UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2011

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

For the transition period from __________, 200__, to ________, 200__.

Commission File Number

0-32267

EXERGETIC ENERGY, INC.

(Exact Name of Registrant as Specified in Charter)

Michigan	27-2950066
(State of Incorporation)	(I.R.S. Employer Identification No.)

440 Burroughs Suite 386, Detroit, MI	48202
(Address of Principal Executive Offices)	(ZIP Code)

Registrant's Telephone Number, Including Area Code: (313) 378-0834

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer, large 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

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

Transitional Small Business Disclosure Format (check one): Yes ¨ No x

There were 14,863,341 shares of the Registrant’s $.0001 par value common stock outstanding as of June 21, 2011.

Exergetic Energy, Inc.

Contents

Part I – Financial Information

Item 1.	Financial Statements	F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	4

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	10

Item 4T.	Controls and Procedures	10

Part II – Other Information

Item 1.	Legal Proceedings	10

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10

Item 3.	Defaults Upon Senior Securities	11

Item 4.	Submission of Matters to a Vote of Security Holders	12

Item 5.	Other Information	12

Item 6.	Exhibits	12

Signatures		12

PART I—FINANCIAL INFORMATION

Statements in this Form 10Q Quarterly Report may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in this Form 10Q Quarterly Report, under “Management’s Discussion and Analysis of Financial Condition or Plan of Operation and in other documents which we file with the Securities and Exchange Commission.

In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, competition, fulfillment of contractual obligations by other parties and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10Q Quarterly Report, except as required by law.

Item 1. Financial Statements

EXERGETIC ENERGY, INC.

(FORMERLY SPECIALIZED SERVICES, INC.)

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

AS OF MARCH 31, 2011 AND DECEMBER 31, 2010

	March 31, 2011			December 31, 2010
ASSETS
Current Assets
Cash	$	1,349		$	1,304
Accounts receivable, net		14			0
Prepaid interest		10,282			14,113
Total Current Assets		11,645			15,417

Land		10			0

TOTAL ASSETS	$	11,655		$	15,417

LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
Current Liabilities
Accounts payable	$	3,631		$	8,107
Accrued expenses and taxes		198,623			200,374
Accrued interest		4,603			4,603
Due to shareholders		5,000			5,000
Due to related party		10			0
Leases payable – current portion		266,853			218,221
Loans payable – related party		5,768			5,768
Line of credit		52,294			52,294
Total Current Liabilities		536,782			494,367

Long – Term Liabilities
Leases payable, net of current portion		0			48,632

Total Liabilities		536,782			542,999

STOCKHOLDERS’ DEFICIT
Common Stock – $.0001 par value, 100,000,000 shares authorized; 12,813,341 and 473,341 shares issued and outstanding, respectively		1,281			47
Additional paid-in capital		1,217,988			408,872
Treasury stock		175			0
Accumulated deficit		(1,744,571	)		(936,501	)
Total Stockholders’ Deficit		(525,127	)		(527,582	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	11,655		$	15,417

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

F-1

EXERGETIC ENERGY, INC.

(FORMERLY SPECIALIZED SERVICES, INC.)

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

	Three months ended March 31, 2011			Three months ended March 31, 2010
NET REVENUES	$	334		$	10,360

OPERATING EXPENSES		518,631			29,233

LOSS FROM OPERATIONS		(518,297	)		(18,873	)

OTHER INCOME (EXPENSE)		(7,681	)		6

NET LOSS BEFORE INCOME TAXES		(525,978	)		(18,867	)

PROVISION FOR INCOME TAXES (BENEFIT)		0			0

NET LOSS	$	(525,978	)	$	(18,867	)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		8,578,285			473,341

NET LOSS PER SHARE: BASIC AND DILUTED	$	(0.06	)	$	(0.04	)

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

F-2

EXERGETIC ENERGY, INC.

(FORMERLY SPECIALIZED SERVICES, INC.)

