CLEAN POWER CONCEPTS INC. - FORM 10-Q

Attached files

file	filename
EX-31.1 - SECTION 302 CEO AND CFO CERTIFICATION - CLEAN POWER CONCEPTS INC.	exhibit31-1.htm
EX-32.1 - SECTION 906 CEO AND CFO CERTIFICATION - CLEAN POWER CONCEPTS INC.	exhibit32-1.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2009

[ ] 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 333-133710

CLEAN POWER CONCEPTS, INC.

(Exact name of small business issuer as specified in its charter)


Nevada		98-0490694
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

1207 Halifax Street, Regina, SK, S4R 1T7

(Address of principal executive offices)

306-530-0418

(Issuer's telephone number)

None

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

Common Stock, par value $0.001 per share

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

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 þ No o

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 o		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 50,016,000 common shares issued and outstanding as of November 09, 2009.

CLEAN POWER CONCEPTS, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION:

Item 1.	Consolidated Financial Statements	3

	Consolidated Balance Sheets – September 30, 2009 (unaudited) and June 30, 2009	4

	Consolidated Statements of Operations (unaudited) for the three months ended September 30, 2009 and September 30, 2008 and for the Cumulative Period from October 17, 2005 (inception) to September 30, 2009	5

	Consolidated Statements of Cash Flows (unaudited) for the three months ended September 30, 2009 and September 30, 2008 and for the Cumulative Period from October 17, 2005 (inception) to September 30, 2009	6

	Notes to Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 4.	Controls and Procedures	15

PART II	OTHER INFORMATION:

Item 1.	Legal Proceedings	16

Item 1A	Risk Factors	16

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults Upon Senior Securities	19

Item 4.	Submission of Matters to a Vote of Securities Holders	19

Item 5.	Other Information	19

Item 6.	Exhibits	20

Signatures

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying consolidated interim financial statements of Clean Power Concepts Inc. and subsidiary (the “Company”), (a development stage company), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

The results for the period ended September 30, 2009 are not necessarily indicative of the results of operations for the full year. It is suggested that these financial statements be read in conjunction with the audited financial statements and notes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission for the period ended June 30, 2009.

CLEAN POWER CONCEPTS INC. AND SUBSIDIARY

(A Development Stage Company)

INTERIM CONSOLIDATED BALANCE SHEETS

As of September 30, 2009 and June 30, 2009

(Unaudited – see Note 1)



		September 30 2009			June 30 2009

ASSETS
Current
Cash	$	7,203		$	2,227
Prepaid expenses		883			813
Accounts receivable		-			-

	$	8,086		$	3,040

LIABILITIES
Current
Accounts payable and accrued liabilities -Note 3	$	68,353		$	82,623
Accounts payable – related party – Note 3		20,183			20,183
Demand loans – Notes 4		425,900			425,900
Interest payable – Note 4		94,044			83,309
	$	608,480		$	612,015

SHAREHOLDERS’ (DEFICIENCY) EQUITY

Share Capital – Note 5
Authorized:
1,000,000,000 common shares with a par value of $0.001 per share

Issued:
50,016,000 common shares		50,016			50,016
Stock subscription received		34,600			-
Additional paid-in capital		(17,216	)		(17,216	)
Deficit accumulated during the development stage		(667,794	)		(641,775	)
	$	(600,394	)	$	(608,975	)

	$	8,086		$	3,040

See the accompanying notes to the consolidated financial statements

CLEAN POWER CONCEPTS INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS


								Cumulative
								Period from
								Inception
		For the three months ended						October 17, 2005
		SEPTEMBER 30						to
		2009			2008			September 30, 2009

Revenue	$	-		$	-		$	-

General and Administrative Expenses		(15,284	)		(9,086	)		(573,750	)
		(15,284	)		(9,086	)		(573,750	)
Other Expenses
Interest Expense		(10,735	)		(10,735	)		(94,044	)

