UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2015

[ ]	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 000-52502

XTREME GREEN ELECTRIC VEHICLES, INC.

(Exact name of registrant as specified in its charter)

Nevada		26-2373311
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification Number)

3010 East Alexander Rd, Las Vegas, NV		89030
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (702) 870-0700

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]

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 number of shares outstanding of issuer’s common stock, $0.001 par value as of August 7, 2015: 42,396,000.

INDEX

	Page
PART I - Financial Information	3

Item 1: Financial Statements	3

Condensed Consolidated Balance Sheets as of June 30, 2015 (Unaudited) and December 31, 2014	3

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2015 and 2014 (Unaudited)	4

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014 (Unaudited)	5

Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations	9

Item 3: Controls and Procedures	12

PART II - Other Information	13

Item 1: Legal Proceedings	13

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds	13

Item 5: Other Information	13

Item 6: Exhibits	13

Signatures	14

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

XTREME GREEN ELECTRIC VEHICLES, INC.

Condensed Consolidated Balance Sheets

June 30, 2015 and December 31, 2014

	2015			2014
ASSETS		Unaudited
Current assets:
Cash	$	41,605		$	11,104
Accounts receivable, net of allowance		151,908			36,667
Inventory (note 6)		651,982			559,403
Prepaid expenses and deposits (note 7)		137,902			115,256
Total current assets		983,397			722,430

Property and equipment, net (note 5)		396,955			299,070
Deposit on lease		88,750			88,750

TOTAL ASSETS	$	1,469,102		$	1,110,250

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	120,821		$	194,638
Customer deposits		13,224			44,524
Current portion of long-term debt		63,229			33,252
Stockholder loans		675,000			180,000
Total current liabilities		872,274			452,414

Deferred rent		28,946			33,370
Notes payable		173,007			155,143
Warranty reserves		23,435			22,599

Total Liabilities		1,097,662			663,526

Stockholders’ equity (deficit):
Common stock, $0.001 par value, 100,000,000 shares authorized; 42,246,000 and 41,546,000 shares issued and outstanding, respectively		42,246			-
Common Stock Payable					41,546
Additional paid-in capital		13,967,176			13,267,876
Accumulated deficit		(13,637,982	)		(12,862,698	)
Total stockholders’ equity		371,440			446,724

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,469,102		$	1,110,250

See the accompanying unaudited notes to the financial statements.

XTREME GREEN ELECTRIC VEHICLES, INC.

Condensed Consolidated Statements of Operations

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Sales, net	$	422,204		$	204,945		$	614,817		$	547,676

Cost of sales		342,754			295,397			540,278			650,809

Gross margin (loss)		79,450			(90,452	)		74,539			(103,133	)

Costs and expenses:
General and administrative		320,755			371,832			637,454			759,328
Sales and marketing		121,453			88,839			194,196			162,023
Directors Fees		4,000						8,000
Moving and relocation								10,668
Interest expense		8,474			1,987			12,552			15,385
Other Income		(13,047	)					(13,047	)
Total costs and expenses		441,635			460,658			849,823			936,736

Net loss from operations		(362,185	)		(553,110	)		(775,284	)		(1,039,869	)

Extraordinary costs and expenses:
Gain realized from Chapter 11 Reorganization		-			-			-			571,578
Expenses and fee related to Chapter 11 filing		-			(42,316	)		-			(42,316	)

Net loss before provision for income taxes	$	(362,185	)	$	(595,426	)	$	(775,284	)	$	(510,607	)

Provision for income taxes		-			-			-			-

Net loss	$	(362,185	)	$	(595,426	)	$	(775,284	)	$	(510,607	)

Per share information - basic and diluted:

Loss per common share	$	(0.01	)		(0.01	)	$	(0.02	)	$	(0.01	)

Weighted average common shares outstanding		42,125,121			40,840,934			41,925,696			45,885,897

See the accompanying unaudited notes to the consolidated financial statements.

XTREME GREEN ELECTRIC VEHICLES, INC.

