UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K


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


For the fiscal year ended October 31, 2010


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


For the transition period from __________ to __________


Commission File No.  000-50493


ALVERON ENERGY CORP..

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


Delaware                                   98-0412431

(State or other jurisdiction of     (I.R.S. Employer

Incorporation or organization)     Identification No.


735 Don Mills Road, Suite 1405

Toronto, Ontario, M3C 1S9

(Address of Principal Executive Offices)


647-435-9852

(Issuer’s telephone number)


MODENA I, INC.

 (Former name, address and fiscal year, if changed since last report)


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act [  ] Yes [x ] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act [  ] Yes [x ] No

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. [X] Yes [  ] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]




 

 

 

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 Rule12b-2 of the Exchange Act.

Large accelerated filer [  ] Accelerated filer [  ]

Non-accelerated filer [  ] (Do not check if a smaller reporting company) Smaller reporting company [x]

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of the last business day of the registrant’s most recently completed second fiscal quarter. $0.00


As of February 14, 2011, there were 52,040,000 shares of the registrant’s $.001 par value common stock issued and outstanding


 

 

 

 

 

 

 

 



TABLE OF CONTENTS


PART I


Item 1.

Business

4

Item 1A

Risk Factors

5

Item 1B.

Unresolved Staff Comments                                                                                       

5

Item 2.

Properties

6

Item 3.

Legal Proceedings

6

Item 4.

Submission Of Matters To A Vote Of Security Holders

6


PART II


Item 5.

Market For Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

  6

Item 6

Selected Financial Data                                                                                     

  7

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  7

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

17

Item 8

Financial Statements and Supplementary Data

18

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

37

Item 9A (T)

Control and Procedures

37

Item 9B.

Other Information

38


PART III


Item 10.

Directors, Executive Officers, and Corporate Governance

39

Item 11

Executive Compensation

40

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

40

Item 13.

Certain Relationships and Related Transactions and Director Independence

41

Item 14.

Principal Accountant Fees and Services

41


PART IV

Item 15

Exhibits, Financial Statement Schedules

42








 NOTE REGARDING FORWARD LOOKING STATEMENTS

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS

OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995


This Annual Report contains historical information as well as forward looking statements. Statements looking forward in time are included in this Annual Report pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to be materially different from any future performance suggested herein. We wish to caution readers that in addition to the important factors described elsewhere in this Form 10-K, the following forward looking statements, among others, sometimes have affected, and in the future could affect, our actual results and could cause our actual consolidated results during the period covered by this report and beyond, to differ materially from those expressed in any forward-looking statements made by or on our behalf.


Use of Term

 

Except as otherwise indicated by the context, references in this report to “Company”, “NIA”, “we”, “us” and “our” are references to Alveron Energy Corp. All references to “USD” or United States Dollars refer to the legal currency of the United States of America.


Available Information


We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.W., Washington, DC 20549. You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov.


ITEM 1.    Description of Business.


General

Alveron Energy Corp. (formerly Modena I, Inc.) is a development stage company which was incorporated under the laws of the State of Delaware on November 18, 2003. From inception to September 2007, the Company was focused on providing a vehicle for a foreign or domestic non-public company to become an SEC reporting (publicly-traded) company. To that end, we had intended to locate and negotiate with a business entity for the combination of that target company with the Company.

Since September 2007, we have been conducting preliminary investigation into becoming a wind and hydro electric energy company. We intend to identify and evaluate the economic feasibility and resource potential of wind and hydro properties, predominantly in the Greater Toronto area and the surrounding areas of Ontario Canada, for the purposes of developing commercial scale wind and hydro turbine projects. We intend to participate in these projects with development partners and receive revenue from the sale of electric energy through our working interests in the partnerships. As of the time of this filing, we have not identified any suitable properties, project opportunities or development partners.


We are a development stage company that has generated no revenues from operations since our incorporation on November 18, 2003. We have incurred losses since our inception, have no operations and rely upon the sale of our securities and funds provided by management to cover expenses. In addition, our independent accountant has issued an opinion indicating that there is substantial doubt about our ability to continue as a going concern.


Since September 2007, we have been primarily engaged in business planning activities, including researching wind and hydro energy technologies, developing our economic models and financial forecasts, performing due-diligence regarding potential development partners, investigating wind and hydro electric energy properties and project opportunities and raising capital.




 


On February 12, 2010, the Company formed a new Joint Venture Corporation, “Yantai Alveron Energy Development Company”, in Shandong, China as per the agreement sign on June 20, 2009. The company ownership was organized per the agreement with Alveron Energy Corp. owning 77% and the joint partners owning the remaining 23% of the new entity.


On April 12, 2010 the Board of Directors of Modena I, Inc. (the “Company”) filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of Delaware changing the Company’s name to Alveron Energy Corp.


Prior to generating any revenue from operations, we must complete the following steps:


1.

 

Site and Development Partner Identification and Agreement

 

 

 

2.

 

Due Diligence Data Collection to Determine Site Suitability

 

 

 

3.

 

Complete and Secure Approval of an Environmental Assessment

 

 

 

4.

 

Enter into Power Purchase Agreements

 

 

 

5.

 

Finalize Land Use or Acquisition Terms with Government or Private Land Owner

 

 

 

6.

 

Develop Access Roads to Our Site

 

 

 

7.

 

Complete Interconnection Studies Concerning Connection with Power Grid

 

 

 

8.

 

Complete Construction

 

We have not completed the work required on any of these steps. Additional financing must be obtained by us and future development partners to implement our business plan. There is no assurance that financing to cover the costs of implementing our business plan can be obtained.



Employees, Officers and Directors



Employees


We have no employees as of the date of this prospectus other than our sole executive officer and directors who devote only part of his time to our business.

  


Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 1B. Unresolved Staff Comments

Not Applicable




Item 2.  Properties.


Our executive offices are located at the residence of our President and Chief Executive Officer. Mr. Kim provides such office to the Company at no charge. We believe that this space is adequate for our current and immediately foreseeable operating needs. We do not have any policies regarding investments in real estate, securities, or other forms of property.


We do not intend to renovate, improve, or develop properties. We are not subject to competitive conditions for property and currently have no property in insure. We have no policy with respect to investments in real estate or interests in real estate and no policy with respect to investments in real estate mortgages. Further, we have no policy with respect to investments in securities of or interests in persons primarily engaged in real estate activities.


Item 3.  Legal Proceedings.


There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.


Item 4.  Submission of Matters to a Vote of Security Holders.

During the period ending October 31, 2010, there has not been any matter which was submitted to a vote of the Company’s shareholders through the solicitation of proxies or otherwise.


PART II


Item 5.  Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.


Market Information


There is no trading market for our Common Stock at present and there has been no trading market to date. There is no assurance that a trading market will ever develop or, if such a market does develop, that it will continue.

 

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person’s account for transactions in penny stocks and (ii) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person’s account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction.


Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 




 

Holders

As of February 14, 2011 there were 52,040,000 shares of common stock issued and outstanding, 40,000,000 of which are controlled by Sang-Ho Kim, the Company's sole officer and director.


