Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 2010
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ______________
Commission File Number 333-133347
CREENERGY CORPORATION
----------------------------
(Exact name of registrant as specified in its charter)
Nevada 98-0479983
------------------------------ ------------------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
57113 -2020 Sherwood Drive, Sherwood Park, Alberta T8A 3H9
----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (780) 668-7422
Online Originals, Inc.
----------------------
(Former name or former address, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
-------------------------------- ------------------------------------
Common Stock, par value $0.001 OTCQB
per share
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [_] No [X]
Indicate by check mark if the Registrant is not required to file reports
pursuant to Rule 13 or Section 15(d) of the Exchange Act. Yes [_] No[X]
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes [X] No [_]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [_] No [_]
1
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Larger accelerated filer [_] Accelerated filer [_]
Non-accelerated filer [_] Smaller reporting company [X]
Indicate by check mark whether registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [_] No [X]
Number of shares issued and outstanding of the registrant's class of common
stock as of February 1, 2011: 96,000,000 shares of common stock.
The aggregate market value of voting stock held by non-affiliates of the
registrant was approximately $0.00, based on the average bid and ask as of
February 1, 2011.
The Company recognized nil revenues for its most recent fiscal year.
2
TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business 4
Item 1A. Risk Factors 6
Item 1B. Unresolved Staff Comments 10
Item 2. Description of Property 11
Item 3. Legal Proceedings 11
Item 4. (Removed and Reserved.) 11
PART II
Item 5. Market For Common Equity and Related Stockholder Matters 11
Item 6. Selected Financial Data 13
Item 7. Management's Discussion And Analysis Of Financial Condition And Results Of Operation 13
Item 7A. Quantitative and Qualitative Disclosures of Market Risk 16
Item 8. Financial Statements and Supplementary Data 16
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 30
Item 9A. Controls and Procedures 30
Item 9B. Other Information 30
PART III
Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of 31
the Exchange Act
Item 11. Executive Compensation 33
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 33
Item 13. Certain Relationships and Related Transactions and Director Independence 34
Item 14. Principal Accountant Fees and Services 34
PART IV
Item 15. Exhibits and Financial Statement Schedules 34
Signatures 36
3
FORWARD-LOOKING STATEMENTS
In addition to historical information, some of the information presented in this
Annual Report on Form 10-K contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform
Act"). Although CREEnergy Corporation ("CREEnergy" or the "Company," which may
also be referred to as "we," "us," or "our") believes that its expectations are
based on reasonable assumptions within the bounds of its knowledge of its
business and operations: there can be no assurance that actual results will not
differ materially from our expectations. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those anticipated, including but not limited to, our ability to
reach satisfactorily negotiated settlements with our outstanding creditors,
achieve a listing on the over the counter bulletin board, raise debt and/or
equity to fund negotiated settlements with our creditors and to meet our ongoing
operating expenses and merge with another entity with experienced management and
opportunities for growth in return for shares of our common stock to create
value for our shareholders. You are urged to carefully consider these factors,
as well as other information contained in this Annual Report on Form 10-K and in
our other periodic reports and documents filed with the SEC.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Business Development
We incorporated as Online Originals, Inc. on November 18th, 2005 in the State of
Nevada. We changed our name to CREEnergy Corporation (hereinafter referred to as
CREEnergy) on July 29, 2010 by filing an amendment to our Articles of
Incorporation. Our principal executive offices are located at 57113 -2020
Sherwood Drive, Sherwood Park, Alberta T8A 3H9. Telephone number is (780)
668-7422. Our fiscal year end is November 30th.
June 2, 2010, the Company's majority shareholder approved the following
corporate actions:
To change the Company's name to CREENERGY CORPORATION:
To authorize a forward split of the common stock issued and
outstanding on a thirty (30) new shares for one (1) old shares basis; and
To amend the Company's articles of incorporation to increase the
authorized common shares of the company from 75,000,000 shares of common stock
to 675,000,000 shares of common stock.
Business of Issuer
------------------
Since inception, the Company's business plan was to develop a membership based
website art gallery/auction house specifically focused on displaying and selling
original artwork. The Company changed its status from a development stage
company to an operating company on November 30, 2009. Management realized that
the results of operations from the sale of artwork was lack-luster, and it was
decided to change the Company's business focus and plan for other strategic
opportunities and discontinued the sale of artwork to be effective June 25,
2010. Effective June 26, 2010, the Company started to focus on a new business
development. On July 29, 2010, the Company's name changed from Online Originals,
Inc. to CREEnergy Corporation. The name change was intended to convey a sense of
the Company's new business focus as it looks to pursue other opportunities.
Specifically, the Company intends to obtain leases for the exploration and
production of oil and gas in northern Canada and the United States. At the date
of this Annual Report, the Company has not identified any prospects or entered
into any leases or agreements.
CREEnergy Corporation is a development stage oil and gas company that is engaged
in the development and exploration for natural resources. The Company is active
in Canada and the United States and is seeking to acquire properties that are
4
prospective for petroleum and natural gas and related hydrocarbons. The
prospects the Company intends to target are those properties that are generally
under leases and include partial and full working interests. It is intended that
in all of the core properties, CREEnergy will be the operator and majority
interest owner. It is understood that, the prospects are subject to varying
royalties due to the state, province, territory, or federal governments and, in
some instances, to other royalty owners in the prospect.
Principal Products and Services
-------------------------------
Currently, we have not acquired any leases or working interests. We do not have
any production.
Competition
-----------
There are a large number of companies and individuals engaged in the exploration
for oil and gas; accordingly, there is a high degree of competition for
desirable properties. Almost all of the companies and individuals so engaged
have substantially greater technical and financial resources than CREEnergy
does.
Markets
-------
The availability of a ready market for oil and gas discovered, if any, will
depend on numerous factors beyond the Company's control, including the proximity
and capacity of refineries, pipelines, and the effect of provincial regulation
of production and of regulations of products sold in interstate commerce, and
recent intrastate sales. The market price of oil and gas are volatile and beyond
the Company's control. The market for natural gas is also unsettled, and gas
prices have increased dramatically in the past four years with substantial
fluctuation, seasonally and annually.
There generally are only a limited number of gas transmission companies with
existing pipelines in the vicinity of a gas well or wells. In the event that
producing gas properties are not subject to purchase contracts or that any such
contracts terminate and other parties do not purchase the Company's gas
production, there is no assurance that CREEnergy will be able to enter into
purchase contracts with any transmission companies or other purchasers of
natural gas and there can be no assurance regarding the price which such
purchasers would be willing to pay for such gas. There presently exists an
oversupply of gas in the certain areas of the marketplace due to pipeline
capacity, the extent and duration of which is not known. Such oversupply may
result in restrictions of purchases by principal gas pipeline purchasers.
Effect of Changing Industry Conditions on Drilling Activity
-----------------------------------------------------------
Lower oil and gas prices have caused a decline in drilling activity in the U.S.
from time to time. However, such reduced activity has also resulted in a decline
in drilling costs, lease acquisition costs and equipment costs, and an
improvement in the terms under which drilling prospects are generally available.
CREEnergy cannot predict what oil and gas prices will be in the future and what
effect those prices may have on drilling activity in general, or on its ability
to generate economic drilling prospects and to raise the necessary funds with
which to drill them.
Governmental Regulations
------------------------
Oil and Gas: The oil and gas business in the United States and Canada is subject
to regulation by both federal, state, provincial and territorial authorities,
particularly with respect to pricing, exploration permits, discharge permits for
drilling operations, drilling and abandonment bonds, operating practices,
reports concerning operations, the spacing of wells, pooling of properties
allowable rates of production, marketing and environmental matters.
The production of crude oil and gas has, in recent years, been the subject of
increasing controls. No assurance can be given that newly imposed or changed
laws will not adversely affect the economic viability of any oil and gas
properties the Company may acquire in the future.
The above paragraphs only give a brief overview of potential federal, state,
provincial and territorial regulations. Because the Company has not acquired any
specific properties, and because of the wide range of activities in which
CREEnergy may participate, it is impossible to set forth in detail the potential
impact federal, state, provincial and territorial regulations may have on the
Company.
5
Research and Development Activities and Costs
---------------------------------------------
We have not incurred any costs to date relating to research and development and
have no plans to undertake any research and development activities within the
next twelve months.
Facilities and Properties
-------------------------
We do not own or rent facilities of any kind. At present operations are being
conducted from the offices of our President, and she provides this space free of
charge. We will continue to use this space for executive offices for the
foreseeable future.
Employees
---------
Our officers and directors are responsible for planning, developing and
operational duties and will continue to do so throughout the early stages of our
growth. We have no intentions in hiring any employees until our business has
sufficient and reliable revenue from operations and do not expect to hire any
such employees in the next twelve months.
ITEM 1A. RISK FACTORS
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
The Company has a lack of revenue history and has had a limited history of
--------------------------------------------------------------------------------
operations.
----------
CREEnergy was formed on November 18, 2005 for the purpose of engaging in any
lawful business and had adopted a plan to engage the sale of art work over the
internet. The Company had minimal revenues. On July 29, 2010 the Company's name
changed from Online Originals, Inc. to CREEnergy Corporation. The name change
was intended to convey a sense of the Company's new business focus as it looks
to pursue other opportunities. Specifically, the Company intends to obtain
leases for the exploration and production of oil and gas in northern Alberta,
Canada. At the date of this Information Statement, the Company has not
identified any prospects or entered into any leases or agreements. The Company
is not profitable. CREEnergy must be regarded as a start up venture with all of
the unforeseen costs, expenses, problems, risks and difficulties to which such
ventures are subject.
