United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-K

(Mark One)

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

( ) 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 000-52258

PROPER POWER AND ENERGY, INC.

(Name of small business issuer in its charter)

Delaware 59-3681572

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

405 South Dale Mabry Highway #360, Tampa, Florida 33609

(Address of principal executive offices) (Zip Code)

Issuer's telephone number: (904) 371-2445

Securities registered under Section 12(b) of the Exchange Act:

Title of each class Name of each exchange on which registered

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ( ) No (x)

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes (x) No ( )

Indicate by check mark Check 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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (x) No (_).

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes (x) No ( ).

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K Yes (_) No (x).

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 and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]

(Do not check if a smaller reporting company)

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)

The aggregate market value of the Common Stock held by non-affiliates of approximately 52,292,000 shares of Common Stock as of March 11, 2011 was approximately $1,412,000 based on a closing sales price of $0.027 per share of Common Stock on December 31, 2010, the last business day of the Registrant’s most recently completed year as reported by NASDAQ.com.

The number of shares outstanding of the issuer’s Common Stock, $.001 par value, as of March 11, 2011 was 101,500,000 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None

PROPER POWER AND ENERGY, INC.

ANNUAL REPORT ON FORM 10-K

Fiscal Year Ended December 31, 2010

TABLE OF CONTENTS



	Page
PART I
Item 1. B usiness	5
Item 1A. Risk Factors	8
Item 1B. Unresolved Staff Comments	8
Item 2. Properties	8
Item 3. Legal Proceedings	8
Item 4. [Removed and reserved.]
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	8
Item 6. Selected Financial Data	9
Item 7. Management’s Discussion and Analy sis of Financial Condition and Results of Operations	9
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	10
Item 8. Financial Statements and Supplementary Data	10
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	10
Item 9A. Controls and Procedures	11
Item 9B. Other Information	11

PART III
Item 10. Directors, Executive Officers and Corporate Governance	12
Item 11. Executive Compensation	13
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	14
Item 13. Certain Relationships and Related Transactions, and Director Independence	15
Item 14. Principal Accountant Fees and Services	15
PART IV
Item 15. Exhibits and Financial Statement Schedules	16
Signatures	17
Index to Financial Statements	18

Special Note Regarding Forward Looking Statements.

This annual report on Form 10-K of Proper Power and Energy, Inc. for the year ended December 31, 2010 contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements which, by definition, involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.

The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the costs and effects of legal proceedings.

In some cases, you can identify forward-looking statements by our use of terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “intends,” “predicts,” “potential” or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined under “Risk Factors.” These factors may cause our actual results to differ materially from any forward-looking statement. Factors that could affect our actual results and could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, the following:

Our business strategy;

Our financial position;

The extent to which we are leveraged;

Our cash flow and liquidity;

Declines in the prices of oil and gas affecting our estimated operating results and cash flow;

Economic slowdowns that can adversely affect consumption of oil and gas by businesses and consumers;

Uncertainties in estimating our oil and gas reserves;

Replacing our oil and gas reserves;

Uncertainty in exploring for oil and producing oil and gas;

Our inability to obtain additional financing in order to fund our operations, capital expenditures, and to meet our other obligations;

Availability of drilling and production equipment and field service providers;

Disruption of operations and damages due to natural disasters;

Availability, cost and adequacy of insurance coverage;

Competition in the oil and gas industry;

Our inability to attract and retain key personnel;

The effects of government regulation and permitting and other legal requirements; and

Cost associated with perfecting title for mineral rights in some of our properties.

(a)

an abrupt economic change resulting in an unexpected downturn in demand;

(b)

governmental restrictions or excessive taxes on our products;

(c)

over-abundance of companies supplying computer products and services;

(d)

economic resources to support the retail promotion of new products and services;

(e)

expansion plans, access to potential clients, and advances in technology; and

(f)

lack of working capital that could hinder the promotion and distribution of products and services to a broader based business and retail population.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. We do not intend to update any of the forward-looking statements after the date of this report to conform prior statements to actual results.

PART I

Item 1. Business.

Business Development

Proper Power and Energy, Inc. (“PPWE”, “The Company”) was incorporated January 1, 2000 in the State of Delaware. Prior to the March 31, 2009, the Company operated under the name Ivecon, Inc. (“IVEO”, “Ivecon”) as a developer of a secure (encrypted) instant messenger with integrated desktop search, media center, and commerce system. The Company also provided computer support for designing websites.

During the first quarter of 2009 the Company had a change in control. On March 5, 2009 Ivecon entered into a material definitive agreement with Belmont Partners, LLC by which Belmont Partners LLC acquired one million (1,000,000), pre-forward split (50:1) restricted common stock shares of the Company in exchange for $157,500 in cash in a private equity transaction with the then majority shareholder. Following the transaction, Belmont Partners, LLC became the majority shareholder with control of 74.07% of the Company’s outstanding capital stock. At approximately this same time, the Company changed stock transfer agents to PacWest Transfer, LLC of Las Vegas, Nevada.

Additionally occurring on March 5, 2009, in a separate private equity transaction, Joseph Abdo acquired from Belmont Partners LLC the control block of stock in the Company consisting of one million (1,000,000) ), pre-forward split (50:1) restricted common stock shares of the Company for $250,000.

In May 2009, the new management resulting from the change in control, changed the name from Ivecon, Inc. to Proper Power and Energy, Inc., and changed the operating direction to an oil and gas exploration and production company. The organization is committed to utilizing a very dynamic system of research and testing, and as a result of this extensive research and testing, have selected several sites with very good to excellent potential for productivity.

Nature of the Business

Proper Power and Energy, Inc. is an oil and natural gas exploration company, whose growth strategy is to acquire mineral rights and search for and develop known reserves for further production, through an efficient scientific approach toward exploration. We have procured a scientific engineer approach, termed radiometric. All of our prospects are classified as exploratory in nature, but they are not “wildcat” (oil wells drilled in areas not known to be oil fields) since we use radiometric data advantage, a technology based methodology. Our prospects are separated geographically from existing oil and gas production, but they are not always separated geologically or radiologically. Therein lays the difference from “wildcatting.”

The economics of exploration with radiometrics are compelling. We believe we can reduce the finding costs and everything associated with the actual drilling and the completion risks. While there is a higher drilling risk associated with an exploratory well than with a development well, the reward potential with a successful exploratory well far exceeds the upside of any developmental well. In time, our technology may become the industry standard.

(1) Principal Products or Services and Their Markets

In recent years, the increase in product prices has increased drilling activity for oil and natural gas. However, U.S. production volumes from traditional sources continue to decline. We believe our radiometrics exploration can help offset this decline by increasing the efficiency of finding new wells.