As of February 14, 2011 there were 42 holders of record of shares of our common stock.  Holders of common stock do not have cumulative voting rights.

 

Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued and outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation.

 

Although there are no provisions in our charter or by-laws that may delay, defer or prevent a change in control, we are authorized, without shareholder approval, to issue shares of preferred stock that may contain rights or restrictions that could have this effect.

 

Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.

  

The issued and outstanding shares of our Common Stock were issued in accordance with the exemptions from registration afforded by Section 4(2) of the Securities Act of 1933.


Dividends


Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

 

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.


Item 6. Selected Financial Data

Not applicable

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.


Safe Harbor Statement under The Private Securities Litigation Reform Act of 1995

 

Certain statements contained in this section and elsewhere in this Form 10-K constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, regulatory and economic factors, seasonality, competition, litigation, the nature of supplier or customer arrangements that become available to the Company in the future, adverse weather conditions, possible technological obsolescence of existing products and services, possible reduction in the carrying value of long-lived assets, estimates of the useful life of its assets, potential environmental liability, customer concentration, the ability to obtain financing, and other risks detailed in this report and in the Company's other periodic reports filed with the Securities and Exchange Commission ("SEC"). The words "believe", "expect", "anticipate", "may", "plan", "should" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

 




Critical Accounting Policies

 

The Company's discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Several of the Company's accounting policies involve significant judgments, uncertainties and estimations. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. To the extent that actual results differ from management's judgments and estimates, there could be a material adverse effect on the Company. On a continuous basis, the Company evaluates its estimates, including, but not limited to, those estimates related to its allowance for doubtful accounts, inventory reserves, valuation allowance for the deferred tax assets relating to its net operating loss carry forwards ("NOL's") and commitments and contingencies. With respect to accounts receivable, the Company estimates the necessary allowance for doubtful accounts based on both historical and anticipated trends of payment history and the ability of the customer to fulfill its obligations. For inventory, the Company evaluates both current and anticipated sales prices of its products to determine if a write down of inventory to net realizable value is necessary. In determining the Company's valuation allowance for its deferred tax assets, the Company assesses its ability to generate taxable income in the future. The Company utilizes both internal and external sources to evaluate potential current and future liabilities for various commitments and contingencies. In the event that the assumptions or conditions change in the future, the estimates could differ from the original estimates.

 

 The accounting policies of the company are in accordance with United States of America generally accepted accounting principles.  Outlined below are those policies considered particularly significant:

 

Organization and Start Up Costs

 

Costs of start up activities, including organization costs are expensed as incurred.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist of commercial accounts and interest-bearing bank deposits and are carried at cost, which approximates current value. Items are considered to be cash equivalents if the original maturity is three months or less.


Income Taxes

 

Deferred tax assets and liabilities are recorded for differences between the financial statements and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.  As of October 31, 2010, a deferred tax asset (which arises solely as a result of net operating losses), has been entirely offset by a valuation reserve due to the uncertainty that this asset will be realized in the future.


 

 

 

Fair Value of Financial Instruments

 

The carrying value of the Company's accounts payable approximates fair value because of the short-term maturity of these instruments.


Earnings or Loss Per Share

 

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.

 

There were no dilutive financial instruments for the years ended October 31, 2010 or 2009.


Deferred Offering Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed.  At the time of the completion of the offering, the costs are charged against the capital raised.  Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

 

Revenue Recognition

 

Revenue is recognized when it is realized or realizable and earned. Alveron Energy Corp. considers revenue realized or realizable and earned when persuasive evidence of an arrangement exists, services have been provided, and collectability is reasonably assured. Revenue that is billed in advance such as recurring weekly or monthly services are initially deferred and recognized as revenue over the period the services are provided.

 

The Company currently has one revenue stream which is providing information technology consulting services.  These revenues are recognized on completion of the services rendered.  The customers are billed on completion and are due on receipt. 

 

 

Recent Accounting Pronouncements


In April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 – Receivable – Loans and Debt Securities Acquired with Deteriorated Credit Quality (“Subtopic 310-30”). Furthermore, the amendments clarify guidance about maintaining the integrity of a pool as the unit of accounting for acquired loans with credit deterioration.  Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early adoption is permitted. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements. 




 


In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.” The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash

flows of the Company.


In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), “Consolidation (Topic 810): Amendments for Certain Investment Funds.” The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU 2010-10 did not have a material effect on the financial position, results of operations or cash flows.


In February 2010, the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic 855) “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company’s financial position and results of operations.


In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06, “Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a material impact on the Company’s financial statements.


In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The adoption of this standard is not expected to have a

significant impact on the Company’s consolidated financial statements.


In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of this standard is not expected to have a significant impact on the Company’s consolidated financial statements.


In October 2009, FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.




 


In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the product’s essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.


In August 2009, the FASB issued ASU No. 2009-05, Measuring Liabilities at Fair Value, which provides additional guidance on how companies should measure liabilities at fair value under ASC 820. The ASU clarifies that the quoted price for an identical liability should be used. However, if such information is not available, an entity may use the quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities traded as assets, or another valuation technique (such as the market or income approach). The ASU also indicates that the fair value of a liability is not adjusted to reflect the impact of contractual restrictions that prevent its transfer and indicates circumstances in which quoted prices for an identical liability or quoted price for an identical liability traded as an asset may be considered level 1 fair value measurements. This ASU is effective October 1, 2009. The adoption of this standard did not have a material impact on the results of operations or financial condition.


In June 2009 the FASB established the Accounting Standards Codification ("Codification'" or "ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.


In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”, which is included in ASC Topic 855, Subsequent Events. ASC Topic 855 established principles and requirements for evaluating and reporting subsequent events and distinguishes which subsequent events should be recognized in the financial statements versus which subsequent events should be disclosed in the financial statements. ASC Topic 855 also requires disclosure of the date through which subsequent events are evaluated by management. ASC

Topic 855 was effective for interim periods ending after June 15, 2009 and applies prospectively. Because ASC Topic 855 impacts the disclosure requirements, and not the accounting treatment for subsequent events, the adoption of ASC Topic 855 did not impact our results of operations or financial condition. See Note 9 for disclosures regarding our subsequent events.


Accounting Standards Update ("ASU") ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU's No. 2009-2 through ASU No. 2009-15 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.





The Company does not expect that adoption of these or other recently issued accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.



Overview

Alveron Energy Corp. is a development stage company which was incorporated under the laws of the State of Delaware on November 18, 2003.  From inception to September 2007, the Company was focused on providing a vehicle for a foreign or domestic non-public company to become an SEC reporting (publicly-traded) company. Since September 2007, the Company has shifted its focus to becoming a wind and hydro electric energy generation company.

In February 12, 2010, the Company formed a new Joint Venture Corporation, “Yantai Alveron Energy Development Company”, in Shandong, China as per the agreement sign on June 20, 2009. The company ownership was organized per the agreement with Alveron Energy Corp. owning 77% and the joint partners owning the remaining 23% of the new entity.

On April 12, 2010 the Board of Directors of Modena I, Inc. (the “Company”) filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of Delware changing the Company’s name to Alveron Energy Corp.

