UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————


þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended: March 31, 2011
or

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the transition period from: _____________ to _____________

———————

Andover Holdings, Inc.

(Exact name of registrant as specified in its charter)

———————


Florida	000-17746	64-1045849
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

7300 N. Federal Highway Suite 207 Boca Raton, Florida 33487

(Address of Principal Executive Office) (Zip Code)

561 989 3600

(Registrant’s telephone number, including area code)

N/A

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

———————


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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files).			¨	Yes	¨	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.

Large accelerated filer	¨	Accelerated filer			¨
Non-accelerated filer	¨	Smaller reporting company			þ

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of March 31, 2011 was approximately 31,110,580.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS


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

Cash	$	38,330		$	57,094
Total current assets		38,330			57,094

Total assets	$	38,330		$	57,094

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current Liabilities
Accounts payable and accrued expenses	$	97,513		$	189,386
Accounts payable and accrued expenses, related parties		299,518			294,329
Loans payable		287,500			277,500
Loans payable- related parties		185,869			185,869
Total current liabilities		870,400			947,084

Total liabilities		870,400			947,084

Commitments and contingencies

Stockholders' (deficit):
Preferred stock, $0.001 par value; 20,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.001 par value, 50,000,000 shares authorized; 31,110,580 shares issued and outstanding, respectively		31,111			31,111
Additional paid-in capital		2,857,089			2,857,089
Deficit accumulated during the development stage		(3,720,270	)		(3,778,190	)

Total stockholders' (deficit)		(832,070	)		(889,990	)

Total liabilities and stockholders' (deficit)	$	38,330		$	57,094

The accompanying notes are an integral part of the consolidated financial statements

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Cumulative From
	Inception
	(June 28, 1999)			For the Three Months Ended
	To March 31,			March 31,
	2011			2011			2010
	(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	—		$	—		$	—

Operating expenses		3,813,379			30,711			—

Operating (Loss)		(3,813,379	)		(30,711	)		—

Other income (expense)
Cancellation of debt pursuant to agreement rescission		130,000			—			—
Cancellation of accounts payable		96,029
Interest ( expense)		(132,920	)		(7,398	)		(7,945	)
Income (Loss) Before Provision for Income Taxes		(3,720,270	)		57,920			(7,945	)

Income Taxes		—			—			—

Net Income (Loss)	$	(3,720,270	)	$	57,920		$	(7,945	)


Net (Loss) Per Common Share -
Basic and Diluted				$	—			—

Weighted Average Shares of Common Stock Outstanding					31,110,580			31,110,580

The accompanying notes are an integral part of the consolidated financial statements

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Cumulative From
	Inception
	(June 28, 1999)			For the Three Months Ended
	To March 31,			March 31,
	2011			2011			2010
	(Unaudited)			(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(3,720,270	)	$	57,920		$	(7,945	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,885			—			—
Stock based compensation		1,405,600			—			—
Stock issued for liabilities		122,845			—
Cancellation of debt pursuant to agreement rescission		(130,000	)		—			—
Stock and note issued for purchased R & D		161,250			—			—
Accumulated loss of acquisition		8,711			—			—
Changes in operating assets and liabilities:
Other assets, security deposits		—			—			—
Accounts payable and accrued expenses		105,512			(91,873	)		1,356
Accounts payable and accrued expenses-related parties		724,023			5,189			6,589
Net cash used in operating activities		(1,319,444	)		(28,764	)		—

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(2,885	)		—			—
Net cash used in investing activities		(2,885	)		—			—

CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft repayment		—			—			—
Loans payable proceeds, related parties		321,594			—			—
Loans payable repayments, related parties		(183,483	)		—			—
Proceeds from loans payable		237,500			10,000			—
Proceeds from sale of common stock		935,048			—			—
Net cash provided by financing activities		1,360,659			10,000			—

Net increase (decrease) in cash		38,330			(18,764	)		—

Cash and equivalents, beginning of period		—			57,094			—

Cash and equivalents, end of period	$	38,330		$	38,330		$	—

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(UNAUDITED)


