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 August 31, 2010
OR
[ ] 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 333-133347
CREENERGY CORPORATION
-----------------------
(Exact name of registrant as specified in its charter)
Nevada 98-0479983
- ------------------------------ ---------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
57113, 2020 Sherwood Drive, Sherwood Park, AB, Canada, T8A 5L7
----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (780) 668-7422
Online Originals, Inc.
------------------------
(Former name or former address, if changed since last report.)
Indicate by check mark whether the registrant (1) 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 Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.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
definition of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Larger accelerated filer [_] Accelerated filer [_]
Non-accelerated filer [_] Smaller reporting company [X]
1
Indicate by check mark whether registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [_] No [X]
Number of shares issued and outstanding of the registrant's class of common
stock as of September 30, 2010: 216,000,000 shares of common stock.
The Company recognized revenues of $nil during the quarter ended August 31,
2010.
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Balance Sheets F-5
Interim Statements of Operations F-6 to F-7
Interim Statements of Cash Flows F-8
Interim Statement of Changes in Stockholders' (Deficit) F-9
Notes to Interim Financial Statements F-10 to F-12
Item 2. Management's Discussion and Analysis 13
Item 3 Quantitative and Qualitative Disclosure about Market Risk 15
Item 4 Controls and Procedures 15
PART II - OTHER INFORMATION
Item 1 Legal Proceedings - Not Applicable 15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16
Item 3. Defaults upon Senior Securities - Not Applicable 16
Item 4. Removed and Reserved 16
Item 5. Other Information 16
Item 6. Exhibits 16
SIGNATURES 17
3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CREENERGY CORPORATION
(FORMERLY ONLINE ORIGINALS, INC.)
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
AUGUST 31, 2010
(Unaudited)
Financial Statements Page
Balance Sheets F-5
Interim Statements of Operations F-6 to F-7
Interim Statements of Cash Flows F-8
Interim Statement of Changes in Stockholders' (Deficit) F-9
Notes to Interim Financial Statements F-10 to F-12
F-4
CREENERGY CORPORATION
(FORMERLY ONLINE ORIGINALS, INC.)
(A Development Stage Company)
BALANCE SHEETS
August 31, November 30, 2009
2010
(Unaudited) (See Note 1)
ASSETS
Current Assets
Cash $ 4,485 $ 2,841
Prepaid expense 1,109 109
--------------------------------------
Total Current Assets 5,594 2,950
Computer Equipment, net of depreciation of $6,836 - 476
--------------------------------------
- 476
--------------------------------------
TOTAL ASSETS $ 5,594 $ 3,426
======================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Current Liabilities
Accounts payable $ 16,656 $ 3,900
Accrued liabilities 2,755 8,000
--------------------------------------
Total Liabilities, all current 19,411 11,900
--------------------------------------
Commitments and Contingencies (Note 2)
STOCKHOLDERS' EQUITY (DEFICIT)
Capital Stock
Authorized:
675,000,000 common shares, par value $0.001 per share
Issued and outstanding:
216,000,000 and 96,000,000 common shares at August 31, 2010
and November 30, 2009, respectively 216,000 96,000
Accumulated comprehensive income 319 312
Accumulated (Deficit) (212,902) (104,786)
Accumulated (Deficit) during Development Stage (17,234) -
--------------------------------------
Total Stockholders' (Deficit) (13,817) (8,474)
--------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) $ 5,594 $ 3,426
======================================
The accompanying notes are an integral part of these statements.
F-5
CREENERGY CORPORATION
(FORMERLY ONLINE ORIGINALS, INC.)
(A Development Stage Company)
INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
Three month period Three month period
ended ended
August 31, August 31,
2010 2009
---------------------------------------------------
Revenue $ - $ -
---------------------------------------------------
- -
---------------------------------------------------
Expenses
Office and administration 1,231 107
Professional fees 16,612 1,911
---------------------------------------------------
17,843 2,018
---------------------------------------------------
Net (Loss) From Continuing Operations
(17,843) (2,018)
---------------------------------------------------
Discontinued Operations (Note 5)
Net Profit (Loss) from discontinued
operations (40) 12,345
---------------------------------------------------
Net Profit (Loss) $ (17,883) $ 10,327
===================================================
Basic And Diluted Income (Loss) Per Share
$ Nil $ Nil
===================================================
Weighted Average Number Of Shares
Outstanding 216,000,000 96,000,000
===================================================
The accompanying notes are an integral part of these statements.
F-6
CREENERGY CORPORATION
(FORMERLY ONLINE ORIGIONALS, INC.)