STATEMENT OF STOCKHOLDERS’ DEFICIT (UNAUDITED)

AS OF MARCH 31, 2011

	Common Stock						Additional Paid in			Treasury		Accumulated
	Shares			Amount			Capital			Stock		Deficit			Total
Balance, December 31, 2010		473,341		$	47		$	408,872		$	0	$	(936,501	)	$	(527,582	)

Merger and recapitalization		1,750,000			175			(175	)		-		(282,092	)		(282,092	)

Shares issued to officers for cash at $0.05 per share		840,000			84			41,916			-		-			42,000

Shares issued to officer for payable		1,000,000			100			43,925			-		-			44,025

Share issued to officers for services		4,035,000			404			201,346			-		-			201,750

Shares issued for accrued expenses		4,875,000			487			243,263								243,750

Shares issued for professional services		1,590,000			159			278,841			-		-			279,000

Shares taken back into treasury		(1,750,000	)		(175	)		-			175		-			0

Net loss for the three months ended March 31, 2011		-			-			-					(525,978	)		(525,978	)

Balance, March 31, 2011		12,813,341		$	1,281		$	1,217,988		$	175	$	(1,744,571	)	$	(525,127	)

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

F-3

EXERGETIC ENERGY, INC.

(FORMERLY SPECIALIZED SERVICES, INC.)

STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

	Three months ended March 31, 2011			Three months ended March 31, 2010
Cash Flows from Operating Activities:
Net loss for the period	$	(525,978	)	$	(18,867	)

Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:
Amortization of prepaid interest		3,831			15,175
Common stock issued for services		480,750			0
Changes in Assets and Liabilities
(Increase) decrease in accounts receivable		(14	)		5,428
Increase in accounts payable		24			136
(Decrease) in accrued expenses and taxes		(1,643	)		(5,009	)
Increase in officer payable		1,050			0
Increase in due to shareholder		0			900
Net Cash Provided by (Used in) Operating Activities		(41,980	)		(2,237	)

Cash Flow from Investing Activities:
Cash received in merger		25			0
Net Cash Provided by Investing Activities		25			0

Cash Flows from Financing Activities:
Proceeds from sale of common stock		42,000			0
Borrowings on line of credit		0			850
Net Cash Provided by Financing Activities		42,000			850

Net Increase (Decrease) in Cash and Cash Equivalents		45			(1,387	)

Cash and Cash Equivalents – Beginning		1,304			7,314

Cash and Cash Equivalents – Ending	$	1,349		$	5,927

Supplemental Cash Flow Information:
Cash paid for interest	$	9,438		$	0
Cash paid for income taxes	$	0		$	0
Supplemental Non-Cash Investing and Financing Information:
Land acquired in merger	$	10		$	0
Common stock issued in connection with merger	$	175		$	0
Common stock issued for accrued expenses	$	243,750		$	0
Common stock issued for officer payable	$	44,025		$	0
Accounts payable reduced through intercompany payment	$	4,500		$	0

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

F-4

EXERGETIC ENERGY, INC.

(FORMERLY SPECIALIZED SERVICES, INC.)

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2011

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Exergetic Energy, Inc., was founded on May 27, 2010 as a Michigan corporation, and was created to improve upon and expand the various energy options/resources available for prospective customers. While specializing in both renewable and efficient non-renewable sources, Exergetic believes itself to be well positioned to capitalize upon the opportunities that are taking place as the world moves to a more enlightened stance on energy consumption.

Specialized Services, Inc. (SSI) was incorporated in Michigan in January, 1988. The Company aggregates (bundles) fuel products and services, and delivers these products and services to customers in a way that reduces the customers’ costs. In addition the Company has a competitive local exchange carrier license to provide telecommunications services to companies.

In 2011, Exergetic Energy, Inc. and SSI finalized a merger pursuant to a Final Definitive Agreement dated December 3, 2010 with EXERGETIC being the surviving entity from this corporate merger.

