in 2011 ~~since~~consists ~~this~~engineering ~~project~~support ~~was~~services ~~completed~~amounting byto ~~December 31~~$151,680 ~~2011.~~to ~~Revenues~~help ~~from~~ Hefei inset ~~2010~~up ~~consists~~their ofproduction afacilities ~~one-time purchase~~in ~~and~~the ~~resale~~Anhui province of ~~specialized~~China. ~~equipment~~Revenues ~~for~~from ~~Hefei’s~~Mahindra ~~manufacturing~~in ~~facility amounting~~2011 ~~amounting~~of to $~~411~~74,~~106~~819 ~~and engineering~~represent ~~support~~sales ~~services~~pursuant ~~amounting~~ to ~~$142,479.~~our ~~This~~Technical ~~project~~Assistance ~~was~~Agreement ~~completed~~that expired byin ~~June 30,~~ 2011.

Direct Costs, Labor and Gross ~~Loss~~ Income:

Direct costs decreased by $~~391~~34,~~722~~156 to $2827,~~029~~613 for the quarter ended ~~December~~March 31, ~~2011~~2012 compared to the quarter ended ~~December~~March 31, ~~2010~~2011 due to decreased material costs because of lower revenues in fiscal ~~2011~~2012. ~~In addition, the purchase of specialized equipment for Hefei’s manufacturing facility was included in direct costs in 2010.~~ Direct labor decreased by $8910,~~157~~055 to $~~200~~180,~~021~~457 for the quarter ended ~~December~~March 31, ~~2011~~2012 compared to the quarter ended ~~December~~March 31, ~~2010~~2011 due to ~~the~~a ~~decrease~~20% reduction in ~~revenues~~compensation for all salaried employees and reduction of hours worked by hourly employees by approximately 20% effective December 2011.

Our gross ~~loss~~income was $4438,~~373~~136 for the quarter ended ~~December~~March 31, ~~2011~~2012 versus $1856,~~447~~428 for the quarter ended ~~December~~March 31, ~~2010~~2011.

Operating Expenses:

Our operating expenses decreased by $100,712 to $255,421 for the quarter ended March 31, 2012 compared to the quarter ended March 31, 2011. Compensation and travel expense decreased by $50,875 and 30,317, respectively in 2012 primarily due to the decrease in revenues. In addition, effective December, 2011, the Company reduced compensation for all salaried employees by 20% and reduced the hours worked by hourly employees by approximately 20%. Professional fees decreased by $34,782 primarily due to a decrease in legal fees related to the filing of form S-1 Registration Statement under the Securities Act of 1933 in the quarter ended March 31, 2011. Bad debt expense increased by $25,000 from $0 in the quarter ended March 31, 2012 primarily due to management’s estimate of the amount of probable credit losses in accounts receivable

Other Income ( Expense)

Interest expense for fiscal 2012 was $13,528 and for fiscal 2011 was $9,761. This increase was primarily due to increase in short term debt entered into in fiscal year 2012.

We recognized a gain on debt extinguishment in the amount of $6,566 due to settlement of past due liabilities at less than recorded value in the quarter ended March 31, 2012.

Comparison of six months ended March 31, 2012 and 2011

Net Sales:

Net sales by customer for the six months ended March 31, 2012 as compared to the six months ended March 31, 2011 is as follows:

	2012					2011
Customer	Amount		% of Total			Amount		% of Total			$ Change
Hefei	$	8,500		2.0	%	$	705,265		70.6	%	$	(696,765	)
Department of Defense (Army SBIR) – Phase 2 - Innovative Motor and Generator Technologies		352,456		82.0	%		103,720		10.4	%		248,736
Department of Defense (Navy SBIR) - Advanced Marine Generator for Combatant Craft		-		-	%		79,853		8.0	%		(79,853	)
Hivron, Inc		11,214		2.6	%		-		-	%		11,214
Mahindra & Mahindra		16,115		3.7	%		74,820		7.5	%		(58,705	)
Solar car participants		41,598		9.7	%		35,536		3.5	%		6,062
Total	$	429,883		100.0	%	$	999,194		100.0	%	$	(569,311	)

Revenues from Army SBIR increased by $248,736 to $352,456 and amounted to 82.0% of our total revenues in fiscal 2012. There were no revenues from the Navy SBIR in 2012 since this project was completed by March 31, 2011. Revenues from Hefei in 2011 consists of a one-time purchase and resale of specialized equipment for Hefei’s manufacturing facility amounting amounting to $411,106 and engineering support services amounting to $294,159. This project was completed by June 30, 2011.

