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Item 2. Management’s Discussion and Analysis

2010-07-30 compared with 2010-03-24 · 153 added, 100 removed, 12 unchanged (95% of the section changed)

1 unchanged sentence

Results of Operations.

FORWARD-LOOKING

quarterly report contains forward-looking statements.

These statements relate to

future events or our future financial performance.

In some cases, you can

identify forward-looking statements by terminology such as "may", "should",

"expects", "plans", "anticipates", "believes", "estimates", "predicts",

"potential" or "continue" or the negative of these terms or other comparable

These statements are only predictions and involve known and unknown

risks, uncertainties and other factors that may cause our or our industry's

actual results, levels of activity, performance or achievements to be materially

different from any future results, levels of activity, performance or

achievements expressed or implied by these forward-looking statements.

we believe that the expectations reflected in the forward-looking statements are

reasonable, we cannot guarantee future results, levels of activity, performance

or achievements.

Except as required by applicable law, including the

securities laws of the United States, we do not intend to update any of the

forward-looking statements to conform these statements to actual

unaudited financial statements are stated in United States Dollars (US$) and are

prepared in accordance with United States Generally Accepted Accounting

The following discussion should be read in conjunction with our

financial statements and the related notes that appear elsewhere in this

quarterly report.

The following discussion contains forward-looking statements

that reflect our plans, estimates and beliefs.

Our actual results could differ

materially from those discussed in the forward looking statements.

following discussion contains forward-looking statements that reflect our plans,

estimates and beliefs.

Our actual results could differ materially

from those discussed in the forward looking statements.

could cause or contribute to such differences include, but are not limited to,

those discussed below and elsewhere in this quarterly report.

quarterly report, unless otherwise specified, all dollar amounts are expressed

in United States dollars.

All references to "US$" refer to United States dollars

and all references to "common shares" refer to the common shares in our capital

in this quarterly report, the terms "we", "us", "our" and "our company" means

Clenergen Corporation, unless otherwise indicated.

those discussed below and elsewhere in this Quarterly Report on Form

For further information, see “Note Regarding Forward-Looking

of Operations

month Summary ending January 31, 2010 and 2009

operating expenses for the three month periods ended January 31, 2010 and 2009

are outlined in the table below:

Administrative

expenses for the three months ended January 31, 2010, increased by $1,441,350 as

compared to the comparative period in 2009 primarily as a result of an increase

in legal, professional and consulting fees and travel expenses.

not earned any revenues since our inception and we do not anticipate earning

revenues in the upcoming quarter.

months ended April 30, 2010 and 2009

results of operations for the subject three-month periods are summarized as

Three Months Ended

not recognize any revenues for the three months ended April 30, 2010 (the "2010

Second Quarter") and 2009 (the "2009 Second Quarter").

and administrative expenses for the three months ended April 30, 2010 increased

by $5,365,548 as compared to the 2009 Second Quarter, primarily as a result of

share-based compensation totaling $4,615,802, as compared to $0 incurred in the

2009 Second Quarter.

The remaining general and administrative

expenses reflect increases in travel, legal, and professional fees, incurred, in

part, in connection with our efforts to migrate from the advanced development

stage to an operating company.

months ended April 30, 2010 and 2009

results of operations for the subject six-month periods are summarized as

Six Months Ended

not recognize any revenues for the six months ended April 30, 2010 (the "2010

Six Month Period") and 2009 (the "2009 Six Month Period").

to April 30, 2010, we migrated from a development stage company to an operating

company as a result of our acquisition of a biomass energy plant in Salem, India

on June 2, 2010.

