UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended December 31, 2008

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

For the transition period from ________ to ________

COMMISSION FILE NUMBER 000-52565

BALD EAGLE ENERGY INC.

(Exact name of registrant as specified in its charter)

NEVADA	72-1619354
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

21 Waterway Avenue, Suite 300

The Woodlands, TX 77380

(Address of principal executive offices)

(281) 362-2821

(Registrant’s telephone number, including area code)

Not Applicable

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-

accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o

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

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of February 17, 2009, the issuer had 72,960,267 shares of common stock outstanding.

Table of Contents

TABLE OF CONTENTS

	Page

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets as of December 31, 2008 (unaudited) and September 30, 2008	2

Statements of Operations for the three months ended December 31, 2008 and 2007, and for the period from inception through December 31, 2008 (unaudited)	3

Statements of Cash Flows for the three months ended December 31, 2008 and 2007, and for the period from inception through December 31, 2008 (unaudited)	4

Notes to the Financial Statements	5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

Item 3. Quantitative and Qualitative Disclosures About Market Risks	16

Item 4. Controls and Procedures	16

PART II – OTHER INFORMATION

Item 1. Legal Proceedings	17

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3. Defaults Upon Senior Securities	17

Item 4. Submission of Matters to a Vote of Security Holders	17

Item 5. Other Information	17

Item 6. Exhibits	18

SIGNATURES	19

- 1 -

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

BALD EAGLE ENERGY INC.

(An Exploration Stage Company)

BALANCE SHEETS

	(Unaudited) December 31, 2008			September 30, 2008
ASSETS
Current
Cash	$	4,460		$	47,170
Prepaid		6,045			—
Total current assets		10,505			47,170
Oil & gas rights		621,608			621,608
Total Assets	$	632,113		$	668,778

LIABILITIES
Current
Accounts payable	$	341,583		$	234,994
Loan payable – related party		—			5,784
Accrued liabilities		17,998			9,027
Total current liabilities		359,581			249,805

Total Liabilities		359,581			249,805

STOCKHOLDER'S EQUITY
Capital Stock
Authorized:
400,000,000 common voting stock, $0.001 par value
100,000,000 preferred stock, $0.001 par value
Issued and outstanding:
72,960,267 and 71,898,600 common shares, respectively		72,961			71,899
Additional paid-in-capital		1,198,710			1,059,772
Deficit accumulated during the exploration stage		(999,139	)		(712,698	)

Total Stockholders’ Equity		272,532			418,973

Total Liabilities and Stockholders’ Equity	$	632,113		$	668,778

The accompanying notes form an integral part of these financial statements.

- 2 -

Table of Contents

BALD EAGLE ENERGY INC.

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS

For the three months ended December 31, 2008 and 2007 and for the period

October 12, 2005 (Inception) to December 31, 2008

(Unaudited)

	Three months ended December 31, 2008			Three months ended December 31, 2007			October 12, 2005 (Inception) to December 31, 2008

Expenses
General and administrative	$	286,441		$	9,942		$	981,940
Mineral property acquisition and exploration costs		—			—			17,199

Net loss	$	286,441		$	9,942		$	999,139

Basic loss per share	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding		72,292,115			130,068,600

The accompanying notes form an integral part of these financial statements.

- 3 -

Table of Contents

BALD EAGLE ENERGY INC.

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

For the three months ended December 31, 2008 and 2007 and for the period

October 12, 2005 (Inception) to December 31, 2008

(Unaudited)

	Three months ended December 31, 2008			Three months ended December 31, 2007			October 12, 2005 (Inception) to December 31, 2008

Cash provided by (used in)

Operating Activities:
Net loss	$	(286,441	)	$	(9,942	)	$	(999,139	)
Add: Impairment of mineral property		—			—			9,699
Change in operating assets and liabilities:
Prepaid expense		(6,045	)		(3,000	)		(6,045	)
Accounts payable and accrued liabilities		106,589			(1,480	)		341,583
Accrued liabilities		8,971			—			17,998

