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

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2012

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

For the transition period from

Commission File No. 000-50493

ALVERON ENERGY CORP.
(Exact Name of Registrant as Specified in its Charter)

Delaware
 
98-0412431
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
100-224 11th Avenue S.W. Calgary, Alberta, Canada
  T2R 0C3
(Address of Principal Executive Offices)   (Zip Code)
 
(403) 233-9239
(Registrant’s Telephone Number Including Area Code)

____________________
(Former Name, Address and Fiscal Year, if Changed Since Last Report)

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x Noo

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 o Accelerated filer o
Non-accelerated filer o 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 o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 55,473,333 shares outstanding as of June 26, 2012.



 
 

 
TABLE OF CONTENTS
 

 PART I – FINANCIAL INFORMATION      
         
 Item 1.   
Financial Statements
    3  
 Item 2.   
Management’s Discussion and Analysis of Financial Condition
    11  
 Item 3    
Quantitative and Qualitative Disclosures About Market Risk
    15  
 Item 4T.
Control and Procedures
    15  
           
  PART II – OTHER INFORMATION        
           
 Item 1.    
Legal Proceedings
    16  
 Item 2.  
Unregistered Sales of Equity Securities and Use of Proceeds
    16  
 Item 3.  
Defaults Upon Senior Securities
    17  
 Item 4.  
Submission of Matters to a Vote of Security Holders
    17  
 Item 5.  
Other Information
    17  
 Item 6.  
Exhibits
    17  
 
Signatures
    18  
 
 
2

 
 
PART I
 
FINANCIAL INFORMATION
 
Item 1. Financial Statements.
 
ALVERON ENERGY CORP.
       
(A Development Stage Company)
       
 
CONSOLIDATED BALANCE SHEETS
       
As of APRIL 30, 2012 and OCTOBER 31, 2011
       
 
             
             
   
April 30,
2012
   
October 31,
2011
 
   
(Unaudited)
       
ASSETS
Current Assets:
           
Cash and cash equivalents
  $ 292,656     $ 109  
Prepaid Expenses
    200,000       -  
Total Current Assets
    492,656       109  
                 
Total Assets
  $ 492,656     $ 109  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
                 
Current Liabilities:
               
Accounts payable and accrued liabilities
  $ 61,177     $ 46,005  
Related party note
    500,974       482,731  
Total Current Liabilities
    562,151       528,736  
                 
Total Liabilities
    562,151       528,736  
                 
STOCKHOLDERS' DEFICIT
               
Capital stock  - $.001 par value, 100,000,000 common shares authorized, 
               
55,473,333 and 52,140,000 common shares outstanding as of April 30, 2012 and October 31, 2011, respectively     55,473       52,140  
Additional paid-in capital
    681,009       184,342  
Deficit accumulated during the development stage
    (805,977 )     (765,109 )
Total Stockholders' Deficit
    (69,495 )     (528,627 )
                 
Total Liabilities and Total Stockholders' Deficit
  $ 492,656     $ 109  
 
The accompany notes are integral part of these consolidated financial statements.
 
 
3

 
 
ALVERON ENERGY CORP.
       
(A Development Stage Company)
 
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended April 30, 2012 and 2011, and Cumulative from
November 18, 2003 (Date of Inception) Through April 30, 2012 (Unaudited)
 
                           
November 18, 2003
 
   
Three Months
   
Three Months
   
Six Months
   
Six Months
   
(Date of Inception)
 
   
Ended
   
Ended
   
Ended
   
Ended
   
Through
 
   
April 30,
   
April 30,
   
April 30,
   
April 30,
   
April 30,
 
   
2012
   
2011
   
2012
   
2011
   
2012
 
                               
Revenues
  $ -     $ -     $ -     $ -     $ -  
                                         
Expenses
                                       
Professional fees
    18,145       3,400       20,145       8,000       85,653  
Consulting Expense
    -       -       -       26,000       30,000  
Interest expense
    3,437       11,398       13,116       18,984       57,440  
Office and Administrative
    6,180       465       7,607       7,536       41,042  
Research and development
    -       9,072       -       9,072          
Loss on Investment
    -       -       -       239,900       589,900  
Foreign currency translation
    -       (3,657 )     -       (5,225 )     1,942  
Total operating expenses
    27,762       20,678       40,868       304,267       805,977  
                                         