We operate in the energy services sector, which services the broader upstream energy industry where companies explore, develop, produce, transport, and market oil and gas. This industry is comprised of a diverse number of operators, ranging from very small independent contractors to the extremely large corporations. While the majority of oil and gas is produced by very large international oil companies, there are a much larger number of smaller independent companies who own and operate the vast majority of new and existing wells. As a smaller firm with a specialized service, we hope to compete successfully.

Activity in the energy services industry tends to be cyclical with oil and gas prices. In addition to the currently positive industry fundamentals, we believe the following sector-specific trends enhance the growth potential of our business sectors:


·	While oil prices are difficult to predict, we believe they will remain relatively high by historic terms for the next several years. Following the current recession, we expect a resumption of high consumption and strong growth in Asian demand, along with limitations in delivery infrastructure and political unrest in major supplying countries to be primary contributing factors.


·	We believe gas prices, while volatile, will recover over the next several years due to the combination of strong market demand for clean fuels and major supply constraints in conventional areas. However, the impact of new supplies from unconventional gas sources may have a dampening effect on price.


·	We do not believe there is any major substitution threat to oil and gas in the foreseeable future. In particular, any significant substitution of fossil fuels by hydrogen or other potential energy sources is believed by management to be at least a decade away.

(2) Distribution Methods of the Services.

We intend to develop our initial wells and manage the production to produce cash flow to fund further exploration.

(3) Status of Any Publicly Announced New Product or Service.

None

(4) Our Competition

We may encounter intense competition from other oil and gas companies in all areas of our operations, including the acquisition of producing properties and undeveloped acreage. Our competitors include major integrated oil and gas companies, numerous independent oil and gas companies and individuals. Many of our competitors are large, well-established companies with substantially larger operating staffs and greater capital resources and have been engaged in the oil and gas business for a much longer time than our company. These companies may be able to pay more for productive oil and gas properties, exploratory prospects and to define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in this highly competitive environment.

(5) Sources and Availability of Raw Materials

We may encounter intense competition from other oil and gas companies in all areas of our operations, including the acquisition of equipment and manpower. Our competitors include major integrated oil and gas companies, numerous independent oil and gas companies and individuals. At this time we do not see a critical dependence on any supplier(s) that could adversely affect our operations.

(6) Dependence on Limited Customers

We believe that the market for oil and gas will be adequate to support our operations for the foreseeable future.

(7) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts

At the present time we do not own or have any domain names, patents, trademarks, licenses (other than the usual business license), franchises, concessions, royalty agreements or labor contracts. However, in the future, our success may depend in part upon our ability to preserve our trade secrets, obtain and maintain patent protection for our technologies, products and processes, and operate without infringing upon the proprietary rights of other parties. However, we may rely on certain proprietary technologies, trade secrets, and know-how that are not patentable. Although we may take action to protect our unpatented trade secrets and our proprietary information, in part, by the use of confidentiality agreements with our employees, consultants and certain of our contractors, we cannot guarantee that these agreements will not be breached; that we would have adequate remedies for any breach; or that our proprietary trade secrets and know-how will not otherwise become known or be independently developed or discovered by competitors.

(8) Need for Government Approval of Principal Products or Services

Currently, our operations do not require specific government approval. When we start to drill, we will become subject to numerous regulations and approval processes. See a summary of the regulation below. Based on the current permitting climate, we do not believe that the approval processes will be detrimental to our operations.

(9) Government Regulation

Regulation of Oil and Gas Production, Sales and Transportation

The oil and gas industry is subject to regulation by numerous national, state and local governmental agencies and departments. Compliance with these regulations is often difficult and costly and noncompliance could result in substantial penalties and risks. Most jurisdictions in which we operate also have statutes, rules, regulations or guidelines governing the conservation of natural resources, including the unitization or pooling of oil and gas properties and the establishment of maximum rates of production from oil and gas wells. Some jurisdictions also require the filing of drilling and operating permits, bonds and reports. The failure to comply with these statutes, rules and regulations could result in the imposition of fines and penalties and the suspension or cessation of operations in affected areas.

The United States Department of Transportation and certain governmental agencies regulate the safety and operating aspects of the transportation and storage activities of these facilities by prescribing standards. However, based on current standards concerning transportation and storage activities and any proposed or contemplated standards, we believe that the impact of such standards is not material to our operations, capital expenditures or financial position.

Environmental Regulation

Various federal, state and local laws and regulations relating to the protection of the environment, including the discharge of materials into the environment, may affect our exploration, development and production operations and the costs of those operations. These laws and regulations, among other things, govern the amounts and types of substances that may be released into the environment, the issuance of permits to conduct exploration, drilling and production operations, the handling, discharge and disposition of waste materials, the reclamation and abandonment of wells, sites and facilities, financial assurance under the Oil Pollution Act of 1990 and the remediation of contaminated sites. These laws and regulations may impose substantial liabilities for noncompliance and for any contamination resulting from our operations and may require the suspension or cessation of operations in affected areas.

The environmental laws and regulations applicable to us and our operations will include, among others, the following United States federal laws and regulations:

Clean Air Act, and its amendments, which governs air emissions;

Clean Water Act, which governs discharges of pollutants into waters of the United States;

Comprehensive Environmental Response, Compensation and Liability Act, which imposes strict liability where releases of hazardous substances have occurred or are threatened to occur (commonly known as “Superfund”);

Resource Conservation and Recovery Act, which governs the management of solid waste;

Oil Pollution Act of 1990, which imposes liabilities resulting from discharges of oil into navigable waters of the United States;

Emergency Planning and Community Right-to-Know Act, which requires reporting of toxic chemical inventories;

Safe Drinking Water Act, which governs underground injection and disposal activities; and

U.S. Department of Interior regulations, which impose liability for pollution cleanup and damages.

We will routinely obtain permits for our facilities and operations in accordance with these applicable laws and regulations on an ongoing basis. To date, there are no known issues that have had a significant adverse effect on the permitting process or permit compliance status of any of our facilities or operations.

The ultimate financial impact of these environmental laws and regulations is neither clearly known nor easily determined as new standards are enacted and new interpretations of existing standards are rendered. Environmental laws and regulations are expected to have an increasing impact on our operations. In addition, any non-compliance with such laws could subject us to material administrative, civil or criminal penalties, or other liabilities. Potential permitting costs are variable and directly associated with the type of facility and its geographic location. For example, costs may be incurred for air emission permits, spill contingency requirements, and discharge or injection permits. These costs are considered a normal, recurring cost of our ongoing operations and not an extraordinary cost of compliance with government regulations.