Direct Costs, Labor and Gross Loss:

Direct costs decreased by $425,881 to $55,642 for the six months ended March 31, 2012 compared to the six months ended March 31, 2011 due to decreased material costs because of lower revenues in fiscal 2012. In addition, the purchase of specialized equipment for Hefei’s manufacturing facility was included in direct costs in 2011 amounting to $411,106. Direct labor decreased by $99,212 to $380,478 for the six months ended March 31, 2012 compared to the six months ended March 31, 2011 due to the decrease in revenues. In addition, effective December, 2011, the Company reduced compensation for all salaried employees by 20% and reduced the hours worked by hourly employees by approximately 20%.

Our gross loss was $6,237 for the six months ended March 31, 2012 versus gross income of $37,981 for the six months ended March 31, 2011.

Operating Expenses:

Our operating expenses decreased by $95195,~~055~~767 to $~~296~~552,~~997~~418 for the ~~quarter~~six months ended ~~December~~March 31, ~~2011~~2012 compared to the ~~quarter~~six months ended ~~December~~March 31, ~~2010~~2011. Compensation ~~expense decreased by $30,429~~ and travel expense decreased by $5681,~~452~~304 and 86,769, respectively in ~~2011~~2012 primarily due to ~~the~~a decrease in revenues. In addition, effective December, 2011, the Company reduced compensation for all salaried employees by 20% and reduced the hours worked by hourly employees by approximately 20%. Professional fees decreased by $29,246 primarily due to a decrease in legal fees related to the filing of form S-1 Registration Statement under the Securities Act of 1933 in fiscal year 2011. Bad debt expense increased by $25,000 from $0 in fiscal 2011 primarily due to management’s estimate of the amount of probable credit losses in accounts receivable

Other ~~Expenses~~Income ( Expense):

Interest expense for fiscal ~~2011~~2012 was $1125,~~624~~152 and for fiscal ~~2010~~2011 was $1020,~~916~~677. This increase was primarily due to increase in short term debt entered into in fiscal year 2012.

We recognized a gain on debt extinguishment in the amount of $6,566 due to settlement of past due liabilities at less than recorded value in the six months ended March 31, 2012.

Liquidity and Capital Resources

The following table summarizes total current assets, current liabilities and working capital at ~~December~~March 31, ~~2011~~2012 compared to September 30, 2011.

	December 31, 2011			September 30, 2011
	March 31, 2012			September 30, 2011
Current Assets	$	~~337~~274,~~851~~437		$	323,061
Current Liabilities	$	12,~~948~~091,~~998~~067		$	1,612,721
Working Capital (Deficit)	$	(1,~~611~~816,~~147~~630	)	$	(1,289,660	)

Our principal source of funds has been ~~equity~~ equity provided by our stockholders, various borrowings (including borrowings from a principal stockholder) and sales to our customers. Our principal use of funds has been for operating expenses and direct labor costs. We estimate that we have sufficient funds to continue operations until approximately ~~March~~June 2012 (without giving effect to ~~exercise~~ of ~~options~~the ~~to acquire our Class A Preferred Stock or~~ sale of our Series B Preferred Stock, as to which no assurance can be given, would raise ~~between~~approximately $2,~~800~~300,000 ~~to $3,000,000~~).