Net Loss
    (27,762 )     (20,678 )     (40,868 )     (304,267 )     (805,977 )
                                         
Non Controlling Interest
    -       4,756       -       54,542       59,374  
                                         
Adjusted Net Loss
  $ (27,762 )   $ (15,922 )   $ (40,868 )   $ (249,725 )   $ (746,603 )
                                         
Loss per Common Share – Basic
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
and Diluted
                                       
                                         
Weighted average number of shares outstanding during the periods basic and diluted
    52,825,185       52,140,000       55,473,333       51,722,597          
 
The accompany notes are integral part of these consolidated financial statements.
 
 
4

 
 
ALVERON ENERGY CORP. – Consolidated
       
(A Development Stage Company)
       
         
STATEMENTS OF CASH FLOWS
       
For the Six Months Ended April 30, 2012 and 2011, and Cumulative from November 18, 2003
 
(Date of Inception) Through April 30, 2012 (Unaudited)
       
 
               
November 18, 2003
 
                (Date of Inception)   
   
Six Months Ended
   
Six Months Ended
   
 Through
 
   
April 30, 2012
   
April 30, 2011
   
April 30, 2012
 
                   
Cash Flows from Operating Activities
                 
Net (loss) earnings
  $ (40,868 )     (304,267 )     (805,977 )
Adjustments to reconcile net loss to net cash used by
                       
Operating activities:
                       
Common stock issued for services
    -       26,000       30,000  
Interest accrued on convertible note
    -       -       6,220  
Loss on discontinued operations
    -       239,900       545,965  
Repayment in excess of lending
    -       5,000       5,000  
Changes in operating assets and liabilities:
                       
Prepaid expense
    (200,000 )     -       (200,000 )
   Accounts payable and accrued liabilities
    15,172       21,020       58,038  
Net cash used in continuing operating activities
  $ (225,696 )     (12,348 )     (360,754 )
Net cash used in discontinued operating activities
    -       -       (44,206 )
Cash flows used in operating activities
    (225,696 )     (12,348 )     (404,960 )
                         
Cash Flows from Investing Activities
                       
Discontinued investing activities
  $ -       (501,758 )     (501,758 )
Cash flows used in investing activities
    -       (501,758 )     (501,758 )
                         
Cash Flows from Financing Activities
                       
Proceeds from convertible note
    -       (6,000 )     6,000  
Repayment of note
    -       -       (11,000 )
Proceeds from issuance of common stock
    500,000       -       561,200  
Advances from related party
    18,243       550,446       615,696  
Stockholder contributions
    -       -       37,199  
Net cash used in continuing financing activities
    518,243       544,446       1,209,095  
Net cash provided by discontinued financing activities
                    (9,721 )
                         
Cash flows provided by financing  activities
  $ 518,243       544,446       1,199,374  
                         
Net (Decrease) Increase in Cash
  $ 292,547       30,340       292,656  
                         
Cash and Cash Equivalents beginning of period
  $ 109       15,858       -  
                         
Cash and Cash Equivalents end of period
  $ 292,656       46,198       292,656  
                         
Supplemental Cash Flow Information
                       
                         
Interest paid
    -       -       -  
Income taxes paid
    -       -       -  
 
The accompany notes are integral part of these consolidated financial statements.
 
 
5

 
 
ALVERON ENERGY CORP.
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Financial Statements
April 30, 2012 and 2011
Unaudited
 
1.            History and Organization

Modena I, Inc. was a development stage company which was incorporated under the laws of the State of Delaware on November 18, 2003.  From inception to September 2007, the Company was focused on providing a vehicle for a foreign or domestic non-public company to become an SEC reporting (publicly-traded) company. To this end, we intended to locate and negotiate with a business entity for the combination of that target company with the Company.  Since September 2007, the Company has shifted its focus to becoming a wind and hydro electric energy generation company.
 
On April 12, 2010 the Board of Directors of Modena I, Inc. (the “Company”) filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of Delware changing the Company’s name to Alveron Energy Corp.
 
