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Item 1. Financial Statements

2011-09-20 compared with 2011-06-20 · 166 added, 88 removed, 123 unchanged (67% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

April 30, 2011

July 31, 2011

October 31, 2010

Current Assets :

Accounts receivable

Other receivables

Prepaid expenses and other

Current Assets of discontinued operations

Total Current Assets

1 unchanged sentence

Property and equipment, net

Fixed Assets of discontinued operations

Total Fixed Assets

Other Assets :

Deposits of discontinued operations

Total Other Assets

LIABILITIES AND STOCKHOLDERS' EQUITY/DEFICIENCY

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities :

Accounts payable and accrued expenses

Payroll liabilities

Customer Advances

Due to Related Parties and Shareholders

Due to affiliates and shareholders

Current Liabilities of discontinued operations

Total Current Liabilities

Total Liabilities

Stockholders' Equity/(Deficiency) :

Stockholders' Deficiency :

Preferred stock, $0.001 par value;

5 unchanged sentences

Stock subscriptions receivable

Accumulated other comprehensive income/(loss)

Accumulated other comprehensive income

Accumulated deficit during development stage

Total Stockholders' Equity/Deficiency

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/DEFICIENCY

Total Stockholders' Deficiency

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CLENERGEN CORPORATION

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended April 30, 2011 and 2010

and from October 27, 2005 (Inception) to April 30, 2011

For the Three and Nine Months Ended July 31, 2011 and 2010

and from October 27, 2005 (Inception) to July 31, 2011

Three Months Ended

Six Months Ended

Nine Months Ended

From Inception

April 30, 2011

July 31, 2011

Cost of services

3 unchanged sentences

Interest expense

Other income, net

Loss before income taxes

Provision for income taxes

Loss from continuing operations

Income/(loss) from discontinued operations

Loss per share from continuing operations

Loss per share from discontinued operations

Loss per share, basic and diluted

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended April 30, 2011 and 2010

and From October 27, 2005 (Inception) to April 30, 2011

Six Months Ended

From Inception to

April 30, 2011

For the Nine Months Ended July 31, 2011 and 2010

and From October 27, 2005 (Inception) to July 31, 2011

Nine Months Ended

From Inception to July 31,

CASH FLOWS FROM OPERATING ACTIVITIES

7 unchanged sentences

(Increase)/decrease prepaid expenses and other current assets

(Increase)/decrease in accounts receivable

(Increase)/decrease in inventory

(Increase)/decrease in deposits

(Increase)/decrease other receivables

(Increase)/decrease deposits

Increase/(decrease) in accounts payable and accrued expenses

Increase/(decrease) in accrued payroll liabilities and customer advances

Total adjustments to net loss

Net cash used in operating activities

Net cash used in operating activities of continuing operations

Net cash (used in) provided by operating activities of discontinued operations

CASH FLOWS FROM INVESTING ACTIVITIES

Advances for discontinued operations

Purchase of furniture and equipment

12 unchanged sentences

Common stock issued for deposit

Common stock issued for conversion of debt

Common stock issued for debt cancellation

4 unchanged sentences

(A Development Stage Company)

For the Three and Six Months Ended April 30, 2011 and 2010

and from October 27, 2005 (Inception) to April 30, 2011

For the Three and Nine Months Ended July 31, 2011 and 2010

and from October 27, 2005 (Inception) to July 31, 2011

Notes to Condensed Consolidated Financial Statements

ORGANIZATION AND DESCRIPTION OF BUSINESS

Clenergen Corporation (the “Company”) was incorporated in the State of Nevada on May 2, 2005 under the name “American Bonanza Resources Limited.” On August 4, 2009, the Company acquired Clenergen Corporation Limited (UK), a United Kingdom corporation (“Limited”), and succeeded to the business of Limited.

Clenergen Corporation (the “Company,” “we,” “our” and “us”) was incorporated in the State of Nevada on May 2, 2005 under the name “American Bonanza Resources Limited.” On August 4, 2009, the Company acquired Clenergen Corporation Limited (UK), a United Kingdom corporation (“Limited”), and succeeded to the business of Limited.