CREEnergy can give no assurance of success or profitability to the Company's
--------------------------------------------------------------------------------
investors.
---------
There is no assurance that CREEnergy will ever operate profitably. There is no
assurance that the Company will generate revenues or profits, or that the market
price of the Company's common stock will be increased thereby.
CREEnergy may have a shortage of working capital in the future which could
--------------------------------------------------------------------------------
jeopardize the Company's ability to carry out its business plan.
---------------------------------------------------------------
The Company's capital needs consist primarily of expenses related to expenses
incurred with maintaining its reporting status and could exceed $35,000 in the
next twelve months. Such funds are not currently committed, and CREEnergy's cash
as of the date of this Annual Report on Form 10K of approximately $2,000.
We will incur expenses in connection with our sec filing requirements and we may
--------------------------------------------------------------------------------
not be able to meet such costs, which could jeopardize our filing status with
--------------------------------------------------------------------------------
the sec.
-------
As a public reporting company we are required to meet the filing requirements of
the SEC. We may see an increase in our legal and accounting expenses as a result
of such requirements. We estimate such costs on an annualized basis to be
approximately $50,000, which includes both the annual audit and the review of
the quarterly reports by our auditors. These costs can increase significantly if
the Company is subject comment from the SEC on its filings and/or we are
required to file supplemental filings for transactions and activities. If we are
not compliant in meeting the filing requirements of the SEC, we could lose our
status as a 1934 Act Company, which could compromise our ability to raise funds.
6
CREEnergy's officers and directors may have conflicts of interest which may not
--------------------------------------------------------------------------------
be resolved favorably to the Company.
------------------------------------
Certain conflicts of interest may exist between CREEnergy and its officers and
directors. The Company's Officers and Directors have other business interests to
which they devote their attention and may be expected to continue to do so
although management time should be devoted to CREEnergy business. As a result,
conflicts of interest may arise that can be resolved only through exercise of
such judgment as is consistent with fiduciary duties to CREEnergy. See
"Directors and Executive Officers" (page 31).
The Company will need additional financing for which CREEnergy has no
--------------------------------------------------------------------------------
commitments, and this may jeopardize execution of the Company's business plan.
-----------------------------------------------------------------------------
CREEnergy has limited funds, and such funds may not be adequate to carry out the
business plan. The Company's ultimate success depends upon its ability to raise
additional capital. The Company has not investigated the availability, source,
or terms that might govern the acquisition of additional capital and will not do
so until it determines a need for additional financing. If the Company needs
additional capital, it has no assurance that funds will be available from any
source or, if available, that they can be obtained on terms acceptable to the
Company. If not available, CREEnergy's operations will be limited to those that
can be financed with its modest capital.
The Company may in the future issue more shares which could cause a loss of
--------------------------------------------------------------------------------
control by its present management and current stockholders.
----------------------------------------------------------
CREEnergy may issue further shares as consideration for the cash or assets or
services out of its authorized but unissued common stock that would, upon
issuance, represent a majority of the voting power and equity of the Company.
The result of such an issuance would be those new stockholders and management
would control the Company, and persons unknown could replace the Company's
management at this time. Such an occurrence would result in a greatly reduced
percentage of ownership of CREEnergy by its current shareholders, which could
present significant risks to investors.
CREEnergy is not diversified and it is dependent on only one business.
---------------------------------------------------------------------
Because of the limited financial resources that the Company has, it is unlikely
that the Company will be able to diversify its operations. CREEnergy's probable
inability to diversify its activities into more than one area will subject the
Company to economic fluctuations within the oil and gas industry and therefore
increase the risks associated with the Company's operations due to lack of
diversification.
CREEnergy will depend upon management but it will have limited participation of
--------------------------------------------------------------------------------
management.
----------
The Company currently has two individuals who are serving as its officers and
directors for up to 5 hours per week each on a part-time basis. The Company's
directors are also acting as its officers. The Company will be heavily dependent
upon their skills, talents, and abilities, as well as several consultants to
CREEnergy, to implement the Company's business plan, and may, from time to time,
find that the inability of the officers, directors and consultants to devote
their full-time attention to CREEnergy business results in a delay in progress
toward implementing the Company's business plan.
CREEnergy does not know of any reason other than outside business interests that
would prevent them from devoting full-time to its Company, when the business may
demand such full-time participation.
The Company's officers and directors may have conflicts of interests as to
--------------------------------------------------------------------------------
corporate opportunities which it may not be able or allowed to participate in.
-----------------------------------------------------------------------------
Presently there is no requirement contained in the Company's Articles of
Incorporation, Bylaws, or minutes which requires officers and directors of its
business to disclose to the Company's business opportunities which come to their
attention. CREEnergy officers and directors do, however, have a fiduciary duty
of loyalty to the Company to disclose to it any business opportunities which
come to their attention, in their capacity as an officer and/or director or
7
otherwise. Excluded from this duty would be opportunities which the person
learns about through his involvement as an officer and director of another
company. CREEnergy has no intention of merging with or acquiring business
opportunity from any affiliate or officer or director.
Because Ms. Shari Sookarookoff, one of the Company's directors and our sole
--------------------------------------------------------------------------------
officer, controls approximately 78% of the outstanding common stock, she will
--------------------------------------------------------------------------------
control and make corporate decisions and investors will have limited ability to
--------------------------------------------------------------------------------
affect corporate decisions.
--------------------------
Ms. Shari Sookarookoff controls approximately 78% of the outstanding shares of
the Company's common stock. Accordingly, she has almost complete influence in
determining the outcome of all corporate transactions and business decisions.
The interests of Ms. Sookarookoff may differ from the interests of the other
stockholders, and since she has the ability to control most decisions through
her control of the Company's common stock, our investors will have limited
ability to affect decisions made by management.
The regulation of penny stocks by SEC and FINRA may discourage the tradability
--------------------------------------------------------------------------------
of our securities.
-----------------
The Company is a "penny stock" company. None of our securities currently trade
in any market and, if ever available for trading, will be subject to a
Securities and Exchange Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such securities to persons other than
established customers or accredited investors. For purposes of the rule, the
phrase "accredited investors" means, in general terms, institutions with assets
in excess of $5,000,000, or individuals having a net worth in excess of
$1,000,000 or having an annual income that exceeds $200,000 (or that, when
combined with a spouse's income, exceeds $300,000). For transactions covered by
the rule, the broker-dealer must make a special suitability determination for
the purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. Effectively, this discourages broker-dealers from executing
trades in penny stocks. Consequently, the rule will affect the ability of
shareholders to sell their securities in any market that might develop therefore
because it imposes additional regulatory burdens on penny stock transactions.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because our securities constitute "penny stocks" within
the meaning of the rules, the rules would apply to us and to our securities. The
rules will further affect the ability of owners of shares to sell our securities
in any market that might develop for them because it imposes additional
regulatory burdens on penny stock transactions.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired consequent investor losses. Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
The Company will pay no foreseeable dividends in the future.
-----------------------------------------------------------
The Company has not paid dividends on our common stock and do not ever
anticipate paying such dividends in the foreseeable future.
Our investors may suffer future dilution due to issuances of shares for various
--------------------------------------------------------------------------------
considerations in the future.
----------------------------
There may be substantial dilution to our shareholders a result of future
decisions of the Board to issue shares without shareholder approval for cash,
services, or acquisitions.
8
RISK FACTORS RELATING TO THE COMPANY AND BUSINESS
Any person or entity contemplating an investment in the securities offered
hereby should be aware of the high risks involved and the hazards inherent
therein. Specifically, the investor should consider, among others, the following
risks:
CREEnergy's business, the oil and gas business, has numerous risks which could
--------------------------------------------------------------------------------
render the Company unsuccessful.
-------------------------------
The search for new oil and gas reserves frequently results in unprofitable
efforts, not only from dry holes, but also from wells which, though productive,
will not produce oil or gas in sufficient quantities to return a profit on the
costs incurred. There is no assurance the Company will find or produce oil or
gas from any of the undeveloped acreage which may be acquired by the Company,
nor are there any assurances that if CREEnergy ever obtains any production it
will be profitable. (See "Business and Properties")
The Company has substantial competitors who have an advantage over CREEnergy in
--------------------------------------------------------------------------------
resources and management.
------------------------
The Company is and will continue to be an insignificant participant in the oil
and gas business. Most of CREEnergy competitors have significantly greater
financial resources, technical expertise and managerial capabilities than the
Company and, consequently, it will be at a competitive disadvantage in
identifying and developing or exploring suitable prospects. Competitors'
resources could overwhelm the Company's restricted efforts to acquire and
explore oil and gas prospects and cause failure of CREEnergy business plan.
CREEnergy will be subject to all of the market forces in the energy business,
--------------------------------------------------------------------------------
many of which could pose a significant risk to the Company's operations.
-----------------------------------------------------------------------
The marketing of natural gas and oil which may be produced by the Company's
prospects will be affected by a number of factors beyond the Company's control.