The address of our principal executive office is Alveron Energy Corp., c/o Sang Ho Kim, 735 Don Mills Rd., #1405 Toronto Ontario M3C 1S9, Canada.  Our phone number at that location is (647) 435-9852 and our facsimile number is (416) 467-5179.  We do not have a functioning website at this time.

Proposed Business


Since September 2007, we have shifted our focus and intend to become a wind and hydro electric energy generation company. We intend to identify and evaluate the economic feasibility and resource potential of wind and hydro properties, predominantly in the Greater Toronto area and surrounding areas of Ontario Canada, for the purposes of developing commercial scale wind and hydro turbine projects. We intend to participate in these projects with development partners and receive revenue from the sale of electric energy through our working interests in the partnerships. As of the time of this filing, we have not identified any suitable properties, project opportunities or development partners.


We are a development stage company that has generated no revenues from operations since our incorporation on November 18, 2003. We have incurred losses since our inception, have no operations and rely upon the sale of our securities and funds provided by management to cover expenses. In addition, our independent accountant has issued an opinion indicating that there is substantial doubt about our ability to continue as a going concern.


Since our inception, we have been primarily engaged in business planning activities, including researching for a target company with which to do a business combination.  Since September 2007, we have been focused on researching wind and hydro energy technologies, developing our economic models and financial forecasts, performing due-diligence regarding potential development partners, investigating wind and hydro electric energy properties and project opportunities and raising capital.  


Prior to generating any revenue from operations, we must first enter into an agreement with a development partner and locate and obtain an interest in a property with potential for a commercial wind or hydro electric energy project. Then, we must perform a detailed study of the wind and hydro resource of that property and if that resource study is positive we must complete a detailed construction cost estimate. If that cost estimate determines that exploiting the resource on the property is economically feasible, we must then obtain the necessary capital to construct the project. If sufficient wind or hydro resources exist and the construction estimate is economic and we obtain the necessary capital to construct the project, we must still further negotiate and execute an agreement for the purchase of the electric energy generated by the wind or hydro turbines to be constructed on the property. Only then, if all of the steps are completed above, can we obtain the necessary permits and conduct the environmental before construction takes place and connection to the electrical grid established.




 

 

Additional financing must be obtained by us and our development partners to implement our business plan. There is no assurance that financing to cover the costs of implementing our business plan can be obtained. We do not have any current plans to raise these funds.

 

Stages of Development


We have identified nine stages of development for our wind and hydro electric energy projects.


 

1.

            Site and Development Partner Identification and Agreement — Identify regions that are economically viable for wind or hydro turbine development and development partners that would be appropriate for a particular project. We would then have to finalize an agreement with a development partner before proceeding.

 

2.

           Data Collection — For the wind energy projects this involves location mapping and wind resource data monitoring and collection using meteorological instruments. For hydro-electric projects, this involves location mapping and water resource data monitoring and collection using acoustical current instruments.       

 

3.

          Environmental Assessment — Pursuant to relevant government regulations, wind energy projects and hydro electric energy projects meeting specified thresholds must be acknowledged in general by the relevant governmental regulatory authority. A document containing General Terms is then developed, in cooperation with various responsible government agencies, which could include a process of consultation with the general public. The application eventually submitted to the relevant authority details sufficient information on which to fully assess the environmental and social impact of the proposed project.

 

Following acceptance of the General Terms document, fieldwork and preliminary design work are conducted. In general, an application will not be accepted until a formal review process commences, at which time all information required under the General Terms document to conduct a full assessment has been collected and assembled. 

 

4.

     

Power Purchase Agreements — At this stage we would respond to Requests for Proposals issued by utility companies in the area in which the project is located in order to obtain power purchase agreements.       


5.

         Site--Finalization of land lease or acquisition terms with government or private land owner      


6.

        Access — Wind and hydro electric energy sites permitted to us in general will be located in remote areas and require road construction for access. This access will be gated to prevent the inappropriate use of the roads near to potentially environmentally
sensitive areas.  

 

7.

 

 Interconnection Studies — At this stage, we will retain engineering consultants to conduct studies on interconnecting our wind or hydro electric energy projects to the relevant transmission grid. Each wind power or hydro electric energy project requires a separate interconnection study.

 

8.

 

Construction — Once financing arrangements are made, the time allotted for the construction phase depends on the speed of regulatory permitting, the rate of road construction for remote areas and weather conditions. We estimate constructing a typical 1.5mW modern wind turbine as part of an overall project ranges between 18 and 24 months. For run of river hydro electric energy projects, we estimate construction time at 30 months. 


9.

 

Operation — This phase of project development involves working with the supplier of wind or hydro electric energy turbines to optimize generation performance. Maintenance schedules and training will be facilitated by the wind or hydro turbine manufacturer and us. 

 

 

 



We intend to carry out all stages of development in conjunction with development partners and consultants. The environmental assessment process is extremely unpredictable and accordingly, it is not possible at this point to predict if and when we will ever advance beyond the stage of development indicated in item three above. Accordingly it is not possible to predict when we will enter the operational stage of development indicated in item nine above, or when revenues will be generated.


We do not have sufficient resources to effectuate our business. We expect to incur a minimum of $400,000 in expenses during the next twelve months of operations. Accordingly, we will have to raise the funds to pay for such expenses. We might do so through a private offering after this registration statement is declared effective and our shares are quoted on the Over the Counter Bulletin Board. We potentially will have to issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.



Results of Operation


We have earned no revenues from operations from the time of our incorporation on November 18, 2003 to October 31, 2010. We do not anticipate earning any revenues from operations until we have acquired a property and establish a wind or hydro project on such property, secure a power purchase agreement and erect turbines on the land or water, of which there is no guarantee that we will be successful.


We incurred operating expenses in the amount of $124,014 for the period from our inception on November 18, 2003 to October 31, 2010. These operating expenses were comprised of professional fees, including legal and accounting fees, and administrative expenses.


Liquidity and Capital Resources


As shown in the accompanying financial statements, Alveron generated a loss of $124,014 from November 18, 2003 (inception) to October 31, 2010, and has an accumulated deficit of $124,014 and negative working capital of $33,971 as of such period. These results raise substantial doubt as to our ability to continue as a going concern. Over the next twelve months, we anticipate expenses will be approximately $35,000, which includes administrative costs, including professional fees and general business expenses, including costs related to complying with our filing obligations as a reporting company. Our sole executive officer, Mr. Sang Ho Kim has indicated that he is prepared to loan such funds to us for these expenses, but there are no formal arrangements in this regard and he is not legally obligated to loan funds to us.






As our operations become more complex, it is anticipated that these costs will increase. We do not have sufficient funds on hand to cover these expenses.  Our cash on hand, $15,858 as of October 31, 2010, will not be sufficient to implement operational activities during the next 12 months and we will require at least $500,000 additional funding to implement our business plan.