On April 20, 2012, the Company underwent a change of control where the former President and Director of the Company sold 39,900,000 common shares to a company controlled by the current President and Director of the Company.
 
On May 14, 2012, we acquired 100% of SafeBrain System (“SafeBrain”) from Rod Newlove for $900,000.  Safebrain is a corporation duly organized, validly existing, and in good standing under the laws of Saskatchewan, Canada.  Following payment, Newlove will transfer all rights to SafeBrain System to the Company.  The SafeBrain Systems works in two ways; the Cranium Impact Analyzer Sensor (“C.I.A”) is mounted on the helmet of athlete; The SafeBrain software allows in-depth analysis of any impact event and can be customized for the notification and data logging settings for each athlete. The Company plans to market the SafeBrain System to non-professional athletes who participate in sports that require helmets such as hockey, football, biking, motor-cross, skiing and snowboarding.

2.            Going Concern
 
These accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company has a working capital deficit of $69,495 and has no current revenue stream. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
 
The Company's ability to continue as a going concern is also contingent upon its ability to complete certain capital formation activities and generate working capital operations in the future. Management's plan in this regard is to secure additional funds through equity financing activities, and from loans made by the Company's stockholder.
 
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability of the Company to continue as a going concern.
 
 
6

 
 
3.            Basis of Presentation

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is October 31.
 
4.            Principle of Consolidation

The accounts of all of our wholly-owned subsidiaries are included in the consolidation of these financial statements from the date of acquisition.  All significant intercompany accounts and transactions have been eliminated in consolidation.  During the current quarter we have consolidated the joint venture as discussed in note 9 below. The Company records net income attributable to non-controlling interest in the consolidated statements of operations for any non-owned portion of its consolidated subsidiary.  Non-controlling interest being accounted for in owners’ equity on the consolidate balance sheet.  
 
5.            Summary of Significant Accounting Policies
 
a)            Fair Value of Financial Instruments
 
Pursuant to ASC 820, Fair Value Measurements and Disclosures , an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
 
Level 1
 
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
 
Level 2
 
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
 
Level 3
 
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
 
The Company’s financial instruments consist principally of cash, accounts payable, accrued liabilities, and amounts due to related parties. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
 
 
7

 
 
b)            Earnings or Loss Per Share
 
The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.
 
c)            Use of Estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
d)            Cash and Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of October 31, 2011 and 2010, there were no cash equivalents.
 
e)            Recent Accounting Pronouncements
 
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operation.

f)             Foreign Currency Translation
 
Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into United States dollars at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in income.
 
g)            Stock-based Compensation
 
The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.
 
 
8

 

6.            Prepaid Expense
 
       During the period the company prepaid $200,000 to outside consultants for services to be performed subsequent to April 30, 2012.

7.            Promissory Note
 
In July 2007, the Company received proceeds of $6,000 and issued a convertible note to an unrelated party.  The loan bears a stated interest rate of 5% per annum, is unsecured and the principal amount of $6,000 plus all accrued interest was due on July 2, 2010. As of October 31, 2010 the note was past due.  In addition, the holder has the option at any time to convert all or part of the outstanding principal and interest amount into common shares of the Company contingent upon mutual agreement on a conversion price between the company and the note holder.  The number of common shares that shall be issued upon conversion of the note shall be determined by the holder and the Company.
 
The Company evaluated the conversion feature embedded in the debt instrument and concluded that a beneficial conversion feature existed.  In accordance with the provisions of FASB ASC Topic 470-20, the Company calculated the aggregate value of the embedded beneficial conversion features in connection with the issuances of the convertible notes. The fair value of the embedded beneficial conversion feature was estimated to be the difference between the issue date fair value and face amount of the debt, with the fair value of the debt being determined on a relative fair value basis based on the underlying estimated fair values of the common shares issuable on conversion. The embedded beneficial conversion feature was recorded as a contribution to additional paid-in capital of $2,715. The resulting debt discounts are being accreted over the term of the notes using the effective interest amortization method.   In addition, the Company evaluated the convertible note for embedded derivatives and as a result of the provision in the Convertible Promissory Note agreement; conversion of note is contingent upon a mutually agreed upon conversion price.  As such, no derivative liabilities need to be recorded.