Net loss for the year	$	(26,019	)		(19,821	)	$	(667,794	)


Basic And Diluted Loss Per Share	$	(0.00	)	$	(0.00	)

Weighted Average Number Of Shares Outstanding (Note 5)		50,016,000			50,016,000

See the accompanying notes to the consolidated financial statement

CLEAN POWER CONCEPTS INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ending September 30, 2009 and 2008

(Unaudited – see Note 1)


		For the Three Months Ended September 30						Cumulative Period from Inception October 17, 2005 to September 30,
		2009			2008			2009

Cash Flows From Operating Activities
Net loss for the period	$	(26,019	)	$	(19,821	)	$	(667,794	)

Adjustments To Reconcile Net Loss To Net Cash
Provided (Used) By Operating Activities
Changes in prepaid expenses		(70	)		-			(882)
Changes in advances		-			-			-
Changes in accounts payable and accrued liabilities		(14,270	)		(2,627)			68,352
Changes in interest payable		10,735			10,735			94,044
Capital contributions – expenses		-			-			15,000
		(29,624	)		(11,713	)		(491,280	)

Cash Flows From Financing Activities

Stock Subscription Received –Note 3		34,600						34,600
Proceeds from issuance of common Stock					-			17,800
Demand loan					-			425,900
Due to related party					-			20,183

		34,600			-			498,483

Cash Flows From Investing Activities		-				-		-


Net (Decrease) Increase In Cash For The Period		4,976			(11,713	)		7,203
Cash, Beginning Of Period		2,227			18,506			-
Cash, End Of Period	$	7,203		$	6,793		$	7,203

See the accompanying notes to the consolidated financial statements

CLEAN POWER CONCEPTS INC. AND SUBSIDIARY

(A Development Stage Company

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009 AND 2008

(Unaudited)


Note 1	NATURE AND CONTINUANCE OF OPERATIONS

Loma Verde Inc. (the “Company”) was incorporated on October 17, 2005 under the laws of the State of Nevada, USA. The Company is a public company whose common shares are listed for trading on the United States Over-the Counter Bulletin Board. The Company organized its wholly owned subsidiary, Loma Verde Explorations Ltd., which was incorporated in British Columbia on October 28, 2005.

The Company was organized for the purpose of acquiring and developing mineral properties and was therefore considered to be in the pre-exploration stage. Mineral claims, with unknown reserves, had been acquired. However, since the Company had not established the existence of a commercially mineable ore deposit, it has decided to abandon its mineral claims and pursue other business opportunities.

On March 22, 2007, a wholly owned subsidiary of the Company, Clean Power Concepts, Inc. was incorporated under the laws of the State of Nevada. By agreement, effective April 2, 2007, Clean Power Concepts, Inc. was merged into the Company for the sole purpose of changing the Company’s name. The Company became the surviving entity and changed its name form Loma Verde Inc. to Clean Power Concepts Inc. to further reflect the Company’s anticipation of exiting the mining exploration business and pursuing other business opportunities. The number of shares, amount of consideration allocated to par value and additional paid-in capital have been retroactively restated to reflect this forward split from date of inception.

With the abandonment of its mineral claims, we are simultaneously seeking alternate business opportunities in other industries, one of which is the alternative energy business.


Note 2	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Methods

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Basic and Diluted Net Income (loss) Per Share

Basic net income (loss) per share amounts is computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Clean Power Concepts, Inc. (parent) and its subsidiary from their inception. All significant intercompany accounts and balances have been eliminated in consolidation.

Evaluation of Long-Lived Assets

The Company periodically reviews its long term assets and makes adjustments, if the carrying value exceeds fair value.

Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

On September 30, 2009, the Company had a net operating loss carry forward of $667,794 for income tax purposes. The tax benefit of approximately $200,000 from the loss carry forward has been fully offset by a valuation reserve because the future tax benefit is undeterminable since the Company is unable to establish a predictable projection of operating profits for future years. The carry forward losses will expire in 2030.