While we have raised capital to meet our ~~working~~ working capital and financing needs in the past, additional financing is required in order to meet our current and projected cash ~~flow~~ flow deficits from operations and development of revenue sources. As of ~~December~~March 31, ~~2011~~2012, we had a working capital deficit of $1,~~611~~816,~~147~~630. There can be no assurance that we will be able to raise such funds if and when we wish to do so or on terms acceptable to us. This raises substantial doubt about our ability to continue as a going concern. Specifically, in the event that we are not successful at raising capital to a level sufficient to pay our expenditures, we are prepared to ~~reduced~~further reduce our administrative overhead and reduce our marketing and public relations expenditures. If we are unable to cut expenses to earn profits or raise additional debt or equity capital we will have to discontinue operations. The doubt about our ability to continue as a going concern was reflected in the opinion of our auditors expressed with respect to our financial statements for the years ended September 30, 2011 and 2010 which opinion was qualified on a “going concern basis”. The auditors noted that in light of our negative cash flow from operations, our working capital deficiency and stockholders’ deficiency, there was substantial doubt about our ability to continue as a going concern. Management currently intends to attempt to raise additional capital through ~~public~~ public or private offerings, the conversion of its preferred stock option, the acquisition of a company; or merger with or into ~~another~~ another company.

Net cash used in operating activities was $~~136~~42,~~594~~ 572 and $~~705~~872,~~321~~025 for the ~~three~~six months ended ~~December~~March 31, ~~2011~~2012 and ~~2010~~2011, respectively. Cash flows from financing activities was $6967,~~475~~473 and $~~134~~182,~~219~~763 for the ~~three~~six months ended ~~December~~March 31, ~~2011~~2012 and ~~2010~~2011, respectively, and was primarily due to the net proceeds from ~~the~~ the sale of the Company’s equity securities, as well as, the sale of convertible notes and bridge loans. At ~~December~~March 31, ~~2011~~ ~~and~~2012 and September 30, 2011, we had $30122,~~445~~465 and $97,564 cash on hand, respectively.

For the three months ended December 31, 2011, we entered into a subscription agreement with one related party accredited investor pursuant to which, among other things, we issued an aggregate of 111,111 Series B convertible preferred shares, par value $0.001 per share (“Series B Preferred Stock”), at a purchase price of $0.18 per share, for aggregate gross proceeds of $20,000. This investor also received two-year warrants to purchase common stock in an amount equal to 20% of the number of shares of Series B Preferred Stock purchased by such investor.7

6For the six months ended March 31, 2012, we entered into a subscription agreement with one related party accredited investor pursuant to which, among other things, we issued an aggregate of 111,111 Series B convertible preferred shares, par value $0.001 per share (“Series B Preferred Stock”), at a purchase price of $0.18 per share, for aggregate gross proceeds of $20,000. This investor also received two-year warrants to purchase common stock in an amount equal to 20% of the number of shares of Series B Preferred Stock purchased by such investor.

For the ~~three~~six months ended ~~December~~March 31, ~~2011~~2012, we entered into a bridge note payable agreements for aggregate gross proceeds of $49,000 with one accredited investor and two related parties. These investors also received two and four-year warrants to purchase common stock in an amount equal to 20% of the number of shares of Series B Preferred Stock purchased by such investor.

As of ~~December~~March 31, ~~2011~~2012 and September 30, 2011, the Company had a total of $~~741~~698,~~953~~608 and $692,118 of debt outstanding, respectively. The primary components of this total are $596,108 owed to New Generation Motors, $50,000 and $70,000 owed to holders of the Company’s convertible promissory notes at March 31, 2012 and September 30, 2011, respectively and $52,500 in short-term notes payable in ~~2011~~2012.

The Company is delinquent in its quarterly payments todue ~~New~~August ~~Generation~~15, ~~Motors~~2011, ~~due~~November ~~August~~ 15, 2011 and ~~November~~February 15, ~~2011~~2012. On January 6, 2012, New Generation Motors granted a waiver to defer these quarterly payments until March 7, 2012. ~~The~~On ~~Company~~March is21, in2012, ~~default~~New onGeneration ~~its~~Motors 3%extended ~~convertible~~this ~~promissory~~waiver ~~notes because~~until ~~it did not convert the promissory notes and accrued interest into common stock or repay the debt within the terms of the~~May ~~agreements~~12, 2012.