We believe our operations will be in substantial compliance with applicable environmental laws and regulations. We plan to make expenditures on a regular basis relating to environmental compliance. We plan to maintain insurance coverage for spills, pollution and certain other environmental risks, although we are not fully insured against all such risks. The insurance coverage maintained by us will provide for the reimbursement to us of costs incurred for the containment and clean-up of materials that may be suddenly and accidentally released in the course of our operations, but such insurance does not fully insure pollution and similar environmental risks. We do not anticipate that we will be required under current environmental laws and regulations to expend amounts that will have a material adverse effect on our financial position or our results of operations

(10) Research and Development During Last Two Fiscal Years

During the last two fiscal years no money was spent on research and development of our product or processes.

(11) Cost and Effects of Compliance with Environmental Laws

We currently do not have any operations subject to federal, state or local environmental laws. However, since environmental costs and liabilities are inherent in our operations and in the operations of companies engaged in similar businesses and since regulatory requirements frequently change and may become more stringent, there can be no assurance that material costs and liabilities will not be incurred in the future. Such costs may result in increased costs of operations and acquisitions and decreased production.

(12) Our Employees

As of December 31, 2010, we had 3 part time employees. We have no consulting contracts with anyone to provide services to the company.

Item 1A. Risk Factors.

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Security Exchange Act of 1934 and are not required to provide the information under this item.

Item 1B. Unresolved Staff Comments

We did not receive any comments from the commission staff during fiscal year 2010.

Item 2. Properties.

The Company rents office space in Tampa, Florida from a related party.

The Company has secured a lease on 11,000 acres in the Rush Valley region of Utah and seismic charts of the area for exploration.

The Company has secured a revenue sharing lease in Kentucky on 87 acres with existing capped wells.

Item 3. Legal Proceedings.

None

Item 4. [Removed and reserved.]

Part II

The common stock of Proper Power and Energy, Inc. commenced trading on the OTC Bulletin Board March 18, 2009 under the symbol “PPWE”. Before that time the stock of “IVEC.OB” never had any trading volume in the stock. The following table sets forth the high and low trading prices of a share of our common stock as reported for the period of active trading. The quotations provided are for the over the counter market, which reflect interdealer prices without retail mark-up, mark-down or commissions, and may not represent actual transactions.


QUARTER ENDED	HIGH	LOW

June 30, 2009	$ 0.27	$ 0.10
September 30, 2009	$ 0.25	$ 0.12
December 31, 2009	$ 0.35	$ 0.07
March 31, 2010	$ 0.30	$ 0.05
June 30, 2010	$ 0.28	$ 0.14
September 30, 2010	$ 0.18	$ 0.04
December 31, 2010	$ 0.12	$ 0.02

As of March 11, 2011, we had 101,500,000 shares of common stock issued and outstanding held by approximately 51 shareholders of record.

Holders of Common Stock

Holders of shares of common stock are entitled to one vote per share on each matter submitted to a vote of shareholders. In the event of liquidation, holders of common stock are entitled to share pro rata in the distribution of assets remaining after payment of liabilities, if any. Holders of common stock have no cumulative voting rights, and, accordingly, the holders of a majority of the outstanding shares have the ability to elect all of the directors. Holders of common stock have no preemptive or other rights to subscribe for

shares. Holders of common stock are entitled to such dividends as may be declared by the Board out of funds legally available therefore. The outstanding shares of common stock are validly issued, fully paid and non-assessable. As of December 31, 2010 the number of holders of record of shares of common stock, excluding the number of beneficial owners whose securities are held in street name was approximately 51.

Dividend Policy

The Company will not pay any cash dividends on its common stock in 2010 because it intends to retain its earnings to finance the expansion of its business. Thereafter, declaration of dividends will be determined by the Board of Directors in light of conditions then existing, including without limitation the Company's financial condition, capital requirements and business condition.

Securities Authorized For Issuance Under Equity Compensation Plans

None.

Item 6. Selected Financial Data

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Security Exchange Act of 1934 and are not required to provide the information under this item.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our accompanying financial statements and the notes to those financial statements included elsewhere in this annual report. The following discussion includes forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements.

Plan of Operation

General

Since our reorganization in March 2009, the Company has not had any active operations. No sales of any kind were made during 2010 on the former products of IVEC, During 2009 we realigned the operations of the Company, hired consultants and procured the land leases in our preferred site and seismic charts of the area. During 2010, the Company evaluated several new leases and acquired a lease in Kentucky for production and exploration. During 2011, we intend to solicit the funds necessary to begin our exploratory fieldwork and drilling in Utah and to start production in Kentucky.

Employees

We intend to hire additional employees within months of receiving additional funding. Our employees will be those individuals that we have named as our key personnel who are currently assisting the company on an unpaid basis. We are continuing to research the types of individuals, salary ranges and benefit programs we will need to put in place to attract personnel that can produce results. Outside of our key employees we believe that we will need to augment our office staff with a general accounting and a receptionist/secretary to handle and distribute incoming inquires for sales and general inquires. Also, we will also need a number of field employees as the well field is explored and drilling starts.

Liquidity and Capital Resources

Our cash decreased to $82 as of December 31, 2010 compared to $18,538 as of December 31, 2009, due to payment of expenses.

The cash used in operating activities during the period ended December 31, 2010 was ($50,947) compared to ($723,044) used during the period ended December 31, 2009. The decrease was due to fewer expenses for consulting and reporting. There were no sales during 2010 or 2009 and gross profit was zero for both years. Operating expenses decreased during the same period to $426,088 compared to $748,865, primarily due a decrease in consulting fees slightly offset by an increase in officer compensation.

Our Plan of Operation for the next twelve months is to raise capital to implement our strategy. We do not have the necessary cash and revenue to satisfy our cash requirements for the next twelve months. We anticipate that we will use the funds raised in this offering and revenues generated to fund the hiring of employees, equipment purchases, office improvements, and marketing activities and working capital. Our failure to market and promote our services will harm our business and future financial performance. If we are unable to commence our operations within the next twelve months, we will likely fail to increase our revenues. We cannot guarantee

that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then we may not be able to expand our operations. If adequate funds are not available, we believe that our officers and directors will contribute funds to pay for some of our expenses. However, we have not made any arrangements or agreements with our officers and directors regarding such advancement of funds. We do not know whether we will issue stock for the loans or whether we will merely prepare and sign promissory notes. If we are forced to seek funds from our officers or directors, we will negotiate the specific terms and conditions of such loan when made, if ever. None of our officers or directors is obligated to pay for our expenses.

Expected purchases or sale of plant and significant equipment

Once we secure adequate funding, we expect to expend significant amounts on equipment, labor and contractors to perform our exploration and drilling

Off-Balance Sheet Arrangements

We have made no 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.