On November 26, 2010, Alveron repaid $6,000 principal towards the convertible promissory note. As of April 30, 2012, accrued interest of $1,493 remains unpaid.
 
8.            Related Party Transactions

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

During the quarter, $18,243 was paid by shareholder for office and administration fees, which were added to the related party loans. Since inception, the shareholder has advanced funds for professional fees and other office and general expenses in the amount of $638,173.  The shareholder has waived reimbursement of $137,199 and considered these advances as a contribution to capital. Accordingly, the contributions have been recorded as additional paid-in capital. The remaining $500,974 is considered as an unsecured loan with interest rate of 8% annual rate and due upon demand. Accrued interest recorded as of April 30, 2012 is $13,116.

9.            Stockholders’ Activity

Between April 11, 2012 and April 30, 2012, we sold 3,333,334 Units at a price of $0.15 per Unit to a group of private investors.  Each Unit consisted of one share of common stock and one warrant.  Every two warrants entitle the holder to purchase one share of our common stock at a price of $0.35 per share at any time on or before April 30, 2014.  A total of 1,666,667 warrants were issued, with a relative fair market value of $118,114. The warrants were valued using the Black-Scholes Valuation Model using the stock price on the date of grant.

 
9

 
 
10.          Joint Venture

On February 12, 2010, the Company formed a new Joint Venture Corporation, “Yantai Alveron Energy Development Company”, in Shandong, China as per the agreement sign on June 20, 2009. The company ownership was organized per the agreement with Alveron Energy Corp. owning 77% and the joint partners owning the remaining 23% of the new entity. On the date of the Joint Venture, Yantai had no balance sheet or income statement activities. Alveron Energy Corp. transferred a total of $539,900 to this new entity during the quarter ending January 31, 2011 to be used on the feasibility report for a potential 48MW wind energy plant in Shandong, China. Out of the total $539,900, $239,900 was allocated to the Rushan Project and $258,230 to the Longquan Project. As of October 31, 2011 and based on events that have deterred the likely success of the Rushan and Longuan Project, the company has discontinued operations in the Joint Venture.

11.          Subsequent Events

On May 14, 2012, we acquired 100% of SafeBrain System (“SafeBrain”) from Rod Newlove for $900,000.  Safebrain is a corporation duly organized, validly existing, and in good standing under the laws of Saskatchewan, Canada.  Following payment, Newlove will transfer all rights to SafeBrain System to the Company.  The SafeBrain Systems works in two ways; the Cranium Impact Analyzer Sensor (“C.I.A”) is mounted on the helmet of athlete; The SafeBrain software allows in-depth analysis of any impact event and can be customized for the notification and data logging settings for each athlete. The Company plans to market the SafeBrain System to non-professional athletes who participate in sports that require helmets such as hockey, football, biking, motor-cross, skiing and snowboarding.
 
 
10

 
 
Item 2. Management’s Discussion and Analysis and Plan of Operation.

Modena I, Inc. was a development stage company which was incorporated under the laws of the State of Delaware on November 18, 2003.  From inception to September 2007, the Company was focused on providing a vehicle for a foreign or domestic non-public company to become an SEC reporting (publicly-traded) company. To this end, we intended to locate and negotiate with a business entity for the combination of that target company with the Company.  Since September 2007, the Company has shifted its focus to becoming a wind and hydro electric energy generation company.