On January 6, 2012, the Company and one ~~investor~~ investor agreed to extend the term of a $50,000 convertible note agreement until January 6, 2013 under the original terms and conditions. Onand ~~January 31, 2012,~~ the Company converted one note in the amount of $20,000 plus accrued interest of $725 to 115,338 shares of common stock.

Critical Accounting Policies

We have disclosed in the notes to our financial statements those accounting policies that we consider to be significant in determining our results of operations and our financial position which are incorporated by reference herein. The following reflects the more critical accounting policies that currently affect our financial condition and results of operations.

Revenue and Cost Recognition

Revenue under the Company’s SBIR contracts with both the US Army and the US Navy will be recognized in the same period as allowable and billable costs are incurred.

Changes in job performance, estimated profitability and final contract settlements may result in revisions to cost and revenue, and are recognized in the period in which the revisions are determined.

Contract costs include all direct materials, subcontract and labor costs and other indirect costs. Selling, general and administrative costs are charged to expense as incurred. At the time a loss on a contract becomes known, the entire amount of the estimated loss is accrued.

Use of estimates

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the allowance for doubtful accounts, the valuation of inventories and the recoverability of long-lived assets. Actual results could differ from those estimates.

Accounts Receivables

In the normal course of business, the Company typically extends credit to its customers without requiring collateral or other security interests. Management reviews its accounts receivables at each reporting period to provide for an allowance against accounts receivable for an amount that could become uncollectible. This review process may involve the identification of payment problems with specific customers. The Company estimates this allowance based on the aging of the accounts receivable, historical collection experience, and other relevant factors, such as changes in the economy and the imposition of regulatory requirements that can have an impact on the industry. These factors continuously change, and can have an impact on collections and the Company’s estimation process. These impacts may be material. Subsequent cash recoveries are recognized as income in the period when they occur.

Share-Based Payment

At inception, the Company implemented ASC 718, “Share-Based Payment” which requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The statement also requires the recognition of compensation expense for the fair value of any unvested stock option awards outstanding at the date of adoption. The Company values any employee or non-employee stock based compensation at fair value using the Black-Scholes Option Pricing Model.

Recent Accounting Pronouncements

~~The~~ASU ~~Company~~No. ~~will~~2011-04; ~~adopt~~Amendments ~~the~~to ~~methodologies prescribed~~Achieve byCommon ~~this~~Fair ~~ASU~~Value byMeasurement ~~the date required,~~ and ~~does~~Disclosure ~~not~~Requirements ~~anticipate~~in ~~that~~U.S. ~~the~~GAAP ~~ASU~~and ~~will have a material effect on its financial position or results of operations.~~IFRSs