Condensed Consolidated Statements of Cash flows

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

	2015			2014
Cash flows from operating activities:
Net income (loss)	$	(775,284	)	$	(510,607	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		46,434			40,541
Gain realized from Chapter 11 Reorganization		-			(571,578	)
Gain from sale of equipment		(5,642	)		-
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable, net		(115,241	)		56,842
Increase in inventory		(122,578	)		(92,132	)
Increase in other current assets		(22,646	)		(15,971	)
(Decrease) increase in accounts payable and accrued expenses		(31,391	)		203,139
Decrease in accrued expenses - related party		-			(50,279	)
Increase (decrease) in accrued interest - related party		7,675			(22,869	)
Decrease in warranty reserve		(24,524	)		(9,564	)
Increase in extended warranty		836			16,603
Decrease in customer deposits		(31,301	)		(38,975	)
Net cash used in operating activities		(1,073,662	)		(994,850	)
Cash flows from investing activities:
Proceeds from sale of equipment		6,000
Purchases of property and equipment		(144,677	)		(190,833	)
Net cash used in investing activities		(138,677	)		(190,833	)
Cash flows from financing activities:
Proceeds from issuance of common stock		700,000			495,000
Proceeds from long-term debt		65,144			135,375
Proceeds from convertible debt - related party		-			500,000
Repayment of convertible debt		-			(15,371	)
Repayment of long term debt		(17,304	)		-
Repayment of Stockholder’s loan		(32,600	)		-
Proceeds from stockholders loan		527,600			(17,500	)
Net cash provided by financing activities		1,242,840			1,097,504
Net increase in cash		30,501			88,179
Cash - beginning of period		11,104			261,436
Cash - end of period	$	41,605		$	173,257
Supplemental Cash Flow information:
Cash paid for interest		3,425			15,385
Cash paid for taxes		-			-

See the accompanying unaudited notes to the consolidated financial statements.

XTREME GREEN ELECTRIC VEHICLES, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2015

(Unaudited)

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and Rule 8.03 of Regulation SX. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.

The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements of the Company as of and for the year ended December 31, 2014, on Form 10-K, including notes thereto.

(2) Chapter 11 Proceedings

On August 22, 2013 (the Petition Date), Xtreme Green Products, Inc. (the “Company”) filed a voluntary petition (the “Chapter 11 Case”) for relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Nevada (the “Bankruptcy Court”). The Chapter 11 Case was administered under Case No. BK-S-13-17266-MKN.

On January 29, 2014 (the “Confirmation Date”), the Bankruptcy court entered an Order Confirming the company’s First Amended Plan of reorganization (the “Plan”) under Chapter 11 of the Bankruptcy Code. The Bankruptcy Court ordered the Chapter 11 closed as of February 28, 2014.

(3) Earnings per Share

The Company calculates net income (loss) per share as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, “Earnings per Share.” Basic earnings” (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding.

(4) Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a net loss of $775,284 for the six month period ended June 30, 2015 and accumulated deficit of $13,637,982 as of June 30, 2015. The Company expects that without additional capital it is expected that it will continue to have negative cash flows through the next twelve months.

These conditions give rise to doubt about the company’s ability to continue as a going concern. These financial statements do not include adjustments relating to the recoverability and classification of reported assets amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing or sale of its common stock as may be required and ultimately to attain profitability.

(5) Property and Equipment

Property and equipment is recorded at cost. Expenditures for major improvements and additions are added to property and equipment, while replacements, maintenance and repairs which do not extend the useful lives are expenses. Depreciation is computed using the straight line method over the estimated useful lives of the assets of 5 years.

Property and equipment consists of the following as of June 30, 2015 and December 31, 2014:

	June 30, 2015			December 31, 2014
Manufacturing equipment	$	199,059		$	125,730
Vehicles for demonstration		185,335			155,455
Other equipment		24,427			23,020
Leasehold improvements		53,783			13,722
Automotive equipment		188,266			202,659
		650,870			520,586
Accumulated depreciation		(253,915	)		(221,516	)
	$	396,955		$	299,070

(6) Inventory

The value of inventory is determined by using the average cost method of accounting which calculates the cost of ending inventory and cost of goods sold for a period on the basis of the weighted average cost per unit. Inventory consists of finished vehicles, vehicles in process, and parts. The Company’s management monitors the inventory for excess and obsolete items and makes necessary valuation adjustments when required. The Company has recorded a reserve for obsolete inventory at June 30, 2015 of $5,338.

Inventory consists of the following as of June 30, 2015 and December 31, 2014:

Parts and accessories	560,712	507,269
Vehicles in process	91,270	52,134
Total	651,982	559,403

(7) Prepaid expenses and deposits:

	June 30, 2015		December 31, 2014
Prepaid inventory	$	21,633	$	28,969
Prepaid insurance		55,165		67,387
Other prepaid expenses		61,104		18,900
TOTAL	$	137,902	$	115,256

(8) Stock Holder Loans

As of June 30, 2015 there was a loan balance due to the Company’s largest stockholder and CEO of $425,000 and an additional $250,000 due to another shareholder. The total balance due on the loans at June 30, 2015 is $675,000, The loans are due upon receipt, and bear interest at 3.0%.