	Cumulative From
	Inception
	(June 28, 1999)		For the Three Months Ended
	To March 31,		March 31,
	2011		2011		2010
	(Unaudited)		(Unaudited)		(Unaudited)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Payment of taxes	$	—	$	—	$	—
Payment of interest	$	10,120	$	—	$	—

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock Issued for Services	$	1,405,600	$	—	$	—
Contribution of debt by shareholder	$	370,222	$	—	$	—
Stock Issued for Acquisition of Timber Property, Inc.	$	8,711	$	—	$	—
Stock Issued for Purchased R & D	$	31,250	$	—	$	—

The accompanying notes are an integral part of the consolidated financial statements

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011

NOTE 1. - DESCRIPTION OF BUSINESS

The Company was incorporated under the laws of the State of Florida on June 28, 1999. We filed a Form 10SB with the Securities and Exchange Commission, thereby becoming a publicly reporting company. On October 29, 2001, the Company changed its name from Xelos, Inc. to Real Logic, Inc. On July 31, 2008, it changed the name from Real Logic, Inc. to Andover Energy Holdings, Inc. Management's intentions were to focus on Wind Energy Turbines manufacturing. Due to a change in Management, the Company changed the name to Andover Holdings, Inc. on August 24. 2010.

NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Development Stage Company

The Company is in its development stage since its formation in 1999 and has an accumulated deficit of $3,720,27.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. Estimates are used when accounting for allowance for bad debts, collect ability of accounts receivable, amounts due to service providers, depreciation, and litigation contingencies, among others.

Principles of consolidation

The consolidated financial statements will include the accounts of the Company and its future subsidiaries, in accordance with U.S. generally accepted accounting principles, under the rules and regulations of the U.S. Securities and Exchange Commission (SEC). All inter-company transactions and balances will be eliminated in consolidation.

Revenue recognition

Revenue will be recognized when the related service has been provided, and there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection is reasonably assured. Revenue from other professional services, will be recognized in the period the services are to be provided. Deferred revenue will consist of amounts that have been prepaid and services which have not yet been rendered.

Net loss per common share

In accordance with FASB ASC 260 basic net loss per common share is computed using the weighted average number of common shares outstanding during each period presented, excluding unvested restricted stock awards subject to cancellation. Diluted net loss per common share is computed by using the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares represent the incremental common shares issuable for stock options.

Cash and cash equivalents

The Company classifies cash on hand and deposits in the bank as cash and considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

Concentrations of Risk

The Company’s revenues will primarily be derived from Independent Acquisitions Entities which will be structured as Subsidiaries to the Parent Holding Company.

Property and Equipment

Depreciation is computed on the straight-line method, based on the estimated useful lives of the asset of five to seven years. Expenditures for maintenance and repairs will be charged to operations as incurred. Upon retirement or sale, the cost of assets disposed of and related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. The Company had a minimal amount $2,885 of office equipment that it disposed of in 2008.

Share-Based Compensation

The Company will record compensation expense for share-based compensation in accordance with ASC Topic 718. Currently, there are no Share Options issued. For share options to certain officers and others, in the future, the Company will use the Black-Scholes pricing model to determine the fair value of stock options on the grant dates for stock option awards issued. The Black-Scholes valuation model requires the Company to make assumptions and judgments about the variables used in the calculation. These variables and assumptions include the fair value of our common stock, expected term, the expected volatility, and certain present values.

Income taxes

The Company’s U.S. Federal and state income tax returns prior to fiscal year December 31, 2008 are filed and management will continually evaluate expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The Company recognizes interest and penalties associated with tax matters as part of the income tax provision and includes accrued interest and penalties with the related tax liability in the consolidated balance sheets. Deferred income taxes (benefits) are provided for certain income and expenses which are recognized in different periods for tax and financial reporting purposes.

The Company had cumulative net operating loss carry-forwards for income tax purposes at March 31, 2011 of approximately $3,720,270 expiring through December 31, 2023. The Company has established a 100% valuation allowance against this deferred tax asset, as the Company has no history of profitable operations.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of notes and loan payables is determined using current applicable rates which approximate market rates of such debt.