Cash used in operating activities		(176,926	)		(14,422	)		(635,904	)

Investing Activities:
Mineral property acquisition and exploration costs		—			—			(9,699	)
Lease acquisitions		—			—			(621,608	)

Cash used in investing activities		—			—			(631,307	)

Financing Activities:
Payments on loan payable – related party		(5,784	)		—
Issuance of common stock for cash		140,000			—			1,271,671

Cash provided by financing activities		134,216			—			1,271,671

Net increase (decrease) in cash		(42,710	)		(14,422	)		4,460

Cash, beginning of the period		47,170			14,504			—

Cash, end of the period	$	4,460		$	82		$	4,460

The accompanying notes form an integral part of these financial statements.

- 4 -

Table of Contents

BALD EAGLE ENERGY INC.

(An Exploration Stage Company)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

December 31, 2008

(Unaudited)

Note 1

Interim Reporting and Continuance of Operations

While the information presented in the accompanying interim three month financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, result of operations and cash flows for the interim periods presented. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. It is suggested that these financial statements be read in conjunction with the Company’s September 30, 2008 annual financial statements.

Operating results for the three-month period ended December 31, 2008 are not necessarily indicative of the results that can be expected for the year ending September 30, 2009.

The interim financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. However, at December 31, 2008, the Company had not yet achieved profitable operations, had accumulated losses of $999,139 since its inception and expected to incur further losses in the development of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but believes that the Company will be able to obtain additional funds through additional private equity financing and/or related party advances; however, there is no assurance that additional funding will be available.

Note 2

Alaska North Slope leases

On April 18, 2008, the Company entered into an agreement for the exclusive oil and gas rights under certain leases in the State of Alaska. The total consideration was $621,608, which was payable in stages beginning with an initial payment on April 18, 2008. The lease assignments were exchanged on September 29, 2008, at which time the transaction was deemed to be closed. Upon closing of the purchase agreement, the Company has been assigned the rights to a 100% working interest (representing a net revenue interest of 78.33%) under six (6) separate oil and gas leases (the “North Slope Leases”) located in the State of Alaska’s North Slope hydrocarbon province, which include the exclusive right to drill for, extract, remove, process and dispose of oil and natural gas and associated substances. The parcels subject to the North Slope Leases acquired by the Company constitute an aggregate total of 18,418 acres. The initial primary term of each Lease begins on February 1, 2007 and expires on January 31, 2012, unless it is extended for production or as otherwise provided under the terms of the Lease. The Company is still in the process of completing the final actions related to the transfer of the North Slope Leases by the State of Alaska, as discussed further below.

- 5 -

Table of Contents

BALD EAGLE ENERGY INC.

(An Exploration Stage Company)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

December 31, 2008

(Unaudited)

As part of the transfer, the sellers (Samuel H. Cade and Daniel K. Donkel) reserved an overriding royalty interest equal to 5% of 8/8ths, in addition to the 16.67% royalty interest reserved by the State of Alaska, which will apply to all renewals and extensions of the North Slope Leases. The application for assignment of the North Slope Leases to the Company was completed and submitted to the State of Alaska Department of Natural Resources on November 14, 2008.

Our local representatives in Alaska have been working closely with that state’s Department of Natural Resources in order to complete the transfers of the North Slope Leases since the November 14 closing. We were previously told that our transfer application was effective and had been completed; however, on January 29, 2009 we received a request from Alaska’s Department of Natural Resources for detailed information regarding Bald Eagle’s ability to explore and develop the North Slope Leases. Our local representatives have continued working with the state on satisfying any requests for additional information, which we understand is not unusual for the state to request from companies that have not previously owned leasehold interests in the state, such as our company. We believe that we have provided all the information requested by the state, and that this process is primarily ministerial in nature and will not adversely impact our ownership and development of the North Slope Leases. We hope to complete the state’s review process within the next quarter. In the meantime, Bald Eagle has paid the first annual rental fees due under the North Slope Leases to the State of Alaska, which provided Bald Eagle receipts for same in the first week of February, and we are continuing our plans to raise capital to develop the North Slope Leases.