Limited acquired the assets of Rootchange Limited, a biofuel and biomass research and development company, in April 2009.

The Company commenced operating two biomass power plants in India in October 2010.

The Company has entered into agreements to acquire such two plants from their current respective owners.

The agreement to acquire one of such plants, for which the Company is reporting $2,543,350 in revenues for the three months ended April 30, 2011 and $4,441,192 for the six months ended April 30, 2011 in the accompanying unaudited Condensed Consolidated Statements of Operations, requires, as a condition to consummating the acquisition, that the bank-lender to the plant, IDBI Bank Ltd., approve such acquisition and the assumption of the debt owed to the bank-lender.

The Company is in discussions with the bank-lender.

However, the bank-lender has stated that it will not approve the acquisition until such time as the Company provides sufficient collateral in the form of cash deposits with the bank-lender as required under Indian banking laws.

The Company currently does not have available the funds necessary to make such a deposit and is seeking additional capital to make the deposit.

No assurance can be given that the Company will be successful in obtaining such additional capital, nor, if successful, the terms and costs of additional capital will be advantageous to the Company.

The Company has an oral arrangement with the owners of the plant to the effect that the Company is operating the plant, retaining all revenues generated from such operations and paying all costs associated with operating the plant.

This oral arrangement can be terminated at any time.

As such, the revenues being generated may not be deemed revenues generated from continuing operations, which is a factor in determining whether or not the Company is to be treated, for accounting purposes, as a development stage company.

Accordingly, the Company will continue to be considered a development stage company until such time as the Company consummates its acquisition of this plant, or either (x) enters into a long-term definitive agreement to operate the plant, (y) commences significant operations at other plants or (z) commences other operations which result in generating operations from continuing operations under applicable accounting rules.

The Company is reporting zero revenues from the second power plant for both the three months and six months ended April 30, 2011.

The Company is in the process of developing strategic clean energy and sustainable fuel supply alternatives to address the demand for renewable and sustainable sources of power.

The Company has developed a unique supply of biomass for use with gasification, combustion steam, Pyrolysis oil and pelleting technologies to generate electricity.

The Company intends to use proprietary and mixed biomass feedstock to provide sustainable supplies of clean energy to regional, captive end users, mining companies and, through government- or privately-owned power grid systems and other end users, including private homes.

The Company intends to address the needs for a cleaner, greener planet with environmentally sound and sustainable clean energy generation and an integrated fuel supply chain, which is intended to be in compliance with and in excess of international standards for environmental protection, biodiversity, quality, safety and full traceability.

We had entered into agreements to acquire two biomass power plants from their current respective owners.

The agreement to acquire one of such plants, which generated $1,276,514 in revenues for discontinued operations for the three months ended July 31, 2011 and $5,717,705 for the nine months ended July 31, 2011, required, as a condition to consummating the acquisition, that the bank-lender to the plant, IDBI Bank Ltd, approve such acquisition and the assumption of the debt owed to the bank-lender.

However, the bank-lender had stated that it will not approve the acquisition until such time as we provided sufficient collateral in the form of cash deposits with the bank-lender as required under Indian banking laws.

We did not have available the funds necessary to make such a deposit.

We had an oral arrangement with the owners of the plant to the effect that we would operate the plant, retain all revenues generated from such operations and pay all costs associated with operating the plant.

We were not able to raise the funds required for the cash deposit from equity or debt financing.

Furthermore, the transportation cost of feedstock for supplying fuel to the power plant was significantly higher than projected.

Furthermore, servicing the debt loan to IDBI was not possible from the revenues generated from operating the power plant.

As a result, the plant operated at a net consolidated loss through until July 31, 2011.

We were not able to operate the power plant during the month of July 2011 due to a sudden change in government policy by the State of Tamilnadu regarding the sale of power by independent power producers (each, an “IPP”).

The office of the new Chief Minister of Tamilnadu proposed a change in legislation which would require IPP’s to either sell electricity to the state government or to private clients under private power supply agreements.

Historically, the power plant had been selling electricity to private clients and during off peak periods, selling electricity at a significantly lower rate to the State of Tamilnadu.