(9) Long Term Debt

The carrying value as of June 30, 2015 of the portion of notes payable due after twelve months for truck and manufacturing equipment loans is $173,007 compared to $155,143 at year ended 2014.

On February 4, 2015 the Company entered into a lease purchase agreement for the acquisition of manufacturing equipment. The amount of the loan is $65,144 and is payable in 33 installments of $2,412 including sales tax. The loan is guaranteed by the Company’s largest stockholder. There remains a balance due at June 30, 2015 of $57,947.

(10) Equity Transactions

On April 14, 2015 the Company privately sold 100,000 shares of its common stock to a private investor at a purchase price of $1.00 per share.

On May 7, 2015 the Company privately sold 250,000 shares of its common stock to a private investor at a purchase price of $1.00 per share. In addition the company issued three year warrants expiring March 31, 2017 to purchase an additional 250,000 shares of common stock at a purchase price of $1.00 per share.

(11) Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern. The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of this ASU on the Company’s consolidated financial statements.

(12) Subsequent Events

On July 31, 2015 the Company privately sold 50,000 shares of its common stock to a private investor at a purchase price of $1.00 per share.

On August 4, 2015 the Company privately sold 50,000 shares of its common stock to a private investor at a purchase price of $1.00 per share.

On August 5, 2015 the Company privately sold 250,000 shares of its common stock to a private investor at a purchase price of $1.00 per share.

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

Forward-Looking Statements

The information herein contains forward-looking statements. All statements other than statements of historical fact made herein are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Recent Developments

On January 21, 2015 the Company was granted a tax abatement by the Governor’s Office of Economic Development (GOED). The agreement was effective December 31, 2013 and includes a sales and use tax abatement of 6.1%, a sales and use tax deferral of 2%, modified business tax abatement of 50% of the levied tax for a period of 4 years, and personal property tax abatement of 50% of the levied tax for a period of 10 years.

On January 19, 2015, the Company signed an agreement with Dagoway Trading in Chile to be the exclusive distributor. In addition, on March 15, 2015, the Company signed agreements with distributors in Peru, Colombia, Costa Rica and Ecuador.

On February 4, 2015 the Company entered into a lease purchase agreement for the purchase of manufacturing equipment. The amount of the loan is $65,144 and is payable in 33 installments of $2,412 including sales tax.

The loan is guaranteed by the Company’s majority stockholder.

During the period ended March 31, 2015 the company closed its subassembly facility in Wenling, China relocating all equipment and inventory to its main manufacturing and assembly plant in Las Vegas, Nevada. As a result of this move 100% of the Company’s manufacturing and assembly will be accomplished in the United States.

Results of Operations

Comparison of three months ended June 30, 2015 to the three months ended June 30, 2014

Revenue - Sales for the three months ended June 30, 2015 were $422,204 compared to $204,945 for the three months ended June 30, 2014. Since its emergence from Chapter 11, the Company has gone through a substantial reorganization. A significant amount of time and resources were allocated to the closing and relocation of its China facility to Las Vegas, installation of new machinery and equipment, and restructuring its marketing strategy through the addition of new distribution channels both domestically and internationally. As a result of this reorganization, the company’s sales were negatively impacted during the first quarter ended March 31, 2015 with some order commitments moved to the second quarter 2015.

Sales during the three month period ended June 30, 2015 were enhanced from revenue generated from orders of specialty custom built vehicles, increased sales to security companies, and orders from overseas.

Cost of Sales – Cost of sales for the three months ended June 30, 2015 was $342,754which resulted in a gross profit of $79,450 compared to cost of sales of $295,397 and a negative operating margin of $90,452 for the comparable prior year period. Direct costs of manufacturing and factory overhead costs are applied to cost of sales using predetermined rates. Excess manufacturing capacity resulted in increased fixed costs in our units produced relative to the revenues generated, During the second quarter ended June 30, 2015 the Company experienced improvements in its production efficiency as a result of the closing of its China Facility and consolidation of its manufacturing and assembly operations to the Las Vegas facility.