The Company must pay annual rental to the State of Alaska in accordance with the following rental schedule:

•

for the first year, $1.00 per acre or fraction of an acre, which results in aggregate annual rent of $18,418;

•

for the second year, $1.50 per acre or fraction of an acre, which results in aggregate annual rent of $27,627;

•

for the third year, $2.00 per acre or fraction of an acre, which results in aggregate annual rent of $36,836;

•

for the fourth year, $2.50 per acre or fraction of an acre, which results in aggregate annual rent of $46,045; and

•

for the fifth year and following years, $3.00 per acre or fraction of an acre, which results in aggregate annual rent of $55,254.

Consequently, the Company will incur significant expenses regardless of our success in exploring for oil and gas on these leases. The State of Alaska may increase the annual rental rate as provided by law if the North Slope Leases are extended beyond the primary term.

- 6 -

Table of Contents

BALD EAGLE ENERGY INC.

(An Exploration Stage Company)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

December 31, 2008

(Unaudited)

Note 3

Share Capital

On November 12, 2008, the Company issued 280,000 common shares at $0.25, along with warrants for the purchase of 280,000 shares of common stock at an exercise price of $0.45 each, exercisable at any time and which expire November 12, 2011, to one non-affiliated non-U.S. person for total proceeds of $70,000.

On December 3, 2008, the Company issued 466,667 common shares at $0.15, along with warrants for the purchase of 466,667 shares of common stock at an exercise price of $0.30 each, exercisable at any time and which expire December 3, 2011, to one non-affiliated non-U.S. person for total proceeds of $70,000.

In the first quarter of fiscal 2009, the Company caused its transfer agent to issue and deliver certificates for 315,000 shares related to financings completed in fiscal 2008 (September 29, 2008 and August 12, 2008). Although the Company completed those transactions in fiscal 2008, due to an administrative error the certificates were not issued and the shares were not included in the transfer agent's final tally for the year ended September 30, 2008. The shares and related warrants are being treated for legal purposes as being issued on the respective closing dates of August 12, 2008 (115,000) and September 29, 2008 (200,000), in accordance with the relevant subscription documents.

There were 2,891,667 warrants outstanding and exercisable as of December 31, 2008. These warrants had exercise prices ranging from $0.35 to $1.00 per share, and an average remaining life of approximately 2.5 years.

Note 4

Loan Payable

A consultant to the Company advanced $59,935 in prior periods, which has been paid in full as of December 31, 2008.

Note 5

Contractual Obligations

Rental of the Company’s premises in The Woodlands, Texas is $2,500 per month pursuant to a Services Agreement, which expires October 31, 2009. The Company rents a virtual office at 2911 Turtle Creek Boulevard, Suite 300, Dallas, Texas, on a month-to-month basis pursuant to an Office and Services Agreement that expires March 31, 2009, at a cost of approximately $238 per month. Additionally, the Company rents a virtual office in Anchorage, Alaska on a month-to-month term, at a cost of approximately $224 per month

Note 6

Subsequent events

On January 29, 2009, the Company subscribed 500,000 common shares at $0.10, along with warrants for the purchase of 500,000 shares of common stock at an exercise price of $0.17 each, exercisable at any time and which expire January 29, 2012, to one non-affiliated non-U.S. person for total proceeds of $50,000.

- 7 -

Table of Contents

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q constitute “forward-looking statements”. These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. We advise you to carefully review the reports and documents we file from time to time with the United States Securities and Exchange Commission (the “SEC”), particularly our periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”).

As used in this Quarterly Report, the terms “we,” “us,” “our,” “Bald Eagle” and “the Company” mean Bald Eagle Energy Inc. and its subsidiaries unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

OVERVIEW

Our company was incorporated under the laws of the state of Nevada on October 12, 2005 under the name "Columbus Ventures Inc." We amended our Articles of Incorporation to change our name as of July 21, 2008 to "Bald Eagle Energy Inc." in order to more accurately reflect our current principal business activities, which are the acquisition, exploration and development of oil and natural gas properties and prospects.