~~ASU No. 2011-05; Amendments to Topic 220, Comprehensive Income.~~ In ~~June~~May, 2011, the FASB issued ASU No. 2011-0504. The ~~Under the~~ amendments in this ASU, angenerally ~~entity~~represent ~~has~~clarifications ~~the option to present the total~~ of ~~comprehensive~~Topic ~~income~~820, ~~the~~but ~~components~~also ofinclude ~~net~~some ~~income,~~instances ~~and~~where ~~the components of other comprehensive income either in~~ a ~~single~~particular ~~continuous~~principle ~~statement~~or ofrequirement ~~comprehensive~~for ~~income~~measuring orfair invalue ~~two~~or ~~separate~~disclosing ~~but~~information ~~consecutive~~about ~~statements.~~fair Invalue ~~both~~measurements ~~choices,~~has anchanged. ~~entity~~This ~~is required~~ASU toresults ~~present~~in ~~each~~common ~~component~~principles ofand ~~net~~requirements ~~income~~for ~~along~~measuring ~~with~~fair ~~total~~value ~~net~~and ~~income,~~for ~~each~~disclosing ~~component~~information ofabout ~~other~~fair ~~comprehensive~~value ~~income~~measurements in ~~along~~accordance with ~~a total~~U.S. ~~for~~GAAP ~~other~~and ~~comprehensive~~IFRSs. ~~income,~~The ~~and~~amendments ain ~~total~~this ~~amount~~ASU ~~for~~are ~~comprehensive~~to ~~income~~be applied prospectively. ~~This~~For ~~ASU~~public ~~eliminates~~entities, the ~~option~~amendments are toeffective ~~present~~during ~~the components~~interim ofand ~~other~~annual ~~comprehensive~~periods ~~income~~beginning asafter ~~part~~December of15, ~~the~~2011. ~~statement~~Early ofapplication ~~changes~~by inpublic ~~stockholders'~~entities ~~equity~~is not permitted. The ~~amendments~~Company inhas ~~this~~adopted ~~ASU do not change~~ the ~~items~~methodologies ~~that~~prescribed ~~must~~by bethis ~~reported~~ASU inand ~~other~~the ~~comprehensive~~ASU ~~income~~did ornot ~~when~~have ana ~~item~~material ofeffect ~~other~~on ~~comprehensive~~its ~~income must~~financial beposition ~~reclassified~~or toresults ~~net~~of ~~income~~operations.

~~The amendments in this~~ ASU ~~should be applied retrospectively~~No. ~~For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15,~~ 2011.-05; ~~Early~~Amendments ~~adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. Due~~ to ~~the recency of this pronouncement, the Company is evaluating its timing of adoption~~Topic ~~of ASU 2011-05~~220, ~~but~~Comprehensive ~~will adopt the ASU retrospectively by the due date.~~Income

OnIn ~~September 15~~June, 2011, the FASB issued ASU No. 2011-~~08,~~05. ~~Intangibles~~Under –the ~~Goodwill~~amendments ~~and~~in ~~Other~~this ASU, ~~which simplifies how~~ an entity ishas ~~required~~the option to ~~test~~present ~~goodwill~~the ~~for~~total ~~impairment.~~of ~~This~~comprehensive income, the components ~~ASU~~of ~~would~~net ~~allow~~income, anand ~~entity~~the tocomponents ~~first~~of ~~assess~~other ~~qualitative~~comprehensive ~~factors~~income toeither ~~determine~~in ~~whether~~a itsingle iscontinuous ~~necessary~~statement toof ~~perform~~comprehensive ~~the~~income or in two~~-step~~ ~~quantitative goodwill~~separate ~~impairment~~but ~~test~~consecutive statements. ~~Under~~In ~~the~~both ~~ASU~~choices, an entity ~~would~~is ~~not be~~ required to ~~calculate~~present ~~the~~each ~~fair~~component ~~value~~ of anet ~~reporting~~income ~~unit unless~~along ~~the~~with ~~entity~~total ~~determines~~net income, ~~based~~each oncomponent of other comprehensive income along with a ~~qualitative~~total ~~assessment~~for other comprehensive income, ~~that~~and ita istotal amount ~~more~~for ~~likely~~comprehensive ~~than~~income. ~~not~~This ~~that~~ASU ~~its~~eliminates ~~fair~~the ~~value~~option isto ~~less~~present ~~than~~the ~~its~~components of other comprehensive income as part ~~carrying~~of ~~amount~~the statement of changes in stockholders' equity. The amendments in this ASU ~~includes~~do anot ~~number~~change ofthe ~~factors~~items tothat ~~consider~~must be reported in other ~~conducting~~comprehensive ~~the~~income ~~qualitative~~or ~~assessment~~when an item of other comprehensive income must be reclassified to net income. The ~~ASU~~amendments in isthis ~~effective~~ASU ~~for~~should ~~annual~~be ~~and~~applied ~~interim~~retrospectively. ~~goodwill~~For ~~impairment~~public ~~tests~~entities, ~~performed~~the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted., ~~This~~because ~~standard~~compliance with the amendments is already permitted. The amendments do not ~~expected~~require toany transition disclosures. The Company has adopted the methodologies prescribed by this ASU and the ASU did not have a material ~~impact~~effect on ~~the~~its ~~Company’s~~financial ~~reported~~position or results of operations ~~or financial position~~.