General and administrative – General and administrative expenses were $320,755 for the three months ended June 30, 2015 compared to $371,832 for the three months ended June 30, 2014. The reduction in general and administrative expense is primarily a result of the Company’s emphasis and strategy to reduce overhead costs. In addition the closing of the China facility enabled the Company to downsize and consolidate some of its administrative positions. Our general and administrative expenses consist primarily of salaries, insurance expense, legal and professional fees, and general operating costs. We had 27 full-time employees during the three months ended June 30, 2015 compared to 23 for the comparable prior year period.

Sales & marketing – The cost of sales and marketing for the three months ended June 30, 2015 was $121,453 compared to $88,839 for the same prior year period. . The increase in marketing costs are a result of the Company’s engagement of an outside consulting team to help grow sales in the military and international market sectors. The Company’s marketing strategy is to continue its mission to reposition itself both domestically and internationally through the employment of marketing consultancies and the addition of independent distributorships.

Interest expense – Interest expense for the three months ended June 30, 2015 was $8,474 compared to interest of $1,987 for the comparable prior year period. Interest expense consists primarily of amounts due under various notes payable to shareholders. The increase in interest expense is primarily due to the increase in shareholder notes payable when compared to the same prior year period.

Loss from operations – We incurred a loss from operations of $362,185 for the three months ended June 30, 2015 compared to a loss of $553,110 for the comparable prior year period. The reduction in the Company’s loss is a result of increased sales volume, improved manufacturing and assembly efficiencies, and cost cutting measures in general and administrative costs implemented during the second quarter ended June 30, 2015.

Comparison of six months ended June 30, 2015 to the six months ended June 30, 2014

Revenue – Sales for the six months ended June 30, 2015 were $614,817 compared to $547,676 for the comparable prior year period. The Company’s sales improved as a result of orders for custom design vehicles and the implementation of its strategic marketing plan utilizing sales distributorships both domestically and internationally.

Cost of Sales – Cost of sales for the six months ended June 30, 2015 was $540,278 which resulted in a gross profit of $74,539 compared to cost of sales of $650,809 and a negative operating margin of $103,133 for the prior six month period. Direct costs of manufacturing and factory overhead costs are applied to cost of sales using predetermined rates. Excess manufacturing capacity resulted in increased fixed costs in our units produced relative to the revenues generated, During the second quarter ended June 30, 2015 the Company experienced improvements in its production efficiency as a result of the closing of its China Facility and consolidation of its manufacturing and assembly operations to the Las Vegas facility.

General and administrative – General and administrative expenses were $637,454 for the six months ended June 30, 2015 compared to $759,328 for the six months ended June 30, 2014. Our general and administrative expenses for the six months ended June 30, 2015 consist primarily of salaries, insurance expense, legal and professional fees, and general operating costs. The reduction in general and administrative expense is primarily a result of the Company’s emphasis and strategy to reduce overhead costs. In addition the closing of the China facility enabled the Company to downsize and consolidate some of its administrative positions. We had 27 full-time employees during the three months ended June 30, 2015 compared to 23 for the comparable prior year period.

Sales & marketing – The cost of sales and marketing for the six months ended June 30, 2015 was $194,196. Sales and marketing cost for the comparable period in 2014 was $162,023. The increase in marketing costs are a result of the Company’s engagement of an outside consulting team to help grow sales in the military and international market sectors. The Company’s marketing strategy is to continue its mission to reposition itself both domestically and internationally through the employment of marketing consultancies and addition of independent distributorships.

Interest expense – Interest expense for the six months ended June 30, 2015 was $12,552 compared to interest of $15,385 for the comparable prior year period. Interest expense consists primarily of amounts due under various notes payable to shareholders and equipment financing.

Loss from operations – We incurred a loss from operations of $775,284 for the six months ended June 30, 2015 compared to a loss of $1,039,869 for the comparable prior year period.

Liquidity and Capital Resources

Since our inception on May 21, 2007, we have financed the costs associated with our operational activities through (i) the sale of shares of our common stock pursuant to private placements, and (ii) loans from certain of our stockholders. From inception through June 30, 2015, we have incurred a cumulative net loss of $13,606,554. Although the Company has experienced considerable improvement over the past quarter ended June 30, 2015, the notes to our financial statements include language that raises some doubt about our ability to continue as a going concern. At June 30, 2015 the Company had cash of $41,605, net working capital of $111,123, and stockholders’ equity of $371,440.