The consequences of such legislation being passed would have had a negative impact on the ability to generate profits from biomass power plants located within the State of Tamilnadu and possibly resulting in the closure of biomass power plants.

In order to counteract this legislation, all the IPPs stopped producing electricity as from July 1, 2011.

The legislation was withdrawn on July 27, 2011 as a result of the actions taken by the IPPs in the State of Tamilnadu.

We reported zero revenues from the second power plant, a 1.5MW Anaerobic Digestion Power Plant located in Namikkall, Tamilnadu for both the three months and nine months ended July 31, 2011.

Trials commenced in October 2010 using one of the GE Jenbacher gas engines.

The second engine required maintenance in order to be operational.

After three months of trials, it was determined that both the GE Jenbacher gas engines needed servicing in order to operate efficiently.

The estimated cost of repairs and maintenance required hiring specialized engineers to assess the cost involved in repairing the engines and providing ongoing maintenance services.

As a result of the operational issues associated with these two power plants, we decided on September 5, 2011 to divest ourselves of our assets and liabilities in Clenergen India Private Limited (“Clenergen India”).

We entered into a Transfer Agreement, effective as of September 5, 2011 (the “Divestiture Agreement”), whereby we sold to Maxrise Powergen Limited, a Hong Kong corporation (“Maxrise”), all of our equity interest in Clenergen India.

The purchase price for the sale of our Clenergen India equity interest was $1.00;

although the Divesture Agreement also requires Maxrise to transfer to us the sum of $1,011,669.99 by September 2, 2011.

Maxrise had requested additional time to complete the transfer such funds, of which we have granted.

We expect to have received the full amount on or before September 30, 2011.

Excluded from the transfer of our Clenergen India equity interest was the license we were granted from Star Biotechnology Limited related to Polyploidy growth technology covering India and Sri Lanka and other third party agreements with agronomy and technology suppliers located in India.

As a result of such sale, the assets and liabilities of Clenergen India will no longer be reflected on our consolidated financial statements.

Maxrise is owned by a consortium of Asian Investors.

The divestiture of Clenergen India, the granting of equity interests and 100% management control in Clenergen Ghana, Clenergen Guyana, Clenergen Trinidad and Clenergen Philippines to Futenco and the licensing of certain of our intellectual property rights to Futenco reflects the shift in our business model toward becoming a worldwide supplier of biomass feedstock for use in producing wood chips for renewable electricity, Pyrolysis oil and wood pellets to co-fire coal power plants in an effort to reduce their carbon emissions.

The business model anticipates a continued focus on the installation of small turnkey gasification power plants for the captive end users, such as mining and manufacturing operations.

Our primary income streams will be through the supply of saplings for energy crops, development fees, license fees, sale of biomass feedstock grown on our plantations and distributions from the Joint Venture Entities and other projects in which we participate.

BASIS OF PRESENTATION

1 unchanged sentence

In the opinion of management, all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods have been included.

The results of operations for the three months and six months ended April 30, 2011 are not necessarily indicative of results that ultimately may be achieved for any future interim period or for the year ending October 31, 2011.

The results of operations for the three months and nine months ended July 31, 2011 are not necessarily indicative of results that ultimately may be achieved for any future interim period or for the year ending October 31, 2011.

These interim unaudited financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended October 31, 2010.

The Company has evaluated all subsequent events through the date of the filing of the Company’s Form 10-Q in which these interim financial statements and notes thereto are included for appropriate accounting and disclosure.

The Company has evaluated all subsequent events through the date of the Company’s Form 10-Q in which these interim financial statements and notes thereto are included for appropriate accounting and disclosure.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

11 unchanged sentences

Amounts determined to be uncollectible will be written-off when it is determined that the balance will not be collected.

Based on the factors listed above, management concluded no allowance for doubtful accounts was required as of April 30, 2011.

Inventory - The inventory of the Company, comprising exclusively of the raw material feedstock fuel for the biomass power plant operated by the Company, have been valued at weighted average cost.

Based on the factors listed above, management concluded no allowance for doubtful accounts was required as of July 31, 2011.

Foreign currency translation - The Company’s assets and liabilities have been translated using the exchange rate at the balance sheet date.