These factors include the extent of the supply of oil or gas in the market, the
availability of competitive fuels, crude oil imports, the world-wide political
situation, price regulation, and other factors. Current economic and market
conditions have created dramatic fluctuations in oil prices. Any significant
decrease in the market prices of oil and gas could materially affect the
Company's profitability of oil and gas activities.
There generally are only a limited number of gas transmission companies with
existing pipelines in the vicinity of a gas well or wells. There may, on
occasion, be an oversupply of gas in the marketplace or in pipelines, the extent
and duration may affect prices adversely. Such oversupply may result in
reductions of purchases and prices paid to producers by principal gas pipeline
purchasers.
CREEnergy business is subject to significant weather interruptions.
------------------------------------------------------------------
The Company's activities may be subject to periodic interruptions due to weather
conditions. Weather-imposed restrictions during certain times of the year on
roads accessing properties could adversely affect its ability to benefit from
production on such properties or could increase the costs of drilling new wells
because of delays.
The Company is subject to significant operating hazards and uninsured risk in
--------------------------------------------------------------------------------
the energy industry.
-------------------
CREEnergy proposed operations will be subject to all of the operating hazards
and risks normally incident to exploring, drilling for and producing oil and
gas, such as encountering unusual or unexpected formations and pressures,
blowouts, environmental pollution and personal injury. The Company will maintain
general liability insurance but it has not obtained insurance against such
things as blowouts and pollution risks because of the prohibitive expense.
Should the Company sustain an uninsured loss or liability, or a loss in excess
of policy limits, CREEnergy's ability to operate may be materially adversely
affected.
CREEnergy is subject to substantial government regulation in the energy industry
--------------------------------------------------------------------------------
which could adversely impact the Company.
----------------------------------------
The production and sale of oil and gas are subject to regulation by state,
provincial, territorial and federal authorities, the spacing of wells and the
prevention of waste. There are federal, provincial, territorial and state laws
regarding environmental controls which may necessitate significant capital
outlays, resulting in extended delays, materially affect CREEnergy's earnings
9
potential and cause material changes in the in the Company's proposed business.
We, cannot predict what legislation, if any, may be passed by Congress,
Parliament, state and/or provincial legislatures in the future, or the effect of
such legislation, if any, on the Company. Such regulations may have a
significant effect on the Company's operating results.
The Company believes investors should consider certain negative aspects of
--------------------------------------------------------------------------------
CREEnergy's proposed operations.
-------------------------------
Dry Holes: CREEnergy may expend substantial funds acquiring and potentially
participating in exploring properties which the Company later determines not to
be productive. All funds so expended will be a total loss to the Company.
Technical Assistance: The Company will find it necessary to employ technical
assistance in the operation of its business. As of the date of this Form 10K,
the Company has not contracted for any technical assistance. When CREEnergy
needs it such assistance is likely to be available at compensation levels the
Company would be able to pay.
Uncertainty of Title: CREEnergy will attempt to acquire leases or interests in
leases by option, lease, farm out or by purchase. The validity of title to oil
and gas property depends upon numerous circumstances and factual matters (many
of which are not discoverable of record or by other readily available means) and
is subject to many uncertainties of existing law and its application. The
Company intends to obtain an oil and gas attorney's opinion of valid title
before any significant expenditure upon a lease.
Government Regulations: The area of exploration of natural resources has become
significantly regulated by state, provincial, territorial and federal
governmental agencies, and such regulation could have an adverse effect on the
Company's operations. Compliance with statutes and regulations governing the oil
and gas industry could significantly increase the capital expenditures necessary
to develop the Company's prospects.
Nature of CREEnergy Business: CREEnergy business is highly speculative, involves
the commitment of high-risk capital, and exposes the Company to potentially
substantial losses. In addition, the Company will be in direct competition with
other organizations which are significantly better financed and staffed than
CREEnergy.
General Economic and Other Conditions: The Company's business may be adversely
affected from time to time by such matters as changes in general economic,
industrial and international conditions; changes in taxes; oil and gas prices
and costs; excess supplies and other factors of a general nature.
CREEnergy will be subject to many factors beyond the Company's control.
----------------------------------------------------------------------
The acquisition, exploration, development, production and sale of oil and gas
are subject to many factors which are outside the Company's control. These
factors include general economic conditions, proximities to pipelines, oil
import quotas, supply and price of other fuels and the regulation of
transportation by federal and state governmental authorities.
The Company anticipates substantial competition in its effort to explore oil and
gas properties and may have difficulty in putting together drilling participants
and getting prospects drilled and explored. Established companies have an
advantage over CREEnergy because of substantially greater resources to devote to
property acquisition and to obtain drilling rigs, equipment and personnel. If
the Company is unable to compete for capital, participation and drilling rigs,
equipment and personnel, CREEnergy business will be adversely affected.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
10
ITEM 2. DESCRIPTION OF PROPERTY
We do not own or rent facilities of any kind. At present we are operating from
our principal office that is located within the offices of our President, who
provides this space free of charge.
We do not have any manufacturing plants and have minimal equipment for the
operation of our business.
Investment Policies
We do not have any investments in real estate or interest in real estate or
investments real estate mortgages. We also do not have any investments in any
securities of or interests in persons primarily engaged in real estate
activities.
Description of Real Estate and Operating Data
None
ITEM 3. LEGAL PROCEEDINGS
On November 22, 2010, the Company was served with a claim filed by a former
director and officer of the Company. The claim, filed in the court of Queen's
Bench of Alberta, Canada, alleges that the former director and officer of the
Company suffered losses and damages as a result of the failure of the Company in
providing him with corporate documents and implementing a change of the board of
directors. The Company has retained legal counsel to address the claim. On
December 8, 2010, the Company filed a Statement of Defense requesting that the
claim be dismissed. In the opinion of management, this claim is without merit
and the Company intends to defend this claim vigorously.
Other then the above, preceding the Company is not a party to any other pending
legal proceedings, nor is the Company aware of any civil proceeding or
government authority contemplating any legal proceeding as of the date of this
filing.
ITEM 4. (REMOVED AND RESERVED.)
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market for Common Equity and Related Stockholder Matters
(a) Market Information
Our Common Stock is presently traded on the over-the-counter market on the
OTCQB. On August 7, 2008, we began trading on the over the counter bulletin
board under the symbol "OLOI." During the period of August 7, 2008 through
November 30, 2010, our shares have not traded.
(b) Holders
As of January 31, 2011, there were approximately forty-three (43) holders of
record of our common stock.
(c) Dividend Policy
We have never declared or paid dividends on our common stock. We intend to
retain earnings, if any, to support the development of our business and
therefore do not anticipate paying cash dividends for the foreseeable future.
Payment of future dividends, if any, will be at the discretion of our board of
directors after taking into account various factors, including current financial
condition, operating results and current and anticipated cash needs.
(d) Securities authorized for issuance under equity compensation plans
None.
11
RECENT SALES OF UNREGISTERED SECURITIES
During the years ended November 30, 2010, 2009, and 2008, the Company made no
sales of its unregistered securities.
On May 21, 2010, the Company issued 120,000,000 shares of its restricted common
stock to Mr. David Calahasen, a director of the Company, at a price of $0.001
per share for cash totalling $16,000.
On June 2, 2010, our Board of Directors authorized a forward split of the
Corporation's total issued and outstanding shares of common stock at the ratio
of 1 existing share resulting in 30 shares. This share dividend became effective
August 10, 2010. As a result of the forward stock split, 208,800,000 additional
shares were issued.
On November 1, 2010, the President of the Company returned 120,000,000 post
forward-split shares to the Company for no consideration.
Exemption from Registration Claimed
All of the shares described above were issued by us in reliance upon an
exemption from the registration requirements of the Securities Act of 1933, as
amended, provided by Section 4(2). All of the individuals and/or entities listed
above that purchased or were issued the unregistered securities were all known
to us and our management, through pre-existing business relationships, as long
standing business associates, friends, and employees. All purchasers were
provided access to all material information, which they requested, and all
information necessary to verify such information and were afforded access to our
management in connection with their purchases. All purchasers of the
unregistered securities acquired such securities for investment and not with a
view toward distribution, acknowledging such intent to us. All certificates or
agreements representing such securities that were issued contained restrictive
legends, prohibiting further transfer of the certificates or agreements
representing such securities, without such securities either being first
registered or otherwise exempt from registration in any further resale or
disposition.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue up to 675,000,000 shares of Common Stock, $0.001 par
value. At present, we are not authorized to issue any series or shares of
preferred stock. The holders of our Common Stock are entitled to one vote per
share held and have the sole right and power to vote on all matters on which a
vote of stockholders is taken. Voting rights are non-cumulative. Common
stockholders are entitled to receive dividends when, as, and if declared by the
Board of Directors, out of funds legally available therefore and to share pro
rata in any distribution to stockholders. Upon liquidation, dissolution, or the
winding up of our Company, common stockholders are entitled to receive the net
assets of our Company in proportion to the respective number of shares held by
them after payment of liabilities which may be outstanding. The holders of
Common Stock do not have any preemptive right to subscribe for or purchase any
shares of any class of stock of the Company. The outstanding shares of Common
Stock will not be subject to further call or redemption and are fully paid and
non-assessable. To the extent that additional common shares are issued, the
relative interest of existing stockholders will likely be diluted.
Stock Purchase Warrants
None.