(A Development Stage Company)
INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative Amounts from
June 25, 2010
Nine-month Nine-month (Date of New
Period ending Period ending Development Stage)
August 31, 2010 August 31, 2009 to August 31, 2010
Revenue $ - $ - $ -
-------------------------------------------------------------------------
- - -
-------------------------------------------------------------------------
Expenses
Office and administration 1,356 204 911
Professional fees 23,865 6,845 16,323
-------------------------------------------------------------------------
25,221 7,049 17,234
-------------------------------------------------------------------------
Net (Loss) from Continuing Operations
(25,221) (7,049) (17,234)
Discontinued Operations (Note 5)
Net Profit from discontinued
operations 3,871 10,252 -
-------------------------------------------------------------------------
Net Profit (Loss) For The Period $ (21,350) $ 3,203 (17,234)
=========================================================================
Basic And Diluted Loss Per Share $ Nil $ Nil
===========================================
Weighted Average Number of Shares
Outstanding 141,547,445 96,000,000
===========================================
The accompanying notes are an integral part of these statements.
F-7
CREENERGY CORPORATION
(FORMERLY ONLINE ORIGINALS, INC.)
(A Development Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
Nine-month Nine-month Cumulative Amounts
period ending period from June 25, 2010
August 31, ending (Date of New
2010 August 31, Development Stage)
2009 to August 31, 2010
Cash Flows from Operating Activities
Net profit (loss) for the period $ (21,350) $ 3,203 (17,234)
Adjustments to Reconcile Net Profit (Loss) to Net
Depreciation and amortization 476 2,496 -
Changes in Operating Assets and Liabilities
Prepaid expenses (1,000) (66) 850
Accounts payable and accrued liabilities 7,511 (7,139) 16,333
------------------------------------------------------------
Net Cash (Used in) Operating Activities (14,363) (1,506) (51)
Cash Flows from Investing Activities
Additions to capital assets - - -
Disposal of capital assets - - -
------------------------------------------------------------
Net Cash Provided by Investing Activities - - -
Cash Flows From Financing Activities
Issuance of common shares 16,000 - -
Foreign currency translation adjustment 7 427 -
------------------------------------------------------------
Net Cash Provided by (Used in) Financing
Activities 16,007 427 -
Increase (Decrease) in Cash during the Period 1,644 (1,079) (51)
Cash, Beginning Of Period 2,841 4,904 4,536
------------------------------------------------------------
Cash, End Of Period $ 4,485 $ 3,825 4,485
============================================================
Supplemental Disclosure Of Cash Flow Information
Cash paid for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
============================================================
The accompanying notes are an integral part of these statements.
F-9
CREENERGY CORPORATION
(FORMERLY ONLINE ORIGINALS, INC.)
STATEMENT OF STOCKHOLDERS' (DEFICIT)
For the Period from November 30, 2008 through August 31, 2010
(Unaudited)
CAPITAL STOCK ACCUMULATED
---------------------------------------------------
ADDITIONAL DEFICIT DURING ACCUMULATED
PAID-IN ACCUMULATED DEVELOPMENT COMPREHENSIVE
SHARES AMOUNT CAPITAL DEFICIT STAGE INCOME (LOSS) TOTAL
---------------------------------------------------------------------------------------------------------------------
Balance,
November
30, 2008 96,000,000 $ 96,000 $ - $ (98,397) $ - $ (129) $ (2,526)
---------------------------------------------------------------------------------------------------------------------
Foreign
currency
translation
adjustment - - - - - 441 441
Net loss
for the
year ended - - - (6,389) - - (6,389)
---------------------------------------------------------------------------------------------------------------------
Balance,
November
30, 2009 96,000,000 96,000 - (104,786) - 312 (8,474)
---------------------------------------------------------------------------------------------------------------------
May 20,
2010 -
Shares
issued
for cash
at $0.004 120,000,000 120,000 - (104,000) - - 16,000
Foreign
currency
translation - - - - - 7 7
Net loss
for the
period
ended August
31, 2010 - - - (416) (17,2340) - (21,350)
---------------------------------------------------------------------------------------------------------------------
Balance,
August
31, 2010 216,000,000 $ 216,000 $ - $ (212,902) $ (17,234) $ 319 $ (13,817)
=====================================================================================================================
The accompanying notes are an integral part of these statements.
F-9
CREENERGY CORPORATION
(FORMERLY ONLINE ORIGINALS, INC.)