1 unchanged sentence

Translation adjustments are reported separately and accumulated in a separate component of equity, “Accumulated other comprehensive income/loss.”

Comprehensive income (loss) - Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under US GAAP are included in comprehensive income (loss) but are excluded from net loss as these amounts are recorded directly as an adjustment to stockholders’ equity/ (deficiency).

The Company’s other comprehensive income (loss) is comprised of foreign currency translation adjustments.

5 unchanged sentences

Share-based awards that do not require future services are expensed immediately.

Basic earnings (loss) per share - Basic net loss per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding.

As of April 30, 2011, the Company has issued potentially dilutive purchase warrants to purchase an aggregate of 2,500,000 shares of the Company common stock.

Basic loss per share - Basic net loss per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding.

As of July 31, 2011, the Company has issued potentially dilutive purchase warrants to purchase an aggregate of 2,500,000 shares of the Company common stock.

These shares have no effect on earnings per share as a result of the operating loss of the Company.

7 unchanged sentences

The accompanying financial statements are presented on a going concern basis.

For the period of October 27, 2005 (date of inception) through April 30, 2011, the Company incurred an aggregate net loss of $42,007,449.

As of April 30, 2011, the Company has not emerged from the development stage and its ability to continue as a going concern is dependent upon the Company's ability to generate net income and obtain additional financing.

Since inception, the Company has financed its activities principally from the use of advances from stockholders and others to pay for its operations.

The Company intends on financing its future development activities and its working capital needs largely from the issuance of stock, until such time that funds provided by operations are sufficient to fund working capital requirements.

There can be no assurance that the Company will be successful at achieving its financing goals on reasonably commercial terms, if at all.

For the period of October 27, 2005 (date of inception) through July 31, 2011, the Company incurred an aggregate net loss of $42,623,471.

As of July 31, 2011, we had not emerged from the development stage and our ability to continue as a going concern is dependent upon our ability to generate net income and obtain additional financing.

Since inception, we have financed our operations principally from the use of advances from stockholders and others.

We intend to finance our future development activities through joint ventures, licensing fees and biomass supply agreements.

Under agreements signed with Futenco, all overhead, salaries and project financing requirements of the Joint Venture Entities for their current and future projects in Guyana, Ghana and the Philippines will be funded by Futenco.

We are not required to fund the salaries and overheads of our subsidiary companies.

As a result, we no longer retain any full time consultants.

We anticipate that we will finance our overhead, consulting, directors and advisory fees largely from the issuance of stock, until such time that funds provided by operations and other revenue streams are sufficient to fund our working capital requirements.

There can be no assurance that we will be successful at achieving our financing needs on reasonably commercial terms, if at all.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should the company be unable to continue as a going concern.

PREPAID EXPENSES AND OTHER

The Company has a receivable from United Biofuels Ltd.

in the amount of approximately $2.04 million representing advances the Company has made to a unit of the Government of India (IREDA) in connection with the Company’s planned acquisition of a 1.5 MW/h anaerobic digestion biomass power generation plant in Namakkal, Tamilnadu, India.

The Company has paid an advance of around $226,000 as an initial sum towards acquiring an 8.5 MW/h power plant in Tamil Nadu, India.

The Company also has made initial investments in and advances to several entities incorporated in Ghana, India and the Philippines, which were formed to develop and expand the Company’s business in such jurisdictions.

Further, the Company has paid approximately $551,000 towards the long term bank loan liability of the 18.0 MW/h power plant it currently operates in Tamil Nadu, India.

This payment has been classified as recoverable, pending the formal closure of the acquisition of the 18.0 MW/h power plant.

STOCK TRANSACTIONS

All forms of share-based payment awards, including shares issued under employee stock purchase plans, stock options, restricted stock and stock appreciation rights, as well as share grants and other awards issued to employees and non-employees under free-standing arrangements are recorded at fair value on grant date, based on the estimated number of awards that are expected to vest and will result in a charge to operations.

Between November 1, 2010 and January 31, 2011, the Company sold an aggregate of 673,046 shares of Company common stock to a total of nine purchasers in private transactions the Company conducted in Germany.