The table below sets forth the anticipated expenses for the next 12 months:

 

 

 

 

 

 

Amount Allocated

Amount Expended

Estimated Completion

 

 

 

 

 

Marketing Materials/Website

$ 20,000

 

Use as needed

Legal/Accounting

$ 50,000

 

Use as needed

SEC Reporting

$25,000

 

Use as needed

Computer Systems

$6,000

 

Use as needed

Feasibility Reports

$100,000

 

 

Assessment Reports and Approvals

$80,000

 

 

Consultants

$ 80,000

 

 

General Administration

 

 

Use as needed

Meals & Entertainment

$6,000

 

Use as needed

Insurance

$6,000

 

Use as needed

Office Supplies

$6,000

 

Use as needed

Salaries

$80,000

 

Use as needed

Professional Fees

$7,000

 

Use as needed

Rent

$6,000

 

Use as needed

Telephone/Mobile

$6,000

 

Use as needed

Travel

$20,000

 

Use as needed

Utilities

$2,000

 

Use as needed

Total

 

 

 

 

 

 

 

 

We have allocated approximately $139,000 towards general business purposes. Of this amount, $6,000 is intended to be used to computer hardware and software, $6,000 will be used to purchase general office supplies and $87,000 is set aside for salaries and other professional expenses.


We will not generate any revenues in the next twelve months and we will be required to raise additional capital by issuing equity or debt securities in exchange for cash in order to continue as a going concern. We can not assure you that any financing can be obtained or, if obtained, that it will be on reasonable terms. Without realization of additional capital, it would be unlikely for us to continue as a going concern.



Going Concern Consideration


Our independent auditors included an explanatory paragraph in their report on the financial statements included herein regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.


Off-Balance Sheet Arrangements


We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that are material to investors

 

 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.





 

 


Item 8. Financial Statements.


ALVERON ENERGY CORP.
(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

YEARS ENDED OCTOBER 31, 2010 and 2009

AND THE PERIOD FROM INCEPTION THROUGH OCTOBER 31, 2010

















REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors

Alveron Energy Corp.

(A Development Stage Company)


We have audited the accompanying consolidated balance sheets of Alveron Energy Corp. (A Development Stage Company) as of October 31, 2010 and 2009 and the related statements of operations, shareholders' deficit and cash flows for the twelve months period then ended. The financial statements from November 18, 2003(inception), through October 31, 2008 were audited by other auditors whose report expressed an unqualified opinion on those statements. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.


We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Alveron Energy Corp. as of October 31, 2010 and 2009, and the results of its operations and cash flows for the periods described above in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ M&K CPAS, PLLC

www.mkacpas.com

Houston, Texas

February 14, 2011










ALVERON ENERGY CORP.

 

 

 

(A Development Stage Company)

 

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

As of OCTOBER 31, 2010 and 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

2010

2009

ASSETS

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

$

                 15,858

    $            210

Total Current Assets

 

15,858

                 210

 

 

 

 

Total Assets

 $

15,858

    $            210

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

Current Liabilities:

 

 

 

Accounts payable and accrued liabilities

$

7,655

$         13,561

Related party note

 

33,038

3,013

Convertible note, net of discount

 

9,136

5,852

Total Current Liabilities

 

49,829

22,426

 

 

 

 

 

 

 

 

Total Liabilities

 

49,829

22,426

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

Capital stock  - $.001 par value, 100,000,000 common shares authorized,            49,540,000 and 44,040,000 common shares outstanding  as of October 31, 2010 and 2009, respectively

 

49,540

44,040

Additional paid in capital

 

55,942

6,072

Deficit accumulated during the development stage

 

(124,014)

(72,328)

Non-Controlling Interest

 

(15,439)

-

Total Stockholders' Deficit

 

(33,971)

(22,216)

 

 

 

 

Total Liabilities and Total Stockholders' Deficit

 $

15,858

     $           210







The accompany notes are integral part of these consolidated financial statements.





ALVERON ENERGY CORP.

 

 

 

 

(A Development Stage Company)

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

For the Years Ended October 31, 2010 and 2009, and Cumulative from November 18, 2003 (Date of Inception) Through October 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

November 18, 2003

 

 

 

 

(Date of Inception)

 

 

 

 

Through

 

 

 

 

October 31,

 

 

2010

2009

2010

 

 

 

 

 

Revenues

$

                     -   

       $             -   

            $                   -   

 

 

 

 

 

Expenses   

 

 

 

 

Consulting Expense

 

1,476

              -

                       5,476

Professional fees

 

13,666

              16,094

                   54,414

Interest expense

 

3,652

                 1,282

6,219

Office and Administrative

 

27,118

                 15,725

50,337

Research and Development

 

21,509

-

21,509

Foreign exchange loss/(gain)

 

(296)

                 823

                       1,498

Total Operating Expenses

 

              67,125

              33,924

139,453

 

 

 

 

 

Net Loss including non-controlling Interest

 

(67,125)

(33,924)

(139,453)

Net Loss attributable to non-controlling interest

 

15,439

-

15,439

Net Loss attributable to Alveron Energy Corp.

$

(51,686)

$  (33,924)

$(124,014)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss Per Common Share - Basic

$

(0.00)

$      (0.00)

 

and Diluted

 

 

 

 

 

 

 

 

 

Weighted Average Number of
  Common Shares Outstanding, Basic and Diluted

 

47,082,466

44,040,000

 



The accompany notes are integral part of these consolidated financial statements.




ALVERON ENERGY CORP.

 

 

 

 

(A Development Stage Company)

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

For the Years Ended October 31, 2010 and 2009, and Cumulative from

 

 

 November 18, 2003 (Date of Inception) Through October 31, 2010

 

 

 

 

 

 

November 18, 2003

 

 

 

 

(Date of Inception)

 

 

 

 

Through

 

 

 

 

October 31

 

 

2010

2009

2010

 

 

 

 

 

Cash Flows from Operating Activities

 

 

 

 

     Net loss including non-controlling      

     interest

$

(67,125)

$        (33,924)

$        (139,453)

Adjustments to reconcile net loss to net           

cash used by Operating Activities:

 

 

 

 

Common stock issued for services

 

-

-

4,000

Imputed Interest

 

369

-

369

Interest accrued on convertible note

 

3,284

1,284

5,851

Changes in assets and liabilities

 

 

 

 

Accounts payable and accrued liabilities

 

(5,905)

10,624

7,653

 

 

 

 

 

Cash flows used in operating activities

 

(69,377)

(22,016)

(121,580)

 

 

 

 

 

Cash Flows from Investing Activities

 

                           -

                           -

                                 -

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

Proceeds from convertible note

 

                    -

                    -

6,000

Proceeds from issuance of common   

stock

 

                      55,000

-

61,200

Advances from related party

 

9,593

3,013

                         12,607 

Advances from shareholder

 

20,432

-

20,432

Stockholder contributions

 

-

19,003

37,199

 

 

 

 

 

Cash flows provided by financing  activities

 

                    85,025

                    22,016

137,437

 

 

 

 

 

Net (Decrease) Increase in Cash

 

15,648

-

15,858

 

 

 

 

 

Cash and Cash Equivalents, beginning of year

 

                           210   

                           210   

                                 -

 

 

 

 

 

Cash and Cash Equivalents, end of year

$

15,858

$             210

$          15,858

 

 

 

 

 

Supplemental Cash Flow Information

 

 

 

 

 

 

 

 

 

Interest paid

$

-

$                  -

$              -

Income taxes paid

 

-

 -

 -


 

 

The accompany notes are integral part of these consolidated financial statements.