NOTES TO INTERIM FINANCIAL STATEMENTS
August 31, 2010
(Unaudited)
1. UNAUDITED STATEMENTS
While the information presented in the accompanying interim financial
statements is unaudited, it includes all adjustments which are, in the
opinion of management, necessary to present fairly the financial
position, results of operations and cash flows for the interim periods
presented. Except as disclosed below, these interim financial
statements follow the same accounting policies and methods of their
application as the Company's audited November 30, 2009 annual financial
statements. It is suggested that these interim financial statements be
read in conjunction with the Company's audited financial statements for
the year ended November 30, 2009, included in the annual report
previously filed with the Securities and Exchange Commission on Form
10-K. The results of operations for the interim periods presented are
not necessarily indicative of the results to be expected for the full
year.
The information as of November 30, 2009 is taken from the audited
financial statements as of that date.
2. BASIS OF PRESENTATION - GOING CONCERN
The accompanying consolidated financial statements have been prepared
in conformity with generally accepted accounting principles in the
United States of America, which contemplates our continuation as a
going concern. However, the Company has losses to date of approximately
$110,635. These matters raise substantial doubt about our ability to
continue as a going concern. In view of these matters, realization of
certain of the assets in the accompanying consolidated balance sheet is
dependent upon the Company's ability to meet its financing
requirements, raise additional capital, and the success of its future
operations. The Company is seeking additional means of financing to
fund its business plan. There is no assurance that the Company will be
successful in raising sufficient funds to assure the eventual
profitability of the Company. Management believes that actions planned
and presently being taken to revise the Company's operating and
financial requirements provide the opportunity for the Company to
continue as a going concern. The consolidated financial statements do
not include any adjustments that might result from these uncertainties.
3. INCOME TAXES
The Company is subject to foreign and domestic income taxes. The
Company has net losses of $110,635 since inception, and therefore has
paid no income tax.
Deferred income taxes arise from temporary timing differences in the
recognition of income and expenses for financial reporting and tax
purposes. The Company's deferred tax assets consist entirely of the
benefit from net operating loss (NOL) carry-forwards. The NOL carry
forwards expire in various years through 2030. The Company's deferred
tax assets are offset by a valuation allowance due to the uncertainty
of the realization of the NOL carry-forwards. NOL carry-forwards may be
further limited by a change in company ownership and other provisions
of the tax laws.
The Company's deferred tax assets, valuation allowance, and change in
valuation allowance are as follows:
Estimated Tax Change in
Estimated NOL Benefit from Valuation Valuation Net Tax
Period Ending Carry-forward NOL Expires NOL Allowance Allowance Benefit
November 30, 2009 89,285 Various 22,321 (22,321) (1,597) -
August 31, 2010 21,350 2030 5,338 (5,338) (5,338) -
F-10
CREENERGY CORPORATION
(FORMERLY ONLINE ORIGINALS, INC.)
NOTES TO INTERIM FINANCIAL STATEMENTS
August 31, 2010
(Unaudited)
Income taxes at the statutory rate are reconciled to the Company's
actual income taxes as follows:
Income tax benefit at statutory rate resulting from net operating
loss carry forward (25%)
Deferred income tax valuation allowance 25%
------------
Actual tax rate 0%
============
4 COMMON STOCK
On May 21, 2010, the Company issued 4,000,000 shares of its restricted
common stock to Mr. David Calahasen, a director of the Company, at a price
of $0.004 per share for cash totalling $16,000.
Prior to the issuance, the Company had 3,200,000 shares of common stock
issued and outstanding. After the issuance, the Company has 7,200,000
shares of common stock issued and outstanding.
As a result of the issuance, Mr. Calahasen owns approximately 55.55% of
the issued and outstanding common stock of the Company and is the majority
shareholder of the Company.
As a result of the issuance, the ownership of Ms. Shari Sookarookoff, the
Chief Executive Officer and Director of the Company was decreased from
78.13% to 34.72%.
On June 2, 2010 our Board of Directors authorized an increase to the
authorized shares of the Corporation from 75,000,000 common shares with a
par value of $0.001 to 675,000,000 common shares with a par value of
$0.001. On August 10, 2010, our Articles of Incorporation were amended to
change the aggregate number of shares which we have authority to issue to
six hundred and seventy five million (675,000,000) shares of common stock,
par value $0.001 per share.