Gross proceeds from such sales totaled approximately $444,000 and selling commissions and other sale expenses totaled approximately $202,000, resulting in net proceeds of $242,000.

Between February 1, 2011 and April 30, 2011, the Company sold an aggregate of 1,107,600 shares of Company common stock to a total of twenty four purchasers in private transactions the Company conducted in Germany.

Gross proceeds from such sales totaled approximately $554,000 and selling commissions and other sale expenses totaled approximately $222,000, resulting in net proceeds from such sales of $332,000, of which $109,000 remains outstanding as at April 30, 2011.

On February 16, 2011, the Company sold and issued to a single investor 40,000 shares for a total consideration of $20,000.

Also, February 16, 2011, the Company sold and issued to a single investor 600,000 shares for a total consideration of $322,000.

In a third separate transaction occurring on February 16, 2011, the Company sold and issued to three investors 491,100 shares of its common stock for a total consideration of $270,000, which remains outstanding as at April 30, 2011.

The Company did not incur any commission or other fees in connection with such sales.

The Company's stock subscription receivable has increased by approximately $140,000 for the six months period between November 1, 2010 and April 30, 2011.

The Company has recovered during the six months period $257,000, being receivable from earlier periods, which has reduced the subscriptions receivable.

However during the six months period, the Company issued shares for which a gross subscription amount of $394,000 was outstanding as at the end of the quarter.

The effect of change in currency rates between November 1, 2010 and April 30, 2011 was approximately $2,000.

During the six months ended April 30, 2011, the Company received an advance of $500,000 pursuant to an informal arrangement with an investor in conjunction with the company’s efforts to raise additional capital.

On February 16, 2011, the Company formalized the arrangement with this investor and agreed to issue 600,000 shares of Company common stock at a purchase price of approximately $322,000, which purchase price was applied against the $500,000 advance.

A promissory note in the principal amount equal to the remaining balance of the advance, $177,884, was issued to the investor.

The promissory note had a stated interest rate of 12% per annum and matured on April 16, 2011.

On April 16, 2011, the investor agreed to extend the maturity date until June 30, 2011.

During the months of May and June, 2011, we sold an aggregate of 365,200 shares of our common stock to a total of four purchasers in private transactions we conducted in Germany.

Gross proceeds from such sales totaled approximately $181,000 and selling commissions and other sale expenses totaled approximately $72,000, resulting in net proceeds from such sales of $109,000.

On May 5, 2011, we issued an aggregate of 300,000 shares of our common stock to three consultants of our company, which were valued at $249,000.

On June 16, 2011, we sold and issued to a single investor 357,143 shares for a total consideration of $125,000.

We did not incur any commission or other fees in connection with such sale.

On June 29, 2011, we sold and issued to a single investor 285,714 shares for a total consideration of $100,000.

We did not incur any commission or other fees in connection with such sales.

On July 8, 2011, we sold and issued to a single investor 28,600 shares of our common stock for a total consideration of $10,000.

We did not incur any commission or other fees in connection with such sales.

Our stock subscription receivable has decreased by approximately $109,000 between April 30, 2011 and July 31, 2011, such subscriptions being receivable from earlier periods and recovered during the current quarter.

Pursuant to an agreement signed on May 17, 2011, the Company received an interim bridge loan of $150,000 from a private investor towards the working capital requirements of its India subsidiary.

The Company intends to repay the bridge loan to the private investor in September 2011.

SUBSEQUENT EVENTS

On May 23, 2011, the Company obtained a loan of $300,000 from TCA Global Credit Fund, LP (“TCA”).

The loan is evidenced by a promissory note and provides for an interest rate of 10% per annum, payable on the maturity date.

The maturity date of the note is November 21, 2011.

The Company received net proceeds of $277,950 on May 26, 2011 after deduction of incidental legal expenses and loan commitment charges imposed by TCA.

As security for the repayment of the note, the Company entered into a Pledge and Escrow Agreement, dated May 21, 2011.

Pursuant to such agreement, the Company pledged 5,000,000 shares of common stock to secure the satisfaction of the Company’s obligations under this note.

The pledged shares are being held in escrow by TCA’s legal counsel.

The Company intends to use the net proceeds of the loan to fund a deposit on acquisition of an 8.5 MW/h biomass plant in India and for general working capital purposes.