ALVERON ENERGY CORP.

 

 

 

 

 

 

 

 

 

(A Development Stage Company)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

FOR THE PERIOD FROM INCEPTION THROUGH 31 OCTOBER 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Shares

 

Capital Stock

 

Accumulated 
Deficit During the Development Stage

 

Additional 
Paid-In Capital

Non-Controlling Interest

 

Total Stockholders' Equity (Deficit)

Stock issued on acceptance of incorporation expenses on November 18, 2003

40,000,000

$

40,000

$

-

$

(39,900)

$                  -

$

100

Net loss

-

 

-

 

(3,350)

 

                         -   

 

 

(3,350)

  Balance, 31 October 2004

40,000,000

$

40,000

$

(3,350)

$

                         (39,900)   

$                  -

$

(3,250)

Net loss

-

 

-

 

(8,754)

 

 -

 

 

(8,754)

  Balance, 31 October 2005

40,000,000

$

40,000

$

(12,104)

$

                         (39,900)   

$                  -

$

(12,004)

Stockholder contributions

 

 

 

 

 

 

                 13,636

 

 

13,636

Net loss

-

 

-

 

(7,496)

 

                         -   

 

 

(7,496)

  Balance, 31 October 2006

40,000,000

$

40,000

$

(19,600)

$

            (26,264)

 $                  -

$

(5,864)

Stock issued

200,000

 

200

 

-

 

 300

 

 

500

Stockholder contributions

-

 

-

 

-

 

108

 

 

108

Discount on Convertible Note

-

 

-

 

-

 

2,715

 

 

2,715

Net loss

 

 

 

 

(4,299)

 

 

 

 

(4,299)

  Balance, 31 October 2007

40,200,000

$

40,200

$

(23,899)

$

            (23,141)

$                  -

$

(6,840)

Stock issued

2,240,000.

 

2,240

 

-

 

 3,360

 

 

5,600

Stock issued for services

1,600,000

 

1,600

 

-

 

2,400

 

 

4,000

Stockholder contributions

-

 

-

 

-

 

4,450

 

 

4,450

Net loss

 

 

 

 

(14,505)

 

 

 

 

(14,505)

  Balance, 31 October 2008

44,040,000

$

44,040

$

(38,404)

$

            (12,931)

$                  -

$

(7,295)

Stockholder contributions

-

 

-

 

-

19,003

 

 

19,003

Net loss

 

 

 

 

(33,924)

 

 

 

 

(33,924)

  Balance, 31 October 2009

44,040,000

$

44,040

$

(72,328)


$            6,073

 

$

(22,216)

Stock issued for Cash

5,500,000

 

5,500

 

 

49,500

 

 

55,000

Imputed Interest

 

 

 

 

 

369

 

 

369

Net loss

 

 

 

 

(51,686)

 

 


    (15,439) 

(67,125)

  Balance, 31 October 2010

49,540,000

$

49,540

$

(124,014)


$           55,942


$        (15,439)

$

(33,971)




The accompany notes are integral part of these consolidated financial statements.



ALVERON ENERGY CORP.
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
October 31, 2010 and 2009

1.

History and Organization

Modena I, Inc. is a development stage company which was incorporated under the laws of the State of Delaware on November 18, 2003.  From inception to September 2007, the Company was focused on providing a vehicle for a foreign or domestic non-public company to become an SEC reporting (publicly-traded) company. To this end, we intended to locate and negotiate with a business entity for the combination of that target company with the Company.  Since September 2007, the Company has shifted its focus to becoming a wind and hydro electric energy generation company. In February 12, 2010, the Company formed a new Joint Venture Corporation, “Yantai Alveron Energy Development Company”, in Shandong, China as per the agreement sign on June 20, 2009. The company ownership was organized per the agreement with Alveron Energy Corp. owning 77% and the joint partners owning the remaining 23% of the new entity. Alveron Energy Corp. transferred $50,000 to this new entity during the quarter ending July 31, 2010 to be used on the feasibility report for a potential 48MW wind energy plant in Shandong, China.


On April 12, 2010 the Board of Directors of Modena I, Inc. (the “Company”) filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of Delware changing the Company’s name to Alveron Energy Corp.


2.

Going Concern Assumption

These accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company has a working capital deficit of $33,971 and has no current revenue stream. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company's ability to continue as a going concern is also contingent upon its ability to complete certain capital formation activities and generate working capital operations in the future. Management's plan in this regard is to secure additional funds through equity financing activities, and from loans made by the Company's stockholder.

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




ALVERON ENERGY CORP.
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
October 31, 2010 and 2009

 

 

 

3.

Basis of Presentation

 

The Company has not earned any revenues from limited principal operations and accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth in FASB Pronouncements. Among the disclosures required are that the Company's financial statements be identified as those of a development stage company, and that the statements of operation, stockholders' deficit and cash flows disclose activity since the date of the Company's inception.


4.

Principles of Consolidation


The accounts of the joint venture are included in the consolidation of these financial statements from the date when the joint venture was formed. All significant intercompany accounts and transactions have been eliminated in consolidation. During the current year we have consolidated our 77% owned joint venture as discussed in note 10 below. The Company records net income attributable to non-controlling interest in the consolidated statements of operations for any non-owned portion of its consolidated subsidiary. Non-controlling interest being accounted for in owners’ equity on the consolidate balance sheet.


5.

Summary of Significant Accounting Policies

The accounting policies of the Company are in accordance with US GAAP, and their basis of application is consistent with that of the previous year. Outlined below are those policies considered particularly significant:

a)

Fair Value of Financial Instruments

The Company adopted ASC No. 820-10 (ASC 820-10), formerly SFAS 157, Fair Value Measurements.  ASC 820-10 relates to financial assets and financial liabilities.

ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property as defined in SFAS 13. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions, that are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The following presents assets that are measured and recognized at fair values as of October 31, 2010 on a non-recurring basis:

Level 1: None

Level 2: None

Level 3: None

 

As of October 31, 2010 and 2009, the carrying value of cash, accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments.

 




 

 

b)

Income Taxes

The Company had adopted Accounting Standard Codification subtopic 740-10, Income Taxes (“ASC 740-10”) which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.  Under this method, deferred tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period. As of October 31, 2009, a deferred tax asset (which arises solely as a result of net operating losses), has been entirely offset by a valuation reserve due the uncertainty that this asset will be realized in the future.

 

c)

Earnings or Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.




ALVERON ENERGY CORP. (A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
October 31, 2010 and 2009

d)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

e)

Cash and Cash Equivalents

Cash and cash equivalents are considered to be all highly liquid investments purchased with an initial maturity of three (3) months or less.

f)

Beneficial Conversion Feature of Convertible Note

Company recognized the advantageous value of conversion rights attached to convertible note. Such rights gives the holder the ability to convert debt into shares of common stock at a price per share that is less than the fair market value of the common stock on the day the loan is made to the Company. The beneficial value was calculated as the intrinsic value of the beneficial conversion feature of the convertible note and the related accrued interest and was recorded as a discount to the related debt and an addition to additional paid in capital. The discount was calculated as $2,715 and, using the effective interest rate, is being amortized over the life of the convertible note.

g)

Recent Accounting Pronouncements




ALVERON ENERGY CORP.
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
October 31, 2010 and 2009


 

In April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 – Receivable – Loans and Debt Securities Acquired with Deteriorated Credit Quality (“Subtopic 310-30”). Furthermore, the amendments clarify guidance about maintaining the integrity of a pool as the unit of accounting for acquired loans with credit deterioration.  Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early adoption is permitted. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.” The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.