On June 2, 2010 our Board of Directors authorized a forward split of the
Corporation's total issued and outstanding shares of common stock at the
ratio of 1 existing share resulting in 30 shares. This share dividend
became effective August 10, 2010. As a result of the forward stock split,
208,800,000 additional shares were issued. Capital and additional paid-in
capital have been adjusted accordingly. When adjusted retroactively at
August 31, 2010, there was an $119,501 shortage of additional
paid-in-capital; thus an adjustment to accumulated deficit of $104,000
will be recorded at May 20, 2010 (the date of issuance of 120,000,000
shares) and $15,501 to the beginning balance.. The financial statements
contained herein reflect the appropriate values for capital stock and
accumulated deficit. All references in the accompanying financial
statements to the number of common shares and per share amounts have been
retroactively restated to reflect the forward stock split.
5 DISCONTINUED OPERATIONS AND NEW DEVELOPMENTS
The Company's attempts over the past years to build a business that
provides a website where members and customers are able to bid on and
purchase pieces of art.had not come to fruition so management decided to
change the business focus and look for other opportunities. Therefore,
management decided to discontinue selling art pieces and reflect such
discontinuance in its operating statement and cash flow statements
effective June 25, 2010.
Management decided on that date to focus on new business development in
the form of obtaining leases for the exploration and production of oil and
gas in First Nation areas of northern Alberta, Canada.
During the nine-month period ending August 31, 2010 and the nine month
period ending August 31, 2009, the Company had $6,042 and $13,110 in
revenue, respectively, related to its discontinued operations.
F-11
CREENERGY CORPORATION
(FORMERLY ONLINE ORIGINALS, INC.)
NOTES TO INTERIM FINANCIAL STATEMENTS
August 31, 2010
(Unaudited)
Three-month Three-month Nine-month Nine-month
Period ending Period ending Period ending Period ending
August 31, August 31, August 31, August 31,
2010 2009 2010 2009
Revenue $ - $ 13,110 $ 6,042 $ 13,110
Expenses
Depreciation and amortization - 682 477 2,496
Office and administration 40 83 1,694 362
Professional fees - - - -
---------------------------------------------------------
40 765 2,171 2,858
---------------------------------------------------------
Net Profit (Loss)
from Discontinued Operations $ (40) $ 12,345 $ 3,871 $ 10,252
=========================================================
6 CHANGE OF NAME
On July 7, 2010, our Board of Directors authorized the Company to change
our name to CEENERGY Corporation. On July 29, the name change became
effective upon the filing of the Amendment of the Articles of
Incorporation with the Secretary of State of Nevada.
F-12
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results, or other developments.
Forward-looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic, and competitive,
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward-looking
statements made by or on our behalf. We disclaim any obligation to update
forward-looking statements.
The following discussion of the plan of operation, financial condition, results
of operations, cash flows and changes in financial position of our Company
should be read in conjunction with our most recent financial statements and
notes appearing elsewhere in this Quarterly Report on Form 10-Q, our Schedule
14C Information Statement filed July 7, 2010, our Quarterly Report on Form 10-Q
filed on July 19, 2010, our Quarterly Report on Form 10-Q filed on April 13,
2010, and our Annual Report on Form 10-K filed on March 10, 2010.
The independent registered public accounting firm's report on the Company's
financial statements as of November 30, 2009, and for each of the years in the
two-year period then ended; include a "going concern" explanatory paragraph that
describes substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to the factors prompting the explanatory
paragraph are discussed below and also in Note 2 to the unaudited quarterly
financial statements.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
DISCONTINUED OPERATIONS AND NEW DEVELOPMENTS
Since the Companies inception, the Company has attempted to build a business
that provides a website where members and customers are able to bid on and
purchase pieces of art. However, as of June 25, 2010, the Company has abandoned
that segment/business and is now focused on new business; obtaining leases for
the exploration and production of oil and gas in First Nation areas of northern
Alberta, Canada.
A new business plan is being developed. At the date of this filing, the Company
has identified prospective lease opportunities; however, the Company has not yet
begun any discussions with any prospects or entered into any leases or
agreements.
On July 7, 2010, the Company filed a Definitive Information Statement on
Schedule 14C to amend the articles of incorporation as follows:
1. To authorize the Company to change the name to CREENERGY Corporation,
2. To authorize a forward split of common stock issued and outstanding on a
thirty (30) new shares for one (1) old shares basis, and
3. To increase the authorized common shares of the company from 75,000,000
shares of common stock to 675,000,000 shares of common stock.
Such proposals have been approved by the majority shareholders of the Company.
The name change became effective July 29, 2010, upon the filing of an Amendment
to the Articles of Incorporation with the Secretary of State of Nevada.
Since we intend to operate with very limited administrative support, our
officers will continue to be responsible for these tasks for at least the next
six (6) months.