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

In February 12, 2010, the Company formed a new Joint Venture Corporation, “Yantai Alveron Energy Development Company”, in Shandong, China as per the agreement signed on June 20, 2009. The company ownership was organized per the agreement with Alveron Energy Corp. owning 77% and the joint partners owning the remaining 23% of the new entity. Alveron Energy Corp. transferred $50,000 to this new entity during the quarter ending July 31, 2010 to be used on the feasibility report for a potential 48MW wind energy plant in Shandong, China. On the date of the Joint Venture, Yantai had no balance sheet or income statement activities. Alveron Energy Corp. transferred a total of $539,900 to this new entity during the quarter ending January 31, 2011 to be used on the feasibility report for a potential 48MW wind energy plant in Shandong, China. Out of the total $539,900, $239,900 was allocated to the Rushan Project and $258,230 to the Longquan Project. On July 20, 2011, the Company discontinued the operations for the Longquan joint venture to build the 48MW wind power plant near Yantai, Shandong, China. The operations were discontinued due to the inability to further fund the project under the time line required by the joint venture. The Company suffered a loss as of October 31, 2011 for the amount of $306,064 due to the discontinued operation on the Longquan Project.  In addition, the Rushan Project $239,900 loss has been reclassified in a prior period, to discontinued operations.  Total loss from discontinued operation from inception to October 31, 2011 is $589,900.

In March 2012, Michael Scott purchased 39,900,000 shares of our common stock from Sang-Ho Kim who, at that time, was our Chief Executive Officer.

In March 2012, Sang-Ho Kim and Surendran Shanmugan appointed Michael Scott as one of our directors. Following the appointment of Mr. Scott, Mr. Kim resigned as our officer. Following his resignation, Mr. Scott became our Chief Executive Officer and our Principal Financial and Accounting Officer.

In March 2012 Mr. Scott transferred 18,900,000 shares he purchased from Sang-Ho Kim to various shareholders in SafeBrain Systems, Inc. and to other third parties.

Mr. Kim and Mr. Shanmugan resigned as directors on April 15, 2012.

Acquisition of the SafeBrain Technology

On May 25, 2012, we acquired the SafeBrain System (“SafeBrain”) from Rod Newlove for $900,000, of which $600,000 has been paid and the remaining $300,000 was to be paid no later than June 14, 2012.

SafeBrain works in two ways:

·  
The Cranium Impact Analyzer Sensor (the “C.I.A.”) is mounted on the helmet of an athlete; and
 
·  
The SafeBrain software allows in-depth analysis of any impact event and can be customized for the notification and data logging settings for each athlete.

The C.I.A. sensor was designed to ensure compatibility with a wide range of athletic helmets. The sensor is approximately the size of a quarter and weighs less than 8 grams. Even at this small size, the C.I.A. patented sensor contains a 3-axis accelerometer, based on a 16-bit microprocessor. The C.I.A. sensor contains a data-logger and real-time clock to provide time-stamped force-readings when used with the SafeBrain software.
 
 
11

 

Placed on the helmet, the small CIA sensor accurately measures G-force on all 3 –axis. An LED indicator light flashes to alert the monitor, coaching staff or an individual when an impact has occurred that has the potential to cause a concussion which requires proper assessment and perhaps medical attention.

On May 15, 2012, we entered into a consulting agreement with a company controlled by Mr. Newlove. The agreement provides that we will pay the consultant $10,000 per month for supervising the manufacturing of, and developing improvements for, the SafeBrain System. In addition, during each twelve-month period during the term of this agreement, we will provide supplies and materials to the Consultant, at a cost not to exceed $5,000 during the twelve-month period, to be used by the Consultant in performing the consulting services.

The consulting agreement will expire on June 30, 2017.

Marketing

We plan to market the SafeBrain System to non-professional athletes who participate in sports that require helmets such as hockey, football, biking, motor-cross, skiing and snowboarding.

There are over 1.5 million registered minor hockey players worldwide with over 71% of them being located in North America representing over 50,000 teams.

There are an estimated 1.1 million high school students playing American football and 35,000 college players currently in the USA. Studies published over the last 20 years indicate that 15-20% of high school football players or nearly 250,000 players suffer concussions each year in the United States. According to Safekids.org as of October 25, 2011, thirty-three states in the USA have enacted youth sports concussion related laws. Although the wording varies from state to state the focus is primarily on three main points;

·  
Teams are to educate their players and parents about the nature of concussions and brain injury;
 
·  
Coaches who suspect a player has sustained a concussion must remove the player from the game, competition and practice; and
 
·  
A player removed from play due to a concussion must be evaluated by a health care provider and receive written clearance before participating in sports again.

With the demand for extreme sports related competitions growing, sports such as biking, skiing, snow-boarding, motor cross and the like are also garnering significant media exposure for head trauma related injuries most noticeably concussions.