In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), “Consolidation (Topic 810): Amendments for Certain Investment Funds.” The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU 2010-10 did not have a material effect on the financial position, results of operations or cash flows.


In February 2010, the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic 855) “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company’s financial position and results of operations.


In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06, “Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a material impact on the Company’s financial statements.


In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The adoption of this standard is not expected to have a significant impact on the Company’s financial statements.




 


In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers.  Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


In October 2009, FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.


In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the product’s essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.


On September 30, 2009, the Company adopted changes issued by the Financial Accounting Standards Board (FASB) to the authoritative hierarchy of GAAP. These changes establish the FASB Accounting Standards Codification (Codification) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Company’s financial statements.


In August 2009, FASB issued an amendment to the accounting standards related to the measurement of liabilities that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard is effective for the Company on October 1, 2009. The adoption of this amendment did not have a material effect on the Company’s financial statements.





In June 2009, the FASB issued guidance now codified as FASB ASC Topic 105, Generally Accepted Accounting Principles, as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the Company’s consolidated financial statements, but did eliminate all references to pre-codification standards.


In May 2009, FASB issued ASC 855, Subsequent Events, which establishes general standards of for the evaluation, recognition and disclosure of events and transactions that occur after the balance sheet date. Although there is new terminology, the standard is based on the same principles as those that currently exist in the auditing standards. The standard, which includes a new required disclosure of the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009. The adoption of ASC 855-10 did not have a material effect on the Company’s financial statements.


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operation






ALVERON ENERGY CORP.
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
October 31, 2010 and 2009


6.

Convertible Note

In July 2007, the Company received proceeds of $6,000 and issued a convertible note to an unrelated party.  The loan bears a stated interest rate of 5% per annum, is unsecured and the principal amount of $6,000 plus all accrued interest was due on July 2, 2010. As of October 31, 2010 the note is past due.  In addition, the holder has the option at any time to convert all or part of the outstanding principal and interest amount into common shares of the Company contingent upon mutual agreement on a conversion price between the company and the note holder.  The number of common shares that shall be issued upon conversion of the note shall be determined by the holder and the Company.

The Company evaluated the conversion feature embedded in the debt instrument and concluded that a beneficial conversion feature existed.  In accordance with the provisions of FASB ASC Topic 470-20, the Company calculated the aggregate value of the embedded beneficial conversion features in connection with the issuances of the convertible notes. The fair value of the embedded beneficial conversion feature was estimated to be the difference between the issue date fair value and face amount of the debt, with the fair value of the debt being determined on a relative fair value basis based on the underlying estimated fair values of the common shares issuable on conversion. The embedded beneficial conversion feature was recorded as a contribution to additional paid-in capital of $2,715. The resulting debt discounts are being accreted over the term of the notes using the effective interest amortization method.   For the year ended October 31, 2010, interest expense of $3,652 was recorded on the loan compared to $1,282 of interest expense recorded for the year ended October 31, 2009.  In addition, the Company evaluated the convertible note for embedded derivatives and as a result of the provision in the Convertible Promissory Note agreement; conversion of note is contingent upon a mutually agreed upon conversion price.  As such, no derivative liabilities need to be recorded.


 

7.

Capital Stock

Total shares authorized as of October 31, 2010 are 100,000,000 common shares, par value $0.001 per share.  Total shares issued and outstanding as of October 31, 2009 are 44,040,000 common shares.  Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company's ability to pay dividends on its common stock. During fiscal year 2010 the Company has not declared any dividends since incorporation.


On October 6, 2008, the Company issued 1,600,000 shares of common stock to a Director, in consideration for the services rendered to the Company in his capacity as a director, valued in the amount of $4,000.


As of year ended October 31, 2008, we issued 2,240,000 shares of common stock to 40 investors in a private placement. The consideration paid for such shares was $0.0025 per share, amounting in the aggregate to $5,600.


 On June 5, 2009, the Company’s board of directors declared a 39900% stock dividend. Each shareholder of record on June 5, 2009 received 399 additional shares of common stock for each share of common stock then held. The Company retained the current par value of $0.001 per share for all shares of common stock.  All references in the financial statements to the number of shares outstanding, per share amounts, common stock, additional paid-in capital and stock option data of the Company’s common stock have been restated retroactively to reflect the effect of the stock dividend for all periods presented.


For the period ended October 31, 2010, we issued 5,500,000 shares of common stock to 3 investors in a private placement. The consideration paid for such shares was $0.01 per share, amounting in the aggregate to $55,000.





ALVERON ENERGY CORP.
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
October 31, 2010 and 2009
 

8.

Income Taxes

The Company has paid no federal or state income taxes.  As of October 31, 2010 and 2009, the Company has net operating loss carry forwards of $124,014 and $72,329 which, if unused, will begin to expire in 2023.  The tax effect, at the statutory state and federal rates of 34% and 35%, of the operating loss carry forwards and temporary differences at October 31, 2010 and 2009 respectively, are as follows:

 

 

 

 

2010

2009

 

 

 

Deferred income tax assets

 

 

Net operating loss carryforwards

$    43,405

$    25,315

Valuation allowance

      (43,405)

      (25,315)

 

 

 

Deferred income taxes

$            -

-


9.

Related Party Transactions


Related party transactions are in the normal course of operations and are recorded at amounts established and agreed between the related parties. Related party transactions not disclosed elsewhere in these financial statements are as follows:


During 2008, $4,450 was paid by shareholder contribution for professional fees, which were waived for reimbursement. Since inception to October 31, 2008, the shareholder has advanced funds for professional fees and other office and general expenses in the amount of $18,196. The shareholder has waived reimbursement of these expenses and considered these advances as a contribution to capital. Accordingly, the contributions have been recorded as additional paid-in capital. The Company incurred expenses relating to consulting services performed by a director and a shareholder for $4,000 which was paid by the issuance of 1,600,000 of the company’s common shares.


During 2009, $19,003 was paid by shareholder contribution for professional fees, which were waived for reimbursement. Since inception, the shareholder has advanced funds for professional fees and other office and general expenses in the amount of $37,199.  The shareholder has waived reimbursement of these expenses and considered these advances as a contribution to capital.  Accordingly, the contributions have been recorded as additional paid-in capital.


In September 2009, a related party shareholder loan the company $3,013, payable in demand, for payment of professional fees with imputed interest of 8%.  Due to transaction occurring near year end October 31, 2009, the interest expense was found to be immaterial.