Results of Operations and Critical Accounting Policies and Estimates

The results of operations are based on preparation of financial statements in conformity with accounting principles generally accepted in the United States. The preparation of financial statements requires management to select accounting policies for critical accounting areas as well as estimates and assumptions that affect the amounts reported in the financial statements. The Company’s accounting policies are more fully described in Note 2 to Notes of Financial Statements found in the Company’s annual financial statements filed with Form 10-K.

2010 Compared to 2009

Total revenues during 2010 and 2009 were $0. Operating expenses decreased during the same period to $426,088 compared to $748,865, primarily due to a decrease in consulting fees slightly offset by an increase in officer compensation. We hope to start see revenues from production in our new Kentucky lease and later in Utah after we have drilled our first well.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Security Exchange Act of 1934 and are not required to provide the information under this item.

Item 8. Financial Statements and Supplementary Data.

Our financial statements are contained herein commencing on page F-1, which appear at the end of this annual report.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None

Item 9A. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

With respect to the fiscal year ending December 31, 2010, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934. Based upon our evaluation regarding the fiscal year ending December 31, 2010, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, has concluded that its disclosure controls and procedures were not effective due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.

(b) Management’s Annual Report on Internal Control Over Financial Reporting.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

With respect to the fiscal year ending December 31, 2010, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our internal controls over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 and based on the criteria for effective internal control described in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon our evaluation regarding the fiscal year ending December 31, 2010, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, has concluded that its internal controls over financial reporting were not effective due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.

The Company’s disclosure controls and procedures and internal controls over financial reporting are designed to provide reasonable assurance of achieving their objectives. However, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and procedures, or its internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this Annual Report.

(c) Changes in Internal Controls.

There have been no changes in the Company’s internal control over financial reporting during the period ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

Item 9B. Other Information.

None.

PART III.

Item 10. Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers

The names and ages of our directors and executive officers are set forth below. Our By-Laws provide for not less than one and not more than fifteen directors. All directors are elected annually by the stockholders to serve until the next annual meeting of the stockholders and until their successors are duly elected and qualified.



Name	Age	Position
Joseph E. Abdo	54	Chief Executive Officer and Chairman of the Board of Directors (1)
Andrew J. Kacic	63	President
Lior Segal	38	Treasurer, Chief Financial Officer and Director
Mark E Pena	49	Secretary/Director
Khalil Abdo	53	Director (2)
(1). This is the first Directorship of a reporting company held by Mr. Joseph Abdo
(2) This is the first Directorship of a reporting company held by Mr. Khalil Abdo

Background of Executive Officers and Directors

Joseph E. Abdo

Joseph E. Abdo is 54 years of age. Mr. Abdo is the brother of our director, Khalil Abdo. In the last five years, Mr. Abdo has served as the Chairman of the Board of Directors and President for J&K Properties, Inc., a privately owned corporation involved in the real estate business. He also has served as the Chairman of the Board of Directors and President for J&J Properties, Inc. a privately owned corporation engaged in private investment and lending activities. None of the aforementioned entities are a parent, subsidiary or affiliate of the Company. Mr. Abdo is not an officer or director of any other public company. As of the date of this filing, Mr. Abdo has not engaged in any related party transactions with the Company. Mr. Abdo’s qualifications to serve as a director at this time include his knowledge of the Company’s intended business model as well as his many years of business experience in various industries, including real estate and investments. Mr. Abdo’s business skills and his experience in corporate financial matters provide the understanding necessary to serve on Board of Directors and as the President and Chief Executive Officer of the Company.

Khalil Abdo

Khalil Abdo is 53 years of age. Mr. Abdo is the brother of our President, Chief Executive Officer and Director, Joseph E. Abdo. In the last five years, Mr. Abdo has served as the president and a director for Riverside, Inc., a privately owned corporation engaged in the real estate business as well as private investment activities. Riverside, Inc. is not a parent, subsidiary or affiliate of the Company. Mr. Abdo is not an officer or director of any other public company. As of the date of this filing, Mr. Abdo has not engaged in any related party transactions with the Company. Mr. Abdo’s qualifications to serve as a director at this time include his knowledge of the Company’s intended business model as well as his many years of business experience in various industries, including real estate and investments. Mr. Abdo’s business skills and his experience in corporate financial matters provide the understanding necessary to serve as a member of the Board of Directors of the Company.

Mark E. Pena

Mark E. Pena is 49 years of age. Mr. Pena has no relationship with any other officer or director of the Company. For the last five years, Mr. Pena has been engaged in the practice of law as his principal occupation. Mr. Pena is a member of the Florida Bar, the United States District Court for the Middle District of Florida and the United States Court of Appeals for the Eleventh Circuit. Mr. Pena is the president and director of The Law Office of Mark E. Pena, P.A., which is not a parent, subsidiary or affiliate of the

Company. The primary focus of Mr. Pena’s practice has been corporation formation and litigation, with a minor concentration of securities filings and securities litigation. Mr. Pena is not an officer or director of any other public company. As of the date of this filing, Mr. Pena has not engaged in any related party transactions with the Company. Mr. Pena’s qualifications to serve as a director at this time include his knowledge of the Company’s intended business model as well as his many years of business experience in various industries, including real estate, investments and the practice of law. Mr. Pena’s education, business skills, and his experience as an attorney and in corporate financial and legal matters provide the understanding necessary to serve on Board of Directors of the Company.

Lior Segal

Lior Segal is 38 years of age. Mr. Segal has no relationship with any other officer or director of Company. Since May 2007, Mr. Segal has been a partner in the law firm of Segal & Schuh, P.L. From April 2006 through January 2007, Mr. Segal served as the chief financial officer for Internal Hydro International, Inc. From September 2003 through January 2006, Mr. Segal served as the chief financial officer for Sun Rayz Products, Inc. None of the aforementioned entities is a parent, subsidiary or other affiliate of the Company. Mr. Segal is not an officer or director of any other public company. As of the date of this filing, Mr. Segal has not engaged in any related party transactions with the Company. Mr. Segal’s qualifications to serve as a director at this time include his knowledge of the Company’s intended business model as well as his many years of business experience in various industries, including real estate, investments and the practice of law. Mr. Segal’s education, business skills, his experience as an attorney and in corporate financial and legal matters, as well as serving as the chief financial officer for other companies in the past, provide the understanding necessary to serve on Board of Directors and as the Chief Financial Officer of the Company.