We expect to generate revenues as a result of plant

operations, commencing with our fiscal quarter ending October

We also entered into an agreement in July 2010 to acquire a

turnkey 18 MW/e biomass power plant located near Chennai, India.

expect to consummate the Chennai acquisition in our current fiscal

and administrative expenses for the six months ended April 30, 2010, increased

by $6,787,657 as compared to the six months ending April 30, 2009, primarily as

a result of the establishment of field offices in Chennai and the Philippines in

the 2010 Six Month Period totaling $1,129,786, development of project sites near

Salem and Chennai in the 2010 Six Month Period in anticipation of our acquiring

biomass power plants associated such sites totaling $391,332 and share-based

compensation totaling $5,116,651.

significant expenses incurred during the six month period include travel, legal,

and professional fees, reflecting, in part, our efforts to migrate from the

advanced development stage to an operating company.

operating expenses to increase as we place on-line and expand the capacity of

power plants we acquire, as well as operating expenses relating to our

plantations as more acreage is devoted to growing biomass feedstock for our

power plants and for sale to third parties.

We do not anticipate compensating

our officers, directors, employees and consultants with shares of our common

stock during the next six months at the same or similar rate as incurred in the

2010 Six Month Period, although we do intend to grant warrants at exercise

prices equal to or greater than the market price of our common stock on the

dates of such warrant grants, as well as implementing a stock option program, so

as to provide incentives to our officers, directors, employees and consultants.

We expect to commence generating revenue in the second half of our current

fiscal year, with growth in revenue as operations expand.

expect that expenditures will increase due to our further acquisition of and

expansion of generating capacity at our power plants;

but anticipate that that

such costs will be offset by the revenue generated from such power

and Financial Condition

Working Capital

April 30 2010, we had working capital of $24,081, calculated as

At October 31,

Increase/Decrease

Cash Provided by (Used in) Operating Activities

Cash Provided by (Used In) Investing Activities

working capital has increased over the six month period ending April 30, 2010 by

Our current assets have increased by $2,736,995 since

October 31, 2009 while our current liabilities have increased by $2,178,168 for

the same period.

the six months, we increased our current assets by virtue of prepaid expenses,

capital from stock subscriptions, and proceeds from short-term notes

retained Vastani Company SA (“Vastani”) as an advisor pursuant to a Letter of

Agreement, dated March 15, 2010.

As of April 30, 2010, we are

reporting a balance of $699,643 in subscriptions receivable.

represents the balance of monies held in escrow for completed

subscriptions.

This balance was received from our escrow agent during

Subscriptions

entered into various consulting agreements whereby consultants have been issued

shares as compensation for services.

We are amortizing the value of

the compensation over the terms of the individual agreements and is carrying the

unearned portion as prepaid expense.

As of April 30, 2010, the value

of prepaid consulting is $1,544,105.

liabilities have increased primarily as a result of expenses payable including,

but not limited to, travel and legal and professional fees.

received approximately $220,000 from short term shareholder notes.

past six months, we have been transitioning from an advanced development stage

entity to an operating company.

During the six month period, we have

primarily been financed through use of our common stock;

through sales to third

parties and others and by the issuance of stock as share-based

compensation.

We currently have 50 highly qualified individuals,

located in six different geographic areas, providing services to our company.

part by preserving cash flow through compensating, in whole or part, our

services providers, consisting of employees and consultants, through issuances

of stock rather than cash payments, we believe that we have acquired assets,

including what we hope to be valuable intellectual property rights, and have

begun to create the infrastructure required to generate revenues in the near

While such stock issuances have resulted in dilution to our

current shareholders, we note that there are no current liens on any of our

assets that could, in the long term, restrict our ability to manage operations

and the further implementation of our business model.

following summarizes our cash flows for the six months ending April 30,

Six Months Ended

cash used in operating activities

cash used in investing activities

cash provided by financing activities

(Decrease) In Cash During The Period

January 31, 2010, our company had working capital of $1,120,248.

