U.S. 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 March 31, 2011





OR





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





For the transition period from __________ to __________.





Commission file number 000-53035


CLEAN WIND ENERGY TOWER, INC.


(Exact name of Issuer as specified in its charter)





Nevada
82-6008752(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)1997 Annapolis Exchange Pkwy., Suite 300, Annapolis, MD
21401(Address of Principal Executive Offices)
(Zip Code)




(410) 972 - 4713


(Registrant’s Telephone Number, Including Area Code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 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 o No o




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. (Check one):





Large accelerated filer o

Accelerated filer oNon-accelerated filer o

Smaller reporting company x(Do not check if a smaller reporting company)





Indicate by check mark whether the 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 equity, as of the latest practicable date: 325,419,621 shares of Common Stock ($.0001 par value) as of May 10, 2011.











Clean Wind Energy Tower, Inc.


(A Development Stage Company)


FORM 10-Q for the Quarter Ended March 31, 2011





Index





PagePART I. FINANCIAL INFORMATION
2Item 1. Financial Statements (Unaudited)
2Condensed Consolidated Balance Sheets:

March 31, 2011(unaudited)  and December 31, 2010
2Condensed Consolidated Statements of Operations:

For three  months Ended March 31, 2011 (unaudited) and for the period from July 26, 2010 (date of inception) through March 31, 2011 (unaudited)
3Condensed Consolidated Statement of Equity

For the period July 26, 2010 (date of inception) through March 31, 2011 (unaudited)
4Condensed Consolidated Statements of Cash Flows:

For three  months Ended March 31, 2011 (unaudited) and for the period from July 26, 2010 (date of inception) through March 31, 2011 (unaudited)
5Notes to Condensed Unaudited Consolidated Financial Statements:

March 31, 2011
6Item 2. Management’s Discussion and Analysis
11Item 3. Quantitative and Qualitative Disclosures About Material Risk
15Item 4. Controls and Procedures
15PART II. OTHER INFORMATION
16Item 1. Legal Proceedings
16Item 1A. Risk Factors
16Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
16Item 3. Defaults Upon Senior Securities
16Item 4. (Removed and Reserved)
16Item 5. Other Information
16Item 6. Exhibits
17Signatures
18





1





PART I. FINANCIAL INFORMATION





Item 1. Financial Statements (Unaudited)





Clean Wind Energy Tower, Inc.


(A Development Stage Company)


Condensed Consolidated Balance Sheets





March 31,

2011

(Unaudited)


December 31,

2010AssetsCurrent assets:Cash and cash equivalents

$
48,653


$
195,184Prepaid expenses


12,500



29,697Total current assets


61,153



224,881Property and equipment, net


2,309



-Other assets:Other assets


9,330



9,330Total other assets


9,330



9,330Total Assets

$
72,792


$
234,211Liabilities and Stockholders’ DeficitCurrent liabilities:Accounts payable

$
162,654


$
191,581Accrued liabilities and expenses


416,383



183,126Advances from stockholders/officers


22,000



47,000Total current liabilities


601,037



421,707Stockholders’ Deficit:Preferred stock, par value $.0001 per share; 10,000,000 shares authorized; none issued or outstanding at March 31, 2011 and December 31, 2010


-



-Common stock, par value $.0001 per share; 500,000,000 shares authorized; 321,155,199 and 20,955,199 shares issued and outstanding at March 31,2011 and December 31, 2010, respectively


32,116



2,096Common stock to be issued


540,000



457,000Additional paid-in-capital


218,545



191,565Accumulated deficit during development stage


(1,318,906
)


(838,157
)Total stockholders’ deficit


(528,245
)


(187,496
)Total Liabilities and Stockholders’ Deficit

$
72,792


$
234,211





See accompanying notes to the unaudited condensed consolidated financial statements




2





Clean Wind Energy Tower, Inc.


(A Development Stage Company)


Condensed Consolidated Statements of Operations


(Unaudited)




For the Three months ended March 31, 2011


For the Period from July 26, 2010 (date of inception) to March 31, 2011Revenue

$
-


$
-Operating expenses:Research and development


111,148



184,707Legal and accounting fees


76,461



266,998Consulting fees


50,000



493,972General and administative


243,140



373,229Total expenses


480,749



1,318,906Net loss

$
(480,749
)

$
(1,318,906
)Net loss per common shareBasic

$
(0.01
)Diluted

$
(0.01
)Weighted average number of common shares outstanding – basic anddiluted


44,344,088





See accompanying notes to the unaudited condensed consolidated financial statements





3





Clean Wind Energy Tower, Inc.