Basis of Accounting

The Company uses the accrual basis of accounting for financial statement reporting. Accordingly, revenues are recognized when products are delivered and services are rendered, and expenses are recognized when the obligation is incurred. The reported net revenues figure represents the total amount of fuel and telecommunications products and services that were purchased from the Company during the year by its customers, net of the Company’s cost of sales, as required under ASC 605-45. See Note 10.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC as of and for the period ended December 31, 2010. In the opinion of management, all adjustments necessary for the financial statements to be not misleading for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Cash and Cash Equivalents

The Company considers certificates of deposit and other highly liquid investments with original maturities of three months or less to be cash equivalents.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, prepaid interest, accounts payable, accrued expenses, accrued interest, due to shareholder, due to related party, leases payable, loan payable – related party and a line of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Property and Equipment

Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful life of each asset. Property and equipment was fully impaired as of December 31, 2010.

F-5

EXERGETIC ENERGY, INC.

(FORMERLY SPECIALIZED SERVICES, INC.)

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2011

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

The Company, with the consent of its stockholders, had elected to be taxed as an S Corporation under the provisions of the Internal Revenue Code for periods prior to 2005. Instead of paying federal corporate income taxes, the stockholders of an S Corporation are taxed individually on their proportionate share of the Company’s taxable income.

In 2005, the Company revoked its S-election and began paying tax as a C-corporation. Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. See Note 8.

Loss Per Share

Loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period. See Note 7.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

In addition, the Company extends credit to customers in the normal course of business. The Company monitors the account receivable balances and does not expect significant collection problems.

Recent Accounting Pronouncements

In May 2009, the FASB issued ASC 855-10 entitled “Subsequent Events”. Companies are now required to disclose the date through which subsequent events have been evaluated by management. Public entities (as defined) must conduct the evaluation as of the date the financial statements are issued, and provide disclosure that such date was used for this evaluation. ASC 855-10 provides that financial statements are considered “issued” when they are widely distributed for general use and reliance in a form and format that complies with GAAP. ASC 855-10 is effective for interim and annual periods ending after June 15, 2009 and must be applied prospectively.

In June 2009, the FASB issued ASC 105-10, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. ASC 105-10 establishes the Codification as the sole source of authoritative accounting principles recognized by the FASB to be applied by all nongovernmental entities in the preparation of financial statements in conformity with GAAP.

F-6

EXERGETIC ENERGY, INC.

(FORMERLY SPECIALIZED SERVICES, INC.)

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2011

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements (continued)

ASC 105-10 was prospectively effective for financial statements issued for fiscal years ending on or after September 15, 2009 and interim periods within those fiscal years. The adoption of ASC 105-10 on July 1, 2009 did not impact the Company’s results of operations or financial condition. The Codification did not change GAAP, however, it did change the way GAAP is organized and presented.

As a result, these changes impact how companies reference GAAP in their financial statements and in their significant accounting policies. The Company implemented the Codification in this Report by providing references to the Codification topics alongside references to the corresponding standards.

With the exception of the pronouncements noted above, no other accounting standards or interpretations issued or recently adopted are expected to have a material impact on the Company’s financial position, operations or cash flows.

NOTE 2 – LAND

The Company owns land in DeSoto County, Florida that was acquired in 2010 for $10 from a related party. The company has developed a solar farm layout for this property and is currently evaluating the efficacy of constructing a unit at this location.

NOTE 3 – ACCRUED EXPENSES

Accrued expenses consisted of $183,923 of officer salary and $14,700 due on a company credit card as of March 31, 2011.

NOTE 4 – LOANS PAYABLE – RELATED PARTIES

Loans payable to related parties are due to officers for funds advanced to the Company for working capital and are non-interest bearing and due upon demand.

NOTE 5 – LINE OF CREDIT PAYABLE

The Company has a $100,000 unsecured line of credit available with First Place Bank, which is payable upon demand. The officers personally guarantee borrowings under this line of credit. At March 31, 2011 $52,294 was owed under this line of credit. Interest rates fluctuate based on the prime rate plus 3.25%. The rate in effect at March 31, 2011 was 6.5%. Accrued interest was $4,603 as of March 31, 2011. The loan is currently in default.