ASU 2011-08, Intangibles – Goodwill and Other

On September 15, 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other, which simplifies how an entity is required to test goodwill for impairment. This ASU would allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under the ASU, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The ASU includes a number of factors to consider in conducting the qualitative assessment. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company has adopted the methodologies prescribed by this ASU and the ASU did not have a material effect on its financial position or results of operations.

Off Balance Sheet Arrangements

an aggregate of $273,741 in operational loans made by our principal shareholders to New Generation Motors to allow them to continue operations prior to August 2007,

$101,083 in customer deposits that they retained though we were responsible for fulfilling such customer orders, and

$29,068 in amounts we agreed to pay to New Generation Motors’s landlord for back rent.

The principal and interest on the loan is to be repaid, on a quarterly basis, until all amounts due thereon have been paid. The amount of each payment is equal to the greater of:

(i)

$7,500, and

(ii)

the product obtained by multiplying our Gross Revenues (as defined) for the quarter by the applicable percentage rate.

The applicable percentage rate increases by one percentage point per year beginning at 2% for 2007 increasing to 6% for 2011 and all subsequent years. The payment is first applied to the accrued interest on the loan and the remainder, if any, to the principal amount owed. As of the date hereof, an aggregate of $90,000 has been paid (twelve quarterly payments of $7,500 per quarter) and all of the payments have been applied to accrued interest. Accordingly, the principal balance of the loan has been $596,108 since August 2007.

defined as:

(i)

all fees and other revenue that NuGen Mobility receives from any source,

(ii)

the then-current fair market value of (x)the assets purchased from New Generation Motors, or (y)the business (as a going concern) or portion thereof sold or otherwise transferred to our affiliate, and

(iii)

the proceeds from the sale or other disposition by NuGen Mobility to any other third party of all or any portion of (x) the assets and/or (y) the business as a going concern. To date, we have not been required to make any such payments.

9The Company is delinquent in its quarterly payments due August 15, 2011, November 15, 2011 and February 15, 2012. On January 6, 2012, New Generation Motors granted a waiver to defer these quarterly payments until March 7, 2012. On March 21, 2012, New Generation Motors extended this waiver until May 12, 2012.

The Company is delinquent in its quarterly payments due August 15, 2011 and November 15, 2011. On January 6, 2012, New Generation Motors granted a waiver to defer these quarterly payments until March 7, 2012.

Although the purchased assets included a license agreement between New Generation Motors and Bajaj Auto Ltd., an Indian based manufacturer of two and three-wheel vehicles, pursuant to which Bajaj Auto licensed our technology which is embedded in Bajaj Auto’s three-wheel Auto-Rickshaw, do not have a consent from Bajaj Auto to the assignment of this agreement with New Generation Motors to us nor do we have any other agreement with Bajaj.