Andrew J. Kacic

In January 2011, Andrew J. Kacic replaced Joseph Abdo as President of Proper Power & Energy. Mr. Kacic, age 63, brings more than 32 years of progressive experience as a chief executive in oil and gas, investment banking, insurance services and public securities. Mr. Kacic was the founder and president of American Resources of Delaware, Inc. and its subsidiary Southern Gas Company, successfully taking assets from $220,000 to more than $40 million in less than 4 years. Mr. Abdo will remain the Chief Executive Officer and Chairman of the Board.

Audit Committee

We do not have an audit committee that is comprised of any independent director. As a company with less than $250,000 in revenue we rely on our Chief Financial Officer, Lior Segal, for our audit committee financial expert as defined in Item 401(e) of Regulation S-B promulgated under the Securities Act. Our Board of Directors acts as our audit committee. The Board has determined that the relationship of Mr. Segal as both our company CFO and our audit committee financial expert is not detrimental to the Company. Mr. Segal has a complete understanding of GAAP and financial statements; the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves in a fair and impartial manner; has experience analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to or exceed the breadth and complexity of issues that can reasonably be expected to be raised by the small business issuer’s financial statements; an understanding of internal control over financial reporting; and an understanding of audit committee functions. Mr. Segal has gained this expertise through his formal education and experience as CFO of several other companies and as a certified public accountant with several years’ experience. He has specific experience coordinating the financials of the company with public accountants with respect to the preparation, auditing or evaluation of the company’s financial statements.

Section 16(a) Beneficial Ownership Reporting Compliance

Under the securities laws of the United States, the Company’s directors, executive officers, and any persons holding more than five percent of the Company’s Common Stock are required to report their initial ownership of the Company’s Common Stock and any subsequent changes in their ownership to the Securities and Exchange Commission (“SEC”). Specific due dates have been established by the SEC, and the Company is required to disclose in this Information Statement any failure to file by those dates. Based upon (i) the copies of Section 16(a) reports that the Company received from such persons for their 2009 fiscal year transactions, the Company believes that there has been compliance with all Section 16(a) filing requirements applicable to such officers, directors, and five-percent beneficial owners for such fiscal year.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our code of ethics will be provided to any person without charge, upon request.

Item 11. Executive Compensation.

The following table sets forth information concerning the annual and long-term compensation of our Chief Executive Officer, and the most highly compensated employees and/or executive officers who served at the end of the fiscal years December 31, 2010 and 2009,

and whose salary and bonus exceeded $100,000 for the fiscal years ended December 31, 2010 and 2009, for services rendered in all capacities to us. The listed individuals shall be hereinafter referred to as the “Named Executive Officers.”



					Long-Term Compensation
		Annual Compensation			Awards		Payouts
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)
Name and principal position	Year	Salary ($)	Bonus ($)	Other Annual Compen- sation ($)	Restricted Stock Award(s) ($)	Securities Underlying Options/ SARs (#)	LTIP Payouts ($)	All Other Compensa-tion($)
Joseph Abdo, President, Chairman of the Board of Directors (2)	2010	-0-	-0-	-0-	$76,500	-0-	-0-	-0-
	2009	-0-	-0-	-0-	-0-	-0-	-0-	-0-
Khalil Abdo, Director (2)	2010	-0-	-0-	-0-	$76,500	-0-	-0-	-0-
Khalil Abdo, Director (2)	2009	-0-	-0-	-0-	-0-	-0-	-0-	-0-
Mark Pena, Secretary/Director (2)	2010	-0-	-0-	-0-	$76,500	-0-	-0-	-0-
Mark Pena, Secretary/Director (2)	2009	-0-	-0-	-0-	-0-	-0-	-0-	-0-
Lior Segal, CFO Treasurer/Director (2)	2010	-0-	-0-	-0-	$76,500	-0-	-0-	-0-
Lior Segal, CFO Treasurer/Director (2)	2009	-0-	-0-	-0-	-0-	-0-	-0-	-0-
Jay D. Solomon (1), President, Chairman of the Board of Directors	2009	-0-	-0-	-0-	-0-	-0-	-0-	-0-

John A. Ziegler (1), Treasurer/Director	2009	-0-	-0-	-0-	-0-	-0-	-0-	-0-
John A. Ziegler (1), Treasurer/Director
Mauricio D'Leon (1), Secretary/Director	2009	-0-	-0-	-0-	-0-	-0-	-0-	-0-
Mauricio D'Leon (1), Secretary/Director

(1) These directors stepped down as of March 5, 2009. There were no employment contracts in place, nor are there any agreements for compensation in the future.
(2) These directors were appointed as of March 7, 2009. There were no employment contracts in place at December 31, 2010 or 2009, nor are there any agreements for compensation in the future. A salary and stock options and/or warrants program may be developed in the future.

Additional Compensation of Directors

All of our directors are unpaid. Compensation for the future will be determined when and if additional funding is obtained.

Board of Directors and Committees

Currently, our Board of Directors consists of Joseph Abdo, Khalil Abdo, Mark Pena, and Lior Segal. We are not actively seeking additional board members. At present, the Board of Directors has not established any committees.

Employment Agreements

Currently, we have no written employment agreements with any of our Directors or Officers.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information concerning the beneficial ownership of shares of our common stock with respect to stockholders who were known by us to be beneficial owners of more than 5% of our common stock as of March 28, 2010, and our officers and directors, individually and as a group. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such shares of common stock. Beneficial ownership is determined in accordance with the rules of the Securities

and Exchange Commission (“SEC”) and generally includes voting or investment power with respect to securities. In accordance with the SEC rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees, if applicable.



		Amount and Nature of Beneficial Ownership	Percent of Class (1)
Title of Class	Name and Address of Beneficial Owner	March 11, 2011	March 11, 2011
Common Stock	Joseph Abdo 334 S Hyde Park Ave Tampa, FL	21,958,006	22%
Common Stock	Mark Pena 334 S Hyde Park Ave Tampa FL	10,200,000	10%
Common Stock	Lior Segal 13575 58^th St N Suite 140 Clearwater, FL	9,650,000	10%
Common Stock	All Executive Officers and Directors as a Group (1)	48,708,006	48%
Common Stock	Highland Capital Fund 3 Seneca Trail Charlestown, RI	10,500,000	10%
Common Stock	Cede & Co 55 Waters St New York, NY	20,719,167	21%
Common Stock	Four Peaks Ventures LLC 5235 North 16^th St, Ste. 321 Phoenix, AZ	5,000,000	5%
Common Stock	Mike Nehmeh 19061 Milford Cir Huntington Beach, CA	5,000,000	5%

(1) The percentages are based on 101,500,000 shares of common stock issued and outstanding as of March 11, 2011

To the best of our knowledge there are no transactions involving any director, executive officer, or any security holder who is a beneficial owner or any member of the immediate family of the officers and directors or an affiliated company.

