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 April 30, 2014


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 000-50693

Clean Enviro Tech Corp.

(Name of Registrant as Specified in Its Charter)

 

Nevada
(State or Other Jurisdiction
of Incorporation or Organization) 		90-0314205
(I.R.S. Employer
Identification No.)


420 N. Nellis Blvd., Suite A3-146, Las Vegas, Nevada

(Address of Principal Executive Offices)


89110
(Zip Code)


(702) 425-4289

(Issuer’s Telephone Number, Including Area Code)

 

Securities registered under Section 12(b) of the Exchange Act:
None

 

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, Par value $0.001per share

Indicate by check mark whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.  [X] Yes   [ ]  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 (§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 whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company. (Check One):

 

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

(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes [ X ] No

 

On June 13, 2014, there were 9,838,721 shares of common stock outstanding.

 

     
 

 

Table of Contents

 

Page No.
PART I. FINANCIAL INFORMATION
ITEM 1 - Unaudited Financial Statements  1
Balance Sheets as of April 30, 2014 (Unaudited) and July 31, 2013  2
Statements of Operations for the Three and Nine Months Ended April 30, 2014 and 2013 (Unaudited) and for the period from August 1, 2008 (inception) through April 30, 2014 3

Statements of Cash Flows for the Nine Months Ended April 30, 2014 and 2013 (Unaudited)

and for the period from August 1, 2008 (inception) through April 30, 2014

4
Notes to Unaudited Financial Statements 5-6
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9
ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk 9
ITEM 4 - Controls and Procedures 9
PART II. OTHER INFORMATION  9
ITEM 6 – Exhibits 9

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. Unaudited Financial Statements

 

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that the following financial statements be read in conjunction with the year-end financial statements and notes thereto included in the Company's Annual Report on Form 10K for the year ended July 31, 2013. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

 

The results of operations for the three and nine months ended April 30, 2014 and 2013 are not necessarily indicative of the results for the entire fiscal year or for any other period.

 

 

 

 

 

 

 

Clean Enviro Tech Corp.
(A Development Stage Company)
Condensed Balance Sheets
 
         
    April 30,   July 31,
    2014   2013
      (unaudited)          
Assets                
Property and equipment, net   $ 3,547     $ 4,514  
                 
Total assets   $ 3,547     $ 4,514  
                 
Liabilities and Stockholders' Deficiency                
                 
Current liabilities:                
                 
Accounts payable and accrued expenses   $ 268,009     $ 206,996  
Advances     214,682       214,682  
Notes payable     173,600       173,600  
                 
Total current liabilities     656,291       595,278  
                 
Commitments and contingencies     —         —    
                 
Stockholders' deficiency:                
                 
Preferred stock, $.001 par value, 10,000,000 shares authorized, 0 issued and outstanding     —         —    
Common stock, $.001 par value, 10,000,000 shares authorized; 9,838,721 and 9,838,721 issued and outstanding at April 30, 2014 and July 31, 2013, respectively.     9,839       9,839  
                 
Additional paid-in capital     7,368,677       7,368,677  
Accumulated deficit     (4,604,623 )     (4,604,623 )
Deficit accumulated during the development stage     (3,426,637 )     (3,364,657 )
                 
Stockholders' deficiency     (652,744 )     (590,764 )
                 
Total liabilities and stockholders' deficiency   $ 3,547     $ 4,514  
                 
                 
See accompanying notes to unaudited condensed financial statements

 

 

 

Clean Enviro Tech Corp.
(A Development Stage Company)
Condensed Statements of Operations
(unaudited)

 

            For the Period Entering
    For the Three Months Ended   For the Nine Months Ended   the Development Stage
    April 30   April 30   August 1, 2008
    2014   2013   2014   2013   - April 30, 2014
                     
Net sales   $ —       $ —       $ —       $ —       $ —    
                                         
Operating expenses:                                        
General and administrative     15,679       11,394       55,520       57,312       851,015  
Research and development     —         332       6,460       2,480       460,592  
                                         