The Company entered into a Shareholders Agreement (the “Clenergen Ghana Shareholders Agreement”) with Futenco with respect to the operation of its formerly majority-owned subsidiary, Clenergen Ghana Limited (“Clenergen Ghana”).

The Clenergen Ghana Shareholders Agreement was made effective as of September 5, 2011.

Under the Clenergen Ghana Shareholders Agreement, Futenco was required to invest $35,000 in Clenergen Ghana on or before August 31, 2011.

As of September 19, 2011, no portion of such $35,000 has been received.

Futenco assumed a 57% equity interest in Clenergen Ghana, with the Company owning a 40% equity interest and three non-affiliated individuals owning the remaining 3% equity interest.

Futenco will have full management control of Clenergen Ghana and be entitled to a 60% “revenue share.” Futenco has the option to acquire the Company’s equity interest for fair market value at any time within the first year, and for $1.00 in the event that Clenergen files for administration.

Futenco is required to use its best efforts to obtain funding of project financing by December 31, 2012 and, if such financing has not been so obtained, the Company will have the option to purchase Futenco’s equity interest for $35,000 plus an amount equal to any additional investment in Clenergen Ghana made by Futenco.

The Company has the option to purchase from Futenco an 11% equity interest in Clenergen Ghana for a mutually agreed upon price if any class of the Company’s securities becomes listed on the American Stock Exchange (the “AMEX”).

We can give no assurance that any class of our securities will ever be listed on the AMEX.

The Company has also entered into an agreement (“Agreement”) with Futenco to raise a $30 million fund for the purpose of cultivating energy crops in Malaysia, Sri Lanka, and Guatemala and in certain regions of Ghana which are not subject to the Clenergen Ghana Shareholders Agreement.

The Company entered into a Shareholders Agreement (the “Clenergen Guyana and Trinidad Shareholders Agreement”) with Futenco with respect to the operation of its formerly majority-owned subsidiaries, Clenergen Guyana Inc., Clenergen Trinidad Inc.

(a Guyana corporation) and Clenergen Trinidad Inc.

(a Trinidad and Tobago corporation) (collectively, “Clenergen Guyana and Trinidad”).

The Clenergen Guyana and Trinidad Shareholders Agreement was made effective as of September 5, 2011.

Under the Clenergen Guyana and Trinidad Shareholders Agreement, Futenco is responsible to invest $150,000 in Clenergen Guyana and Trinidad on or before August 31, 2011.

As of September 19, 2011, no portion of such $150,000 has been received.

Futenco will assume a 60% equity interest in Clenergen, with the Company owning the remaining 40% equity interest.

Futenco will have full management control of Clenergen Guyana and Trinidad.

Futenco has the option to acquire the Company’s equity interest for fair market value at any time within the first year, and for $1.00 in the event that the Company files for administration.

Futenco is required to use its best efforts to obtain funding of project financing by December 31, 2012 and, if such financing has not been so obtained, the Company will have the option to purchase Futenco’s equity interest for $150,000 plus an amount equal to any additional investment in Clenergen Guyana and Trinidad made by Futenco.

The Company has the option to purchase from Futenco an 11% equity interest in Clenergen Guyana and Trinidad for a mutually agreed upon price if any class of the Company’s securities becomes listed on the AMEX.

We can give no assurance that any class of our securities will ever be listed on the AMEX.

The Company entered into a Shareholders Agreement (the “Clenergen Philippines Shareholders Agreement”) with Futenco with respect to the operation of our formerly majority-owned subsidiary, Clenergen Philippines Limited (“Clenergen Philippines”).

The Clenergen Philippines Shareholders Agreement was made effective as of August 31, 2011.

Under the Clenergen Philippines Shareholders Agreement, Futenco was required to invest $400,000 in Clenergen Philippines on or before August 31, 2011.

As of September 16, 2011, a balance of $262,000 has not been received.

Futenco will assume a 60% equity interest in Clenergen, with our owning a 40% equity interest.

Futenco will have full management control of Clenergen Ghana.

Futenco has the option to acquire the Company’s equity interest for fair market value at any time within the first year, and for $1.00 if the Company is in administration.

