q063010.htm

10-Q 1 q063010.htm FORM 10-Q ENDED JUN q063010.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2010

Commission File Number 000-10822

Revonergy Inc.
(Exact name of registrant as specified in its charter)

Nevada	98-0589723
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Landmark House
17 Hanover Square
London, United Kingdom	W1S 1HU
(Address of principal executive offices)	(Zip Code)

+44-207-993-5700
(Registrant’s telephone number)

n/a
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer ¨
Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 11, 2010, the issuer had one class of common stock, with a par value of $0.001, of which 58,508,333 shares were issued and outstanding.

TABLE OF CONTENTS

		Page
	PART I—FINANCIAL INFORMATION

Item 1:	Financial Statements:
	Consolidated Balance Sheets as at June 30, 2010 (unaudited), and
	September 30, 2009	3

	Consolidated Statements of Operations for the
	Three and Nine Months Ended June 30, 2010 and 2009, and the
	Period from Inception (April 9, 2008) to June 30, 2010 (unaudited)	4

	Consolidated Statements of Cash Flows for the
	Nine Months Ended June 30, 2010 and 2009, and the
	Period from Inception (April 9, 2008) to June 30, 2010 (unaudited)	5

	Notes to Consolidated Financial Statements	6

Item 2:	Management’s Discussion and Analysis of Financial Condition
	and Results of Operations	9

Item 3:	Quantitative and Qualitative Disclosures About Market Risk	10

Item 4T:	Controls and Procedures	11

	PART II—OTHER INFORMATION

Item 6:	Exhibits	12

	Signatures	12

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Revonergy Inc.
(formerly York Resources, Inc.)
(a Development Stage Enterprise)

Consolidated Balance Sheets
June 30, 2010 and September 30, 2009
			June 30,		September 30,
			2010		2009
			(unaudited)
Assets

Current assets:
	Cash	$	77,844	$	1,085
	Total current assets		77,844		1,085

Total assets		$	77,844	$	1,085

Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
	Accounts payable and accrued expenses	$	70,205	$	200
	Accounts payable - related party		11,322		-
	Accrued wages		110,509		-
	Advance from shareholder		9,500		3,500
	Total current liabilities		201,536		3,700

Total liabilities			201,536		3,700

Stockholders' Equity (Deficit)
Common stock:
	$0.001 par value, 100,000,000 authorized shares
	58,383,333 and 57,050,000 shares issued and outstanding,
	respectively		58,383		57,050
Additional paid in capital			389,217		(9,450)
Deficit accumulated during the development stage			(569,601)		(50,215)
Accumulated other comprehensive (loss)			(1,691)		-

	Total stockholders' equity (deficit)		(123,692)		(2,615)
Total liabilities and stockholders' equity (deficit)		$	77,844	$	1,085

See accompanying notes to consolidated financial statements.

Revonergy Inc.
(formerly York Resources, Inc.)
(a Development Stage Enterprise)

Consolidated Statements of Operations
For the three and nine months ended June 30, 2010 and 2009
and the period from inception (April 9, 2008) to June 30, 2010
(unaudited)
			Three months Ended June 30, 2010		Three months Ended June 30, 2009		Nine months Ended June 30, 2010		Nine months Ended June 30, 2009		Cumulative from inception (April 9, 2008) to June 30, 2010

Expenses
	General and administrative	$	335,948	$	12,428	$	519,386	$	35,476	$	569,601

			335,948		12,428		519,386		35,476		569,601

Net loss		$	335,948	$	12,428		519,386	$	35,476	$	569,601

Loss per share - basic and diluted		$	(0.01)	$	(0.00)	$	(0.01)	$	(0.00)

Weighted average number of shares outstanding			58,383,333		57,050,000		57,513,980		57,050,000


See accompanying notes to consolidated financial statements.