Recently Issued Accounting Standards

Subsequent Events Disclosures

In February 2010, the FASB issued FASB ASU 2010-09, “Subsequent Events, Amendments to Certain Recognition and Disclosure Requirements,” which clarifies certain existing evaluation and disclosure requirements in ASC 855 “Subsequent Events” related to subsequent events. FASB ASU 2010-09 requires SEC filers to evaluate subsequent events through the date in which the financial statements are issued and is effective immediately. The new guidance does not have an effect on the Company’s consolidated results of operations and financial condition.

Fair Value Measurements

On January 1, 2009, the Company adopted accounting guidance issued by the Financial Accounting Standards Board ( "FASB") which had previously deferred the effective date of fair value measurements for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed in financial statements at fair value on a recurring basis ( at least annually). The adoption of this guidance did not have a material impact on the consolidated financial statements.

NOTE 3 - INCOME TAX

In February 1992, the Financial Standards Board issued Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under SFAS No. 109, deferred assets and liabilities are recognized for the estimated future tax consequences between the financial statement carrying amounts of the existing assets and their respective basis.

Deferred assets and liabilities are measured using enacted tax rates in effect for the year in which temporary differences are expected to be recovered or settled. Under SFAS No. 109, the effect on deferred assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. For the three months ending March 31, 2011 and for the year ending December 31, 2010 the effective income tax rate is:



	Period ending
	March 31, 2011	December 31, 2010
Statutory federal income tax rate	34%	34%
Valuation allowance	(34%)	(34%)
Effective tax rate	––%	––%

The Company has a net operating loss carry forward as of March 31, 2011 of approximately $3,813,379 which is offset by a 100% valuation allowance due to the uncertainty surrounding the ultimate realization of these assets. The loss carry-forwards expires at various dates through 2027.

NOTE 4 - RELATED PARTY TRANSACTIONS

Loan Payable

The Company’s officers and directors have advanced funds to the company for working capital. These advances are unsecured, bear interest at 7% per annum and have no scheduled repayment. For the three months ending March 31, 2011 interest expense of $7,398 has been accrued and the total accrued interest balance at March 2011 is $132,920.

Management Fees

The Board of Directors approved an Executive Employment Agreement of $10,000 per month for Barbara Tolley effective the Second Quarter of Y2010.

NOTE 5 - CAPITAL TRANSACTIONS

There were no capital transactions in the first quarter of Y2010.

NOTE 6 - NOTES AND LOANS PAYABLE

At March 31, 2011 and 2010, total notes and loans payable consisted of the following: Notes and loans payable to principal stockholders are unsecured and due upon demand, with interest at between 5% and 7%.


	March 31, 2011		March 31, 2010

Loans Payable	$	287,500	$	127,500
Loans Payable Related Parties	$	185,869	$	185,869

Interest expense was $7,398 and $7,945 for the quarters ended March 2011 and March 2010, respectively.

NOTE 7. - EQUITY TRANSACTIONS

The fair values of the Stock Options have been valued at the fair market value of the Common Stock at the Date of Issue.

The Company issued a total of 740,000 and 2,670,000, respectively of shares of common stock for a total value of $89,000 and $1,182,400, which has been recorded as compensation expense during the years ended December 31, 2008 and 2007.

The Company issued a total of 320,000 and 25,000, respectively of shares of common stock for a total value of $122,845 and $8,000, which satisfied liabilities during the years ended December 31, 2008 and 2007.

The Company sold 3,305,000 and 3,480,000, respectively of shares of common stock to investors for $348,000 and $142,500 during the years ended December 31, 2008 and 2007.

Effective December 31, 2008, the acting CEO and surviving relative of the deceased CEO Bradford Tolley, of the Company has authorized the contribution $370,222 which represents the balance of his cumulative unpaid accrued compensation to paid in capital of the Company.

The Company has not issued any additional shares resulting from subscription agreements for common stock since July 2008 to present.