During 2010, $20,432 was paid by shareholder contribution for professional fees. Since inception, the shareholder has advanced funds for professional fees and other office and general expenses in the amount of $57,631.  The shareholder has waived prior year reimbursements of these expenses and considered these advances as a contribution to capital.  Accordingly, a total of $37,199 of the contributions has been recorded as additional paid-in capital. The remaining balance of $20,432 is accruing interest at a rate of 7% annually and due upon demand.  As of year ended October 31, 2010, accrued interest balance is $1,641.  




 


During 2010, $9,593 was paid by related party from the joint venture for expenses on behalf of the company.  The related party payable is non-interest bearing, unsecured and due upon demand.  The Company has recorded imputed interest expense of $369 as additional paid-in capital.


10.

Joint Venture


On February 12, 2010, the Company formed a new Joint Venture Corporation, “Yantai Alveron Energy Development Company”, in Shandong, China as per the agreement sign on June 20, 2009. The company ownership was organized per the agreement with Alveron Energy Corp. owning 77% and the joint partners owning the remaining 23% of the new entity. On the date of the Joint Venture, Yantai had no balance sheet or income statement activities. Alveron Energy Corp. transferred a total of $50,000 to this new entity during the year ending October 31, 2010 to be used on the feasibility report for a potential 48MW wind energy plant in Shandong, China. The Company has expensed a total of $21,402 toward research and development which relates to the feasibility report. The total losses from the joint venture exceed the non-controlling interest balance and as a result the Company has recorded net debit balance of approximately $15,439 on the consolidated balance sheet.


11.

Contingencies

 

No legal proceedings are currently pending or, to our knowledge, threatened against us that, in the opinion our management, could reasonably be expected to have a material adverse effect on our business or financial condition or results of operations.


12.

Subsequent Events


On November 26, 2010, Alveron repaid $6,000 principal towards the convertible promissory note owing to an unrelated party.


During the months of November and December, 2010, a shareholder and related party advanced the Company $540,900 as a unsecured loan with an interest rate of 7% annual rate and due upon demand.


On November 15, 2010, 2,500,000 shares of common stock was issued to an individual for consulting services valuing $100,000.





 

 

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

  

The financial statements included in this Form 10-K have been audited by M & K CPAS PLLC to the extent and for the periods set forth in their report appearing elsewhere herein, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting, we have not, nor has anyone engaged on our behalf, consulted with M&K CPAS, PLLC regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on the Company’s financial statements, and M&K CPAS, PLLC did not provide either in a written report or oral advice to the Company that was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) the subject of any disagreement, as defined in Item 304 (a)(1)(v) of Regulation S-K and the related instructions, or a reportable event within the meaning set forth in Item 304 (a)(1)(V) of Regulation S-K.


Item 9A.   Controls and Procedures.


Our management, including our Chief Executive Officer who also serves as our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Report.

 

Based on that evaluation, our Chief Executive Officer concluded that as of the end of the period covered by this Report our disclosure controls and procedures were not effective such that the information required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure. Our Chief Executive Officer is not a financial or accounting professional, and we lack any accounting staff that is sufficiently trained in the application of U.S. generally accepted accounting principles. Until such time as we hire a chief financial officer or similarly titled person with the requisite experience in the application of U.S. GAAP, there is a likelihood that we may experience material weaknesses in our disclosure controls that may result in errors in our financial statements in future periods.


Management’s Report on Internal Control Over Financial Reporting


Our Chief Executive Officer and Principal Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act.


Internal control over financial reporting is promulgated under the Exchange Act as a process designed by, or under the supervision of, our Chief Executive Officer and Principal Financial Officer and effected by our 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:


·

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;


·

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and


·

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition or disposition of our assets that could have a material effect on the financial statements.






Readers are cautioned that internal control over financial reporting, no matter how well designed, has inherent limitations and may not prevent or detect misstatements. Therefore, even effective internal control over financial reporting can only provide reasonable assurance with respect to the financial statement preparation and presentation.


Our management, under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, has evaluated the effectiveness of our internal controls over financial reporting as of the end of the period covered by this report based upon the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation, management concluded that our internal control over financial reporting was not effective as of October 31, 2010 due to the following material weaknesses in the company’s internal control over financial reporting:


·

A system of internal controls (including policies and procedures) has neither been designed nor implemented.


·

A formal, internal accounting system has not been implemented.


·

Segregation of duties in the handling of cash, cash receipt, and cash disbursement is not formalized.


·

A number of journal entries.


Management is evaluating plans on a cost benefit basis to remedy the above weaknesses and we continue the process to complete a thorough review of our internal controls as part of our preparation for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Section 404 requires our management to report on, and our external auditors to attest to, the effectiveness of our internal control structure and procedures for financial reporting. As a non-accelerated filer under Rule 12b-2 of the Exchange Act, our first report under Section 404 as a smaller reporting company will be contained in our

Form 10-K for the year ended October 31, 2010.


This annual report does not include an attestation report of the company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report.


There were no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during our fiscal year ended October 31, 2009, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. In the estimation of our senior management, none of the following changes in the composition of management have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting:


Item 9B.   Other Information


None.





PART II

OTHER INFORMATION


Item 10. Directors, Executive Officers, Promoters and Control Persons


Directors and Executive Officers


Set forth below are the names, ages and present principal occupations or employment, and material occupations, positions, offices or employments for the past five years of our current directors and executive officers.


Name and Business Address

 

Age

 

Position

 

 

 

 

 

Sang-Ho Kim

 

46

 

Chief Executive Officer, President, Chief Financial Officer, Treasurer, Secretary and Director

 

 

 

 

 

Surendran Shanmugan

 

44

 

Director


Sang Ho Kim was appointed as our President, Chief Executive Officer, Chief Financial officer and a member of the Board of Directors as of May 12, 2004.  Mr. Kim is also the co-founder, Chairman and President of Edgetech Services, Inc., a public Nasdaq company specializing in internet and IT security, founded in 2001. Mr. Kim is an electrical engineer by profession and has held various management positions throughout his career.


Surendran Shanmugan was appointed as a member of the Board of Directors as of October 6, 2008. Mr. Shanmugam has over 15 years of experience in corporate finance and accounting with major organizations such as Price Waterhouse Coopers (PWC), Allianz Insurance, Nike Canada and INCO. He is also the Founder of SS Financial Services Inc. since May, 2002 which specializes in VC and loan financing. Mr. Shanmugan worked as an accounting manager for Edgetech Services from January to December of 2004.


Neither our sole executive officer nor any of our directors is a director in any other U.S. reporting companies. Our director/officer has not been affiliated with any company that has filed for bankruptcy within the last five years. The Company is not aware of any proceedings to which the Company’s officer/directors, or any associate of any such officer/directors, is a party adverse to the Company or any of the Company’s subsidiaries or has a material interest adverse to it.


Each director of the Company serves for a term of one year or until the successor is elected at the Company's annual shareholders' meeting and is qualified, subject to removal by the Company's shareholders. Each officer serves, at the pleasure of the board of directors, for a term of one year and until the successor is elected at the annual meeting of the board of directors and is qualified.


Audit Committee and Expert


We do not have an audit committee or an audit committee financial expert. Our corporate financial affairs are simple at this stage of development and each financial transaction can be viewed by any officer or director at will. The policy of having no committee will change if the constitution of one such becomes necessary as a result of growth of the company or as mandated by public policy.