Foreign Currency Translation and Transactions

The Company’s functional currency is United States dollars and the consolidated financial statements are stated in United States dollars, “the reporting currency.” Transactions undertaken in currencies other than the reporting currency are translated at the exchange rate in effect as of the transaction date. Expenses paid in Canadian dollars have been converted at the transaction date and are included in the statement of operations.

Revenue Recognition

Revenue is recognized on the sale and delivery of a product or the completion of a service provided.

Advertising and Market Development

The company expenses advertising and market development costs as incurred.

Financial Instruments

Due to their short term maturities, the carrying amounts of financial instruments are considered by management to be their fair value.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.

Statement of Cash Flows

For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

Off-Balance Sheet Arrangements

During 2009 and 2008, the Company did not use off-balance sheet arrangements.


Note 3	SIGNIFICANT TRANSACTIONS WITH RELATED PARTY

Of the $68,353 in accounts payable and accrued liabilities $67,500 is related to amounts owing to its officers and directors for the past consulting services performed.

The $20,183 due to a related party consists of cash advances made by a director of the Company. This amount is unsecured, non-interest bearing and has no specific terms of repayment.

On August 18, 2009, the Company received $34,600 pursuant to a private placement subscription agreement with an officer and director. The Company has an obligation to issue 494,286 shares of restricted common stock to an officer and director, a non –U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933

As of November 12, 2009 Company’s Directors and Officers do not hold shares in the Company.


Note 4	SHORT TERM ADVANCES AND DEMAND LOAN

The Company has received short term advances from third parties totaling $425,900.00 that are payable on demand, unsecured and bear interest at an annual rate of ten percent. Interest accrued on these advances amount to $94,044 as of September 30, 2009. It is anticipated that these loans will be paid down through the proceeds from a private placement equity financing with accredited investors.


Note 5	CAPITAL STOCK

As of September 30, 2009, we had 50,016,000 shares of common stock issued and outstanding. On March 7, 2007, our board of directors approved a 56 for one (1) forward stock split of our authorized, issued and outstanding shares of common stock. The forward stock split was effective with the Secretary of State of Nevada on March 21, 2007. As a result, our authorized capital increased from 200,000,000 shares of common stock to 11,200,000,000 shares of common stock. Our issued and outstanding share capital increased from 2,561,000 shares of common stock to 143,416,000 shares of common stock. On April 23, 2007, several of our insiders returned an aggregate of 93,400,000 shares of our common stock to our company for cancellation without consideration. The Statement of Stockholders Equity has been re-stated to show the effect of the forward stock split from inception. The weighted average number of shares outstanding as at September 30, 2009 amounted to 50,016,000.


Note 6	GOING CONCERN

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At September 30, 2009, the Company had not yet achieved profitable operations, has accumulated losses of $667,794 since its inception, has a working capital deficiency of $600,394 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.

The Company intends to seek business opportunities that will provide a profit and sustainable growth. However, the Company does not have the working capital necessary to be successful in this effort and to service its debt, which raises substantial doubt about its ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional loans from related parties, and equity funding, which will enable the Company to operate for the coming year.


Note 7	SUBSEQUENT EVENTS

Due to time constraints associated with other business interests, Mr. Ralph Proceviat resigned as Chief Financial Officer on October 22, 2009. Cory Turner has assumed the position of interim Chief Financial Officer.

Effective October 29, 2009, the Company filed a Certificate of Amendment to Articles of Incorporation decreasing its authorized number of common stock from 11,200,000,000 shares of common stock with a par value of $0.001 per share to 1,000,000,000 shares of common stock with a par value of $0.001 per share


ITEM 2.	Management’s discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statement Notice

This quarterly report contains forward-looking statements as that term is defined under applicable securities laws. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", which may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although our Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by our Company or any other person that the objectives and plans of our Company will be achieved. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Financial information contained in this quarterly report and in our unaudited consolidated interim financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes that appear elsewhere in this annual report.