Loss from operations     (15,679 )     (11,726 )     (61,980 )     (59,792 )     (1,311,607 )
                                         
Other (expenses)/income                                        
Interest expense     —         —         —         —         (1,233,270 )
Loss on disposal of assets     —         —         —         —         (26,360 )
Loss on extinguishment of debt     —         —         —         (329,280 )     (956,480 )
Other income     —         —         —         —         101,080  
                                         
Net loss before provision for (benefit from) income taxes     (15,679 )     (11,726 )     (61,980 )     (389,072 )     (3,426,637 )
                                         
Provision for (benefit from) income taxes     —         —         —         —         —    
                                         
Net loss   $ (15,679 )   $ (11,726 )   $ (61,980 )   $ (389,072 )   $ (3,426,637 )
                                         
                                         
Net loss per common share - basic and diluted   $ (0.00 )   $ (0.00 )   $ (0.01 )   $ (0.05 )        
                                         
Weighted average number of common shares outstanding -                                        
basic and diluted     9,838,721       9,838,163       9,838,721       7,196,112          
See accompanying notes to unaudited condensed financial statements
 

 

Clean Enviro Tech Corp.
(A Development Stage Company)
Condensed Statements of Cash Flows
(unaudited)

 

            For the Period Entering
    Nine Months Ended   the Development Stage
    April 30,   August 1, 2008
    2014   2013   - April 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:                        
Net loss   $ (61,980 )   $ (389,072 )   $ (3,426,637 )
Adjustments to reconcile net loss to net cash utilized by operating activities                        
Depreciation     967       5,269       123,733  
Loss on disposal of property and equipment     —         —         26,360  
Loss on extinguishment of debt     —         329,280       956,480  
Expenses paid on the Company's behalf by a third party     58,305       —         58,305  
Increase (decrease) in cash flows from changes in operating assets and liabilities                        
Accounts payable and accrued expenses     2,708       (14,889 )     1,405,787  
Net cash used in operating activities     —         (69,412 )     (855,972 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:                        
Additions to  property and equipment     —         —         (17,015 )
Net cash used in investing activities     —         —         (17,015 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:                        
Proceeds from advances     —         —         1,573,333  
Advances from related parties     —         69,412       1,150,743  
Payments on advances     —         —         (752,231 )
Payments to related parties     —         —         (1,114,553 )
Net cash provided by financing activities     —         69,412       857,292  
                         
CHANGE IN CASH AND CASH EQUIVALENTS                        
Net decrease in cash and cash equivalents     —         —         (15,695 )
Cash and cash equivalents at beginning of period     —         —         15,695  
                         
Cash and cash equivalents at end of period   $ —       $ —       $ —    
                         
SUPPLEMENTAL CASH FLOW DISCLOSURES                        
Cash paid during the year for:                        
Interest   $ —       $ —       $ —    
Income taxes   $ —       $ —       $ —    
                         
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES                        
Shares issued for related party advances   $ —       $ —       $ 4,433,858  
Shares issued for accrued interest on paid promissory note   $ —       $ —       $ 1,360,341  
                         
                         
See accompanying notes to unaudited condensed financial statements

 

 

CLEAN ENIVR0 TECH CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

As of and for the Three and Nine Months Ended April 30, 2014 and 2013

(unaudited)

Note 1. Summary of Significant Accounting Policies

  Basis of Presentation

 

Condensed Interim Financial Statements – The accompanying unaudited condensed financial statements include the accounts of Clean Enviro Tech Corp. (the “Company” or “Clean Enviro”). These financial statements are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. Therefore, these statements should be read in conjunction with the most recent annual financial statements of Clean Enviro for the year ended July 31, 2013 included in the Company’s Form 10-K filed with the Securities and Exchange Commission. In particular, the Company’s significant accounting principles were presented as Note 2 to the Financial Statements in that report. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying condensed financial statements are not necessarily indicative of the results that may be expected for the full year ending July 31, 2014.