We believe SafeBrain is currently the only product that has state of the art advancement technology with 360 degree impact gauging and monitoring in addition to indicator warning lights that flash the moment of impact.

SafeBrain will be marketed to all amateur football and hockey teams starting at the novice level through major junior and professional levels. In addition SafeBrain will also be marketed to individuals and teams in other sports such as skateboarding, skiing, biking, bmx freestyle, motor cross, sport racing and lacrosse. The primary focus for the first eighteen to twenty-four months will be the North American football and hockey markets although there will be no limitations placed on sales in other markets.

Although SafeBrain will benefit from the ongoing media print and television exposure to sports related concussions, to help drive awareness for SafeBrain, the marketing approach will be multifaceted. We will hire a dedicated sales team to assist in generating interest from teams and individuals throughout Canada and the United States. The sales team will be responsible for to following up with teams currently pilot testing the product, setting up media events and interviews, directing targeted traffic to our website, print and content publications as well as organizing booths and displays at all the large sports shows and youth development camps in North America.
 
 
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We expect our revenues will be derived from three components.

Unit sales: Football/Cost $4,995.00

Each SafeBrain System will contain a Team Kit which consists of: 52 C.I.A. Sensors, Safe Brain Software, Netbook PC, Storage Case, Instruction Manual, two data transfer interface cables and 2 C.I.A. emergency replacement sensors.

Unit sales: Hockey/Cost $2,995.00

Each SafeBrain System will contain a Team Kit which consists of: 22 C.I.A. Sensors, Safe Brain Software, Netbook PC, Storage Case, Instruction Manual, two data transfer interface cables and 2 C.I.A. emergency replacement sensors.

Maintenance Agreement and Team Maintenance/Cost $499.00.

The annual maintenance agreements for teams or individuals will include complete battery replacement on all Units as needed, testing, verification and calibration certification on all CIA devices. Data storage is also included to record and store downloaded user data safely and effectively for the entire time any one specific user or team is using the device. A satisfaction guaranteed lifetime warranty also enables easy repair or replacement on any Units sold.

We will also sell individual Units at a cost of $199.00 and annual maintenance costs $49.99 per year.

Manufacturing

We do not own any manufacturing facilities.  Accordingly, we will use unrelated third parties to manufacture our SafeBrain System.  We do not have any written agreements with any person regarding the manufacture of the SafeBrain system or its components.

Plan of Operation

Between April 11, 2012 and April 30, 2012, we sold 3,333,334 Units at a price of $0.15 per Unit to a group of private investors.  Each Unit consisted of one share of common stock and one warrant.  Every two warrants entitle the holder to purchase one share of our common stock at a price of $0.35 per share at any time on or before April 30, 2014.

Our plan of operation and capital requirements for the twelve months ending May 31, 2013 are shown below.
 
Activity
 
Estimated  Completion Date
 
Estimated Cost
 
           
Production
      $ 100,000  
Research and Development
        50,000  
Marketing
        150,000  
Working Capital
        390,000  
Total
      $ 690,000  
 
As of June 15, 2012 we had generated less than $30,000 in revenue from sales of SafeBrain systems.
 
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General

Our principal offices are located at 100, 224-11th Avenue S.W., Calgary, AB T2R 0C3.  Our offices are provided to us free of charge.

Our website is www.safebrain.ca and our telephone number is (403) 801-1506.

As of June 15, 2012 we did not employ any persons on a full time basis.

Results of Operation
 
The Company did not have any operating income from inception (November 18, 2003) through April 30, 2012. During the three months ended April 31, 2012, the company had $5,700 of accounting expenses, $12,445 of legal expenses, interest expense of $3,437 and office and general expenses of $6,180 as compared to the three months ended April 30, 2011, where the company had $3,400 of accounting expenses, interest expense of $11,398 and office and general expenses of $465. The company had no consulting expenses and no loss on investments during the three months ended April 30, 2012 and for the three months ended April 30, 2011. During the three months ended April 30, 2012, the company did not have research and development expenses as compared to the three months ended April 30, 2011, where the company had research and development expenses of $9,072. During the three months ended April 30, 2012, the company did not have foreign currency translation as compared to the three months ended April 30, 2011, where the company had foreign currency translation gain of $3,657.
 