Stock Purchase Options
None.
12
ITEM 6. SELECTED FINANCIAL DATA
None.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
Cautionary and Forward-Looking Statements
In addition to statements of historical fact, this Form 10-K contains
forward-looking statements. The presentation of future aspects of CREEnergy
Originals, Inc. (the "Company" or "Issuer") found in these statements is subject
to a number of risks and uncertainties that could cause actual results to differ
materially from those reflected in such statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof. Without limiting the
generality of the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "intend," or "could" or the negative variations thereof or
comparable terminology are intended to identify forward-looking statements.
These forward-looking statements are subject to numerous assumptions, risks and
uncertainties that may cause the Company actual results to be materially
different from any future results expressed or implied by the Company in those
statements. Important facts that could prevent the Company from achieving any
stated goals include, but are not limited to, the following:
(a) volatility or decline of the Company's stock price;
(b) potential fluctuation in quarterly results;
(c) failure of the Company to earn revenues or profits;
(d) inadequate capital to continue or expand its business, inability to raise
additional capital or financing to implement its business plans;
(e) failure to make sales on an increasing basis;
(f) rapid and significant changes in markets;
(g) litigation with or legal claims and allegations by outside parties;
(h) insufficient revenues to cover operating costs.
There is no assurance that the Company will be profitable, the Company may not
be able to successfully develop, manage or market its products and services, the
Company may not be able to attract or retain qualified executives and personnel,
the Company's products and services may become obsolete, government regulation
may hinder the Company's business, additional dilution in outstanding stock
ownership may be incurred due to the issuance of more shares, warrants and stock
options, or the exercise of warrants and stock options, and other risks inherent
in the Company's businesses.
The Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
Readers should carefully review the factors described in other documents the
Company files from time to time with the Securities and Exchange Commission,
including the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K
filed by the Company.
Plan of Operation for the Next Twelve (12) Months
-------------------------------------------------
The following discussion of the plan of operation, financial condition, results
of operations, cash flows and changes in financial position of our Company
13
should be read in conjunction with our most recent financial statements and
notes appearing elsewhere in this Form 10-K; our Form 10-Q filed on October 20,
2010, our Form 10-Q filed on July 19, 2010, and our Form 10-Q filed on April 13,
2010.
Our registered public accounting firm's audit report on our consolidated
financial statements as of November 30, 2010, and for each of the years in the
three-year period then ended, includes a "going concern" explanatory paragraph
that describes substantial doubt about our ability to continue as a going
concern. Management's plans in regard to the factors prompting the explanatory
paragraph are discussed below.
Since inception, the Company's business plan was to develop a membership based
website art gallery/auction house specifically focused on displaying and selling
original artwork. The Company changed its status from a development stage
company to an operating company on November 30, 2009. Management realized that
the results of operations from the sale of artwork was lack-luster, and it was
decided to change the Company's business focus and plan for other strategic
opportunities and discontinued the sale of artwork to be effective June 25,
2010. Effective June 26, 2010 the Company started to focus on new business
development. On July 29, 2010 the Company's name changed from Online Originals,
Inc. to CREEnergy Corporation. The name change was intended to convey a sense of
the Company's new business focus as it looks to pursue other opportunities.
Specifically, the Company intends to obtain leases for the exploration and
production of oil and gas in northern Alberta, Canada. At the date of this
Annual Report, the Company has not identified any prospects or entered into any
leases or agreements.
CREEnergy Corporation is a development stage oil and gas company that is engaged
in the development and exploration for natural resources. The Company is active
in Canada and the United States and is seeking to acquire properties that are
prospective for petroleum and natural gas and related hydrocarbons. The
prospects the Company intends to target are those properties that are generally
under leases and include partial and full working interests. It is intended that
in all of the core properties, CREEnergy will be the operator and majority
interest owner. It is understood that, the prospects are subject to varying
royalties due to the state, province, territory, or federal governments and, in
some instances, to other royalty owners in the prospect.
We have no employees at the present time. We will continue to operate with very
limited administrative support as our current officers continue to be
responsible for developing and operational duties, without compensation, for at
least the next 12 months.
Our continuing operations are dependent upon the identification and successful
completion of additional long-term or permanent equity financing, the support of
creditors and shareholders, and, ultimately, the achievement of profitable
operations. There can be no assurances that we will be successful, which would
in turn significantly affect our ability to complete our business plan. If not,
we will likely be required to reduce operations or liquidate assets. We will
continue to evaluate our projected expenditures relative to our available cash
and to seek additional means of financing in order to satisfy our working
capital and other cash requirements.
We believe we do not have sufficient cash resources to satisfy our needs through
the end of February 2011. Our ability to satisfy cash requirements thereafter
and the need for additional funding is dependent on our ability to generate
revenue from our business in sufficient quantity and on a profitable basis. To
the extent that we require additional funds to support our operations or the
expansion of our business, we may attempt to sell additional equity shares or
issue debt. Any sale of additional equity securities will result in dilution to
our stockholders. Should we require additional cash in the future, there can be
no assurance that we will be successful in raising additional debt or equity
financing on terms acceptable to us, if at all.
Management's Discussion and Analysis of Financial Condition and Results of
--------------------------------------------------------------------------------
Operations
----------
Financial Condition
At November 30, 2010, we had a working capital deficit of $22,843 compared to
working capital deficit of $8,950 at November 30, 2009. At November 30, 2010,
our total assets consisted of cash of $6,090 and prepaid expenses of $200. This
compares with our total assets at November 30, 2009, which consisted of cash of
$2,841, prepaid expenses of $109 and capital assets of $476.
14
At November 30, 2010, our total current liabilities, consisting of accounts
payable of $6,241, accrued liabilities of $6,892, and note payable of $16,000,
increased to $29,133from $11,900 consisting of accounts payable of $3,900 and
accrued liabilities of $8,000 at November 30, 2009.
Result of Operations - New Developments
---------------------------------------
We recognized $6,042 in revenues from discontinued operations during the fiscal
year ending November 30, 2010, compared to $13,110 in revenues from discontinued
operations for the year ended November 30, 2009. We have not received any
revenue since our inception of the New Developments which began June 26, 2010.
Our short and long-term survival is dependent on funding from sales of
securities as necessary or from shareholder loans.
During the year ended November 30, 2010, we incurred expenses of $33,432
compared to expenses of $19,499 for the year ended November 30, 2009. During the
year ended November 30, 2010, $1,972 of the $33,432 in expenses were applicable
to the discontinued operations and $3,164 of the $19,499 expenses during the
year ended November 30, 2009 were applicable to the discontinued operations. The
principal component of losses in 2010 was professional fees of $28,562 and
office, administration expenses of $4,393 and depreciation of $477 compared with
the principal component losses in 2009 being professional fees of $15,733 and
office, administration expenses of $700 and depreciation of $3,066. During the
year ended November 30, 2010, expenses incurred by the Company increased
significantly. These increased costs were due to restructuring the Company to
developing the new focus and direction for the Company.
During the year ended November 30, 2010 and the year ended November, 2009, the
Company had $6,042 and $13,110 in revenue, respectively, related to its
discontinued operations. During the year ended November 30, 2010 and the year
ended November, 2009, the Company had $1,972 and $3,164 in expenses,
respectively, related to its discontinued operations. This resulted in profits
from discontinued operations of $4,070 for the year ended November 30, 2010
compared to profits of $9,946 for the year ended November 30, 2009.
The net loss for the year ended November 30, 2010 was $27,390 compared to a net
loss of $6,389 for the year ended November 30, 2009. From inception to November
30, 2010, we have incurred a net loss of $132,176.
As of January 31, 2010, our net cash balance is approximately $2,000. In
addition, we have prepaid expenses of $200. Cash on hand is currently our only
source of liquidity. We do not have any lending arrangements in place with
banking or financial institutions and we do not anticipate that we will be able
to secure these funding arrangements in the near future.
We believe our existing cash balance is not sufficient to carry our normal
operations for the next 12 months. To the extent that we require additional
funds to support our operations or the expansion of our business, we may attempt
to sell additional equity shares or issue debt. Any sale of additional equity
securities will result in dilution to our stockholders. There can be no
assurance that additional financing, if required, will be available to our
company or on acceptable terms.
Off Balance Sheet Arrangements.
None.
Critical Accounting Policies and Estimates
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles in the United States requires
management to make assumptions and estimates that affect the reported amounts of
assets, liabilities, revenues and expenses as well as the 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. The
following is a summary of the significant accounting policies and related
estimates that affect the Company's financial disclosures.
15
Revenue Recognition
Revenues are recognized when persuasive evidence of an arrangement
exists, delivery has occurred (or service has been performed), the
sales price is fixed and determinable and collectability is reasonably
assured. Revenue recognition from consignment inventory consists of
commission income.
Foreign Currency Translations
The functional currency is the Canadian dollar and the reporting
currency is the U.S. dollar. At each balance sheet date, assets and
liabilities that are denominated in a currency other than U.S. dollars
are adjusted to reflect the current exchange rate which may give rise
to a foreign currency translation adjustment accounted for as a
separate component of shareholders' equity and included in other
comprehensive loss.