North Slope Leases

We are an exploration stage company engaged in the acquisition, exploration and development of oil and natural gas properties and prospects. We recently acquired the rights to a 100% working interest (representing a net revenue interest of 78.33%) on an aggregate 18,418 acres located within the State of Alaska's North Slope hydrocarbon province under six (6) separate leases (the "North Slope Leases"). We acquired our interest in the North Slope Leases under the terms of a purchase agreement we entered into on April 18, 2008 (the "Purchase Agreement"). We closed the purchase and sale of the North Slope Leases on September 29, 2008; however, we are still in the process of providing information to the states’ Department of Natural Resources in order to complete the process of transferring title to the North Slope Leases. We anticipate the State of Alaska completing its inquiry and effecting the transfers within the next quarter. See Note 2 to the Interim Financial Statements.

The North Slope Leases give the lessee the exclusive right to drill for, extract, remove, process and dispose of oil and natural gas and associated substances in the geographic areas covered by these leases, subject to their terms. The initial primary term of each North Slope Lease begins on February 1, 2007 and expires on January 31, 2012, unless it is extended for production or as otherwise provided under the terms of that lease.

The Company plans to act as a non-operator, which means the Company will not directly engage in exploration, drilling or development operations, but instead will exploit the Company's assets by seeking joint ventures with oil and natural gas companies that have exploration, development and production expertise.

We have not earned any revenues to date. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of oil and natural gas resources on the North Slope Leases or any other properties we may acquire, or if such deposits are discovered, that we will enter into further substantial exploration programs.

- 8 -

Table of Contents

Plan of Operation

Our plan of operation for the next twelve months is to fully evaluate the exploration potential of the six North Slope Leases in the Alaska North Slope petroleum province and to plan and prepare for the first exploration field operations on those leases, which would be new seismic data acquisition during the winter season of 2010. In addition, we plan to evaluate further new exploration opportunities in Alaska, focusing in the North Slope area.

We changed the Company's focus to oil and gas explorations and began the process of acquiring the Alaska North Slope Leases on April 18, 2008 and, due to our investments in this effort, we have experienced losses since that time. As at December 31, 2008, we have a working capital deficit of $349,076. During the fiscal quarter ended December 31, 2008, we completed two separate financings in which an aggregate 746,667 shares and warrants for an equal number of shares were sold for proceeds of $140,000.

We currently do not have sufficient funds to execute our plan of operation for the next twelve months and we will therefore require additional funds. We have relied principally on the issuance of common stock by private placements to raise funds to finance our business. There is no assurance that market conditions will continue to permit us to raise funds when required. If possible, we will issue more common stock at prices we find to be acceptable, which may dilute the value of our common stock.

Our business model is to utilize the services of oil industry expert consultants, and we do not expect any significant increases in the number of employees in the near future.

We are an exploration stage company with limited operations and have not yet received revenues from operations, generated profitability or experienced positive cash flow from operations. We currently have no properties with any known deposits of oil or gas. Andrew S. Harper, our Chief Executive Officer and President, has extensive experience in the oil and gas industry with specific industry experience in exploration operations and new ventures evaluation.

If we are successful in securing further exploration interests in Alaska leases, we will be obliged to pay rentals and complete work programs to maintain our interests in good standing. There can be no certainty as to the costs of future lease acquisitions and exploration work programs; however, we will require additional funds to discharge our obligations and exploration work programs whether the interests are acquired through joint venture or through competitive lease sales. We do not have sufficient capital to satisfy potential future exploration expenditures and we will rely principally on the issuance of common stock to raise funds to finance the expenditures that we expect to incur should we secure exploration interests. Failure to raise additional funds will result in the failure to meet our obligations and the relinquishment of our interest in any future leases acquired. We have relied principally on the issuance of common stock in private placements to raise funds to support our business but there can be no assurance that we will be successful in raising additional funds through the issuance of additional equity.