Item 14. Principal Accountant Fees and Services

Audit Fees

The aggregate fees billed for professional services rendered by our prior principal accountant, Randall N. Drake, C.P.A., P.A. for review of financial statements included in the registrant's quarterly reports on Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the review periods ended March 31, 2009, June 30, 2009 and September 30, 2009 was $2,500.

Peter Messineo, CPA was named as our principal accountant on December 21, 2009. The estimated cost of the audit for the year ended December 31, 2009 was $7,500 for the audit or review of financial statements included in the registrant's quarterly reports on Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.

The aggregate fees billed for professional services rendered by our principal accountant, Peter Messineo, CPA for the audit of the registrant's December 31, 2010 annual financial statements and review of financial statements included in the registrant's quarterly reports on Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the review periods ended March 31, 2010, June 30, 2010 and September 30, 2010 is $3,600. Fees for the annual audit for the year ended December 31, 2010 in the amount of $5,000 have not been billed yet.

Audit-Related Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by Randall N. Drake, C.P.A., P.A. or Peter Messineo, CPA that are reasonably related to the performance of the audit or review of the registrant’s financial statements and are not reported under the caption “Audit Fees” was $0. The nature of the services comprising the fees disclosed under this category was: N/A.

Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by Randall N. Drake, C.P.A., P.A. or Peter Messineo, CPA for tax compliance, tax advice, and tax planning was $ 0.

All Other Fees

The aggregate fees billed in each of the last two fiscal years for products and services provided by Randall N. Drake, C.P.A., P.A. or Peter Messineo, CPA, other than the services reported above were $0 in paragraphs (e)(1) through (e)(3) of this section. The nature of the services comprising the fees disclosed under this category was: N/A.

Item 15. Exhibits, Financial Statement Schedules.

Exhibit Number and Description

Location Reference

(a)

Reports of Independent Certified Accountants

Filed Herewith

(b)

Financial Statements

Filed Herewith

(c)

Exhibits required by Item 601, Regulation SB;

(3.0)

Articles of Incorporation

(3.1)

Initial Articles of Incorporation filed

See Exhibit Key

with SB-2 Registration Statement

on April 26, 2006

(3.2)

Amendment to Articles of Incorporation

See Exhibit Key

filed with SB-2 Registration Statement

on April 26, 2006

(3.3)

Bylaws filed with SB-2 Registration

See Exhibit Key

Statement on April 26, 2006

(11.0)

Statement re: computation of per share

Note 2 to

Earnings

Financial Stmts.

(14.0)

Code of Ethics

See Exhibit Key

(31.1)

Certificate of Chief Executive Officer

Filed herewith

Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

(31.2)

Certificate of Chief Financial Officer

Filed herewith

Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

(32.1)

Certification of Chief Executive Officer

Filed herewith

pursuant to 18 U.S.C. § 1350,

as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

(32.2)

Certification of Chief Executive Officer

Filed herewith

pursuant to 18 U.S.C. § 1350,

as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

Exhibit Key

3.1

Incorporated by reference herein to the Company’s Form SB-2

Registration Statement filed with the Securities and Exchange

Commission on April 26, 2006.

3.2

Incorporated by reference herein to the Company’s Form SB-2

Registration Statement filed with the Securities and Exchange

Commission on April 26, 2006.

3.3

Incorporated by reference herein to the Company’s Form SB-2

Registration Statement filed with the Securities and Exchange

Commission on April 26, 2006.

14.0

Incorporated by reference herein to the Company’s Form SB-2

Registration Statement filed with the Securities and Exchange

Commission on April 26, 2006.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PROPER POWER AND ENERGY, INC.

Date: March 30, 2011

By: /s/ Joseph E. Abdo

JOSEPH E. ABDO,

Chief Executive Officer, Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: March 30, 2011

By: /s/ Joseph E. Abdo

JOSEPH E. ABDO,

Chief Executive Officer, Director

Date: March 30, 2011

By: /s/ Lior Segal

LIOR SEGAL,

Chief Financial Officer, Director

Date: March 30, 2011

By: /s/ Khalil Abdo

KHALIL ADBO, Director

Date: March 30, 2011

By: /s/ Mark Pena

MARK PENA, Director



INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-1

Balance Sheets for the periods ending
December 31, 2010 and 2009	F-2

Statements of Operation for the periods ending
December 31, 2010 and 2009	F-3

Statement of Changes in Stockholders’ Deficit
For the Years Ended December 31, 2010 and 2009	F-4

Statements of Cash Flow
For the Years Ended December 31, 2010 and 2009	F-5

Notes to Financial Statements	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Shareholders of Proper Power and Energy, Inc.:

I have audited the accompanying balance sheets of Proper Power and Energy, Inc. as of December 31, 2010 and 2009, and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended. These financial statements are the responsibility of the company’s management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, I express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Proper Power and Energy, Inc. as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying financial statements, the Company is without significant operating revenues and has losses from operations and has an accumulated deficit. As discussed in note 3, the current losses and the Company’s working capital shortage indicated that there is substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Peter Messineo, CPA

Palm Harbor, Florida

March 12, 2011

F-1

F-2


Proper Power and Energy, Inc.
Balance Sheets


			December 31,		December 31,
			2010		2009
Assets
Current assets
	Cash	$	82	$	18,538
	Accounts receivable		-		-
	Prepaid expenses		612,000		-
Total current assets			612,082		18,538

Property & equipment, net of accumulated
	depreciation of $7,647 and $2,249, respectively		30,139		35,537


Intangible property, net of accumulated
	amortization of $17,458 and $5,833, respectively		312,542		194,167

Total Assets		$	954,763	$	248,242

Liabilities and Stockholders' Deficit
Current liabilities
	Accounts payable and accrued expenses	$	56,528	$	19,710
	Demand notes payable		153,469		87,969
Total current liabilities			209,997		107,679

Notes payable, current			200,000		200,000
Notes payable to Shareholder			563,154		578,154

Total liabilities			973,151		885,833

Stockholders' Deficit
	Common Stock, $.0001 par value, 500,000,000 shares
	authorized; 101,000,000 and 67,500,000 shares
	issued and outstanding, respectively		10,100		6,750
	Additional paid-in capital		1,195,499		153,558
	Accumulated Deficit		(1,223,987)		(797,899)
Total stockholders' deficit			(18,388)		(637,591)