Revenues and expenses are translated at the average daily rate for the
year covering the financial statement year to approximate the rate of
exchange on the transaction date. Exchange gains and losses are
included in the determination of net income (loss) for the year.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We believe our market risk exposures arise primarily from exposures to
fluctuations in interest rates and exchange rates. We presently only transact
business in Canadian and US Dollars. We believe that the exchange rate risk
surrounding the future transactions of the Company will not materially or
adversely affect our future earnings. We do not believe that we are subject to
any seasonal trends. We do not use derivative financial instruments to manage
risks or for speculative or trading purposes.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements required by this Item begin on Page F-14 of this Form
10-K.
16
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
November 30, 2010
Page
Reports of Independent Registered Public Accounting Firms F-18 to F19
Financial Statements:
Balance Sheets F-21
Statements of Loss and Comprehensive Loss F-22
Statements of Cash Flows F-23
Statement of Changes in Stockholders' (Deficiency) F-24
Notes to Financial Statements F-25 to F-32
F-17
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
CREEnergy Corporation
(formerly Online Originals, Inc.)
We have audited the accompanying balance sheets of CREEnergy Corporation
(formerly Online Originals, Inc.), as of November 30, 2009, and the related
statements of operations, stockholders' (deficit), and cash flows for the year
ended November 30, 2009. 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 the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audits 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 our audits provide 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 CREEnergy Corporation (formerly
Online Originals, Inc.) as of November 30, 2009, and the results of its
operations and cash flows for the year ended November 30, 2009, 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 described in Note 1, the Company
has negative working capital and stockholders' deficits and has losses to date,
which raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to this matter are also discussed in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
SCHUMACHER & ASSOCIATES, INC.
/s/Schumacher & Associates, Inc.
Denver, Colorado
March 4, 2010
F-18
Report of Independent Registered Public Accounting Firm
JAMES STAFFORD, INC.
James Stafford, Inc.
Chartered Accountants
Suite 350 -- 1111 Melville Street
Vancouver, British Columbia
Canada V6E 3V6
Telephone +1 604 669 0711
Facsimile +1 604 669 0754
www.jamesstafford.ca
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
CREENERGY Corporation (formerly Online Originals, Inc.)
(A Development Stage Company)
We have audited the balance sheet of CREENERGY Corporation (formerly Online
Originals, Inc.) (A Development Stage Company) (the "Company") as of November
30, 2010 and the related statement of loss and comprehensive loss, cash flows
and changes in stockholders' deficiency for the year then ended. 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. The financial statements of the Company as of November 30, 2009 and
for the years ended November 30, 2009 and 2008 were audited by other auditors
whose report, dated March 4, 2010, expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). 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 purposes of expressing an
opinion on 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 the Company as of November 30,
2010, and the results of its operations and its cash flows for the year then
ended 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 1 to the
financial statements, conditions exist which raise substantial doubt about the
Company's ability to continue as a going concern unless it is able to generate
sufficient cash flows to meet its obligations and sustain its operations.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ James Stafford
Vancouver, Canada Chartered Accountants
January 21, 2011, except for Note 12, as to which the date is March 11, 2011.
F-19
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Stage Company)
Financial Statements
(Expressed in U.S. Dollars)
November 30, 2010
The accompanying notes are an integral part of these statements.
20
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Stage Company)
BALANCE SHEETS
November 30, 2010 November 30, 2009
ASSETS
Current Assets
Cash $ 6,090 $ 2,841
Prepaid expense 200 109
------------------------------------------
Total Current Assets 6,290 2,950
Equipment (Note 3) - 476
------------------------------------------
TOTAL ASSETS $ 6,290 $ 3,426
==========================================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities (Note 4) $ 13,133 $ 11,900
Note payable (Note 5) 16,000 -
------------------------------------------
Total Liabilities, all current 29,133 11,900
------------------------------------------
STOCKHOLDERS' DEFICIENCY
Capital Stock (Note 7)
Authorized:
675,000,000 common shares, par value $0.001 per share
Issued and outstanding:
96,000,000 common shares 96,000 96,000
Additional paid-in capital 13,000 -
Accumulated other comprehensive income 333 312
Accumulated deficit (105,837) (104,786)
Accumulated deficit during development stage (26,339) -
------------------------------------------
(22,843) (8,474)
-----------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 6,290 $ 3,426
==========================================
The accompanying notes are an integral part of these statements.
F-21
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Stage Company)
STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
Cumulative from
re-entering of
development stage
on
Year Ended Year Ended Year Ended June 26, 2010
November 30, November 30, November 30, to November 30,
2010 2009 2008 2010
--------------------------------------------------------------------------
Revenue $ - $ - $ - $ -
--------------------------------------------------------------------------
Expenses
Office and administration 2,898 602 920 2,280
Professional fees 28,562 15,733 24,318 24,059
--------------------------------------------------------------------------
31,460 16,335 25,238 26,339
--------------------------------------------------------------------------
Net Loss From Continuing Operations (31,460) (16,335) (25,238) (26,339)
--------------------------------------------------------------------------
Discontinued Operations (Note 9)
Net profit (loss) from discontinued 4,070 9,946 (3,212) -
Net Loss For The Period $ (27,390) $ (6,389) $ (28,450) $ (26,339)
==========================================================================
Other Comprehensive Income (Loss)
Foreign currency translation adjustment 21 441 (736) -
Comprehensive Loss for The Period $ (27,369) $ (5,948) $ (29,186) (26,339)
==========================================================================
Loss per share from continuing operations -
Basic and diluted $ (0.00) $ (0.00) $ (0.00)
Earnings (loss) per share from discontinued
- Basic and diluted 0.00 0.00 (0.00)
==========================================================================
Weighted Average Number Of Shares
Outstanding 150,246,576 96,000,000 96,000,000
==========================================================================
The accompanying notes are an integral part of these statements.
F-22
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative from
re-entering of
development
Year ended Year ended Year ended stage on June
November 30, November 30, November 30, 26, 2010 to
2010 2009 2008 November 30, 2010
------------------------------------------------------------------------------
Cash Flows from Operating Activities
Net loss $ (27,390) $ (6,389) $ (28,450) $ (26,339)
Adjustments to Reconcile Net Loss to Net Cash
Used by Operating Activities:
Depreciation and amortization 476 3,066 3,628 -
Prepaid expenses (91) (16) - 2,509
Accounts payable and accrued liabilities 1,233 835 5,795 12,384
------------------------------------------------------------------------------
Cash (Used in) Operating Activities (25,772) (2,504) (19,027) (11,446)
------------------------------------------------------------------------------
Cash Flows From Financing Activities
Increase in notes payable 16,000 - - -
Contribution by related party 13,000 - - 13,000
------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 29,000 - - 13,000
------------------------------------------------------------------------------
Increase (Decrease) in Cash during the Period 3,228 (2,504) (19,027) 1,554
Effect of Exchange Rate Changes on Cash 21 441 (736) -
Cash, Beginning Of Period 2,841 4,904 24,667 4,536
------------------------------------------------------------------------------
Cash, End Of Period $ 6,090 $ 2,841 $ 4,904 $ 6,090
==============================================================================
Supplemental Disclosure Of Cash Flow Information
Cash paid for:
Interest $ - $ - $ - $ -
Income taxes $ - $ - $ - $ -
==============================================================================
The accompanying notes are an integral part of these statements.
F-23
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
For the Period from November 30, 2008 through November 30, 2010
CAPITAL STOCK ACCUMULATED
-------------------------------------------
DEFICIT
ADDITIONAL DURING ACCUMULATED
PAID-IN DEVELOPMENT COMPREHENSIVE
ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT STAGE INCOME (LOSS) TOTAL
----------------------------------------------------------------------------------------------------------------
Balance, November
30, 2008 96,000,000 $ 96,000 $ - $ (98,397) $ - $ (129) $ (2,526)
----------------------------------------------------------------------------------------------------------------
Foreign currency
translation
adjustment - - - - - 441 441
Net loss for the
year - - - (6,389) - - (6,389)
----------------------------------------------------------------------------------------------------------------
Balance, November
30, 2009 96,000,000 96,000 - (104,786) - 312 (8,474)
----------------------------------------------------------------------------------------------------------------
Common shares
issued - cash
($0.004 per
share) (Note 6) 120,000,000 120,000 - (104,000) - - 16,000
Common shares
cancelled (120,000,000) (120,000) - 104,000 - - (16,000)
Contribution by
related party - - 13,000 - - - 13,000
Foreign currency
translation - - - - - 21 21
Net loss for the
year ended
November 30, 2010 - - - (1,051) (26,339) - (27,390)
----------------------------------------------------------------------------------------------------------------
Balance, November
30, 2010 96,000,000 $ 96,000 $ 13,000 $ (105,837) $ (26,339) $ 333 $ (22,843)
================================================================================================================
The accompanying notes are an integral part of these statements.