NOTE 6 – CAPITAL LEASES

The Company sold and leased back equipment during the year ended December 31, 2007. The Company entered into five capital lease agreements. All of the leases are for a term of 60 months with varying interest rates. The entire amount of interest due over the term of the leases has been capitalized as prepaid interest and is being amortized over the lease term. All leases are currently in default and the balances have been classified as current liabilities.

F-7

EXERGETIC ENERGY, INC.

(FORMERLY SPECIALIZED SERVICES, INC.)

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2011

NOTE 7 – CAPITAL STOCK

The Company has 100,000,000 shares of $0.0001 par value common stock authorized.

In connection with the merger, the Company issued 1,750,000 shares of common stock which was taken back into treasury during the three months ended March 31, 2011.

The Company issued 840,000 shares of common stock to officers at $0.05 per share for total proceeds of $42,000 in the first quarter of 2011.

The Company also issued 1,000,000 shares to an officer for total cash proceeds of $44,025.

During the three months ended March 31, 2011, the Company issued 8,9100,00 additional shares of common stock issued to officers for services valued at $445,500.

The Company also issued 1,590,000 shares of common stock for professional services during the three months ended March 31, 2011 valued at $279,000.

There were 12,813,341 shares of common stock outstanding as March 31, 2011. There were no preferred shares issued and outstanding at March 31, 2011.

NOTE 8 – INCOME TAXES

As of March 31, 2011, the Company had net operating loss carry forwards of approximately $1,462,500 that may be available to reduce future years’ taxable income through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carryforwards.

The provision for Federal income tax consists of the following for the three months ended March 31:

	2011			2010
Federal income tax benefit attributable to:
Current operations	$	178,833		$	6,415
Less: valuation allowance		(178,833	)		(6.415	)
Net provision for Federal income taxes	$	0		$	0

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of March 31, 2011 and December 31, 2010:

	2011			2020
Deferred tax asset attributable to:
Net operating loss carryover	$	496,833		$	318,000
Less: valuation allowance		(496,833	)		(318,000	)
Net deferred tax asset	$	0		$	0

Due to a recent change in control, the use of the net operating loss carryforwards will be limited as to use in future years

F-8

EXERGETIC ENERGY, INC.

(FORMERLY SPECIALIZED SERVICES, INC.)

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2011

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Our executive offices are located at 440 Burroughs Street, Suite 386, Detroit, Michigan, 48202. The company has a 12 month lease of the current office space at a monthly rate of $375 that began June 1, 2010. The company intends to extend this lease for an additional 12 month term at the completion of the lease term.

Minimum annual rents including the extension are as follows:

Twelve months ended March 31, 2012	$	4,500
March 31, 2013		1,125
Total lease commitment	$	5,625

NOTE 10 – NET REVENUE AND MAJOR CUSTOMERS

Net Revenue for the three months ended March 31, 2011 of $334 was comprised of gross billings of $126,015 less direct costs of $125,681.

Net Revenue for the three months ended March 31, 2010 of $10,360 was comprised of gross billings of $970,071 less direct costs of $959,711.

During the three months ended March 31, 2011, two customers accounted for 99.9% of our gross revenues and 87% of our net revenues as reflected on the statement of operations. In the opinion of management, the loss of either or both of these customers would have no material effect on the Company’s financial position.

NOTE 11 – GOING CONCERN

The Company has negative working capital, has incurred operating losses in its two most recent fiscal years, and its operating activities have required financing from outside institutions and related parties. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company may continue to need outside financing to support its internal growth.

NOTE 12 – SUBSEQUENT EVENTS

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to March 31, 2011 to June 14, 2011, the date these financial statements were issued, and have determined that it does not have any material subsequent events to disclose in these financial statements other than the events described above.