Total Liabilities and Stockholders' Deficit		$	954,763	$	248,242


*The accompanying notes are an integral part of these financial statements.*

F-3


Proper Power and Energy, Inc.
Statement of Operations



		For the Years Ended
		December 31,
			2010		2009

Revenues		$	-	$	-

Direct costs			-		-

Gross Margin			-		-

Operating expenses:
	Marketing & promotion		6,865		15,024
	Consulting		1,800		676,480
	Professional fees		38,370		30,979
	General & administrative		310,436		2,143
	Amortization and depreciation		17,023		8,082
	Interest expenses		36,294		16,157
	Total operating expenses		426,088		748,865

Net income (loss)		$	(426,088)	$	(748,865)


Earnings (loss) per share, primary
	and dilutive	$	(0.01)	$	(0.01)

Weighted average shares outstanding
	primary and dilutive		69,052,055		67,500,000


*The accompanying notes are an integral part of these financial statements.*

F-4


Proper Power and Energy, Inc.
Statement of Stockholders' Deficit


					Additional		Stock-
			Common		Paid in	Accumulated	Holders'
		shares		$.0001 par	Capital	Deficit	Deficit

Balance at December 31, 2008		1,350,000		$ 135	$ 48,966	$ (49,034)	$ 67

	Forward stock split (50:1)	66,150,000		6,615	(6,615)		-

	Issuance of options			-	111,207		111,207

	Net loss (audited)					(748,865)	(748,865)


Balance at December 31, 2009		67,500,000		6,750	153,558	(797,899)	(637,591)

	Stock issued for lease	3,000,000		300	104,700		105,000

	Sale of warrants				6,991		6,991

	Stock issued for offering costs	20,000,000		2,000	610,000		612,000

	Stock issued for services	10,500,000		1,050	320,250		321,300

	Net loss (audited)					(426,088)	(426,088)

Balance at December 31, 2010		101,000,000		$ 10,100	$ 1,195,499	$ (1,223,987)	$ (18,388)


*The accompanying notes are an integral part of these financial statements.*

F-5


Proper Power and Energy, Inc.
Statements of Cash Flows

		For the Year Ended
		December 31,
			2010		2009


Cash Flows from Operating Activities:
	Net (loss) income	$	(426,088)	$	(748,865)
	Adjustment to reconcile Net Income to net
	cash provided by operations:
	Depreciation and amortization		17,023		8,082
	Stock-based compensation		321,300		-
	Changes in assets and liabilities:
	Accounts receivable		-		500
	Prepaid expenses		-		129
	Accounts payable and accrued expenses		36,818		17,110
	Net Cash (Used) by Operating Activities		(50,947)		(723,044)

Cash Flows from Investing Activities:
	Purchase of property and equipment		(25,000)		(37,786)
	Net Cash (Used) by Operating Activities		(25,000)		(37,786)

Cash Flows from Financing Activities:
	Proceeds from issuance of warrants		6,991		111,207
	Proceeds from issuance of note payable		165,500		115,600
	Repayments of notes payable		(100,000)		(27,631)
	Proceeds from stockholder advances		-		590,000
	Repayment of stockholder advances		(15,000)		(11,846)
	Net Cash Provided by Operating Activities		57,491		777,330


Net increase/(decrease) in Cash			(18,456)		16,500

Cash at beginning of period			18,538		2,038

Cash at end of period		$	82	$	18,538

Supplemental cash flow information:
	Interest paid	$	382	$	-
	Taxes paid	$	-	$	-
	Non-cash transactions
	In December 2010, the Company issued 20 million shares of common stock for $612,000 in prepaid offering costs

*The accompanying notes are an integral part of these financial statements.*

F-6

Proper Power and Energy, Inc.

Notes to Financial Statements

December 31, 2010 and 2009

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Organization

Proper Power and Energy, Inc. (“PPWE”, “The Company”) was incorporated January 1, 2000 in the State of Delaware. Prior to the first quarter of 2009, the Company operated under the name Ivecon, Inc. (“IVEO”, “Ivecon”) as a developer of a secure (encrypted) instant messenger with integrated desktop search, media center, and commerce system. The Company also provided computer support for designing websites.

Nature of the Business

To further understand our strategy, it is important to know the difference between developmental and exploratory drilling. Exploratory wells are attempts to find new oil and gas fields, whereas development wells expand or more fully tap into a known oil or gas reservoirs.

We have procured a scientific engineer approach, termed radiometric. All of our prospects are classified as exploratory in nature, but they are not “wildcat” (oil wells drilled in areas not known to be oil fields) since we use radiometric data advantage, a technology based methodology. Our prospects are separated geographically from existing oil and gas production, but they are not always separated geologically or radiologically. Therein lays the difference from “wildcatting.”

The economics of exploration with radiometrics are compelling. We are reducing the finding costs and everything associated with the actual drilling and the completion risks. While there is a higher drilling risk associated with an exploratory well than with a development well, the reward potential with a successful exploratory well far exceeds the upside of any developmental well. In time, our technology may become the industry standard.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.

Certain amounts in the prior year’s financial statements have been reclassified to conform to the 2010 presentation. Such reclassification includes allocation between common stock and additional paid in capital.

F-6

Proper Power and Energy, Inc.

Notes to Financial Statements

December 31, 2010 and 2009

Financial Instruments

The Company’s balance sheets include the following financial instruments: cash, accounts receivable, accrued liabilities and amounts due to stockholder. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

Fair Value Measurement

All financial and nonfinancial assets and liabilities were recognized or disclosed at fair value in the financial statements. This value was evaluated on a recurring basis (at least annually). Generally accepted accounting principles in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on a measurement date. The accounting principles also established a fair value hierarchy which required an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs were used to measure fair value.

Level 1: Quotes market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that were corroborated by market data.

Level 3: Unobservable inputs that were not corroborated by market data.

Cash

The majority of cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of six months or less to be cash equivalents.

Intangibles and Long-Lived Assets

The Company has been in the exploration for oil and gas since March 2009 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are to be expensed as incurred. Mineral property (Land Leases) acquisition costs are initially capitalized when incurred. We amortize intangibles on a straight-line basis over twenty years.

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.

Revenue Recognition

The Company currently has not generated any revenue from the exploration or production from oil and gas drilling. The Company will recognize revenue on the realization of determinable natural resource reserves, based on the production and recovery of such assets.

Income Taxes

The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

Advertising

The costs of advertising are expensed as incurred. Advertising expense was $0 and $3,209 for the years ended December 31, 2010 and 2009, respectively.

Earnings (Loss) per Share

Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares. Due to the losses, the outstanding warrants are considered to be non-dilutive and not included in the earnings per share calculation.

Recent Accounting Pronouncements

The Company reviews new accounting standards as issued. No new standards had any material effect on the financial statements. Accounting pronouncements issued subsequent to the date of these financial statements were considered significant by management and evaluated for the potential effect on these financial statements. Management does not believe any subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to December 31, 2010 through the date these financial statements were issued.