Revonergy Inc.
(formerly York Resources, Inc.)
(a Development Stage Enterprise)

Consolidated Statements of Cash Flows
For the nine months ended June 30, 2010 and 2009
and the period from inception (April 9, 2008) to June 30, 2010
(unaudited)
				Nine months ended June 30, 2010		Nine months ended June 30, 2009		Cumulative from inception (April 9, 2008) to June 30, 2010

Cash provided by (used in):

Operating activities:
	Net loss		$	(519,386)	$	(35,476)	$	(569,601)
	Adjustment to reconcile net loss to
	net cash used in operating activities:
		Impairment of assets		-		-		3,500
		Changes in assets and liabilities
		Accounts payable and accrued expenses		70,005		(1,954)		70,205
		Accounts payable - related party		11,322		-		11,322
		Accrued wages		110,509		-		110,509
	Net cash used in operating activities			(327,550)		(37,430)		(374,065)

Investing activities:
	Purchase of mineral property			-		-		(3,500)
	Net cash used in investing activities			-		-		(3,500)

Financing activities:
	Proceeds from sale of common stock			400,000		-		447,600
	Proceeds from advances from shareholder			6,000		-		9,500
	Net cash provided by financing activities			406,000		-		457,100

Increase (decrease) in cash during the period				78,450		(37,430)		79,535
Foreign exchange effect on cash				(1,691)		-		(1,691)

Cash at beginning of the period				1,085		39,319		-

Cash at end of the period			$	77,844	$	1,889	$	77,844

Supplemental Cash Flow Information:

	Interest paid		$	-	$	-	$	-
	Income taxes paid		$	-	$	-	$	-

See accompanying notes to consolidated financial statements.

Revonergy Inc.

(formerly York Resources, Inc.)

(a Development Stage Enterprise)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of Business and Summary of Significant Accounting Policies

Organization

Revonergy Inc., formerly York Resources, Inc. (“Revonergy” or the “Company”), was incorporated in the state of Nevada on April 9, 2008. Revonergy was originally organized as a mining exploration company, but after assessing the results from its first round of exploration activities on its ODD 1 – 4 Properties, the Company decided not to pursue further explorations on the properties and to search for other business opportunities.

Control of the Company, 35,000,000 shares, was acquired by Sugarberry Assets Limited on December 9, 2009. The Company’s new focus is on the acquisition and development of renewable energy projects. The Company has incorporated new wholly owned subsidiaries, Revonergy Biopower Ltd., incorporated in the United Kingdom on December 9, 2009, and Revonergy Power LLC, incorporated in the state of Nevada on June 10, 2010.

Interim Period Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the Securities and Exchange Commission’s instructions. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The results of operations reflect interim adjustments, all of which are of a normal recurring nature and that, in the opinion of management, are necessary for a fair presentation of the results for such interim period. The results reported in these interim consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2009. Results for the nine months ended are not indicative of the results that may be expected for the year ending September 30, 2010.

Going Concern

The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. Since its inception on April 9, 2008, the Company has not yet generated any revenues and has incurred operating losses totaling $569,601. It is the Company’s intention to raise additional equity to finance the further development of a market for its products until positive cash flows can be generated from its operations. However, there can be no assurance that such additional funds will be available to the Company when required or on terms acceptable to the Company. Such limitations could have a material adverse effect on the Company’s business, financial condition, or operations, and these consolidated financial statements do not include any adjustment that could result. Failure to obtain sufficient additional funding would require the Company to reduce or limit its operating activities or even discontinue operations.

Basis of Consolidation

These consolidated financial statements include the accounts of Revonergy Inc. and its wholly owned subsidiaries, Revonergy Biopower Ltd. and Revonergy Power LLC. All significant intercompany balances and transactions have been eliminated.

Development-Stage Enterprise

The Company has been in the development stage since its formation on April 9, 2008. Accordingly, the Company’s financial statements are presented as a development-stage enterprise, as prescribed by standards for accounting and reporting by development-stage enterprises.

Cash

Cash consists of bank accounts held at financial institutions in the United States, United Kingdom, and Hong Kong. At times cash balances may exceed insured limits. The Company has not experienced any losses related to these balances, and management believes the credit risk to be minimal.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the fiscal year. The Company makes estimates for, among other items, useful lives for depreciation and amortization, determination of future cash flows associated with impairment testing for long-lived assets, determination of the fair value of stock options and warrants, valuation allowance for deferred tax assets, allowances for doubtful accounts, and potential income tax assessments and other contingencies. The Company bases its estimates on historical experience, current conditions, and other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates and assumptions.

Note 2. Related-Party Transactions

During the nine months ended June 30, 2010, a shareholder of the Company advanced $6,000. The balance owing of $9,500 is unsecured and non-interest-bearing.

