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 October 31, 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 December 13, 2014, there were 9,838,721 shares of common stock outstanding.
Table of Contents
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Page No. |
| |
| | |
PART I. FINANCIAL INFORMATION | |
| | |
ITEM 1 - Unaudited Financial Statements | |
| 3 | |
Balance Sheets as of October 31, 2014 and July 31, 2014 (Unaudited) | |
| 4 | |
Statements of Operations for the Three Months Ended October 31, 2014 and 2013 (Unaudited) | |
| 5 | |
Statements of Cash Flows for the Three Months Ended October 31, 2014 and 2013 (Unaudited) | |
| 6 | |
Notes to Unaudited Financial Statements | |
| 8-14 | |
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations | |
| 14-16 | |
ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk | |
| 17 | |
ITEM 4 - Controls and Procedures | |
| 17 | |
PART II. OTHER INFORMATION | |
| 17 | |
ITEM 6 – Exhibits | |
| 17-20 | |
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, 2014. 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 months ended October 31, 2014 and 2013 are not
necessarily indicative of the results for the entire fiscal year or for any other period.
Clean Enviro Tech Corp.
Balance Sheets
|
| |
October 31, | |
July 31, |
| |
2014 | |
2014 |
| |
(unaudited) | |
|
Assets | |
| | | |
| | |
| |
| | | |
| | |
Property and equipment, net | |
| 2,902 | | |
| 3,225 | |
Total assets | |
$ | 2,902 | | |
$ | 3,225 | |
| |
| | | |
| | |
Liabilities and Stockholders' Deficiency | |
| | | |
| | |
| |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 285,506 | | |
$ | 276,676 | |
Advances | |
| 214,682 | | |
| 214,682 | |
Notes payable | |
| 173,600 | | |
| 173,600 | |
Total current liabilities | |
| 673,788 | | |
| 664,958 | |
| |
| | | |
| | |
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 as of October 31, 2014; 9,838,721 issued and outstanding at October 31, 2014 and July 31, 2014, respectively. | |
| 9,839 | | |
| 9,839 | |
Additional paid-in capital | |
| 7,368,677 | | |
| 7,368,677 | |
Retained deficit | |
| (8,049,402 | ) | |
| (8,040,249 | ) |
Stockholders' deficiency | |
| (670,886 | ) | |
| (661,733 | ) |
Total liabilities and stockholders' deficiency | |
$ | 2,902 | | |
$ | 3,225 | |
| |
| | | |
| | |
See accompanying notes to unaudited financial statements |
Clean Enviro Tech Corp. |
Statements of Operations |
(unaudited) |
| |
|
| |
For the Three Months Ended |
| |
October 31, |
| |
2014 | |
2013 |
| |
| | | |
| | |
Net sales | |
| — | | |
| — | |
| |
| | | |
| | |
Operating expenses: | |
| | | |
| | |
General and administrative | |
| 9,153 | | |
| 24,816 | |
Research and development | |
| — | | |
| 6,460 | |
| |
| | | |
| | |
Loss from operations | |
| (9,153 | ) | |
| (31,276 | ) |
| |
| | | |
| | |
Other (expenses)/income | |
| | | |
| | |
Other income/expense | |
| — | | |
| — | |
| |
| | | |
| | |
Net loss before provision for (benefit from) income taxes | |
| (9,153 | ) | |
| (31,276 | ) |
| |
| | | |
| | |
Provision for (benefit from) income taxes | |
| — | | |
| — | |
| |
| | | |
| | |
Net loss | |
$ | (9,153 | ) | |
$ | (31,276 | ) |
| |
| | | |
| | |
| |
| | | |
| | |
Net loss per common share - basic and diluted | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| |
| | | |
| | |
Weighted average number of common shares outstanding - basic and diluted | |
| 9,838,721 | | |
| 9,838,721 | |
| |
| | | |
| | |
See accompanying notes to unaudited financial statements |
Clean Enviro Tech Corp. |
Statements of Cash Flows |
(unaudited) |
| |
| |
|
| |
Three Months Ended |
| |
October 31, |
| |
2014 | |
2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | |
Net loss | |
$ | (9,153 | ) | |
$ | (31,276 | ) |
Adjustments to reconcile net loss to net cash utilized by operating activities | |
| | | |
| | |
Depreciation | |
| 323 | | |
| 322 | |
Expenses paid on the Company’s behalf by a third party | |
| 8,975 | | |
| — | |
Increase (decrease) in cash flows from changes in operating assets and liabilities | |