(A Development Stage Company)


Condensed Consolidated Statements of Changes in Stockholders’ Deficit


For The Period From July 26, 2010 (Date of Inception) Through March 31, 2011


(Unaudited)





Common Stock


Stock To Be IssuedShares


Amount


Shares


Amount


Additional

Paid-In-

Capital


Accumulated

Deficit


Total

Stockholders’

DeficitBalance, date of inception (July 26,2010), adjusted for recapitalization


20,955,199


$
2,096


-


-


$
191,565


-


$
193,661Recapitalization and direct costs resulting from the reverse merger: Shares to be issued to Clean Wind Energy’s stockholders


-



-



300,000,000



30,000



-



-



30,000Shares to be issued for consulting services rendered in connection with the reverse merger










6,100,000



427,000



-



-



427,000Net loss


-



-



-



-



-



(838,157
)


(838,157
)Balance, December 31, 2010


20,955,199



2,096



306,100,000



457,000



191,565



(838,157
)


(187,496
)Recapitalization and direct costs resulting from the reverse merger: Shares  issued to Clean Wind Energy’s stockholders


300,000,000



30,000



(300,000,000
)


(30,000
)


-



-



-Shares  issued for consulting services rendered in connection with the reverse merger


100,000



10



(100,000
)


(7,000
)


6,990



-



-Shares issued for consulting services rendered at $0.20 per share


100,000



10



-



-



19,990



-



20,000Shares to be issued in connection with the PPM Subscription at $0.10 per share


-



-



1,200,000



120,000



-



-



120,000Net loss


-



-















(480,749
)


(480,749
)Balance, March 31,2011


321,155,199


$
32,116



7,200,000


$
540,000


$
218,545


$
(1,318,906
)

$
(528,245
)





See accompanying notes to the unaudited condensed consolidated financial statements




4





Clean Wind Energy Tower, Inc.


(A Development Stage Company)


Condensed Consolidated Statements of Cash Flows


(Unaudited)




For the Three months ended March 31, 2011


For the Period from July 26, 2010 (date of inception) to March 31, 2011Cash Flows from Operating Activities:Net loss

$
(480,749
)

$
(1,318,906
)Adjustments to reconcile net loss to net cash used in operating activities:Common stock to be issued in exchange for services


20,000



447,000Depreciation


66



66Changes in operating assets and liabilities:Prepaid expenses


17,197



(12,500
)Deposits


-



(9,330
)Accounts payable and accrued expenses


204,330



579,037Advances from stockholders/officers


(25,000
)


22,000Net Cash Used In Operating Activities


(264,156
)


(292,633
)Cash flows from investing activities:Cash acquired from reverse merger


-



223,586Purchase of property and equipment


(2,375
)


(2,375
)Net Cash Used In Investing Activities


(2,375
)


221,211Cash flows from financing activities:Proceeds from issuance of subsidiary’s common stock


-



75Proceeds from shares to be issued in connection with PPM Subscription


120,000



120,000Net Cash Provided By Financing Activities


120,000



120,075Net increase/(decrease) in cash and cash equivalent


(146,531
)


48,653Cash and cash equivalent, at beginning of period


195,184



-Cash and cash equivalent, at end of period

$
48,653


$
48,653





See accompanying notes to the unaudited condensed consolidated financial statements




5





Clean Wind Energy Tower, Inc.


(A Development Stage Company)


Notes to Condensed Consolidated Financial Statements March 31, 2011


(Unaudited)





NOTE A – SUMMARY OF ACCOUNTING POLICIES





A summary of the significant accounting policies applied in the preparation of the accompanying unaudited condensed consolidated financial statements follows.





General





The accompanying unaudited condensed consolidated financial statements of Clean Wind Energy Tower, Inc. (the “Company”) have been prepared in accordance with Rule S-X of the “SEC” and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.





In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. However, the results from operations for the three month period ended March 31, 2011, are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated December 31, 2010 financial statements and footnotes thereto included in the Company's Form 10-K filed with the SEC.