As part of this asset purchase agreement, we we agreed to assume New Generation Motor’s commitment to reimburse a conditional grant of $700,000 that it had received from ICICI. We do not have a written assignment from ICICI regarding the assumption of this commitment. This conditional grant is only required to be paid back once Bajaj begins paying licensing fees on the technology mentioned above. If we had been assigned this agreement we would then be obligated to pay ICICI a royalty on the licensing fees received from Bajaj agreement until $1,400,000 is repaid based upon a schedule in the agreement. Since the dates provided for in the schedule to the agreement have passed, the agreement provides that if the actual sales deviate substantially, the royalty schedule will have to be changed. ICICI also provided a loan of $500,000 to New Generation Motors. In connection with this asset purchase agreement, NuGen Mobility assumed the repayment of this $500,000 loan on the condition that the loan would be converted to a conditional grant (similar to the conditional grant executed by New Generation Motors and ICICI in 2001). In 2006, both New Generation Motors and ICICI agreed to convert this second $500,000 loan to a conditional grant under the same terms and conditions as the previous 2001 agreement. However, we currently do not have a signed document indicating such agreement and there can be no assurances that our discussions will result in such conditional grant agreement. Therefore, under the terms of the asset purchase agreement, we are obligated to make payments to New Generation Motors on a conditional grant basis in accordance with the asset purchase agreement. ~~Currently,~~ We ~~no demand has been made to NuGen Mobility for payment; accordingly, we~~ do not reflect this as a liability on our balance sheet but rather we include it under “Commitments and Contingencies” in our financial statement footnotes. As of ~~December~~March 31, ~~2011~~2012, no payments are owed to ICICI, as ~~the~~ Bajaj is not actively marketing the product at present and no payments are required until sales from this product are generated.

We received a correspondence from Puranik and Company, the attorneys for ICICI Bank Limited. This letter was dated March 4, 2012 but was received by us on April 3, 2012. This letter was addressed to New Generation Motors, Inc., NuGen Mobility, Inc and Bajaj Auto Ltd. The letter requests that (1) New Generation Motors pay the amount of $1,400,000 pursuant to the $700,000 Conditional Grant Agreement dated October 30, 2001; (2) New Generation Motors pay the amount $962,763 pursuant to a $500,000 loan outlined in the Foreign Currency Facility Agreement dated March 3, 2003; (3) NuGen Mobility terminate the Asset Purchase Agreement between New Generation Motors and NuGen Mobility and; (4) requests the status from Bajaj Auto, Ltd of the Master License Agreement dated December 17, 2005. Nugen believes that ICICI’s position is without merit since Bajaj is not actively marketing the product at present and no payments are required until sales from this product are generated.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the ~~participation~~ participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of ~~December~~March 31, ~~2011~~2012. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure controls are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal controls over financial reporting during our first fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no pending legal proceedings to which we are a party to or in which to our knowledge any of our directors, officers or affiliates or any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us.

ITEM 1A. RISK FACTORS

The Company is a “smaller reporting company” as defined by Regulation S-K and as such, not required to provide the information contained in this item pursuant to Regulation S-K.

ITEM 2. UNREGISTERED ~~SALE~~SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the period covered by this quarterly report, we entered into a subscription agreement with one related party accredited investor pursuant to which, we issued an aggregate of 111,111 Series B convertible preferred shares, par value $0.001 per share, at a purchase price of $0.18 per share, for aggregate gross proceeds of $20,000. This investor also received two-year warrants to purchase common stock in an amount equal to 20% of the number of shares of Series B Preferred Stock purchased by such investor.None

ITEM 3. DEFAULTS OFUPON SENIOR SECURITIES

The Company is delinquent in its quarterly payments todue ~~New Generation Motors pursuant to the Asset Purchase Agreement dated~~ August 2315, ~~2007~~2011, ~~due~~November ~~August~~ 15, 2011 and ~~November~~ February 15, ~~2011~~2012. On January 6, 2012, New Generation Motors granted a waiver to defer these quarterly payments until March 7, 2012. On March 21, 2012, New Generation Motors extended this waiver until May 12, 2012.

AsITEM of December 31, 2011, the Company was in default in its convertible note agreements dated October 22, 2010 because it did not convert the promissory notes and accrued interest into common stock or repay the debt within the prescribed time frames4. ~~One note in the amount of $50,000 plus accrued interest~~ MINE ~~was~~SAFETY renewed on January 6, 2012 for an additional one year term expiring January 6, 2013 under the same terms and conditions as provided for in the previous note agreement. One note in the amount of $20,000 plus accrued interest was converted to 115,138 shares of common stock on January 31, 2012.DISCLOSURES

~~ITEM 4. (REMOVED AND RESERVED)~~None

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No.		Description

31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act

31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act

32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act

32.2		Certification of Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act

1112

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