 

Development Stage Enterprise - As of August 1, 2008, the Company is considered a development stage enterprise as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development Stage Entities” (“ASC 915”).  The Company has limited revenue to date, continues to try and raise capital and there is no assurance that ultimately the Company will achieve a profitable level of operations.

 

Going Concern - The Company’s financial statements for the period ended April 30, 2014, have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company did not have any revenue and as of April 30, 2014, there was a working capital deficit of approximately $656,000. Management recognized that the Company’s continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses.

 

Since its incorporation, the Company financed its operations almost exclusively through advances from its controlling shareholders. The Company expects to finance operations through the sale of equity or other investments for the foreseeable future, as the Company does not receive significant revenue from its business operations. There is no guarantee that the Company will be successful in arranging financing on acceptable terms.

 

The Company's ability to raise additional capital is affected by trends and uncertainties beyond its control. The Company does not currently have any arrangements for financing and it may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor sentiment. Market factors may make the timing, amount, terms or conditions of additional financing unavailable to it. These uncertainties raise substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

The Company’s significant accounting policies are summarized in Note 2 of the Company’s Annual Report on Form 10-K for the year ended July 31, 2013. There were no significant changes to these accounting policies during the three and nine months ended April 30, 2014 and the Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

Reclassification - The presentation of certain prior year balances has been reclassified to conform to the current year presentation. The due to related parties was reclassified to notes payable since the entity is no longer a related party. There was no material impact to the balance sheet, statement of operations and statement of cash flows.

Note 2. Common Stock

During the nine months ended April 30, 2014, there has been no common stock issued.

 

Note 3. Net Loss Per Common Share

Loss per share is computed based on the weighted average number of shares outstanding during the year. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares and potential common shares during the specified periods. The Company has no outstanding options, warrants or other convertible instruments that could affect the calculated number of shares.

The following table sets forth the reconciliation of the basic and diluted net loss per common share computations for the three and nine months ended April 30, 2014 and 2013.

Three Months Ended Three Months Ended
April 30, 2014 April 30, 2013
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
Net (loss) $ (15,679 ) -  -  $ (11,726 ) -  - 
Basic loss per common share (15,679 ) 9,838,721 (0.00 ) (11,726 ) 9,838,163 (0.00 )
Effect of dilutive securities —   -  -  —   -  - 
Diluted loss per common share $ (15,679 ) 9,838,721 (0.00 ) $ (11,726 ) 9,838,163 (0.00 )
Nine Months Ended Nine Months Ended
April 30, 2014 April 30, 2013
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
Net (loss) $ (61,980 ) -  -  $ (389,072 ) -  - 
Basic loss per common share (61,980 ) 9,838,721 (0.01 ) (389,072 ) 7,196,112 (0.05 )
Effect of dilutive securities —   -  -  —   -  - 
Diluted loss per common share $ (61,980 ) 9,838,721 (0.01 ) $ (389,072 ) 7,196,112 (0.05 )

 

 

Note 4. Notes Payable

On December 15, 2010, the Company issued a non-interest bearing, due on demand, promissory note to Mehboob Charania, (former chief executive and principal financial officer) for which it has received advances of $173,600 and repaid $0. The transaction amounts are reported as current due to the fact that they are due upon demand.

 

Note 5. Advances

The Company's principal financing source in the last two fiscal years had been from its former parent, Terra Inventions. On October 2, 2012, the Company’s entire debt to Terra was assigned to Frontline Asset Management, Inc. (“Frontline”). At October 31, 2013 and July 31, 2013, the Company owed Terra Inventions $0 and $0, respectively. During the nine months ended April 30, 2014 and 2013, the Company received advances totaling $0 and $0, respectively; and made payments of $0 and $0, respectively.