We do not expect any significant purchases of plants and equipment or any increase in the number of employees in the near future.

- 9 -

Table of Contents

RISK FACTORS

If we do not obtain additional financing, our business will fail.

Our operating funds are not sufficient to meet the anticipated costs of completing our exploration program on the North Slope Leases. Therefore, we will need to obtain additional financing in order to complete our full business plan. As of December 31, 2008, we had cash on hand in the amount of $4,460. We have not earned any income since our inception. Our plan of operation calls for significant expenses in connection with the exploration of our oil and natural gas leases.

We currently do not have any arrangements for financing and we may not be able to obtain financing when required. Obtaining additional financing would be subject to a number of factors outside of our control, including the results from our exploration program, and any unanticipated problems relating to our oil and natural gas exploration activities, including environmental assessments and additional costs and expenses that may exceed our current estimates. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us, in which case our business will fail.

We anticipate that we will incur the following expenses over the next twelve months:

Category	Planned Expenditures Over The Next 12 Months (US $)
General & Administrative	$	530,000
Geological & Geophysical	$	2,492,688
TOTAL	$	3,022,688

If our forecast regarding anticipated expenses is inaccurate, we may need to raise additional funds beyond what we have forecasted. There can be no assurance that additional financing will be available when needed on favorable terms, or at all.

We have yet to earn revenue and our ability to sustain our operations is dependent on our ability to raise financing. As a result, our accountants believe there is substantial doubt about our ability to continue as a going concern.

We have accrued net losses of $999,139 for the period from our inception on October 12, 2005 to December 31, 2008, and have no revenues to date. Our future is dependent upon our ability to obtain financing and upon future profitable operations from the development of oil and natural gas leases.

These factors raise substantial doubt that we will be able to continue as a going concern. LBB & Associates Ltd., LLP, Certified Public Accountants, our independent auditors, have expressed substantial doubt about our ability to continue as a going concern. This opinion could materially limit our ability to raise additional funds by issuing new debt or equity securities or otherwise. If we fail to raise sufficient capital when needed, we will not be able to complete our business plan. As a result we may have to liquidate our business and investors may lose their investment. Investors should consider our auditor's comments when determining if an investment in Bald Eagle is suitable.

- 10 -

Table of Contents

Our only assets consist of our rights in the North Slope Leases, and the success of our business depends solely on our ability to commercially develop our interests in the North Slope Leases. If we lose our interests in the North Slope Leases or are unable to develop those interests to a sufficient degree, our business may fail.

Currently, our principal assets consist of our rights to the North Slope Leases, and we have allocated substantially all of our available working capital to the acquisition of those rights under the purchase agreement we entered into in April 2008. Because we have no other source of revenues at this time, our ability to generate revenues depends entirely on our successful development of the North Slope Leases. If we are unable to explore and develop those properties in commercial quantities, or if our interests in those leases are revoked or limited in any significant way, then our business is likely to fail.

On January 29, 2009 we received a request from Alaska’s Department of Natural Resources for detailed information regarding Bald Eagle’s ability to explore and develop the North Slope Leases. Although we have completed the acquisition of the North Slope Leases under the related purchase agreement, the State of Alaska has the power to invalidate the transfer of the North Slope Leases to the Company, if it is not satisfied with the information provided during this recent inquiry. We believe that the state has been provided sufficient information to satisfy its request and that the review by the state will not adversely impact the Company’s ownership and development of the North Slope Leases. However, if the state were to revoke the transfer of the North Slope Leases or in any other manner limit the Company’s ability to explore or develop those properties, then it would have a material adverse impact on the Company and the Company’s stockholders could lose the value of their investment in the Company. In addition, the Company is required to make annual rental payments in order to maintain the effectiveness of the North Slope Leases. If the Company is unable to generate sufficient funds through operations or future investments to make those minimum rental payments, then it could lose its interest in some or all of the North Slope Leases, which could have a material adverse impact on the Company and the Company’s stockholders could lose the value of their investment in the Company.