We estimate our

operating expenses and working capital requirements for the next twelve month

period to be as follows:

Estimated Expenses for the Next Twelve Month

of exchange rate changes on cash

Increase (Decrease) in Cash During the Period

estimate our operating expenses and working capital requirements for the next

twelve month period to be as follows:

power plant new build (2.25MW/h)

power plant acquisitions and upgrade (18MW/h)

power plant acquisitions and upgrade(1.5MW/h)

and consulting

and administrative

to raise additional capital required to meet immediate short-term needs and to

meet the balance of our estimated funding requirements for the twelve months,

primarily through the private placement of our securities.

not aware of any known trends, demands, commitments, events or uncertainties

that will result in or that are reasonably likely to result in our liquidity

increasing or decreasing in any material way.

require additional capital to fund our business and development plan, including

the development and/or construction of our biomass/gasification plants and

expansion of our designated biomass plantations in the regions of

In addition, once these plants have been constructed, we

will have to fund the start-up operations of these plants until, if ever, the

plants generate sufficient cash flow from their operations.

also encounter unforeseen costs that could also require us to seek additional

As a result, we expect to seek to raise additional debt

and/or equity funding.

The full and timely development and

implementation of our business plan and growth strategy will require significant

additional resources, and we may not be able to obtain the funding necessary to

our planned acquisition, development, expansion and/or construction of biomass

power plants and biomass feedstock plantations.

In addition, once the

power plants have been constructed, we will need to fund the start-up costs

operations of these plants until, if ever, the plants generate sufficient cash

flow from their operations to fund the plants' ongoing costs and

We also may encounter unforeseen costs that could also

require us to seek additional capital.

As a result, our business plan

and growth strategy requires that we obtain significant additional financial

resources, including resources obtained through debt and/or equity

We may not be able to obtain the funding necessary to

implement our growth strategy on acceptable terms or at all.

inability to obtain such funding would prevent us from constructing any

biomass/gasification plants.

Furthermore, our construction strategy

may not produce revenues even if successfully funded.

We have not yet

identified all of the sources for the additional financing we require, although

we do have offers of debt financing from two banks for our Clenergen India

Limited and have, in the past, been able to raise equity capital through the

sale of minority interest in Clenergen India Limited.

succeed in raising additional equity capital or in negotiating and obtaining

additional financing.

Our ability to obtain additional capital will

also depend on market conditions, national and global economies and other

factors beyond our control.

We might not be able to obtain required

working capital, the need for which is substantial given our business and

development plan.

The terms of any future debt or equity funding that

we may obtain may be unfavorable to us and to our stockholders.

“smaller reporting company”, we are not required to provide tabular disclosure

Accounting Policies

inability to obtain such funding would prevent us from acquiring, developing,

expanding and/or constructing any plants or plantations.

our business development strategy may not result in significant revenues even if

successfully funded.

not yet identified all of the sources for the additional financing we require,

although we do have offers of debt financing from two banks and have, in the

past, been able to raise equity capital through the sale of equity interest in

Furthermore, we plan to make presentations to major

institutions and renewable energy investment funds in June and July 2010 with

the view of raising interest for our financing projects.

to obtain additional capital will depend on market conditions, national and

global economies, demand for electricity in countries in which we intend to

operate power plants, environmental and legal issues affecting power plant

operations, weather and other conditions affecting our biomass plantations and

other factors beyond our control.

The terms of any future debt or

equity funding that we may obtain may be unfavorable to us and to our

stockholders.

Critical Accounting

significant accounting policies are described in Note 2 of the Notes to

Consolidated Financial Statements included in our Annual Report.

A discussion of

our critical accounting policies and estimates is included in Management’s

Discussion and Analysis of Financial Condition and Results of Operations (the

“MD&A”) in our Annual Report.

There have been no material changes to the

critical accounting policies or estimates reported in the MD&A section of

our audited financial statements for the year ended October 31, 2009 as filed

with the SEC.

Consolidated Financial Statements included in our amended Annual Report on Form

10-K/A for the year ended October 31, 2009, filed with the Securities and

Exchange Commission on March 19, 2010.

A discussion of our critical

accounting policies and estimates is included in the Management’s Discussion and

Analysis of Financial Condition and Results of Operations section of such Form

There have no material changes to such critical accounting

policies or estimates as reported in such amended Annual Report

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q/A

Item 2. Management’s Discussion and Analysis