Subsequent Events

The Company has evaluated subsequent events through March 11, 2011 to assess the need for potential recognition or disclosure in this report. Based upon this evaluation, management determined that all subsequent events that require recognition in the financial statements have been included.

NOTE 3 – GOING CONCERN

The Company’s business plan is to acquire, explore and develop potential oil and gas producing properties. The Company has not determined whether its land leases contain oil and gas reserves that are economically recoverable.

F-7

Proper Power and Energy, Inc.

Notes to Financial Statements

December 31, 2010 and 2009

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues from oil and gas production since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. At December 31, 2010 the Company has limited cash resources and will likely require new financing, either through issuing shares or debt, to continue the development of its business. Management intends to offer additional common stock; however, there can be no assurance that management will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. The continuation of the Company as a going concern is dependent upon the ability of the Company to determine the existence of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, obtain necessary financing and then profitable operations. As of December 31, 2010, the Company has never generated any revenues from oil and gas exploration and has accumulated losses of $1,223,987 since inception. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

F-8

Proper Power and Energy, Inc.

Notes to Financial Statements

December 31, 2010 and 2009

NOTE 4 – INTANGIBLE ASSETS

The Company has entered into two land leases. The land has been identified for future drilling and production. The Company is currently amortizing the leases over 20 years, on a straight-line basis. The Company will re-assess the amortization and any impairment to the properties upon further testing and production estimates. Amortization expense for the years ended December 31, 2010 and 2009 was $11,625 and $5,833, respectively.

Future amortization for the next five years ended December 31:.


2011	$	17,500
2012		17,500
2013		17,500
2014		17,500
2015		17,500

NOTE 5 – NOTES PAYABLE

The Company entered into an agreement with an unrelated company for the purchase of a land lease, in the amount of $200,000. The promissory note is interest bearing (6%) and payable in monthly installments based on a 240 month amortization of the debt. Per the agreement, payments have been deferred for the first 24 months and the note has a balloon provision for payment in full, including any accrued and unpaid interest. The balloon payment is due 24 months after payments begin and installment payments are based on a 240 month repayment.

The minimum payments on the notes payable for the years ending December 31 are as follows:


2010	$	-
2011		3,975
2012		5,585
2013		190,440
2014		-
2015		-
Thereafter		-
Total	$	200,000

The company received advances from unrelated parties in the amount of $153,469. The advances are payable on demand and bear interest at 6%.

F-9

Proper Power and Energy, Inc.

Notes to Financial Statements

December 31, 2010 and 2009

NOTE 6 – INCOME TAXES

The Company has not recognized an income tax benefit for the current quarter and year to date, based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the current period presented is offset by a valuation allowance (100%) established against deferred tax assets arising from operating losses and other temporary differences, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. As of December 31, 2010 and 2009, the Company incurred losses of approximately $105,000 and $798,000, respectively.

NOTE 7 – EQUITY

Common Stock

On April 21, 2009, the Company filed with the Delaware Secretary of State, a Certificate of Amendment to its Certificate of Incorporation which increase the number of authorized shares of common stock to 500,000,000 with a par value of $.0001 per share and which followers split all issued and outstanding shares of common stock on a 50-for-1 ratio.

The fifty for one forward stock split each shareholder received forty nine additional shares for every share they owned. All periods presented have been adjusted for the forward stock-split, retroactive to the periods presented, for the purpose of comparability.

The Company has entered into consulting agreements for the purposes of raising capital investments. The consulting firms will make strategic introductions to funding groups, investment banking firms, and/or other sources interested in furthering the business of PPWE. In the event that a private/public financing transaction is arranged and successfully implemented using a source first introduced to the Company by the consulting firm in the next 24 months, the consulting firm shall be entitled to receive an advisory fee at closing equal to 10% of the gross proceeds received by the Company.

On November 17, 2010, the Company issued 3,000,000 shares of common stock for a revenue interest in a land lease in Kentucky.

On December 20, 2010, the Company issued 2,500,000 shares of common stock to each of the four (4) officers as compensation for services, 500,000 shares of common stock to an outside consultant for services and 20,000,000 shares of common stock for costs associated with private placement memorandums and the raising of capital.

Options and Warrants

During year ended December 31, 2009, the Company issued 100,000 options, with an exercise price of $2 and a term of three years, to a current shareholder for $26,658.

The Company issued an additional 100,000, in October 2010, with exercise prices of $1.50 to $2.00 per share and terms of three years, to certain service providers for work performed. Based on the fair market stock price at the date of the agreement compared to the exercise price, with consideration of the length of time and the stock price volatility, there was no recognition of compensation expense, since the option price exceeded the current valuation of the option.

In December 2010, Company issued 349,550 warrants, with an exercise price of $2, and a term of six months, to a current shareholder for $6,991.


			Weighted Average		Remaining
	Options	Options	Intrinsic	Exercise	Contract
	Outstanding	Vested	Value	Price	Term
Options, December 31, 2008	-	-	-	-
Granted	200,000	200,000

F-10

Proper Power and Energy, Inc.

Notes to Financial Statements

December 31, 2010 and 2009


Exercised	-	-
Forfeited	-	-
Options, December 31, 2009	200,000	200,000
Granted	349,550	349,550
Exercised	-	-
Forfeited	-	-
Options, December 31, 2010	549,550	549,550	-	$ 1.95	.7 years

NOTE 8 – RELATED PARTY TRANSACTIONS

During 2009 the majority shareholder transferred ownership of common stock in settlement of amounts due to consultants, in the amount of $590,000, valued at the shares fair market trading value at the time of settlement. As of December 31, 2010 the balance due to the majority shareholder is $563,154. The use of shares was made for operating cash requirements. The amount due to the shareholder’s bears interest at 2% per annum with no repayment terms and the amount is payable upon demand.

The Company has limited needs for office space and is currently performing administrative tasks from offices provided by related parties as needed and at no charge. The current arrangements are temporary and the Company is actively seeking a facility to occupy upon funding of their plan of operations.

The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.

NOTE 9 – CONTINGENCIES

From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

NOTE 10 – SUBSEQUENT EVENTS

In January 2011, Andrew J. Kacic replaced Joseph Abdo as President of Proper Power & Energy. Mr. Kacic brings more than 32 years of progressive experience as a chief executive in oil and gas, investment banking, insurance services and public securities. Mr. Kacic was the founder and president of American Resources of Delaware, Inc. and its subsidiary Southern Gas Company, successfully taking assets from $220,000 to more than $40 million in less than 4 years. Mr. Abdo will remain the Chief Executive Officer and Chairman of the Board.

F-11

Proper Power & Energy, Inc. 10-K