F-24
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2010
1. NATURE AND CONTINUENCE OF OPERATIONS
a) Organization
CREENERGY Corporation (formerly Online Originals, Inc.) (the
"Company") was incorporated in the State of Nevada, United States of
America, on November 18, 2005. On July 29, 2010, the Company's name
was changed from Online Originals, Inc. to CREENERGY Corporation. The
Company's year end is November 30.
b) Nature of Operations and Change in Business
Since the date of inception on November 18, 2005, the Company's
business plan was to develop a membership-based website art
gallery/auction house specifically focused on displaying and selling
original artwork. The Company changed its status from a development
stage company to an operating company on November 30, 2009. Management
realized that the results of operations from the sale of artwork lacks
luster and decided to change the Company's business focus and plan for
other strategic opportunities and discontinued the sale of artwork
with effect from June 25, 2010. Accordingly, the Company has disclosed
these activities as discontinued operations in the accompanying
financial statements. Effective June 26, 2010 the Company became a
development stage company focusing on new business development in the
form of obtaining leases for the exploration and production of oil and
gas in areas of northern Alberta, Canada.
c) Basis of Presentation
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles in the United States of
America, which contemplates continuation of the Company as a going
concern. However, the Company has negative working capital and
stockholders' deficits at November 30, 2010 and has losses to date of
approximately $117,000. These matters raise substantial doubt about
its ability to continue as a going concern. In view of these matters,
realization of certain of the assets in the accompanying balance sheet
is dependent upon its ability to meet its financing requirements,
raise additional capital, and the success of its future operations.
There is no assurance that future capital raising plans will be
successful in obtaining sufficient funds to assure its eventual
profitability. Management is actively seeking to add new products
and/or services in order to show profitability. In addition, one of
the members of the board of directors has agreed to loan funds to the
Company if needed. To date, due to the continued economic conditions,
they have not yet been able to find products and services that would
contribute to their business. We believe that actions planned and
presently being taken to revise its operating and financial
requirements will provide the opportunity for the Company to continue
as a going concern. The financial statements do not include any
adjustments that might result from these uncertainties.
F-25
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2010
2. SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist
in understanding the Company's financial statements. The financial
statements and notes are representations of management who is
responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting principles in the
United States of America and have been consistently applied in the
preparation of the financial statements. The financial statements are
stated in United States of America dollars.
a) Organizational and Start-up Costs
Costs of start-up activities, including organizational costs, are
expensed as incurred in accordance with Accounting Standards
Codification ("ASC") 720-15, "Start-Up Costs".
b) Discontinued Operations
When specific operations of a business are sold, abandoned, or
otherwise disposed of, the business must account for these related
revenues and expenses (including any gains or losses on related assets
disposed of) as gain (loss) from discontinued operations. Continuing
operations must be reported separately in the income statement from
discontinued operations, and any gain or loss from the disposal of a
segment be reported along with the operating results of the
discontinued segment.
c) Development-Stage Company
On or around June 25, 2010, the Company abandoned its previous
business of sale of original artwork and re-entered the development
stage with its intended new business, which currently has no revenues.
Management expects to sustain losses from operations until such time
it can generate sufficient revenues to meet its anticipated cost
structure. The Company is considered a development-stage company in
accordance with the ASC 915, "Accounting and Reporting by
Development-Stage Enterprises". A development-stage enterprise is one
in which planned principal operations have not commenced or if its
operations have commenced, there has been no significant revenues
there from.
d) Income Taxes
The Company adopted the ASC 740, "Accounting for Income Taxes". ASC
740 requires the use of the asset and liability method of accounting
of income taxes. Under the asset and liability method of ASC 740,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the
financial statements carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. A valuation allowance is
established when necessary to reduce deferred tax assets to the amount
expected to be realized.
F-26
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2010
e) Basic and Diluted Earnings (Loss) per Share
In accordance with ASC 260, "Earnings per Share", the basic loss per
common share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares
outstanding. Diluted loss per common share is computed similar to
basic loss per common share except that the denominator is increased
to include the number of additional common shares that would have been
outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. Diluted earnings per share is
not shown for periods in which the Company incurs a loss because it
would be anti-dilutive. At November 30, 2010, the Company had no stock
equivalents that were anti-dilutive and excluded in the earnings per
share computation.
f) Estimated Fair Value of Financial Instruments
The carrying value of the Company's financial instruments, consisting
of cash, prepaid expense and accounts payable approximate their fair
value due to the short-term maturity of these instruments. Unless
otherwise noted, it is management's opinion that the Company is not
exposed to significant interest or currency risks arising from these
financial statements.
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash and cash
equivalents. At November 30, 2010, approximately $6,090 of cash or
cash equivalents was not insured by agencies of the U.S. Government.
g) Revenue Recognition
Revenues are recognized when persuasive evidence of an arrangement
exists, delivery has occurred (or service has been performed), the
sales price is fixed and determinable and collectability is reasonably
assured. Revenue recognition from consignment inventory consists of
commission income.
h) Foreign Currency Translations
The functional currency is the Canadian dollar and the reporting
currency is the U.S. dollar. At each balance sheet date, assets and
liabilities that are denominated in a currency other than U.S. dollars
are adjusted to reflect the current exchange rate which may give rise
to a foreign currency translation adjustment accounted for as a
separate component of shareholders' equity and included in other
comprehensive loss.
Revenues and expenses are translated at the average daily rate for the
year covering the financial statement year to approximate the rate of
exchange on the transaction date. Exchange gains and losses are
included in the determination of net income (loss) for the year.
F-27
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2010
i) Comprehensive Income (Loss)
The Company adopted ASC 220, "Reporting Comprehensive Income". ASC 220
requires that the components and total amounts of comprehensive income
be displayed in the financial statements beginning in 1998.
Comprehensive income includes net income and all changes in equity
during a period that arises from non-owner sources, such as foreign
currency items and unrealized gains and losses on certain investments
in equity securities.
j) Use of Estimates
The preparation of the Company's financial statements are in
conformity with generally accepted accounting principles which
requires management to make estimates and assumptions that affect the
amounts reported in these financial statements and accompanying notes.
Actual results could differ from those estimates.
k) Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments with
original maturities of three months or less.
l) Equipment
Property and equipment are recorded at cost and depreciated over their
estimated useful lives. The Company uses the straight-line method of
depreciation. A summary of the estimated useful lives follows:
Computer equipment 3 years
m) Recent Accounting Pronouncements
In February 2010, the Financial Accounting Standards Board ("FASB")
issued Accounting Standards Update ("ASU") 2010-09, "Subsequent Events
(Topic 855)", amending guidance on subsequent events to alleviate
potential conflicts between FASB guidance and SEC requirements. Under
this amended guidance, SEC filers are no longer required to disclose
the date through which subsequent events have been evaluated in
originally issued and revised financial statements. This guidance was
effective immediately. The adoption of this guidance did not have a
material impact on these financial statements.
In March 2010, the FASB issued ASU No. 2010-11, "Derivatives and
Hedging (Topic 815): Scope Exception Related to Embedded Credit
Derivatives" (codified within ASC 815 - Derivatives and Hedging). ASU
2010-11 improves disclosures originally required under SFAS No. 161.
ASU 2010-11 is effective for interim and annual periods beginning
after June 15, 2010. The adoption of ASU 2010-11 is not expected to
have any material impact on our financial position, results of
operations or cash flows.
F-28
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2010
In April 2010, the FASB issued ASU No. 2010-17, "Revenue Recognition -
Milestone Method (Topic 605): Milestone Method of Revenue Recognition"
(codified within ASC 605 - Revenue Recognition). ASU 2010-17 provides
guidance on defining a milestone and determining when it may be
appropriate to apply the milestone method of revenue recognition for
research or development transactions. ASU 2010-17 is effective for
interim and annual periods beginning after June 15, 2010. We do not
expect that the adoption of ASU 2010-17 will have a material impact on
the Company's financial position, results of operations or cash flows.
n) Other
The Company consists of one reportable business segment. The Company
paid no dividends during the periods presented.
3. EQUIPMENT
Net Book Value
Accumulated November 30 November 30
Cost depreciation 2010 2009
------------------------------------------------------------
Computer $ 6,836 $ 6,836 $ - $ 476
------------------------------------------------------------
During the year ended November 30, 2010, total additions to property,
plant and equipment were $Nil (2009 - $Nil).
4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities are non-interest bearing,
unsecured and have settlement dates within one year.
5. NOTE PAYABLE
As of November 30, 2010, the Company had $16,000 note payable to an
unrelated party for expenses paid on behalf of the Company. The note
payable is unsecured, non-interest bearing, and has no fixed terms of
repayment.
6. RELATED PARTY TRANSACTIONS
The Company uses the offices of its President for minimal office
facility needs for no consideration. No provision for these costs has
been provided since it has been determined that they are immaterial.
During the year ended November 30, 2010, a director and shareholder of
the Company made cash contribution in the amount of $13,000 (November
30, 2009 - $Nil, November 30, 2008 - $Nil).
F-29
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2010
7. CAPITAL STOCK
Authorized
The Company's authorized common stock consists of 675,000,000 shares of
common stock with a par value of $0.001 per share. On August 10, 2010,
the Company increased the number of authorized share capital from
75,000,000 shares of common stock to 675,000,000 shares of common stock
with the same par value of $0.001 per share.
Issued and outstanding
On June 2, 2010, and effective August 10, 2010, the directors of the
Company approved a forward split of the common stock of the Company on
a basis of 30 new common shares for 1 old common share. As a result of
the forward stock split, 208,800,000 additional shares were issued.
Capital and additional paid-in capital have been adjusted accordingly.
When adjusted retroactively, there was an $119,501 shortage of
additional paid-in capital; thus an adjustment to accumulated deficit
of $104,000 was recorded at May 20, 2010 (the date of issuance of
120,000,000 shares) and $15,501 to the beginning balance. The financial
statements contained herein reflect the appropriate values for capital
stock and accumulated deficit. Unless otherwise noted, all references
in the accompanying financial statements to the number of common shares
and per share amounts have been retroactively restated to reflect the
forward stock split.