Business and Basis of Presentation





Clean Wind Energy Tower, Inc. (formerly known as Superior Silver Mines, Inc.) was incorporated in the State of Idaho on January 22, 1962 as Superior Mines Company and then changed its name to Superior Silver Mines, Inc.  The Company reincorporated as a Nevada corporation on December 27, 2010.  The Company has been dormant for a number of years, and has no known mineral reserves.




On December 29, 2010, pursuant to an Agreement and Plan of Merger, dated December 29, 2010 (the “Merger Agreement”), the Company consummated a reverse merger (the “Merger”) with Clean Wind Energy, Inc., a corporation formed under the laws of the State of Delaware on July 26, 2010 (“Clean Wind Energy”).  In connection with the Merger, the Company issued to the stockholders of Clean Wind Energy in exchange for their Clean Wind Energy Common Stock, the right to receive an aggregate of 300,000,000 shares of the Company’s Common Stock.  The Merger was accounted for as a “reverse merger”, since the stockholders of Clean Wind Energy owned a majority of the Company’s common stock immediately following the transaction and their management has assumed operational, management and governance control.




For accounting purposes, Clean Wind Energy was the surviving entity. The transaction was accounted for as a recapitalization of Clean Wind Energy pursuant to which Clean Wind Energy was treated as the surviving and continuing entity although the Company is the legal acquirer rather than a reverse acquisition.  The Company did not recognize goodwill or any intangible assets in connection with this transaction.  Accordingly, the Company’s historical financial statements are those of Clean Wind Energy immediately following the consummation of the reverse merger.




The Company plans to design, develop, and construct large downdraft towers that use benevolent, non-toxic natural elements to generate electricity and clean water economically (“Downdraft Towers”) by integrating and synthesizing numerous proven as well as emerging technologies. In addition to constructing Downdraft Towers in the United States and abroad, the Company intends to be prepared to establish partnerships at home and abroad to propagate these systems and meet increasing global demand for clean water and electricity




On January 21, 2011, the Company changed its name to Clean Wind Energy Tower, Inc.  In addition, effective January 24, 2011, the Company’s quotation symbol on the Over-the-Counter Bulletin Board was changed from “SSVM” to “CWET”.




6





Going Concern





The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has reported a net loss from continuing operations of $(480,749) for the three months period ended March 31, 2011, accumulated deficit of $(1,318,906) and total current liabilities in excess of current assets of $(539,884) as of March 31, 2011.





The Company is in a development stage and does not have any revenues from operations and will be dependent on funds raise to satisfy its ongoing capital requirements for at least the next 12 months. The Company will require additional financing in order to execute its operating plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events, the Company may be unable to implement its current plans for expansion or respond to competitive pressures, any of these circumstances would have a material adverse effect on its business, prospects, financial condition and results of operations.





Fair Value of Financial Instruments




Our short-term financial instruments, including cash, other assets and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their current maturity.




Long-Lived Assets





We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10 (formerly Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets). Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future cash flows arising from the asset using a discount rate determined by management to be commensurate with the risk inherent to our current business model.





Net Loss per Common Share





The Company computes net loss per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of shares of common stock. Diluted net loss per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period. There is no effect on diluted loss per share since the common stock equivalents are anti-dilutive. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible notes and the exercise of the Company's stock options and warrants.





Use of Estimates





The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.





Revenue Recognition





The Company has generated no revenues to date. It is the Company’s policy that revenue from product sales or services will be recognized in accordance with ASC 605 “Revenue Recognition”. Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product was not delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.




7




Stock Based Compensation





The Company account for its stock based awards in accordance with Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”), which requires a fair value measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors, including restricted stock awards. We estimate the fair value of stock using the stock price on date of the approval of the award. The fair value is then expensed over the requisite service periods of the awards, which is generally the performance period and the related amount recognized in our consolidated statements of operations.





Stock-based compensation expense in connection with stock granted to consultants in exchange for services for the three months ended March 31, 2011was $10,000.





NOTE B –  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS





Recent accounting pronouncements issued by the FASB and the SEC did not, or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.