Futenco is required to use its best efforts to obtain funding of project financing by December 31, 2012, and, if such financing has not been so obtained, the Company will have the option to purchase Futenco’s equity interest for $425,000 plus an amount equal to any additional investment in Clenergen Philippines made by Futenco.

We have the option to purchase from Futenco an 11% equity interest in Clenergen Philippines for a mutually agreed upon price if any class of the Company’s securities becomes listed on the AMEX.

We can give no assurance that any class of our securities will ever be listed on the AMEX.

The Company entered into a license agreement (the “Futenco License Agreement”) with Futenco, pursuant to which the Company granted Futenco certain licenses to the Company’s intellectual property.

Such licenses included (a) exclusive rights within Ghana, Guyana and the Philippines, (b) first rights of refusal for exclusive licenses for the territories of Saipan, Guam, Brazil, the Bahamas, the Dominican Republic, Haiti and Puerto Rico, to be granted on a per project basis provided that a project is implemented within the next twelve months, (c) exclusive distribution rights within Ghana, Guyana and the Philippines and first rights of refusal for exclusive distribution rights for the territories of the United States, Japan, South Korea, Saipan, Guam, Brazil, the Bahamas, the Dominican Republic, Haiti and Puerto Rico, to be granted on a per project basis provided that a project is implemented within the next twelve months.

The Futenco License Agreement contemplates that Futenco will also establish a renewable energy fund, designated for the cultivation of energy crop plantations throughout the emerging and Caribbean markets.

Clenergen will retain the rights to own a majority stake in each of the projects and joint ventures formed within the regions where it is suitable for the cultivation of energy crops, such as Malaysia, Saipan, Guam, Brazil, Bahamas, Dominican Republic, Haiti, Puerto Rico, Sri Lanka, Malaysia and Guatemala.

DISCONTINUED OPERATIONS

The Company entered into a Transfer Agreement, effective as of September 5, 2011 (the “Divestiture Agreement”), pursuant to which the Company sold to Maxrise Powergen Limited, a Hong Kong corporation (“Maxrise”), all of its equity interest and mortgages in Clenergen India.

The purchase price for the sale of its Clenergen India equity interest was $1.00;

although the Divesture Agreement also required Maxrise to transfer to the Company the sum of $1,011,669.99, representing past advances to Clenergen India made on behalf of the Company.

As of September 19, 2011, such payment has not been received by the Company.

As of September 5, 2011, operations had ceased at the 18MW/h and 1.5MW/ power plants in Tamilnadu, India being operated by Clenergen India.

The results for operations for the plants are presented as discontinued operations in the Company’s consolidated financial statements.

The financial presentation and footnotes for fiscal year 2011 and 2010 have been restated to show the comparable effects of the discontinued operations.

The following table summarizes the operating results of the discontinued operations for the and nine month periods ended July 31, 2011 and 2010 and from inception to July 31, 2011.

From inception till

July 31, 2011

July 31, 2010

July 31, 2011

July 31, 2010

Cost of services

Operating expenses

Interest expense

Other income / (expense)

Income/(loss) before income taxes

Provision for income taxes

Net profit / (loss) from discontinued operations, net of tax

The following table sets forth the assets and liabilities of the Company’s discontinued operations included in the consolidated financial statements of the Company as at July 31, 2011 and as at October 31, 2010

July 31, 2011

October 31, 2010

Accounts Receivables

Prepaid Expenses and Other

Current assets of discontinued operations

Fixed assets of discontinued operations

Deposits of discontinued operations

Accounts Payable and Accrued Expenses

Payroll Liabilities

Customer Advances

Due to Related Parties and Shareholders

Current liabilities of discontinued operations

RELATED PARTY TRANSACTIONS

On June 3, 2011, the Company received $47,000 as a temporary loan from a party having prior association with Mark LM Quinn, Chief Executive Officer of the Company.

The proceeds of the loan was to be used to pay certain operational expenses of the Company.

The Company is obligated to pay the lender the sum of $58,700 in full satisfaction of the loan upon the Company obtaining sufficient funds for such purpose.

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

Item 1. Financial Statements