F-9

PART I – FINANCIAL INFORMATION

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

THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS “ANTICIPATED,” “BELIEVE,” “EXPECT,” “PLAN,” “INTEND,” “SEEK,” “ESTIMATE,” “PROJECT,” “WILL,” “COULD,” “MAY,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY’S CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives and performance that involve risk, uncertainties and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements.

OVERVIEW OF THE COMPANY

General

Specialized Service Inc., was founded in January 1988 as a Michigan s-corporation and in 2005 changed to a c-corporation. Exergetic Energy, Inc., was founded on May 27, 2010 as a Michigan corporation, and was created to improve upon and expand the various energy options/resources available for prospective customers. Pursuant to a Final Definitive Agreement dated as of December 3, 2010, Specialized Services, Inc and Exergetic Energy Inc. agreed that the SSI would merge into Exergetic, with Exergetic becoming the successor reporting company under the Exchange Act. On December 3, 2010, the Company SSI, merged with Exergetic Energy, Inc. and changed its name to Exergetic Energy, Inc. The merger was finalized during the first quarter of 2011, and as part of the merger, management of the Company changed, including the Company’s Chief Financial Officer.

While specializing in both renewable and efficient non-renewable sources, Exergetic believes itself to be well positioned to capitalize upon the opportunities that are taking place as the world moves to a more enlightened stance on energy consumption.

Company Overview

As a full service energy company Exergetic Energy, Inc (“Exergetic”) has with its’ tripartite organizational structure the means to address a myriad of different energy challenges facing our customers. Represented by three distinct divisions: Non-Renewables, Renewables & Energy Optimization, Exergetic is a solutions provider for a myriad of different energy solutions. The three main divisions that exist within Exergetic possess the following strategic objectives:

Provide innovative technology driven solutions that meet our client’s needs and align with the larger US Energy Plan as defined by the Obama Administration.

Leverage our expertise in government contract work via Small Business Administrations’ 8A program in order to provide efficient, clean energy solutions to the Departments of Defense and Energy, respectively.

Expand the use of renewable energy sources into mainstream customer applications per the use of smart device technology

Continue to develop/market/manufacture leading edge technology for the vast array of energy needs that occur within the residential and commercial arenas at optimum price points

Our executive offices are located at 440 Burroughs Site 386, Detroit, Michigan 48202. Our telephone number is (313) 378-0834. The company maintains its website at www.exergeticenergy.com.

RENEWABLE ENERGY DIVISION

The Renewable Energy division is focused on the design & installation of solar panel systems per the use of photovoltaic (PV) DC/AC inverters. Exergetic has its’ own proprietary inverter technology for this industry. And while the majority of global solar panel demand is supplied by the China, the company feels that a niche exist especially in the US market for the manufacture and production of solar power inverters. Furthermore, the lack of an international standard creates regional markets for inverters. In the U.S., regulations are particularly burdensome for manufacturers. Regulations differ across PV markets. Regulations for grid-connected PV inverters vary across countries. Requirements are generally believed to be the most stringent in the United States. International manufacturers who want to serve this market need to design models specifically for the United States in order to meet regulations. This lack of uniformity creates regional markets, making it extremely difficult for manufacturers to create a global product.

Nearly 75% of the entire US photovoltaic market is supplied by production from just three manufacturers. The following three companies have US subsidiaries, which are responsible for the production and supply of the photovoltaic market in the US: (1) SMA Solar Technology AG (headquartered in Germany), Xantrex Corporation out of Vancouver, CN and Osaka-Sharp from Japan constitute the major suppliers in this industry. Exergetic views this lack of indigenous manufacturing capabilities of US based companies to be a major opportunity that we intend to capitalize upon while striving to become the largest US manufacture and supply of power inverters to the global marketplace.