At April 30, 2014 and July 31, 2013, the Company owed a third party $214,682 and $214,682, respectively. During the nine months ended April 30, 2014 and 2013, the Company received advances totaling $0 and $0, respectively; and made payments of $0 and $0, respectively. As were the terms with Terra Inventions, the assigned debt remains and any subsequent debt we incur is interest free. No term has been set for repayment and no payment is expected until the Company has begun to become a profitable venture.

Note 6. Subsequent Events

On May 30, 2014, the registrant entered into a letter of intent pursuant to which it will acquire all of the issued and outstanding common shares of Red Apple Pharms Corp. (RAPCO) for 80,000,000 common shares of the registrant, subject to shareholders approval and a due diligence period of 60 days with closing on or before July 30, 2014. RAPCO currently operates an ISP for cannabis news, law changes, both state and federal strains and television productions through Cannabis planet TV. Additionally, RAPCO provides support services relating to banking, debit cards, insurance and licensing requirements of operating Colorado cannabis groups and dispensaries. Gordon F. Lee is an officer, director and majority shareholder of RAPCO. Also Subject to shareholder approval the Company will file to increase the authorized to 110,000,000 shares on or before closing. Accordingly, the Company’s Board of Directors and majority shareholders have approved the increase in the authorized amount of common shares to 110,000,000 on May 31, 2014, pending approval of an Information Statement filed with the Securities and Exchange Commission.

 

The Company will compensate Gordon F. Lee $20,000 per month due at the first of the month.

 

Also, in connection with this share exchange, the company has agreed with creditors owed approximately $400,000 to satisfy this debt by issuing shares at $0.05 per share upon closing.

 

 

ITEM 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations.

 

Forward Looking Statements

 

This quarterly report contains forward-looking statements that involve risks and uncertainties.  We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements.  Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in this section.

 

Introduction

 

We were incorporated on July 15, 2002 under the laws of the State of Nevada. We changed our business in 2008, entering into a license agreement with Terra Inventions on April 15, 2008, for the license of the development of their lithium battery technology. We sold our Zingo Telecom, Inc. and M/S Zingo BPO Services Pvt. Ltd. subsidiaries that offered telecommunications services to business and residential customers utilizing VoIP technology on May 15, 2008.  To reflect our new business, we changed our name from Zingo, Inc. to Superlattice Power, Inc. on April 25, 2008 and on April 5, 2011, we merged with our wholly-owned subsidiary, Sky Power Solutions Corp., and in the merger the name of the Company was changed to Sky Power Solutions Corp.  

 

We entered into a license agreement with Terra Inventions on April 15, 2008, for the license of the technology related to the development of their lithium battery technology. We also leased space within Li-ion’s plant and created a chemical lab and manufacturing facility to begin work on the lithium battery technology we had licensed. Effective May 31, 2012, our lease was terminated with Terra Inventions due to the closure of their facility. Clean Enviro’s physical assets are currently in storage as we search for a new facility. Consultants continue working on our  residential Solar Concentrating, Electric Power Generation Systems independently. 

 

Results of Operations for the Three months Ended April 30, 2014

 

We incurred a net loss of $15,679 during the three months ended April 30, 2014, which included: general and administrative (G&A) costs of $15,679 and research and development (“R&D”) expenses of $0.

 

2014 Compared to 2013

 

Our net loss for the three months ended April 30, 2014 increased to $15,679 from $11,726 for the same period ending April 30, 2013. The increase was primarily due to a increase in professional fees.

 

Results of Operations for the Nine months Ended April 30, 2014

 

We incurred a net loss of $61,980 during the nine months ended April 30, 2014, which included: general and administrative (G&A) costs of $55,520 and research and development (“R&D”) expenses of $6,460.

 

2014 Compared to 2013

 

Our net loss for the nine months ended April 30, 2014 decreased to $61,980 from $389,072 for the same period ending April 30, 2013. The decrease was primarily due to a decrease in professional fees, an increase in research and development costs and a decrease in loss of extinguishment of debt.