Corporate History

Clean Power Concepts, Inc. (the “Company”) was incorporated in the name of Loma Verde Inc. on October 17, 2005 under the laws of the State of Nevada, USA. Our Company is a public company whose common shares are listed for trading on the United States Over-the-Counter Bulletin Board. Our Company’s wholly owned subsidiary, Loma Verde Explorations Ltd., was incorporated in British Columbia on October 28, 2005.

On March 22, 2007, a wholly owned subsidiary of our Company, Clean Power Concepts, Inc. was incorporated under the laws of the State of Nevada. By agreement, effective April 2, 2007, Clean Power Concepts, Inc. was merged into our Company for the sole purpose of changing our Company’s name. Our Company became the surviving entity and changed its name from Loma Verde Inc. to Clean Power Concepts Inc. to further reflect our Company’s anticipation of exiting the mining exploration business and pursuing other business opportunities. In conjunction with the aforementioned merger, our Company forward split its authorized, issued and outstanding common stock on a 56 new for 1 old basis. The number of shares, amount of consideration allocated to par value and additional paid-in capital have been retroactively restated to reflect this forward split.

Our Current Business

We are currently seeking to acquire business opportunities with established business entities for the merger of a target business with our Company. In certain instances, a target business may wish to become a subsidiary of us or may wish to contribute assets to us rather than merge. We anticipate that any new acquisition or business opportunities by our Company will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our Company requires additional financing and we are unable to acquire such funds, our business may fail.

Management of our Company believes that there are perceived benefits to being a reporting company with a class of publicly-traded securities. These are commonly thought to include: (i) the ability to use registered securities to acquire assets or businesses; (ii) increased visibility in the financial community; (iii) the facilitation of borrowing from financial institutions; (iv) improved trading efficiency; (v) stockholder liquidity; (vi) greater ease in subsequently raising capital; (vii) compensation of key employees through stock options; (viii) enhanced corporate image; and (ix) a presence in the United States capital market.

We may seek a business opportunity with entities that have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer be in control of our Company. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors.

As of the date hereof, management has not entered into any formal written agreements for a business combination or opportunity. When any such agreement is reached, we intend to disclose such an agreement by filing a current report on Form 8-K with the Securities and Exchange Commission.

We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes that there are numerous firms in various industries seeking the perceived benefits of being a publicly registered corporation. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We can provide no assurance that we will be able to locate compatible business opportunities.

We are not able to fund our cash requirements through our current operations. Historically, we have been able to raise a limited amount of capital through private placements of our equity stock and loans, but we are uncertain about our continued ability to raise funds privately. Further, we believe that our Company may have difficulties raising capital until we locate a prospective business through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail.

RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with the unaudited interim financial statements and the notes to the unaudited interim financial statements included in the quarterly report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

For the three month periods ended September 30, 2009 and September 30, 2008

Our interim consolidated financial statements report a net loss of $26,019 for the three month period ended September 30, 2009 as compared to a net loss of $19,821 for the three month period ended September 30, 2009. Our accumulated net losses for the period from October 17, 2005, our date of inception, to September 30, 2009 are $667,794.

As at September 30, 2009, we had a working capital deficit of $600,394. Our total liabilities as of September 30, 2009 were $608,480 as compared to total liabilities of $502,111 as at September 30, 2008. The change was due primarily to an increase in accounts payable and accrued liabilities, and interest payable on the demand loans from September 30, 2009 to September 30, 2008.

Cash Flow Used in Operating Activities

Operating activities used cash of $29,624 for the three month period ended September 30, 2009, compared to using $11,713 for the three month period ended September 30, 2008. The increase in cash used during the three month period ended September 30, 2009 was commensurate with increasing operating expenses and increasing current liabilities, primarily accounts payable and accrued liabilities and interest payable.

Cash Flow Provided by Financing Activities

Financing activities provided cash of $34,600 for the three month period ended September 30, 2009 compared to $NIL for the three month period ended September 30, 2008.