| | | |
| | |
Accounts payable and accrued expenses | |
| (145 | ) | |
| 30,954 | |
Net cash used in operating activities | |
| — | | |
| — | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
Net cash used in investing activities | |
| — | | |
| — | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Net cash provided by financing activities | |
| — | | |
| — | |
CHANGE IN CASH AND CASH EQUIVALENTS | |
| | | |
| | |
Net decrease in cash and cash equivalents | |
| — | | |
| — | |
Cash and cash equivalents at beginning of period | |
| — | | |
| — | |
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 | |
| | | |
| | |
| |
| | | |
| | |
See accompanying notes to unaudited financial statements |
CLEAN ENVIRO TECH CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
As of and for the Three Months Ended October
31, 2014
(unaudited)
Note 1. Summary of Significant Accounting Policies
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, 2014 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, 2015.
Going Concern - The Company’s financial statements
for the period ended October 31, 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
October 31, 2014, there was a working capital deficit of approximately $673,788. 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, 2014. There were no significant
changes to these accounting policies during the three months ended October 31, 2014 and the Company does not expect that the adoption
of other recent accounting pronouncements will have a material impact on its financial statements.
Note 2. Common Stock
During the three months ended October 31, 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 months ended October 31, 2014 and 2013.
| |
Three Months Ended | |
Three Months Ended |
| |
October 31, 2014 | |
October 31, 2013 |
| |
Income | |
Shares | |
Per-Share | |
Income | |
Shares | |
Per-Share |
| |
(Numerator) | |
(Denominator) | |
Amount | |
(Numerator) | |
(Denominator) | |
Amount |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net (loss) | |
$ | (9,153 | ) | |
| — | | |
| — | | |
$ | (31,276 | ) | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic loss per common share | |
| (9,153 | ) | |
| 9,838,721 | | |
| (0.00 | ) | |
| (31,276 | ) | |
| 9,838,721 | | |
| (0.00 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Effect of dilutive securities | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Diluted loss per common share | |
$ | (9,153 | ) | |
| 9,838,721 | | |
| (0.00 | ) | |
$ | (31,276 | ) | |
| 9,838,721 | | |
| (0.00 | ) |
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
At October 31, 2014 and July 31, 2014, the Company
owed a third party $214,682 and $214,682, respectively from debt assumed in 2012. Various advances from the same party for operating
expenses since that time have been booked as accounts payable. During the three months ended October 31, 2014 and 2013, the Company
received advances totaling $8,975 and $0, respectively; and made payments of $0 and $0, respectively. The assigned debt 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.
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. 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. December 24, 2012 Sky Power Solutions merged with our
wholly-owned subsidiary, Clean Enviro Tech Corp., and in the merger changed the name of the Company to Clean Enviro Tech
Corp.
Clean Enviro’s physical assets are currently
in storage as we search for a new facility. Consultants work on our residential
Solar Concentrating, Electric Power Generation Systems independently.
Results of Operations for the Three
months Ended October 31, 2013
We incurred a net loss of $9,153 during the
three months ended October 31, 2014, which included: general and administrative (G&A) costs of $9,153 and research and development
(“R&D”) expenses of $0.
2014 Compared to 2013
Our net loss for the three months ended October
31, 2014 decreased to $9,153 from $31,276 for the same period ending October 31, 2013. The decrease was primarily due to a decrease
in professional fees.