Because of the unique difficulties and uncertainties inherent in oil and natural gas exploration ventures, we face a high risk of business failure.

Investors should be aware of the difficulties normally encountered by new oil and natural gas exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the oil and natural gas properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The North Slope Leases do not contain known oil and natural gas deposits and, therefore, any program conducted on the North Slope Leases would be an exploratory search for oil and natural gas. There is no certainty that any expenditures made in the exploration of the North Slope Leases will result in discoveries of commercial quantities of oil and natural gas. Most exploration projects do not result in the discovery of commercially producible oil and natural gas deposits. Problems such as unusual or unexpected geological conditions or operational difficulties are common to oil and natural gas exploration activities and often result in unsuccessful exploration efforts. If the results of our exploration program do not reveal viable commercial oil and natural gas deposits, we may decide to abandon the North Slope Leases and acquire new leases for new exploration. Our ability to acquire additional leases will be dependent upon our possessing adequate capital resources when needed. If no funding is available, we may be forced to abandon our operations.

Geological conditions are variable and unpredictable and heighten exploration risk.

Oil and gas exploration and development involves a higher degree of risk and few properties that are explored are ultimately developed into producing properties. Even if production is commenced from a well, the production will inevitably decline and may be affected or terminated by changes in geological conditions that cannot be foreseen or remedied. A change in geological conditions may render a discovery uneconomic.

- 11 -

Table of Contents

The market price for oil and natural gas is volatile and determined by factors beyond our control. Failure to accurately forecast prices may result in financial losses.

Market prices for oil and natural gas may fluctuate widely from time to time depending on international demand, production and other factors that cannot be foreseen. A decline in price may render a discovery uneconomic resulting in unforeseen losses. If a discovery becomes uneconomic due to declining prices, funds spent to develop the discovery might not be recoverable, leading to financial losses.

We have no known oil and natural gas reserves and if we cannot find any, we may have to cease operations.

We have no oil and natural gas reserves. If we do not find any commercially exploitable oil and natural gas reserves or if we cannot complete the exploration of any oil and natural gas reserves, either because we do not have the money to do so or because it is not economically feasible to do so, we may have to cease operations and our investors may lose their investments. Oil and natural gas exploration is highly speculative. It involves many risks and is often non-productive. Even if we are able to find oil and natural gas reserves on the North Slope Leases, our production capability will be subject to further risks including:

·	the costs of bringing the property into production, including exploration work, preparation of production feasibility studies, and construction of production facilities, all of which we have not budgeted for;

·	the availability and costs of financing;

·	the ongoing costs of production; and

·	environmental compliance regulations and restraints.

The marketability of any oil and natural gas acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of adequate facilities and processing equipment near the North Slope Leases, and other factors such as government regulations, including regulations relating to allowable production, the importing and exporting of oil and natural gas, and environmental protection.

Given the above-noted risks, the chances of our finding and commercially exploiting reserves on our oil and natural gas leases are remote and funds expended on exploration are subject to the risk of being lost.

Because of the inherent dangers involved in oil and natural gas exploration, there is a risk that we may incur liability or damages as we conduct our business.

The search for valuable oil and natural gas deposits involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, hydrocarbon spills and other hazards against which we cannot insure or against which we may elect not to insure. At the present time we have no insurance to cover against these hazards. The payment of such liabilities may result in our inability to complete our planned exploration program and/or obtain additional financing to fund our exploration program.

As we undertake exploration of our oil and natural gas leases, we will be subject to compliance with government regulation that may increase the anticipated cost of our exploration program.

There are several governmental regulations that materially restrict oil and natural gas exploration. We will be subject to state and federal laws of the State of Alaska and the United States of America as we carry out our exploration program on the North Slope Leases. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws. If we enter the development and production phase, the cost of complying with permit and regulatory environment laws will be greater because the impact on the project area is greater. Permits and regulations will control all aspects of the development and production program if the project continues to that stage.