Liquidity and Capital Resources

We had cash of $7,203 and current liabilities of $608,480 as at September 30, 2009. We had a working capital deficit of $600,394 as of September 30, 2009.

To date, we have had negative cash flows from operations and we have been dependent on sales of our equity securities and debt financing to meet our cash requirements. We expect this situation to continue for the foreseeable future. We anticipate that we will have negative cash flows during the twelve month period ended September 30, 2010.

We estimate our general operating expenses for the next twelve month period to be as follows:


Estimated Operating Expenses For the Next Twelve Month Period
Operating Expenses
Consultant Compensation	$	50,000
Professional Fees	$	25,000
General and Administrative Expenses	$	50,000
Total	$	125,000

We do not anticipate enough positive internal operating cash flow until we can generate substantial revenues, which may take the next few years to fully realize depending on the type of business we acquire. Still, there is no assurance we will achieve profitable operations in the future. We have historically financed our operations primarily by cash flows generated from the sale of our equity securities and through cash infusions from officers and affiliates in exchange for debt and/or common stock. No officer or affiliate has made any commitment or is obligated to continue to provide cash through loans or purchases of equity.

We intend to meet the balance of our cash requirements through external sources: a combination of debt financing and equity financing through private placements. We currently do not have any arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unsuccessful in raising enough money through future capital raising efforts, we may review other financing.

We have generated no revenues and incurred significant operating losses from operations. Since we anticipate we will expand operational activities, we may continue to experience net negative cash flows from operations and will be required to obtain additional financing to fund operations through equity securities’ offerings and bank borrowings to the extent necessary to provide working capital. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow from stockholders or other outside sources to sustain operations and meet our obligations on a timely basis and ultimately to attain profitability. We have limited capital with which to pursue our business plan. There can be no assurance that our future operations will be significant and profitable, or that we will have sufficient resources to meet our objectives.

There are no assurances that we will be able to obtain funds required for our continued operation. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further financing. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Product Research and Development

We do not anticipate that we will spend any significant monies on research and development over the twelve month period ending September 30, 2010.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the twelve month period ending September 30, 2010.

Off-Balance Sheet Arrangements

As of September 30, 2009, our Company had no off-balance sheet arrangements, including any outstanding derivative financial statements, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. Our Company does not engage in trading activities involving non-exchange traded contracts.

Employees

We currently have no employees, other than our director and chief financial officer, and we do not expect to hire any employees in the foreseeable future. We presently conduct our business through agreements with consultants and arms-length third parties.

Going Concern

Our interim consolidated financial statements have been prepared assuming we will continue as a going concern. We have incurred a net loss for the period from October 17, 2005 (inception) to September 30, 2009 of $667,794. To date our Company is still in the development stage and has no sales. Our future is dependent upon the continued support of our lenders, our ability to obtain financing and upon future profitable operations from the development of acquisitions. Management has plans to seek additional capital through a private placement of our common stock and the issuance of debt. Our consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event we cannot continue in existence.

Operations to date have been covered primarily from financings associated with equity transactions. There can be no assurances that we will be successful in raising additional cash to finance operations. If not, we will be required to reduce operations and/or liquidate assets. Our interim consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on the annual financial statements for the year ended June 30, 2009, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern.

Critical Accounting Policies

Our interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of consolidated financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. In determining estimates of net recoverable amounts and net realizable values, or whether there has been a permanent impairment in value for accounts receivable, inventories, capital assets, investments, patent rights and other assets, we rely on assumptions regarding applicable industry performance and prospects, as well as general business and economic conditions that prevail and are expected to prevail. Assumptions underlying asset valuations are limited by the availability of reliable comparable data and the uncertainty of predictions concerning future events.

By nature, asset valuations are subjective and do not necessarily result in precise determinations. Should the underlying assumptions change, the estimated net recoverable amounts and net realizable values may change by a material amount.