 

Plan of Operations

 

Currently we have in development a Stand Alone Residential Solar Concentrating Electric Power Generation System. Our system has proprietary elements that make it unique, with better functionality than other systems. We designed and developed this system as we anticipate that the North American Power Grid will not be able to support the recharging of anticipated sales of totally electric vehicles and other electric needs in the coming years. We are developing safe rechargeable battery systems for varied applications ranging from portable electronics to onboard energy storage in EVs. Lithium ion batteries are rechargeable and composed of cathode, anode, separator and electrolytes. In 1990, Sony (Japan) introduced the lithium ion battery and used an expensive cathode material, which was also unsafe. We are pioneering a superlattice cathode material for the use in lithium ion rechargeable batteries.

 

The Solar Concentrating Electric Power Generation System is an extremely efficient photovoltaic solar power generation unit. This system is  able to produce in excess of 2 Kilowatts (kw) of electric power with ZERO emissions with Sun Light as the only fuel including built-in heat capture to provide hot water to users.

 

The lithium ion batteries that we plan to develop are rechargeable batteries composed of cells linked together, each cell created from lithiated cathode powder coated on aluminum foil (electrode material that the electron flows out from during charge) and anode powder coated on copper foil (electrode material that the electro flows into during charge) with a separator (polymer material in between anode and cathode) in a mixture of electrolytes, which is an ionically conductive medium.

 

 

Our goal is to continually improve our proprietary semi-solid synthesis process for the development of lithium ion rechargeable battery technologies to meet the growing needs for a less expensive, high-energy density, extended life and fast recharging battery while keeping safety as a priority.

 

We use a proprietary superlattice cathode material and its technically advanced synthesis process. Our other technical expertise includes Battery Management Systems (“BMS”) and a high current rate battery charger. A typical battery pack will consist of a number of lithium ion cells and a BMS.

 

Our technology development is in the initial phase of prototyping and testing. Once a prototype is successfully obtained, we plan to work closely with production specialists in the battery industry and material synthesis to lead the battery manufacturing unit along with marketing and sales teams. Our primary focus will then simultaneously operate research and development, production and marketing of the new products.

 

Sources and Availability of Raw Materials

 

We have used raw materials from several manufacturers in the United States, such as Alfa Aesar, Pred Chemicals, TIMCAL and Ferro Corporation. We use different types of lithium, manganese, cobalt, nickel and titanium salts, electrolytes, copper and aluminum foil which are available in large scale.

 

License Agreement with Terra Inventions

 

Effective April 15, 2008, we entered into a License Agreement (“License Agreement”) with Terra Inventions providing for Terra Inventions’ license to us of Terra Inventions patent applications and technologies for rechargeable lithium-ion batteries for hybrid vehicles and other applications (“Licensed Products”).

 

Under the License Agreement, Terra Inventions has the right to purchase its requirements of lithium ion batteries from us, and its requirements of lithium ion batteries shall be supplied in preference to, and on a priority basis as compared with, supply and delivery arrangements in effect for our other customers. Terra Inventions’ cost for lithium ion batteries purchased from us is our actual manufacturing costs for such batteries for our fiscal quarter in which Terra Inventions purchase takes place. On May 25, 2010 our agreement was amended to provide that we have exclusive license rights for the United States and Terra Inventions may grant other companies rights elsewhere around the world.

 

We have agreed to invest a minimum of $1,500,000 in each of the first two years under the License Agreement in development of the technology for the Licensed Products. In the initial year under the License Agreement, the Company invested approximately $264,043 in the development of technology, and therefore is not in compliance with its obligations under this covenant of the license agreement.  Terra Inventions has advised us that it will not give notice of default against us for our failure to comply with this over the term of the License Agreement. To date in the fiscal year ended July 31, 2014; we are still not in compliance under this covenant. 