- 12 -

Table of Contents

We may conduct further offerings in the future in which case investors' shareholdings will be diluted.

Since our inception, we have relied on sales of our common stock to fund our operations. We may conduct further equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock shares, then our existing investors' percentage ownership of our common stock will be diluted. The result of this could reduce the value of current investors' stock.

Because our stock is a penny stock, shareholders will be more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 per share, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute "penny stocks" within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the quotation price of our common stock is less than $5.00 per share, the common stock will be subject to penny stock rules. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

·	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

·	contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

·	contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

·	contains a toll-free telephone number for inquiries on disciplinary actions;

·	defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

·	contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide the customer, prior to effecting any transaction in a penny stock, with: (a) bid and offer quotations for the penny stock; (b) the amount of compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a suitably written statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

- 13 -

Table of Contents

RESULTS OF OPERATIONS

Three Months Ended December 31, 2008 and 2007

The following table presents certain items included in the Company’s consolidated statements of operations for the three months ended December 31, 2008 and 2007, a copy of which are included in this Quarterly Report on Form 10-Q, and the percentage change from the prior period. All such data should be read only in conjunction with, and are qualified in their entirety by reference to, our consolidated financial statements and accompanying notes:

	December 31
	2008			2007			Percentage Increase / Decrease
Expenses		(286,441	)		(9,942	)		2,781	%

Net Loss		(286,441	)		(9,942	)		2,781	%

Revenues

We have not earned any revenues to date. We do not anticipate earning revenues from our oil and gas exploration activities in the near future.

Operating Expenses

Our operating expenses for the relevant periods consisted of the following:

	December 31
	2008		2007		Percentage Increase / Decrease
General & Administrative	$	286,441	$	9,942		2,781	%

Total Operating Expenses	$	286,441	$	9,942		2,781	%

We anticipate our operating expenses will increase as we undertake our exploration program for the North Slope Leases. We anticipate our accounting and legal expenses will also increase as a result of our ongoing reporting requirements under the Exchange Act.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital
	December 31, 2008			September 30, 2008			Percentage Increase / (Decrease)
Current Assets	$	10,505		$	47,170			(77	)%
Current Liabilities		(359,581	)		(249,805	)		44	%
Working Capital (Deficit)	$	(349,076	)	$	(202,635	)		72	%

- 14 -

Table of Contents

Cash Flows	Three Months Ended
	December 31, 2008			December 31, 2007
Cash Flows Used In Operating Activities	$	(176,926	)	$	(14,422	)
Cash Flows Used in Investing Activities		—			—
Cash Flows Provided By Financing Activities		134,216			—
Net Decrease In Cash During Period	$	(42,710	)	$	(14,422	)

The decrease in our working capital at December 31, 2008 from September 30, 2008, and the increase in our cash used during the three months ended December 31, 2008, from the comparable period ended December 31, 2007 are primarily attributable to: (i) expenses incurred in connection with increased general & administrative from hiring a full-time CEO, associated rental of premises, and consulting expenses associated with the preliminary work related to our development of the North Slope Leases, as well as increased requirements of legal, accounting and investor relations services; and (ii) from the fact that we had no revenue during the three months ended December 31, 2008.

During the three months ended December 31, 2008, our sole source of financing came in the form of two private placements of the Company’s shares in the amount of $70,000 each, which were completed on November 12 and December 3, 2008.

The Company received certain marketing services from a media marketing consulting agency as part of the development of the Company's initial marketing campaign. The amount was accrued for as of December 31, 2008. As of February 19, 2009, the Company still owes this vendor $169,000. The Company has agreed to pay the vendor $10,000 on January 16, 2009, and $22,714 on each of February 10, March 10, April 10, May 10, June 10, July 10 and August 10, 2009.