The interim consolidated financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:


a.	Use of Estimates The preparation of interim consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates.
b.	Foreign Currency Translation Our Company’s functional currency is the U.S. dollar. Transactions in foreign currency are translated into U.S. dollars as follows: - monetary items at the rate prevailing at the balance sheet date; - non-monetary items at the historical exchange rate; - revenue and expense at the average rate in effect during the applicable accounting period.
c.	Income Taxes Our Company has adopted Statement of Financial Accounting Standards No. 109 – “Accounting for Income taxes” (SFAS 109). This standard requires the use of an asset and liability approach for financial accounting, and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
d.	Basic and Diluted Loss Per Share In accordance with SFAS No. 128 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At September 30, 2009, our Company has no stock equivalents that were anti-dilutive and excluded in the earnings per share computation.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, equity prices, and other market-driven rates or prices. We are not presently engaged in any substantive business and until such time as we consummate a business combination, we will not be exposed to risks associated with foreign exchange rates, equity prices or other market-driven rates or prices.


ITEM 4.	CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2009. Based on this evaluation, our management has concluded that our disclosure controls and procedures adequately ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The evaluation did not identify any change in our internal control over financial reporting that occurred during the quarter ended September 30,2009 that has materially affected or is reasonably likely to materially affect our internal control over such reporting.

The term "internal control over financial reporting" is defined as a process designed by, or under the supervision of, the registrant's principal executive officer, or persons performing similar functions, and effected by the registrant's Board of Directors, management and other personnel, 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 and includes those policies and procedures that:


(1)	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
(2)	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
(3)	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, or use or disposition of the registrant's assets that could have a material effect on the financial statements.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision of our Chief Executive Officer, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2009 using the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of September 30, 2009, the Company determined that there were control deficiencies that constituted material weaknesses, as described below:

(1)

Certain entity level controls establishing a “tone at the top” were considered material weaknesses. The Company has no audit committee and there is an inadequate amount of review by management of the financial statement reporting process. There is no policy on fraud and no code of ethics at this time, though the Company plans to implement such policies in fiscal 2010. A whistleblower policy is not necessary given the small size of the organization

Management is currently evaluating remediation plans for the above control deficiency.

Accordingly, the Company concluded that this control deficiency resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of September 30, 2009 based on criteria established in Internal Control—Integrated Framework issued by COSO.

Changes in Internal Controls

During the period ended September 30, 2009 there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Remediation Initiatives

Although our Company is unable to meet the standards under COSO because of the limited funds available to a shell company of our size and stage of development, we are committed to improving our financial organization. As funds become available, we will undertake to: (1) create a position to segregate duties consistent with control objectives, (2) increase our personnel resources and technical accounting expertise within the accounting function (3) appoint one or more outside directors to our board of directors who shall be appointed to the audit committee of our Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and (4) prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. However, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks.

PART II

OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


ITEM 1A.	RISK FACTORS

Risk Factors

Much of the information included in this quarterly report includes or is based upon estimates, projections or other forward-looking statements. Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward-looking statements. Prospective investors should consider carefully the risk factors set out below.

Scarcity of and competition for business opportunities and combinations.

We are, and will continue to be, an insignificant participant amongst numerous other companies seeking a suitable business opportunity or business combination. A large number of established and well-financed entities, including venture capital firms, are actively seeking suitable business opportunities or business combinations which may also be desirable target candidates for us. Virtually all such entities have significantly greater financial resources, technical expertise and managerial capabilities than we do. We are, consequently, at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. We will also compete with numerous other small public companies seeking suitable business opportunities or business combinations.

We have had negative cash flows from operations and if we are not able to obtain further financing, our business operations may fail.