The total issued and outstanding capital stock is 96,000,000 common
shares with a par value of $0.001 per common share. The Company's
common stock issuances to date are as follows:
i) On Nov 18, 2005, 54,000,000 shares of the Company's common stock
were issued to a former director and officer of the Company for
cash proceeds of $18,000.
ii) On November 28, 2005, 21,000,000 shares of the Company's common
stock were issued to a former director and officer of the company
for cash proceeds of $7,000.
iii) On July 21, 2006, the Company completed a public offering and
issued 21,000,000 shares of the Company's common stock for cash
totalling $70,000. The Company incurred offering costs of $14,501
related to this offering, resulting in net proceeds of $55,499.
iv) On May 21, 2010, 120,000,000 shares of the Company's restricted
common stock, valued at $16,000, were issued to a former director
and officer of the Company. On October 29, 2010, the 120,000,000
restricted common shares of the Company previously issued to a
former director and officer of the Company were returned to
treasury for no consideration. The shares were cancelled on
November 2, 2010.
8. INCOME TAXES
The Company is subject to foreign and domestic income taxes. The
Company has had no income, and therefore has paid no income tax.
F-30
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2010
Deferred income taxes arise from temporary timing differences in the
recognition of income and expenses for financial reporting and tax
purposes. The Company's deferred tax assets consist entirely of the
benefit from net operating loss (NOL) carry-forwards. The NOL carry
forwards expire in various years through 2030. The Company's deferred
tax assets are offset by a valuation allowance due to the uncertainty
of the realization of the NOL carry-forwards. NOL carry-forwards may be
further limited by a change in company ownership and other provisions
of the tax laws.
The Company's deferred tax assets, valuation allowance, and change in
valuation allowance are as follows:
Period Ending Estimated Estimated Change in Effect of
NOL NOL Tax Benefit Valuation Valuation change in Net Tax
Carry-forward Expires from NOL Allowance Allowance tax rate Benefit
November 30, 2009 89,285 Various 22,321 (22,321) (1,597) - -
November 30, 2010 116,675 2030 40,836 (40,836) (18,515) (8,929) -
Income taxes at the statutory rate are reconciled to the Company's
actual income taxes as follows:
2010 2009
Income tax benefit at statutory rate resulting from net operating
Deferred income tax valuation allowance 35% 25%
-------------- ---------------
Actual tax rate 0% 0%
============== ===============
9. DISCONTINUED OPERATIONS AND NEW DEVELOPMENTS
The Company's attempts over the past years to build a business that
provides a website where members and customers are able to bid on and
purchase pieces of art had not come to fruition so management decided
to change the business focus and look for other opportunities.
Therefore, management decided to discontinue selling art pieces and
reflect such discontinuance in its operating statement and cash flow
statements effective June 25, 2010.
Management decided on that date to focus on new business development in
the form of obtaining leases for the exploration and production of oil
and gas in First Nation areas of northern Alberta, Canada.
F-31
CREENERGY CORPORATION
(formerly Online Originals, Inc.)
(A Development Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2010
During the years ended November 30, 2010, 2009 and 2008, the Company
had revenue related to its discontinued operations in the amount of
$6,042, $13,110 and $2,800, respectively.
Year ended Year ended Year ended
November 30, November 30, November 30,
2010 2009 2008
Revenue $ 6,042 $ 13,110 $ 2,800
Expenses
Depreciation and amortization 477 3,066 3,628
Office and administration 1,495 98 2,384
--------------------------------------------------------
1,972 3,164 6,012
--------------------------------------------------------
Net Profit (Loss) from Discontinued
Operations $ 4,070 $ 9,946 $ (3,212)
========================================================
10. CONTINGENCY
On November 22, 2010, the Company was served with a claim filed by a
former director and officer of the Company. The claim alleges that the
former director and officer of the Company suffered losses and damages
as a result of the failure of the Company in providing him with
corporate documents and implementing a change of the board of
directors. The Company has retained legal counsel to address the claim.
On December 8, 2010, the Company filed a Statement of Defense
requesting that the claim be dismissed. In the opinion of management,
this claim is without merit and the Company intends to defend this
claim vigorously. As a loss is not deemed probable, no accruals have
been made as of November 30, 2010.
11. COMPARATIVE FIGURES
Certain comparative figures have been adjusted to conform to the
current year's presentation.
12. SUBSEQUENT EVENT
There are no reportable events for the period from the year ended
November 30, 2010 to the date the financial statements are available to
be issued on March 11, 2011.
F-32
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On November 15, 2010, the Board of Directors of the Company dismissed Schumacher
and Associates, its independent registered public account firm. On the same
date, November 15, 2010, the accounting firm of James Stafford, Inc. Chartered
Accountants was engaged as the Registrant's new independent registered public
account firm. The Board of Directors of the Registrant and the Registrant's
Audit Committee approved of the dismissal of Schumacher & Associates and the
engagement of James Stafford, Inc., as its independent auditor. None of the
reports of Schumacher & Associates on the Company's financial statements for
either of the past two years or subsequent interim period contained an adverse
opinion or disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope or accounting principles, except that the Registrant's
audited financial statements contained in its Form 10-K for the fiscal years
ended November 30, 2009 and 2008, a going concern qualification in the
registrant's audited financial statements.
During the registrant's two most recent fiscal years and the subsequent interim
periods thereto, there were no disagreements with Schumacher and Associates
whether or not resolved, on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which, if not
resolved to Schumacher and Associates satisfaction, would have caused it to make
reference to the subject matter of the disagreement in connection with its
report on the registrant's financial statements.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company maintains a system of disclosure controls and procedures that are
designed for the purposes of ensuring that information required to be disclosed
in the Company's SEC reports is recorded, processed, summarized, and reported
within the time periods specified in the SEC rules and forms, and that such
information is accumulated and communicated to the Company's management,
including the Chief Executive Officer as appropriate to allow timely decisions
regarding required disclosure.
Management, after evaluating the effectiveness of the Company's disclosure
controls and procedures as defined in Exchange Act Rules 13a-14(c) as of
December 6, 2010 (the "Evaluation Date") concluded that as of the Evaluation
Date, the Company's disclosure controls and procedures were effective to ensure
that information relating to the Company would be made known to them by
individuals within those entities, particularly during the period in which this
annual report was being prepared and that information required to be disclosed
in the Company's SEC reports is recorded, processed, summarized, and reported
within the time periods specified in the SEC's rules and forms.
Management's Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act). Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal controls over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives. Furthermore, smaller reporting companies face
additional limitations. Smaller reporting companies employ fewer individuals and
find it difficult to properly segregate duties. Smaller reporting companies tend
to utilize general accounting software packages that lack a rigorous set of
software controls.
Our management, with the participation of the President and Chief Financial
Officer, evaluated the effectiveness of the Company's internal control over
financial reporting as of November 30, 2010. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control --
Integrated Framework. Based on that evaluation, our management concluded that,
as of November 30 2010, our internal control over financial reporting was not
effective due to material weaknesses in the system of internal control.
Specifically, management identified the following control deficiency:
33
- The Company has installed accounting software that does not
prevent erroneous or unauthorized changes to previous reporting
periods and does not provide an adequate audit trail of entries
made in the accounting software.
Accordingly, while the Company has identified certain material weaknesses in its
system of internal control over financial reporting, it believes that it has
taken reasonable steps to ascertain that the financial information contained in
this report is in accordance with generally accepted accounting principles.
Management has determined that current resources would be appropriately applied
elsewhere and when resources permit, they will alleviate material weaknesses
through various steps.
This Annual Report does not include an attestation report of the Company's
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 in this Annual Report. Changes in Internal Control over Financial
Reporting
There were no changes in internal control over financial reporting that occurred
during the last fiscal quarter covered by this report that have materially
affected, or are reasonably likely to affect, the Company's internal control
over financial reporting.
ITEM 9B. Other Information
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors and Executive Officers
The following table sets forth the names, ages and positions of the current
directors and executive officers of the Company, as of the date of this filing:
Name Age Offices Held
Shari Sookarookoff* 34 Director, CEO, President, Secretary/
Treasurer
Ruth Saunders 36 Director
* On May 21, 2010, Mr. David Calahasen was appointed a director of the Company.
On August 18, 2009, Mr. Calahasen was appointed the President and CEO of the
Company. Effective October 29, 2010, David Calahasen resigned as Director,
President and Chief Executive Officer of the Company. On October 29, 2010 Shari
Sookarookoff has been re-appointed President and Chief Executive Officer of the
Company.
Shari Sookarookoff, CEO, CFO, President, Secretary/Treasurer, Member of the
Board
Shari Sookarookoff has served as President and CEO since October 29, 2010. She
has served as a director since September 12, 2008. Ms. Sookarookoff has also
served as Secretary/Treasurer and Chief Financial Officer of the Company since
June 30, 2009. Ms. Sookarookoff previously served as the CEO and President from
September 12, 2008 through August 18, 2009. The term of her office is for two
years and is thereafter renewable on an annual basis.