ENERGY OPTIMIZATION DIVISION

The Energy Optimization division, which operates under the Exergetic name, has an orientation within the energy management and efficiency arena. The energy optimization industry functions as the backbone of the entire energy economy. Whether customers desire solar or fossil power energy sources; the government now mandates that all energy delivery systems be efficient and optimized. The company offers a unique array of services that combine quality engineering standards, such as ISO certification standards, along with Certified Energy Management techniques. In doing so, we are the first company to offer such a holistic array of services all designed to coalesce quality engineering with energy management. Exergetic believes that it stands poised to be a market leader in this hybrid industry and believes that others will follow in this direction as energy management specialist realize that overall system optimization cannot be achieved without quality engineering design and implementation methodologies.

The philosophy behind accelerating the growth of our consulting services is focused on leveraging existing relationships with firms and agencies focused on sustainable development through ISO standards and Energy Management in order to expand their offering beyond management systems to include design and implementation capabilities. Specifically, Exergetic can augment existing consulting firms’ core competencies, thus allowing them to offer their clients the services of:

•

Certified energy manager review/certification of systems, processes, facilities and products

•

Energy Auditing

•

Engineering Design Expertise

•

Design construction and implementation expertise

The energy auditing services offered by Exergetic are suitable for all types of facilities, whether residential, commercial or industrial. Our energy auditors are certified through the Association of Energy Engineers (AEE) and our point auditing system is based on American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) auditing standards. Based on the facility investigated each audit will include a specialized combination of the following services:

•

Thermographic Infrared Scanning: measures surface temperatures by using infrared video and still cameras. These tools see light that is in the heat spectrum. Images on the video or film record the temperature variations of the building's skin. It is also used to determine effectiveness of insulation.

•

PFT Air Filtration Test: this test determines the air filtration profile over a period of time (a few hours to several months).

•

Blower Door Test: this test locates air filtration by depressurizing building envelope.

•

Building Envelope Evaluation: measures heat flow through walls, roofs, foundations, windows in order to determination maximum heat gradients across all surfaces

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Water Conservation Evaluation: measures pressure head and water flux through all faucets in a particular facility.

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Complete Energy System Inspection: including lighting systems, HVAC systems, & hot water system

In assessing the energy optimization marketplace that exists both locally in Michigan and on the national level, the Company believes that this should be a prime area of focus. However, most companies that offer energy auditing services do so as an extension of their building & construction firm, such is the case for local competitors, Bestech Energy Systems in Oakland County and Michigan Energy Audits LLC of Clarkston, MI. Nationally, the same observation can be made of such players like The Hines Group, a global real estate development and property management firm and BEI & Associates, a large architectural & design engineering firm, that was hired to perform energy assessments at the Coleman A. Young Municipal Center in Detroit, MI.

We believe that Exergetic will have a competitive advantage arising from our core technical training—since the company was founded by Mechanical Engineers, we understand the true technological principles that undergird this “new” field of interest. However, energy optimization isn’t really new at all, it is governed by the fundamental laws of thermodynamics and the adherence to these laws defines the laws of physics! Our team has over 35 years of experience developing thermodynamic systems for a myriad of applications and have been performing the task of “energy optimization” for several decades, now. Our Energy Optimization Division provides interpretations and insights not found with the use of standard diagnostic tools—thus building individual solutions for individual clients based on principles of science.