We had a working capital deficiency of $600,394 as of September 30, 2009. We do not have sufficient funds to independently finance the acquisition and development of prospective business opportunities in alternative industries. We do not expect to generate any revenues for the foreseeable future. Accordingly, we will require additional funds, either from equity or debt financing, to maintain our daily operations and to locate, acquire and develop a prospective property or consummate alternative business opportunities. Obtaining additional financing is subject to a number of factors, including economic factors, investor sentiment and any business opportunities or prospective property interests that we may enter into in the future. Financing, therefore, may not be available on acceptable terms, if at all. The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital, however, will result in dilution to existing shareholders. If we are unable to raise additional funds when required, we may be forced to delay our plan of operation and our entire business may fail.

Upon completion of a business opportunity or combination, there can be no assurance that we will be able to successfully manage or achieve growth of that business opportunity or combination.

Our ability to achieve growth upon the acquisition of a suitable business opportunity or business combination will be dependent upon a number of factors including our ability to hire and train management and other employees and the adequacy of our financial resources. There can be no assurance that we will be able to successfully manage any business opportunity or business combination. Failure to manage anticipated growth effectively and efficiently could have a material adverse effect on our company.

If we complete a business opportunity or combination, we may be required to issue a substantial number of common shares which would dilute the shareholdings of our current shareholders and result in a change of control of our company.

We may pursue the acquisition of a business opportunity or a business combination with a private company. The likely result of such a transaction would result in our company issuing common shares to shareholders of such private company. Issuing previously authorized and unissued common shares in the capital of our company will reduce the percentage of common shares owned by existing shareholders and may result in a change in the control of our company and our management.

We have no agreement for a business combination or other transaction and there can be no assurance that we will be able to successfully identify and evaluate a suitable business opportunity.

As at the date of this report, we have no arrangement, agreement or understanding with respect to acquiring a business opportunity or engaging in a business combination with any private entity. The success of our company following an entry into any business opportunity or business combination will depend to a great extent on the operations, financial condition and management of any identified business opportunity. While management intends to seek business opportunities and/or business combinations with entities with established operating histories, there is no assurance that we will successfully locate business opportunities meeting such criteria. In the event that we complete a business combination or otherwise acquire a business opportunity, the success of our operations may be dependent upon management of the successor firm or venture partner firm, together with a number of other factors beyond our control.

Risks Associated with Our Common Stock

Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Our common stock currently trades on a limited basis on the OTC Bulletin Board. Trading of our stock through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reason unrelated to their operating performance and could have the same effect on our common stock.

Penny stock rules will limit the ability of our stockholders to sell their stock.

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account.

The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a shareholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.


ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None


ITEM 3.	DEFAULTS UPON SENIOR SECURITES

None


ITEM 4.	SUBMISSION OF MATTERS TO A VOITE OF SECURITIES HOLDERS

None


ITEM 5.	OTHER INFORMATION

None


ITEM 6.	EXHIBITS

The following exhibits are included as part of this report by reference:


3.1	Certificate of Incorporation (incorporated by reference from Loma Verde’s Registration Statement on Form SB-2 filed on May 1, 2006, Registration No. 333-133710)

3.3	Articles of Incorporation (incorporated by reference from Loma Verde’s Registration Statement on Form SB-2 filed on May 1, 2006, Registration No. 333-133710)

3.4	By-laws (incorporated by reference from Loma Verde’s Registration Statement on Form SB-2 filed on May 1, 2006, Registration No. 333-133710)

4	Stock Specimen (incorporated by reference from Loma Verde’s Registration Statement on Form SB-2 filed on May 1, 2006, Registration No. 333-133710)

10.1	Transfer Agent and Registrar Agreement (incorporated by reference from Loma Verde’s Registration Statement on Form SB-2 filed on May 1, 2006, Registration No. 333-133710)

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002

32.1	Certification of Principal 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

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.


	CLEAN POWER CONCEPTS INC.


By:	/s/ Cory Turner

	Cory Turner
	Chief Executive Officer and
	(Chief Financial Officer
	Date: November 16, 2009

CLEAN POWER CONCEPTS INC. - FORM 10-Q - November 16, 2009

Attached files

CLEAN POWER CONCEPTS INC. Reports