Auditors; Code of Ethics; Financial Expert

 

We do not currently have a Code of Ethics applicable to our principal executive, financial and accounting officers. We do not have a “financial expert” on the board or an audit committee or nominating committee.




 


Potential Conflicts of Interest

Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors.  Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation and audit issues that may affect management decisions.  We are not aware of any other conflicts of interest with any of our executives or directors.

Director Independence


We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of “independent directors.” We do not believe that any of our directors currently meet the definition of “independent” as promulgated by the rules and regulations of the American Stock Exchange.


Item 11. Executive Compensation


Summary Compensation


Since our incorporation on November 18, 2003, we have not paid any compensation to our directors or officers in consideration for their services rendered to our Company in their capacity as such, other than the issuance of 4,000 shares of the Company’s common stock to Surendran Shanmugam on October 6, 2008.  We have no employment agreements with any of our directors or executive officers.  We have no pension, health, annuity, bonus, insurance, stock options, profit sharing or similar benefit plans.


Since our incorporation on November 18, 2003, no stock options or stock appreciation rights were granted to any of our directors or executive officers.  We have no equity incentive plans.


Outstanding Equity Awards

Our directors and officers do not have unexercised options, stock that has not vested, or equity incentive plan awards.

Compensation of Directors

 Since our incorporation on November 18, 2003, we have issued 4,000 shares of common stock to Surendran Shanmugam in consideration for his services rendered in his capacity as director, valued in the amount of $4,000.


Item 12. Security Ownership of Certain Beneficial Owners and Management


The following table lists, as of March 8, 2010, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.




 


The percentages below are calculated based on 49,540,000 shares of our common stock issued and outstanding as of October 31, 2010.  We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock.  Unless otherwise indicated, the address of each person listed is c/o Modena I, Inc., c/o Mr. Sang Ho Kim, 735 Don Mills Rd., #1405 Toronto Ontario M3C 1S9 Canada.



Name of Beneficial Owner

Title Of Class

Amount and Nature of Beneficial Ownership

Percent of Class

 

 

 

 

Mr. Sang Ho Kim

Common

40,000,000

80.74%

 

 

 

 

Mr. Surendram Shanmugam

Common

1,900,0001

3.84%

 

 

 

 

Directors and Officers as a Group (2 person)

Common

41,900,000

84.58%


 Mr. Shanmugam purchased 300,000 shares of the Company’s common stock in the private placement held from October 2007 through July 2008, for the aggregate purchase price of $750. He was also issued 1,600,000 shares of the Company’s common stock in consideration for his services as a director, valued in the amount of $4,000.


Changes in Control

 

There are no arrangements which may result in a change in control of the Company.

 

Item 13. Certain Relationships and Related Transactions


Other than the transactions discussed below, we have not entered into any transaction nor are there any proposed transactions in which our Director, executive officer, stockholder or any member of the immediate family of the foregoing had or is to have a direct or indirect material interest.


Since Mr. Sang Ho Kim became our sole officer and a director, he has advanced funds for professional fees and general expenses in the amount of $20,432 and $19,003 as of October 31, 2010 and 2009, respectively.  Mr. Kim has waived reimbursement of these expenses and considered these advances as a contribution to capital.  Accordingly, the contributions have been recorded as additional paid-in capital.


The Company has been provided office space by its President and Chief Executive Officer for all periods presented. There is no charge to the Company for the space.


Item 14.  Principal Accounting Fees and Services.


Audit Fees


The aggregate fees billed for professional services rendered by the Company’s principal accountant for the audit of the Company’s annual financial statements for the fiscal years ended October 31, 2010 and 2009 were $3,750 and $6,000 respectively.  

 




 


Audit-Related Fees

The Company incurred no fees during the last two fiscal years for assurance and related services by the Company’s principal accountant that were reasonably related to the performance of the audit or review of the registrant’s financial statements and are not reported under Item 9(e)(1) of Schedule A.


Tax Fees

The Company incurred no fees during the last two fiscal years for professional services rendered by the Company’s principal accountant for tax compliance, tax advice and tax planning.


All Other Fees

The Company incurred fees during the last two fiscal years ended October 31, 2010 and 2009 were $5,107 and $15,003 for services rendered by the Company’s principal accountants relating to the review of quarterly financial statements for inclusion in the Company's quarterly reports on Form 10Q.


PART IV

 

Item 15.  Exhibits, Financial Statement Schedules



a)

Exhibits 


(3)

(i)  Articles of Incorporation

(1)

(ii)  Bylaws. (1) 

(14)

Code of Ethics

(16)

Letter re: change in certifying accountant. (2)

(31.1)

Rule 13a-14(a)/15d-14(a) Certifications

(i)  Certification of Sang-Ho Kim

(32.1)

Certification  Pursuant To The Sarbanes-Oxley Act 18 U.S.C. Section 1350 As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002

(i)  Certification of Sang-Ho Kim


(1) Incorporated by reference to previous filing

(2)These items have been previously filed


b)

Reports on Form 8-K

Form 8-K Filed on May 25, 2010 reporting a company name change to Alveron Energy Corp.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

 

  ALVERON ENERGY CORP.



Date: February 14, 2011

By:               /s/ Sang Ho Kim

Name:          Sang Ho Kim

 

 

 

Title:       President, Chief Executive Officer, Chief Financial Officer (Principal Executive Financial and Accounting Officer)




EXHIBIT 31.1


CERTIFICATION PURSUANT TO 18 U.S.C. § 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002


I, Sang Ho Kim, the President, Chief Executive Officer and Chief Financial Officer of Alveron Energy Corp, Inc. (“Alveron”) certify that:

 

 

 

1.    I have reviewed this Annual Report on Form 10-K of Alveron Energy Corp. for the period ended October 31, 2010;


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 Alveron as of, and for, the periods presented in this report;


4.   Alveron’s other certifying officer(s) and I are 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 Alveron 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 Alveron, including its consolidated 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 Alveron’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 Alveron’s internal control over financial reporting that occurred during Alveron’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Alveron’s internal control over financial reporting; and


5.    Alveron’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Alveron’s auditors and the audit committee of Alveron’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 Alveron’s ability to record, process, summarize and report financial information; and


        (b)      Any fraud, whether or n: February 14ot material, that involves management or other employees who have a significant role in Alveron’s internal control over financial reporting


Date: February 14, 2011


By:

/s/ Sang Ho Kim

Name:

Sang Ho Kim

Title:

President, Chief Executive Officer, Chief Financial Officer (Principal Executive Financial and Accounting Officer)








EXHIBIT 32.1


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 Annual Report on Form 10-K of Alveron Energy Corp. (the “Company”) for the period ended October 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sang Ho Kim, the President, Chief Executive Officer and Chief 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:

(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 present, in all material respects, the financial condition and results of operations of the Company.


Date: February 14, 2011


By:

/s/ Sang Ho Kim

Name:

Sang Ho Kim

Title:

President, Chief Executive Officer, Chief Financial Officer (Principal Executive Financial and Accounting Officer)