Liquidity and Capital Resources

As shown in the accompanying financial statements, Alveron generated a consolidated net loss of $805,977 from November 18, 2003 (inception) to April 30, 2012, and has an accumulated deficit of $805,977 and working capital deficit of $69,495 as of such period. These results raise substantial doubt as to our ability to continue as a going concern.

 As our operations become more complex, it is anticipated that these costs will increase. We do not have sufficient funds on hand to cover these expenses.  Our cash on hand, $292,656 as of April 30, 2012, will not be sufficient to implement operational activities during the next 12 months and we will require at least $690,000 additional funding to implement our business plan.

Going Concern Consideration

Our independent auditors included an explanatory paragraph in their report on the financial statements included herein regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.
 
Critical Accounting Policies And Estimates
 
Our most critical accounting policies, which are those that require significant judgment, include: income taxes and revenue recognition. In-depth descriptions of these can be found in our Annual Report on Form 10-K for the fiscal year ended October 31, 2011 (the “2010 Form 10-K”). There have been no material changes in our existing accounting policies from the disclosures included in our 2010 Form 10-K.
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.
 
 
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Item 3.  Quantitative and Qualitative Disclosures about Market Risks

We conduct our business in United States dollars. Our market risk is limited to the United States domestic, economic and regulatory factors.

Item 4T. Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures

Management’s Report on Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.
 
As the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our reports as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting
 
During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
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PART II
OTHER INFORMATION
 
Item 1.   Legal Proceedings.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
 
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.
 
Between April 11, 2012 and April 30, 2012, we sold 3,333,334 Units at a price of $0.15 per Unit to a group of private investors. Each Unit consisted of one share of common stock and one warrant. Every two warrants entitle the holder to purchase one share of our common stock a price of $0.35 per share at any time on or before April 30, 2014.
 
We relied upon the exemption provided by Section 4(2) of the Securities Act of 1933 with respect to the issuance of these securities.  The persons who acquired these securities were sophisticated investors and were provided full information regarding our business and operations.  There was no general solicitation in connection with the offer or sale of these securities.  The persons who acquired these securities acquired them for their own accounts.  The certificates representing these securities will bear a restricted legend providing that they cannot be sold except pursuant to an effective registration statement or an exemption from registration.  No commission or other form of remuneration was given to any person in connection with the sale of these securities. The company has a total of 55,473,333 common shares issued and outstanding held by 57 individuals.
 
 
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Item 3.   Defaults Upon Senior Securities.
 
None.
 
Item 4.   Submission of Matters to a Vote of Security Holders.
 
There has not been any matter submitted to a vote of the Company’s shareholders, through the solicitation of proxies or otherwise, during the three months ended April 30, 2012.
 
Item 5.   Other Information.
 
None.

Item 6.   Exhibits and Reports on Form 8-K

(A) Exhibits

Exhibit Number
 
Description
  
 
  
31.1
 
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  
 
  
32.1
 
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
101.INS **
 
XBRL Instance Document
     
101.SCH **
 
XBRL Taxonomy Extension Schema Document
     
101.CAL **
 
XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF **
 
XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB **
 
XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE **
 
XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(B)  Reports on Form 8-K
 
Form 8-K Filed on March 30, 2012, reporting that Sang-Ho Kim and Surendran  Shanmugan  appointed Michael Scott as one of our directors.  Following the appointment of Mr. Scott,  Mr. Kim resigned as our officer.  Following his resignation,  Mr. Scott became our Chief Executive  Officer and our Principal  Financial and  Accounting  Officer.  It is expected that Sang-Ho Kim and Surendram  Shanmugan  will resign as our directors on or before April 15, 2012.
 
Form 8-K Filed on May 14, 2012, reporting that the Company entered into an  agreement  to acquire the SafeBrain System.

 
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SIGNATURES

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

 
ALVERON ENERGY CORP.
 
       
Date: June 26, 2012 By:  /s/ Michael Scott  
    Name: Michael Scott  
    Title: Chief Executive and Financial Officer  
                           
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