  

Liquidity and Capital Resources

 

As of July 31, 2013, we had cash on hand of $0. During the year ended July 31, 2013, we incurred a net loss of $1,057,142. On July 31, 2013, we had a working capital deficiency of $595,278 and a stockholders' deficit of $590,764.

We had 9,838,721 shares of common stock issued and outstanding as of June 13, 2014. Our common stock is quoted on the OTCQB of the OTC Markets Group.

As of April 30, 2014, we had cash on hand of $0 and liabilities of $656,291 as compared with $595,278 at July 31, 2013, and our property plant and equipment, net decreased to $3,547 at April 30, 2014, as compared with $4,514 at July 31, 2013. Accounts payable and accrued expenses increased at April 30, 2014, to $268,009 as compared with $206,996 at July 31, 2013, and advances were $214,682 at April 30, 2014, as compared to $214,682 at July 31, 2013 and notes payable were $173,600 at April 30, 2014, as compared to $173,600 at July 31, 2013.

 

At April 30, 2014, we had a working capital deficiency of $656,291 and a stockholders' deficit of $652,744.

 

We used net cash in operating activities of $0 in the nine months ended April 30, 2014, as compared with $69,412 in the comparable period in 2013, and cash flows used in investing activities for the purchase of property, plant and equipment was $0 during 2014 and $0 in 2013.

 

During the nine months ended April 30, 2014, we received $0 and repaid $0, to a third party as compared with advances from related parties of $69,412 and repayments of $0 in 2013.

 

During the nine months ended April 30, 2014 we received $0 from the proceeds from our promissory note to Terra Inventions Corp. and repaid $0 as compared to advances received in 2013, of $0 and repayment of $0.

 

Since our incorporation, we have financed our operations almost exclusively through advances from our controlling shareholders. We expect to finance operations through the sale of equity or other investments for the foreseeable future, as we do not receive significant revenue from our new business operations.  There is no guarantee that we will be successful in arranging financing on acceptable terms.

 

 

Our ability to raise additional capital is affected by trends and uncertainties beyond our control. We do not currently have any arrangements for financing and we may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor sentiment. Market factors may make the timing, amount, terms or conditions of additional financing unavailable to us.

 

Our auditors are of the opinion that our continuation as a going concern is in doubt.  Our continuation as a going concern is dependent upon continued financial support from our shareholders and other related parties.

 

Critical Accounting Issues

 

The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires the Company to make estimates and judgments that affect the reported amount of assets, liabilities, and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to intangible assets, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on  various assumptions that are believed to be reasonable under the circumstances,  the results of which form the basis for making judgments about carrying values  of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

  

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Commodity Price Risk – The raw materials for manufacturing our batteries could be affected by changes in the commodities markets, and if we commence manufacturing our own lithium ion batteries, we could be subject to this risk.

 

ITEM 4. Controls and Procedures.

 

The Company's Chief Executive Officer and Principal Financial Officer are primarily responsible for the accuracy of the financial information that is presented in this Quarterly Report. This officer has, as of the close of the period covered by this Quarterly Report, evaluated the Company's disclosure controls and procedures (as defined in Rules 13a-14c and 15d-14c promulgated under the Securities Exchange Act of 1934) and determined that such controls and procedures were not effective in ensuring that material information relating to the Company was made known to her during the period covered by this Quarterly Report. In such officer’s evaluation, no changes were made to the Company's internal controls in this period that have materially affected, or are reasonably likely materially to affect, the Company’s internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

 

ITEM 6. Exhibits

 

31 Certification of Chief Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes- 
Oxley Act of 2002, filed herewith.
32 Certification of Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
   
101.CAL XRL Taxonomy Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Label Linkbase Document
101.PRE XBRL Taxonomy Presentation Linkbase Document

The XBRL related information in Exhibits 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.

 

 

 

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.

 

CLEAN ENVIRO SOLUTIONS CORP.
By: /s/ Liudmilla Voinarovska
Principal Executive Officer and Principal Financial Officer
Date: June 17, 2014