Future Financings

As of the date of this Quarterly Report, we had cash on hand in the amount of $4,460. We will require additional financing to sustain our business operations if we are not successful in exploring and developing our leased properties and earning revenues. We currently do not have any arrangements for financing and we may not be able to obtain financing when required. Obtaining additional financing would be subject to a number of factors, including the various items referenced in “Risk Factors” above. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.

There are no assurances that we will be able to obtain sufficient financing if and when required.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES

The financial statements presented with this Quarterly Report on Form 10-Q have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information. These financial statements do not include all information and footnote disclosures required for an annual set of financial statements prepared under United States generally accepted accounting principles. In the opinion of our management, all adjustments (consisting solely of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows as at December 31, 2008 and for all periods presented in the attached financial statements, have been included. Interim results for the three month period ended December 31, 2008 are not necessarily indicative of the results that may be expected for the fiscal year as a whole.

- 15 -

Table of Contents

Our significant accounting policies are disclosed in the notes to our audited financial statements for the year ended September 30, 2008 included in our Annual Report on Form 10-K filed with the SEC on January 13, 2009.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our principal executive officer and principal financial officer have concluded that these disclosure controls and procedures are effective.

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

- 16 -

Table of Contents

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

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

On November 12, 2008, we completed a private placement to one investor of 280,000 units at a price of $0.25 per post-split unit for total proceeds of $70,000. Each unit is comprised of one share of our common stock and one share purchase warrant. Each share purchase warrant will entitle the holder to purchase one additional post-split share of our common stock at a price of $0.45 per share for a period ending November 12, 2011. This private placement was completed pursuant to the provisions of Regulation S promulgated under the Securities Act. We did not engage in a distribution of this offering in the United States. The investor represented that it was not a US person as defined in Regulation S, and has provided representations indicating that it was acquiring our securities for investment purposes only and not with a view towards distribution.

On December 3, 2008, we completed a private placement to one investor of 466,667 units at a price of $0.15 per post-split unit for total proceeds of $70,000. Each unit is comprised of one share of our common stock and one share purchase warrant. Each share purchase warrant will entitle the holder to purchase one additional post-split share of our common stock at a price of $0.30 per share for a period ending December 3, 2011. This private placement was completed pursuant to the provisions of Regulation S promulgated under the Securities Act. We did not engage in a distribution of this offering in the United States. The investor represented that it was not a US person as defined in Regulation S, and has provided representations indicating that it was acquiring our securities for investment purposes only and not with a view towards distribution.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION.

None.

- 17 -

Table of Contents

ITEM 6. EXHIBITS.

Exhibit Number		Description of Exhibits
3.1		Articles of Incorporation.(1)
3.2		Bylaws, as amended.(1)
10.1		Purchase Agreement - North Slope Leases.(2)
10.2		Independent Contractor Agreement, dated as of October 26, 2008, between the Registrant and Alvaro Vollmers.(3)
10.3		Amendment to Independent Contractor Agreement, dated as of December 29, 2008, between the Registrant and Alvaro Vollmers. (3)
31.1		Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)		Previously filed as an exhibit to our Registration Statement on Form SB-2, as filed with the Securities and Exchange Commission on November 21, 2006.
(2)		Previously filed as an exhibit to our Form 8-K, as filed with the Securities and Exchange Commission on April 24, 2008.
(3)		Previously filed as an exhibit to our Form 10-K for the year ended September 30, 2008, as filed with the Securities and Exchange Commission on January 13, 2009.

- 18 -

Table of Contents

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.

BALD EAGLE ENERGY INC.

Date: February 23, 2009

By: /s/ Andrew S. Harper

ANDREW S. HARPER

Chief Executive Officer, President

Director

(Principal Executive Officer)

Date: February 23, 2009

By: /s/ Alvaro Vollmers

ALVARO VOLLMERS

Chief Financial Officer, Secretary and Treasurer

Director

(Principal Financial Officer and Principal Accounting Officer)

- 19 -

BALD EAGLE ENERGY INC. 10-Q