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. When testing is completed, we will work with manufactures to make these available to homeowners. We also plan
to develop safe rechargeable lithium ion battery systems for varied applications. We plan to pioneer a superlattice cathode material
for the use in lithium ion rechargeable batteries.
Liquidity and Capital Resources
As of October 31, 2014, we had cash on hand
of $0 and liabilities of $673,788 as compared with $664,958 at July 31, 2014, and our property plant and equipment decreased to
$2,902 at October 31, 2014, as compared with $3,225 at July 31, 2014. Accounts payable and accrued expenses increased at October
31, 2014, to $285,506 as compared with $276,676 at July 31, 2014, and advances were $214,682 at October 31, 2014, as compared
to $214,682 at July 31, 2014 and notes payable were $173,600 at October 31, 2014, as compared to $173,600 at July 31, 2014.
At October 31, 2014, we had a working capital deficiency
of $673,788 and a stockholders' deficit of $670,886.
We used net cash in operating activities of
$0 in the three months ended October 31, 2014, as compared with $0 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 three months ended October 31,
2014, we received $0 and repaid $0, to a third party as compared with advances from related parties of $0 and repayments of $0
in 2013.
Since our incorporation, we have financed our operations almost
exclusively through advances from our controlling shareholders and from one third party. 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.
Interest Rate Risk - Interest rate risk refers
to fluctuations in the value of a security resulting from changes in the general level of interest rates. Investments that are
classified as cash and cash equivalents have original maturities of three months or less. Our interest income is sensitive to
changes in the general level of U.S. interest rates. We do not have significant short-term investments, and due to the short-term
nature of our investments, we believe that there is not a material risk exposure.
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.
As of the end of the fiscal quarter covered by this
Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management,
including the Company’s Chief Executive Officer and Principal Financial and Accounting Officer, of the effectiveness of
the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-14 of the Securities
Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer and Principal Financial and Accounting Officer concluded
that the Company’s disclosure controls and procedures are effective in timely alerting her to material information relating
to the Company (including its consolidated subsidiaries) required to be included in this Quarterly Report on Form 10-Q. There
have been no changes in the Company’s internal controls or in other factors which could significantly affect internal controls
subsequent to the date the Company carried out its evaluation.
Subsequent Event
A Definitive Notice has been filed for
a stockholders meeting on January 16, 2015. Management recommends the authorized be increased from 10,000,000 to
250,000,000.
PART II. OTHER INFORMATION
ITEM 6. Exhibits
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 TECH CORP. |
|
|
|
By: |
|
/s/ Liudmilla Voinarovska |
|
|
Chief Executive Officer and Principal Financial Officer |
|
|
|
|
|
Date: December 15, 2014 |
EXHIBIT 31
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES OXLEY ACT
OF 2002
CERTIFICATION
I, Liudmilla Voinarovska, certify that:
1. | | I have reviewed this quarterly report on Form 10-Q of Clean Enviro Tech Corp.; |
2. | | Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report; |
3. | | Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report; |
4. | | I am responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: |
a. | | designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision to ensure that material information relating to the registrant, including
its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared; |
b. | | designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, 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; |
c. | | evaluated the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and |
d. | | disclosed in this report any change in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over
financial reporting; and |
5. | | The Registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent functions): |
a. | | all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and |
b. | | any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal control over financial reporting. |
Date: December 15, 2014 |
|
/s/ Liudmilla Voinarovska |
|
|
Liudmilla Voinarovska, Chief Executive Officer and Principal Financial Officer |
EXHIBIT 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Clean Enviro Tech Corp.
(the “Company”) on Form 10-Q for the three months ended October 31, 2014 as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I, Liudmilla Voinarovska, Chief Executive Officer and Principal
Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:
(1) | | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and |
(2) | | The information contained in the Report fairly presents, in all material respects,
the financial condition and result of operations of the Company. |
December 15, 2014 |
|
/s/ Liudmilla Voinarovska |
|
|
Liudmilla Voinarovska |
|
|
Chief Executive Officer and Principal Financial Officer |