13
Material Changes in Financial Condition
The Company's decision to discontinue the operations of its web based business
resulted in all financial data pertaining directly to the operations relative to
that business to be collapsed with the net amount reported separately from the
continuing operations. This collapsing effect was used to restate the financials
for all periods presented.
At August 31, 2010, our cash balance was $4,485. In addition, we have prepaid
expenses of $1,109. Cash on hand is currently our only source of liquidity. We
do not have any lending arrangements in place with banking or financial
institutions and we do not anticipate that we will be able to secure these
funding arrangements in the near future.
At August 31, 2010, we had a working capital deficit of $13,817 compared to a
working capital deficit of $8,950 at November 30, 2009. At August 31, 2010, our
total assets consisted of cash of $4,485 and prepaid expenses of $1,109. This
compares with total assets at November 30, 2009 consisted of cash of $2,841,
prepaid expenses of $109 and capital assets of $476.
At August 31, 2010, our total current liabilities increased to $19,411 from
$11,900 at November 30, 2009. During the nine months ended August 31, 2010,
accounts payable and accrued liabilities increased by $7,511.
We believe our existing cash balances will not be sufficient to carry our normal
operations over the next three (3) months. Our short and long-term survival is
dependent on sales of securities as necessary or from shareholder loans, and
thus, to the extent that we require additional funds to support our operations
or the expansion of our business, we will attempt to sell additional equity
shares or issue debt. Any sale of additional equity securities will result in
dilution to our stockholders. Continuing events in worldwide capital markets may
make it more difficult for us to raise additional equity or capital. There can
be no assurance that additional financing, if required, will be available to us
or on acceptable terms.
Result of Operations
For The Three Months Ended August 31, 2010 Compared To The Three Months Ended
August 31, 2009.
We recognized nil revenues from operational sales during the three months ending
August 31, 2010.
During the three months ended August 31, 2010, operating expenses were $17,843
which consisted of professional fees of $16,612, and office and administration
costs of $1,231.
We recognized a net loss of $17,883 for the three months ended August 31, 2010.
This net loss includes a loss of $40 which comes from our discontinued
operations (Note 5). This compares to a profit of $10,327 for the three months
ended August 31, 2009, which includes a net profit of $12,345 from discontinued
operations as shown in discontinued operations (Note 5).
For The Nine Months Ended August 31, 2010, Compared To The Nine Months End
August 31, 2009.
We show nil revenues from operational sales during the nine months ending August
31, 2010.
For the nine months ended August 31, 2010, operating expenses were $25,221,
which consisted of professional fees of $23,865, and office and administration
costs of $1,356.
We recognized a net loss of $21,350 for the nine months ended August 31, 2010.
This net loss includes a net profit of $3,871 from our discontinued operations
(Note 5). This compares to a profit of $3,203 for the nine months ended August
31, 2009, which includes a net profit of $10,252 from our discontinued
operations as shown in Discontinued Operations (Note 5).
Off-Balance Sheet Arrangements
We currently do not have any off-balance sheet arrangements.
14
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the
Company is not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we conducted an evaluation,
under the supervision and with the participation of our Chief Executive Officer
and Chief Financial Officer, of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the 1934 Act). Based on this
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective to ensure that
information required to be disclosed by us in reports that we file or submit
under the 1934 Act is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission rules and
forms.
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company in accordance with as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles.
Management's assessment of the effectiveness of the small business issuer's
internal control over financial reporting is as of the quarter ended August 31,
2010. We believe that our internal control over financial reporting was not
effective due to material weaknesses in the system of internal control.
Specifically, management identified the following control deficiency:
The Company has installed accounting software that does not prevent
erroneous or unauthorized changes to previous reporting periods and
does not provide an adequate audit trail of entries made in the
accounting software.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended August 31, 2010, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
15
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. REMOVED AND RESERVED.
Item 5. Other Information
None.
Item 6. Exhibits
(a) Pursuant to Item 601 of Regulation S-K, the following exhibits are included
herein.
Exhibit
Number Description
31.1 Section 302 Certification - Chief Executive Officer.
31.2 Section 302 Certification - Chief Financial Officer.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Chief Executive Officer.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Chief Financial Officer.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 20th day of
October, 2010.
CREENERGY CORPORATION
Date: October 20, 2010 By: /s/ David Calahasen
---------------------------------------------
Name: David Calahasen
Title: President/Chief Executive Officer
Date: October 20, 2010 By: /s/ Shari Sookarookoff
---------------------------------------------
Name: Shari Sookarookoff
Title: Chief Financial (Accounting) Officer
17