In fact, the concept of this primary service offering, the Energy Educator Program, was borne out of a meeting that Exergetic held on July 29, 2010 with the Executive Director of the Detroit Wayne Joint Bldg. Authority (DWJBA). The DWJBA received a 2008 ENERGY STAR Label on behalf of its efforts to reduce energy consumption and implement smart business practices at the Coleman A. Young Municipal Center and Exergetic conducted this meeting to garner a first-hand overview of the potential for energy optimization in the Greater Detroit Metropolitan Area. The Executive Director stated that while there were definitely a significant number of companies engaged in the business of energy auditing and optimization, there were currently no suppliers of the energy optimization technology training that the user needs in order to be able to understand, operate, sustain and realize the energy savings opportunities articulated in standard energy audit reports. The lack of knowledge of how new energy efficient components operate makes this seem like “black box” technology when they really are not. Our Energy Educator Training Program has been developed to bridge this gap and take the mystery out of the science. Our software program known as the “Energy Educator Program”, was conceived as an interactive, on-site, computer based training for customers to effectively manage their energy optimization plan. The initial design for this product was established in 2Q 2010 and additional upgrades have been made as continuous improvements since that time. Now that the program design has been completed, the company will work on finalizing the computer algorithm and begin programming. The Company plans to hire Computer programming experts that are adept at software development and plans for the initial product prototypes to be available by 4Q 2011. We intend to offer our product as free “add ons” for our energy auditing customers as a means to get a sufficient sample population to assist with debugging our product before we begin offering it on a national level. Once finalized, inspected and ready for official product release projected by 1Q 2012, Exergetic plans to submit a patent application to the US Patent and Trade Office in order to obtain patent protection for our concept and algorithm

NON-RENEWABLE DIVISION

The third and final division of Exergetic is the non-renewable business unit. This division functions primarily as a commercial fossil fuel supplier. This division incorporates the business operations of Specialized Services, Inc. existing prior to the merger.

We have established our Fuel Services program as a service capable of providing truck fleets with cost savings based upon high volume nationally, together with the means to track costs, savings and usage, through our third party billing card. With high volume comes the opportunity to operate more efficiently by leveraging costs. Our efficient and productive operations have enhanced our ability to provide customers with competitive pricing of their fuel product needs which advantage improves customer acquisition and retention.

Our business competes in the area of fuel distribution principally on the basis of the following factors: service quality, reputation, technical expertise and reliable service. Competitive pressure and other factors could cause us additional difficulties in acquiring market share or could result in decreases in our margins, either of which could have a material adverse effect on our financial position and results of operations.

We have arrangements with fuel distributors at approximately 3,000 fuel stations under a wide variety of formats across the United States. Further, we provide our Fuel Services program to approximately 3 truck fleet customers.

We negotiate with fuel providers, typically truck stocks, to keep fleet prices for fuel products low by leveraging our existing distribution and wholesale purchasing capabilities and maintaining a lower cost structure associated with operating these distribution networks. We believe this strategy will become increasingly profitable because we focus on high-turnover, employ flow-through distribution methods that eliminate product storage operating costs and handling expense.

Many of our competitors have achieved significant national brand name recognition as fuel distributors and have extensive promotional programs. Our Fuel Services program uses equipment and technology that is widely available. Accordingly, barriers to entry, apart from capital availability, are low in our business, and the entrance of new competitors into the fuel distribution market may reduce our ability to capture improving profit margins. However, we believe that our comprehensive Fuel Services program, which includes pre-negotiated fuel discounts from wholesalers/retailers based upon volume commitments and pre-negotiated customer base with fleet truck operators nationally, provides advantages to both the supplier and the customer at reasonable costs. The Company's ability to compete successfully will depend on our success at retaining current customers and penetrating new targeted markets. There can be no assurance that the Company will be able to compete successfully, that its services will continue to meet with customer approval, that competitors will not develop and market their distribution services that are similar or superior to our services or that the Company will be able to successfully enhance its services.

PRINCIPAL SUPPLIERS

In the non-renewables division, the Company has contractual arrangements with over 8 fuel distribution centers, many of which operate multiple truck stops and other similar facilities nationally. The Company does not believe that it dependent upon any single fuel distributor.

DEPENDENCE ON MAJOR CUSTOMERS

The company does not depend on any major customers for its revenue.

EMPLOYEES

As of March 31, 2011, the Company had 2 full time employees and 4 part-time employees, including its executive officers. No employees are covered by a collective bargaining agreement. The Company's management considers relations with its employees to be satisfactory.

LIQUIDITY AND CAPITAL RESOURCES

In order to achieve our business plan goals, the Company anticipates needing to raise additional capital from the sale of restricted shares over the coming 12 month period.

The Company intends to finance our future development activities and working capital needs largely from the sale of public equity securities with additional funding from a private placement or secondary offering and other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements.