NOTE 8. - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing date of this 10-Q and determined that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes thereto other than as discussed in the accompanying notes.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our consolidated financial statements. Certain statements contained in this report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include those discussed in “Forward Looking Statements,” above.

Results of Operations

We are a development stage company as defined in the Statement of Financial Accounting Standards ASC 915 with limited operations. We have had no revenues since inception. The Companies' acquisition for the Duncan Motor Company did not materialize.

There was no Stock based compensation in the First Quarter of March 31, 2011. The Company's accumulated deficit in the First Quarter was $3,720,270 and a working capital deficit of $870,400 compared to an accumulated deficit of $3,778,190 and a working capital deficit of $947, 084 in 2010. Until we initiate and conclude an acquisition, the Company will continue to operate with a deficit.

Interest expense was $7,398 for the quarter ended March 31, 2011, resulting in a cumulative balance since inception of $132,920.

Accounting fees were $0.00 for the quarter, compared to $13,500 in Y2010.

Legal fees were $0.00 for the quarter, compared to $4,030 in Y2010.

Liquidity and Capital Resources

The following table summarizes the cash flows for the quarters ended March 31, 2011 and 2010:


	For the Quarter Ended March 31,
Net cashed (used in) provided by:	2011			2010

Operating Activities	$	(28,764	)	$	—
Investing Activities	$	—		$	—
Financing Activities	$	10,000		$	—

Critical Accounting Policies

Revenue recognition

Revenue is recognized when the related service has been provided, there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection is reasonably assured. The Company has had no revenue, to date. The Company intends to recognize revenue for services as they are provided, beginning on the date that the customer commences our services and continuing over the term of the customer contract. Revenue from other professional services, including setup and direct installation activities are recognized in the period the services are provided. Amounts that have been invoiced are recorded in accounts receivable and either deferred revenues or revenues, depending on whether the revenue recognition criteria have been met. Therefore, deferred revenue consists of amounts that have been prepaid and services have not yet been rendered. Revenue from the sale of bundled infrastructure hardware is recognized at the time installation is complete.

The Company records compensation expense for share-based compensation in accordance with ASC Topic 718. For share options to certain officers and others, the Company used the Black-Scholes pricing model to determine the fair value of stock options on the grant dates for stock option awards issued. The Black-Scholes valuation model requires the Company to make assumptions and judgments about the variables used in the calculation. These variables and assumptions include the fair value of our common stock, expected term, the expected volatility, and certain present values.

Net Operating Loss Carry Forwards

The Company had cumulative net operating loss carry forwards for income tax purposes at March 31, 2011 of approximately $3,720,270, expiring through December 31, 2024. The Company has established a 100% valuation allowance against this deferred tax asset, as the Company has no history of profitable operations.

Going Concern

There is no assurance that we will be able to successfully raise the funds necessary to fund operations through any means available. Further, there is no assurance that we will be able to successfully grow operations even if we are successful in acquiring the funds necessary, which may have a material impact on our consolidated financial position and results of operations. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

Item 3.

Quantitative and Qualitative disclosure about Market Risk

Not required by smaller reporting companies.

Item 4.

Controls and Procedures.

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2010 (the “Evaluation Date”). This evaluation included reviews of the documentation of controls, evaluation of the design effectiveness of controls, and a conclusion on this evaluation. This evaluation was carried out under the supervision and with the participation of our President, as Principal Executive Officer, and our Chief Financial Officer. Based upon that evaluation, management concluded that, as of the end of such period, our disclosure controls and procedures were effective.

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our President and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

There have been no Legal claims or Procedures

Item 1A.

Risk Factors.

Not required by smaller reporting companies.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

There has been no sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities.

There has been no default upon Senior Securities

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

None

Item 6.

Exhibits.


Exhibit No.		Description

31.1		Certificate of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.

31.2		Certificate of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.

32.1		Certificate of Principal Executive and Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

SIGNATURES

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

Date: May 24, 2012


	Andover Holdings, Inc.


	By:	/s/ Barbara Lang Tolley
		Barbara Lang Tolley
		CEO

Andover Holdings, Inc./FL 10-Q