During the three and nine months ended June 30, 2010, the Company has incurred services provided by a former officer of the Company in the amount of $30,000 and $125,000, respectively (2009 - $nil and $nil). The balance outstanding as at June 30, 2010, of $17,250 is included in accounts payable.

During the nine months ended June 30, 2010, an officer of the Company incurred expenses on behalf of the Company in the amount of $22,584. The balance outstanding as at June 30, 2010, of $11,322 is included in accounts payable-related party.

Note 3. Share Capital

Common Stock

The Company is authorized to issue 100,000,000 shares of common stock, par value of $0.001.

During the nine months ended June 30, 2010, the Company issued 1,333,333 shares of common stock and warrants to purchase 666,667 shares of common stock at an exercise price of $0.40 until March 31, 2011, for subscription received of $400,000.

Stock Purchase Warrants

At June 30, 2010, the Company has reserved 666,667 shares of the Company’s common stock for the following outstanding warrants:

Number of Warrants	Exercise Price	Expiry

666,667	$ 0.40	March 31, 2011

Note 4. Subsequent Event

Subsequent to June 30, 2010:

The Company’s Board of Directors and stockholders have approved amended and restated articles of incorporation that would increase the authorized share capital to 550,000,000 shares, comprised of 500,000,000 shares of common stock, with a par value of $0.001, and 50,000,000 shares of preferred stock, with a par value of $0.001. These amended and restated articles of incorporation will become effective 20 days after a definitive information statement is mailed to the Company’s stockholders.

The amended and restated articles of incorporation would give the Board of Directors the authority to designate class and rights of preferred shares.

·	The Company issued 125,000 fully paid and nonassessable shares of common stock of the Company for services received with a fair value of $15,000.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the accompanying condensed unaudited consolidated financial statements for the three- and nine-month periods ended June 30, 2010 and 2009, and the period from commencement of business on April 9, 2008, to June 30, 2010, and our annual report on Form 10-K for the year ended September 30, 2009, including the financial statements and notes thereto.

Forward-Looking Information May Prove Inaccurate

This report contains statements about the future, sometimes referred to as “forward-looking” statements. Forward-looking statements are typically identified by the use of the words “believe,” “may,” “could,” “should,” “expect,” “anticipate,” “estimate,” “project,” “propose,” “plan,” “intend,” and similar words and expressions. Statements that describe our future strategic plans, goals, or objectives are also forward-looking statements.

Readers of this report are cautioned that any forward-looking statements, including those regarding our management’s current beliefs, expectations, anticipations, estimations, projections, proposals, plans, or intentions, are not guarantees of future performance or results of events and involve risks and uncertainties. The forward-looking information is based on present circumstances and on our predictions respecting events that have not occurred, that may not occur, or that may occur with different consequences from those now assumed or anticipated. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors. The forward-looking statements included in this report are made only as of the date of this report. We are not obligated to update such forward-looking statements to reflect subsequent events or circumstances.

Introduction

Management believes the most significant feature of our financial condition is that our expenses and our net losses are increasing while we continue our efforts to acquire and develop renewable energy projects.

Results of Operations

Comparison of the Three and Nine Months Ended June 30, 2010,

with the Three and Nine Months Ended June 30, 2009

We did not generate any revenue in the three- and nine-month periods ended June 30, 2010 and 2009.

Our operating expenses for the three and nine months ended June 30, 2010, were $335,948 and $519,386, respectively, as compared to $12,428 and $35,476 for the comparable periods in 2009, increases of 2,603% and 1,364%. These increases are due primarily to management remuneration of $144,000, consulting services of $189,000, and additional professional and other costs related to investigation of potential business opportunities.

Overall, we sustained a net loss of $335,948 and $519,386 for the three and nine months ended June 30, 2010, respectively, as compared to net losses of $12,428 and $35,476 in the corresponding periods of the preceding year.

We had two full-time employees as of June 30, 2010.

Liquidity and Capital Resources

As of June 30, 2010, our current assets were $77,844, as compared to $1,085 at September 30, 2009. As of June 30, 2010, our current liabilities were $201,536, as compared to $3,700 at September 30, 2009. In addition, we had a stockholders’ deficit of $123,692 at June 30, 2010, compared to a stockholders’ deficit of $2,615 at September 30, 2009.