The Company may receive proceeds in the future from the exercise of warrants and options outstanding as of March 31, 2011 in accordance with the following schedule:

	Approximate Number of Shares		Approximate Proceeds

Non-Plan Options and Warrants		-0-		-0-

During the coming year, based on our anticipated growth/contraction, the Company has no plans to add or reduce the number of empolyees.

Results of Operations - Comparative Three Month Periods Ended March 31, 2011 and 2010

Throughout this comparative discussion, we refer to changes in the Economic conditions affecting our company and the industry as a whole. For purposes of understanding the impact on the Company’s financials, the resulting decrease in Gross Billings and overall company financial picture, over the reported period was principally a result of changes in the general economic environment and specifically the higher costs of fuel because of lower refinery production. In addition, many of our trucking customers were tied to the automotive industry and with the downturn in the general economic condition and the financial collapse within the automotive industry, services and gross billings declined drastically. Additional information is provided where applicable.

Our Revenues from Operations decreased for the three months ended March 31, 2011 where we posted $334 as compared to $10,360 for the same period in 2010 primarily as a result of reduced demand due to the econmic conditions facing our industry and a shift in focus by the Company to its Renewables divisions.

We had a marked increase in Operating Expenses for the three months ended March 31, 2011 posting Operating Expenses of $518,631 as compared to Operating Expenses of $29,233 for the same period in 2010, due to our focus on streamlining our operations to adjust to the reduced demand in the non-renewables division and the up-front costs associated with the shift in focus to the Company’s renewables divisions.

We recognized an increase in Net Losses for the three months ended March 31, 2011 as compared to the same period in 2010, posting a Net Loss of ($525,978) for the period ending March 31, 2011 verses ($18,867) for the same period ending in 2010, primarily due to the increase in Operating Expenses.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any 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 that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4T. Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the three month period ending March 31, 2011 covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This conclusion by the Company’s Chief Executive Officer and Chief Financial Officer does not relate to reporting periods after March 31, 2011.

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the quarter ended March 31, 2011, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

As of the date of this Quarterly Report, neither we nor any of our officers or directors is involved in any litigation either as plaintiffs or defendants. As of this date, there is not any threatened or pending litigation against us or any of our officers or directors.

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

During the three month period ended March 31, 2011, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

DURING THE PERIOD FROM January 1, 2011 – – March 31, 2011

The company issued 11,015,000 shares of RESTRICTED common stock and 1,625,000 shares of freely traded shares of common stock, thus totalling 12,640,000 shares of stock issued during 1Q 2011.

Item 3. Defaults upon Senior Securities

There have been no defaults in any material payments during the covered period.

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

During the three month period ended March 31, 2011, the Company did not submit any matters to a vote of its security holders.

Item 5. Other Information

The Company does not have any other material information to report with respect to the three month period ended March 31, 2011.

Item 6. Exhibits and Reports on Form 8-K

(a)	Exhibits included herewith are:

31.1	Certification of the Chairman of the Board, Chief Executive Officer, and Chief Financial Officer

(This certification required as Exhibit 31 under Item 601(a) of Regulation S-K is filed as Exhibit 99.1 pursuant to SEC interim filing guidance.) (2)

31.2	Certification of the Principal Accounting Officer

(This certification required as Exhibit 31 under Item 601(a) of Regulation S-K is filed as Exhibit 99.2 pursuant to SEC interim filing guidance.) (2)

Written Statements of the Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer (This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item 601(b)(32)(iii) of Regulation S-K as Exhibit 99.3 pursuant to SEC interim filing guidance.) (2)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	EXERGETIC ENERGY, INC.

Dated: June 24, 2011	By:	/s/ C.B. McCollum
		Chairman of the Board (Principal Executive Officer)

Dated: June 24, 2011	By:	/s/ James D. Jackson, CFO
		Principal Accounting Officer

EXERGETIC ENERGY, INC. 10-Q