Prior to January 29, 2014, the Confirmation date of the Company’s Reorganization Plan under Chapter 11 of the Bankruptcy Code, the Company had issued and outstanding 48,463,370 shares of common stock. Immediately following the cancellations and issuances pursuant to the Plan, there were issued and outstanding 40,000,000 shares of common stock. The number of shares the Company is authorized to issue remains unchanged.

On April 14, 2015 the Company privately sold 100,000 shares of its common stock to a private investor at a purchase price of $1.00 per share.

We are currently investigating various opportunities to raise additional capital through the sale of debt, equity securities and from additional loans from our stockholders. There can be no assurances that we will be able to continue to sell shares of our common stock or borrow additional funds from any of our stockholders or third parties to finance the costs associated with our future operating and investing activities.

Even if we are successful at raising additional equity capital, it may be on terms which would result in substantial dilution to existing shareholders. If our costs and expenses prove to be greater than we currently anticipate, or if we change our current business plan in a manner that will increase our costs, we may be forced to curtail or cease operations.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us 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 periods. As the number of variables and assumptions affecting the probable future resolution of the uncertainties increase, these judgments become even more subjective and complex. Actual results may differ from these estimates.

We have identified the following critical accounting policies, described below, that are the most important to the portrayal of our current financial condition and results of operations.

Stock-Based Compensation

We account for stock based compensation in accordance with ASC 718 Stock Compensation. This Statement requires that the cost resulting from all share-based transactions be recorded in the financial statements. The Statement establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees. The Statement also establishes fair value as the measurement objective for transactions in which an entity acquires goods or services from non-employees in share-based payment transactions.

There was no stock-based compensation during this period.

Revenue Recognition

In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for our various revenues streams:

Revenue is recognized at the time the product is shipped or the service is performed. Provision for sales returns is estimated based on our historical return experience. A provision for sales returns was not required for the three or six month periods ended June 30, 2015.

Deferred revenue is recorded for amounts received in advance of the time at which services are performed and included in revenue at the completion of the related services. For international sales and specialty sales orders a payment of 50% is required upon receiving the order with the balance due upon shipping.

Going Concern

Our ability to operate profitably will depend primarily on increasing our revenue, controlling our costs, reducing our liabilities, and obtaining sufficient financing or other capital to operate successfully.

Our condensed consolidated financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

We have experienced a significant loss from operations as a result of investment necessary to achieve the Company’s operating plan, which is long-term in nature. From inception to June 30, 2015 we have incurred a cumulative net loss totaling $13,637,982 and have working capital and stockholders’ equity of $111,123 and $371,440 at June 30, 2015. Our ability to continue as a going concern is contingent upon our ability to attain profitable operations and secure financing. In addition, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which we operate.

We are actively pursuing financing for our operations and we are seeking additional private investments. In addition, we are seeking to grow our revenue base. Failure to secure such financing, raise additional equity capital and grow our revenue base may result in the depletion of available funds and as a result, we may not be able to pay our obligations.

Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability to continue as a going concern.

Recent Accounting Pronouncements

The Company does not believe that any recent accounting pronouncements will have a material effect on its financial statements.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity, or capital expenditures.

Item 3. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial (and principal accounting) Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of June 30, 2015. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of the end of the period covered by this report. This is the result of inventory control issues at the Company’s China storage facility which was relocated to the Company’s main assembly plant in Las Vegas, NV during the first quarter 2015. The Company expects as a result of the relocation, these inventory issues will no longer occur in the future.

(b) Changes in Internal Controls.

There was no change in our internal controls over financial reporting that has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting during the quarter covered by this Report.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Except as described below, we are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

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

On April 14, 2015 the Company privately sold 100,000 shares of its common stock to a private investor at a purchase price of $1.00 per share.

All shares were issued pursuant to an exemption from registration requirements of the Securities Act of 1933, as amended, under Section 4(2) thereunder, as they were issued in reliance on the recipients’ representation that they were accredited (as such term is defined in Regulation D), without general solicitation and represented by certificates that were imprinted with a restrictive legend. In addition, all recipients were provided with sufficient access to Company information.

Item 5. Other Information

None.

Item 6. Exhibits

31	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)

32	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

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

	Xtreme Green Electric Vehicles Inc.
	(Registrant)

Date: August 7, 2015	/s/ Byron Georgiou
	Byron Georgiou
	Chief Executive Officer (Principal Executive Officer)

Date: August 7, 2015	/s/ Ken Sprenkle
	Ken Sprenkle
	Chief Financial Officer (Principal Financial and Accounting Officer)

XTREME GREEN ELECTRIC VEHICLES INC. 10-Q