Operating activities used net cash of $327,550 for the nine months ended June 30, 2010, as compared to net cash used of $37,430 for the comparable nine months ended June 30, 2009. The $290,120 increase in net cash used by our operating activities resulted primarily from expenses for additional professional and other services related to our commencement of business.

No cash was spent on investing activities during the nine-month periods ended June 30, 2010 and 2009.

Net cash of $406,000 provided by financing activities during the nine months ended June 30, 2010, consists of proceeds of $400,000 from a subscription for shares and advances from a shareholder of $6,000. This is compared to no funds being received during the comparable nine-month period ended June 30, 2009.

Our current cash balances will not meet our working capital and capital expenditure needs for the whole of the current year. Because we are not currently generating sufficient cash to fund our operations, we will need to rely on external financing to meet future capital and operating requirements. Any projections of future cash needs and cash flows are subject to substantial uncertainty. Our capital requirements depend upon several factors, including the rate of market acceptance, our ability to get to production and generate revenues, our level of expenditures for production, marketing, and sales, purchases of equipment, and other factors. We can make no assurance that financing will be available in amounts or on terms acceptable to us, if at all. Further, if we issue equity securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences, or privileges senior to those of existing holders of common stock, and debt financing, if available, may involve restrictive covenants that could restrict our operations or finances. If we cannot raise funds, when needed, on acceptable terms, we may not be able to continue our operations, grow market share, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements, all of which could negatively impact our business, operating results, and financial condition.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4T. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officers (whom we refer to in this periodic report as our Certifying Officers), as appropriate to allow timely decisions regarding required disclosure. Our management has evaluated, with the participation of our Certifying Officers, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act) as of June 30, 2010, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of June 30, 2010, our disclosure controls and procedures were effective.

In our Annual Report on Form 10-K for the year ended September 30, 2009, we reported that we did not maintain effective control over financial reporting. The weaknesses identified during the year ended September 30, 2009, have continued during the nine-month period ended June 30, 2010, and are as follows:

(i)

Lack of any independent directors for our board and audit committee. We currently have two independent directors on our board, which is comprised of four directors. Both of our independent directors were appointed during the nine-month period ended June 30, 2010. Although there is no requirement that we have any independent directors, we intend to have a majority of independent directors as soon as we are reasonably able to do so.

(ii)

Insufficient segregation of duties in our finance and accounting functions due to limited personnel. During the nine-month period ended June 30, 2010, we had one person on staff that performed nearly all aspects of our financial reporting process, including access to the underlying accounting records and systems, the ability to post and record journal entries, and responsibility for the preparation of the financial statements. This creates certain incompatible duties and a lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the Securities and Exchange Commission. These control deficiencies could result in a material misstatement to our interim or annual consolidated financial statements that would not be prevented or detected.

Plan for Remediation of Material Weaknesses

We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies. We intend to consider the results of our remediation efforts and related testing as part of our year-end 2010 assessment of the effectiveness of our internal control over financial reporting.

We have implemented certain remediation measures and are in the process of designing and implementing additional remediation measures for the material weaknesses described. Such remediation activities include the following:

·	We have recently recruited two independent board members, including one who qualifies as an audit committee financial expert, to join our board.

·	We plan to recruit one or more additional independent board members to join our board of directors in due course.

·	We plan to recruit additional employees within the accounting functions when resources permit.

In addition to the foregoing remediation efforts, we will continue to update the documentation of our internal control processes, including formal risk assessment of our financial reporting processes.

PART II—OTHER INFORMATION

Item 6. Exhibits

The following exhibits are filed as a part of this report:

Exhibit Number*	Title of Document	Location

Item 31	Rule 13a-14(a)/15d-14(a) Certifications
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	This filing.

31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	This filing.

Item 32	Section 1350 Certifications
32.01	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)	This filing.

32.02	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)	This filing.

_______________

*	All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. Omitted numbers in the sequence refer to documents previously filed as an exhibit.

SIGNATURES

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

	Registrant

	Revonergy Inc.


Date: August 12, 2010	By:	/s/ Ravi K. Daswani
		Ravi K. Daswani, President and
		Chief Executive Officer


Date: August 12, 2010	By:	/s/ Kenneth G.C. Telford
		Kenneth G.C. Telford
		Chief Financial Officer