Since 1994, Ms. Sookarookoff has been employed by Alberta Forest Products
Shippers Association, a freight broker located in Edmonton, Alberta, Canada that
is dedicated to facilitate the freight requirements of numerous lumber mills in
the Province of Alberta, Canada. In June 1999, she was promoted to traffic
coordinator.
34
In July 2002, Ms. Sookarookoff left Alberta Forest Products Shippers Association
for her present position with Spruce Land Millworks (located in Spruce Grove,
Alberta, Canada) as manager of the shipping department. Resourcing her
accumulated knowledge within the truck brokerage industry.
Ms. Sookarookoff is not an officer or director of any other reporting company
that files annual, quarterly or periodic reports with the United States
Securities and Exchange Commission.
Ruth Saunders, Member of the Board,
Ruth Saunders has served as Director since September 12, 2008. The term of her
office is for two years and is thereafter renewable on an annual basis.
Since graduating in the spring of 2008 with a Diploma in Public Relations from
Grant MacEwan College in Edmonton, Ms. Saunders has been employed by Alberta
Health and Wellness in their public relations department.
After having received a Journalism Diploma in 1997 from Grant MacEwan College,
Ms. Saunders was a Journalist for ten (10) years. She worked first with the
Hinton Parklander in Hinton, Alberta, for 3 years and then with the Wetaskiwin
Times Advertiser in Wetaskiwin, Alberta, from 2001 through 2007.
Ms. Saunders is not an officer or director of any other reporting company that
files annual, quarterly, or periodic reports with the United States Securities
and Exchange Commission.
David Calahasen, Former Officer and Director
Mr. Calahasen served as a director of the Company from May 21, 2010 through
October 29, 2010 and as the President and CEO from August 18, 2010 through
October 29, 2010. David Calahasen of full status of the Cree Nation band (tribe)
in Northern Alberta is a seasoned executive with over 20 years business
experience, providing liaison and consulting services to the Canadian First
Nations and Metis in Alberta, Saskatchewan, Manitoba, and British Columbia
through his consulting business. For the past several years, Mr. Calahasen has
been instrumental in successfully negotiating forestry, oil and gas
initiatives/projects between the First Nations bands and both private and
publically traded companies. Most recently, he has consulted with oil companies
on the possibility of oil refinery and eco-generation on First Nations' lands,
of which he has acquired in excess of 245,000 acres for exploration.
In addition to his consulting business, Mr. Calahasen is also the President of
CREEnergy Oil and Gas, a privately owned company in Edmonton, Alberta. Before
entering the forestry and oil & gas industries, Mr. Calahasen was a bush pilot
for two years and became a commercial airline pilot for 18 years with two
Canadian owned airlines in western Canada.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934 requires any person who
is a director or executive officer or who beneficially holds more than ten
percent (10%) of any class of our securities which have been registered with the
Securities and Exchange Commission, to file reports of initial ownership and
changes in ownership with the Securities and Exchange Commission. These persons
are also required under the regulations of the Securities and Exchange
Commission to furnish us with copies of all Section 16(a) reports they file.
To our knowledge, based solely on our review of the copies of the Section 16(a)
reports furnished to us and a review of our shareholders of record for the
fiscal year ended November 30, 2010, there were no filing delinquencies.
Code of Ethics
We have not yet prepared a written code of ethics and employment standards. We
expect to implement a Code of Ethics during the current fiscal year.
Corporate Governance; Audit Committee Financial Expert
We currently do not have an audit committee financial expert or an independent
audit committee expert due to the fact that our Board of Directors currently
35
does not have an independent audit committee. Our Board of Directors currently
has only one (1) independent member, and thus, does not have the ability to
create a proper independent audit committee.
ITEM 11. EXECUTIVE COMPENSATION
The Executive Officers have not received any compensation since the date of
incorporation of our Company, and we did not accrue any compensation. There are
no securities authorized for issuance under any equity compensation plan, or any
options, warrants, or rights to purchase our common stock.
Compensation of Directors
We do not compensate our directors for their time spent on behalf of our
Company, but they are entitled to receive reimbursement for all out of pocket
expenses incurred for attendance at our Board of Directors meetings.
Pension and Retirement Plans
Currently, we do not offer any annuity, pension or retirement benefits to be
paid to any of our officers, directors or employees, in the event of retirement.
There are also no compensatory plans or arrangements with respect to any
individual named above which results or will result from the resignation,
retirement or any other termination of employment with our company, or from a
change in the control of our Company.
Employment Agreements
We do not have written employment agreements with any of our key employees.
Audit Committee
Presently the Board of Directors is performing the duties that would normally be
performed by an audit committee. We intend to form a separate audit committee,
and are seeking potential independent directors. We are seeking experienced
business people and plan to appoint an individual qualified as an audit
committee financial expert.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth certain information, as of January 18, 2011 with
respect to any person (including any "group", as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) who is known to the Company to be the beneficial owner of more than five
percent of any class of the Company's voting securities, and as to those shares
of the Company's equity securities beneficially owned by each its director, the
executive officers of the company and all of its directors and executive
officers of the Company and all of its directors and executive officers as a
group. Unless otherwise specified in the table below, such information, other
than information with respect to the directors and officers of the Company, is
based on a review of statements filed, with the Securities and Exchange
commission (the "Commission") pursuant to Sections 13 (d), 13 (f), and 13 (g) of
the Exchange Act with respect to the Company's Common Stock. As of November 30,
2010, there were 96,000,000 shares of Common Stock outstanding.
The number of shares of Common Stock beneficially owned by each person is
determined under the rules of the Commission and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares as to which such person has sole
or shared voting power or investment power and also any shares which the
individual has the right to acquire within 60 days after the date hereof,
through the exercise of any stock option, warrant or other right. Unless
otherwise indicated, each person has sole investment and voting power (or shares
such power with his or her spouse) with respect to the shares set forth in the
following table. The inclusion herein of any shares deemed beneficially owned
does not constitute an admission of beneficial ownership of those shares.
The table also shows the number of shares beneficially owned as of November 30,
2010 by each of the individual directors and executive officers and by all
directors and executive officers as a group.
36
Title of Name and Address of Beneficial Owner Amount and
Class Nature of Percent of
Beneficial Class(1)
Ownership
--------------------------------------------------------------------------------------------------
Common Shari Sookarookoff 75,000,000 78.125%
CEO, President & member of the Board of Directors
328 Twin Brooks Dr NW
Edmonton AB, Canada, T6J 6S5
--------------------------------------------------------------------------------------------------
Common Ruth Saunders 0 0.00%
Director
3508 - 48 Street
Edmonton, AB, Canada, T6L 3R4
--------------------------------------------------------------------------------------------------
Common Directors and officers as a group (2 individuals) 75,000,000 78.125%
(1) Percent of Ownership is calculated in accordance with the Securities and
Exchange Commission's Rule 13(d) - 13(d)(1). Based on 96,000,000 shares of
common stock issued and outstanding.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.
We have not entered into any transaction nor are there any proposed transactions
in which any director, executive officer, shareholder of our company or any
member of the immediate family of any of the foregoing had or is to have a
direct or indirect material interest, other than those discussed below.
On May 21, 2010, the Company issued 120,000,000 shares of its restricted common
stock to Mr. Calahasen, a former officer and director of the Company for cash of
$16,000. On October 29, 2010, the 120,000,000 shares were returned to treasury
for no consideration. These shares were cancelled on November 2, 2010.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees.
The aggregate fees billed by our auditors, Schumacher & Associates, for
professional services rendered for the audit of our annual financial statements,
and for the reviews of the financial statements included in our Quarterly
Reports on Form 10-Q during the fiscal years ended November 30, 2010 and 2009,
were $10,500 and $9,200 respectively. The fees billed by our auditors, James
Stafford Inc., for professional services rendered for the audit of our annual
financial statements during the fiscal years ended November 30, 2010 and 2009
were $8,800 and nil respectively.
Audit Related Fees.
We incurred nil fees to auditors for audit related fees during the fiscal year
ended November 30, 2010 and 2009.
Tax Fees.
We incurred nil fees to auditors for tax compliance, tax advice or tax
compliance services during the fiscal year ended November 30, 2010 and 2009.
All Other Fees.
We did not incur any other fees billed by auditors for services rendered to our
Company, other than the services covered in "Audit Fees" for the fiscal year
ended November 30, 2010 and 2009.
The Board of Directors has considered whether the provision of non-audit
services is compatible with maintaining the principal accountant's independence.
Since there is no audit committee, there are no audit committee pre-approval
policies and procedures.
37
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following is a complete list of exhibits filed as part of this Form 10K.
Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of
Regulation S-K.
Exhibit Index
3.1 Articles of Incorporation(1)
3.2 Bylaws(1)
31.1 Section 302 Certification - Chief Executive Officer and Chief
Financial Officer.*.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief
Executive Officer, Chief Financial Officer.*
* File herewith.
(1)Incorporated by reference to our SB-2 Registration Statement, file number
333-133347, filed on April 18, 2006.
38
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 11 day of March,
2011.
CREENERGY CORPORATION
Date: March 11, 2011 By: /s/ Shari Sookarookoff
----------------------
Name: Shari Sookarookoff
Title: President/Chief Executive Officer and
Chief Financial (Accounting) Officer
Date: March 11, 2011 By:/s/ Ruth Saunders
--------------------
Name: Ruth Saunders
Title: Director
3