NOTE C – ADVANCES FROM STOCKHOLDERS/OFFICERS


During the periods of November and December, 2010 through the period ended March 31, 2011, Ronald W. Pickett, a director and executive officer of the Company, gave advances to Clean Wind Energy and at March 31, 2011 the balance outstanding is $22,000. These amounts are interest free advances. The details are as follow;


AdvancesNovember and December 2010, advances

$
47,000Period ended March 31, 2011, repayment


(25,000
)Total outstanding at March 31, 2011

$
22,000





NOTE D – CAPITAL STOCK





The Company has authorized 10,000,000 shares of preferred stock, with a par value of $.0001 per share. As of March 31, 2011, the Company did not have any preferred stock issued and outstanding. The Company has authorized 500,000,000 shares of common stock, with a par value of $.0001 per share. As of March 31, 2011 and December 31, 2010, the Company has 321,155,199 and 20,955,199, respectively, shares of common stock issued and outstanding.





During the three months ended March 31, 2011, the Company issued 200,000 shares of common stock to consultants for services performed and services accrued at December 31, 2010. These shares were valued at $27,000, which approximated the fair value of the shares when they were issued. The Company issued 300,000,000 shares of common stock to the shareholders of its Subsidiary, Clean Wind Energy pursuant to the Merger on December 29, 2010, in exchange for their Clean Wind Energy Common Stock. These issuances of shares were made in reliance upon an exemption from registration under Section 4 (2) of the Securities Act, and Regulation D promulgated thereunder.




On December 29, 2010, the Company agreed to issue to Source Capital 6,000,000 shares for providing financial advisory services to Clean Wind Energy in connection with the Merger. These shares have not been issued as of March 31, 2011 and the shares to be issued were made in reliance upon an exemption from registration under Section 4 (2) of the Securities Act, and Regulation D promulgated thereunder.




NOTE E – RELATED PARTIES





For the period ended March 31, 2011, Ronald W. Pickett, a director and executive officer of the Company had a total of $47,842 of advances and reimbursable expenses owed to him by Clean Wind Energy. The advances are reported in the “advances from stockholders/officers” and the reimbursable expense in the “Accounts payable” categories on the Balance Sheet. These amounts are interest free advances. The details are as follow:


Advances


Reimbursable ExpensesNovember and December 2010, advances and expenses

$
47,000


$
24,333Period ended March 31, 2011, expenses






16,509Period ended March 31, 2011, repayment


(25,000
)


(15,000
)Total outstanding at March 31, 2011

$
22,000


$
25,842




During the periods of November and December, 2010, Mr. Sadle had reimbursable expenses of approximately $15,000 which was paid in full during the period ended March 31, 2011.


8


NOTE F – COMMITMENTS AND CONTINGENCIES





Office Leases Obligations





The Company leases approximately 100 square feet of office space at 1997 Annapolis Exchange Parkway, Suite 300, Annapolis, Maryland 21401 pursuant to a lease that expires October 31, 2011 and leases approximately 8,435 square feet of commercial space in Warrenton, Virginia pursuant to a lease that expires November 30, 2013.




The Company maintains one unpatented lode mining claim, #IMC39643, claim name-Abbatoir, which is leased to U.S. Silver Corporation.




Commitments for minimum rentals under non cancelable leases at March 31, 2011 are as follows:





2011

$
66,8242012


81,8902013


105,366Total

$
254,080





Rental expenses charged to operations for the three months ended March 31, 2011 are $28,467.





Employment and Consulting Agreements





The Company has employment agreements with certain of its key employees which include non-disclosure and confidentiality provisions for protection of the Company’s proprietary information.





The Company has consulting agreements with outside contractors to provide marketing and financial advisory services. The Agreements are generally for a term of 12 months from inception and renewable automatically from year to year unless either the Company or Consultant terminates such engagement by written notice.





On December 29, 2010, pursuant to the Merger, Clean Wind Energy became a wholly-owned subsidiary of the Company.  Clean Wind Energy has employment agreements with its executive officers.  Each of the employment agreements was entered into on September 22, 2010 and amended on November 22, 2010.




Name

Position(s)

Term

Salary

Bonus
SeveranceRonald W. Pickett

President, Chief Executive Officer

3 years; renewable for 1 year on mutual consent

$
200,000

Board Discretionary
Twelve (12) months salary and benefits for termination without cause.Stephen Sadle

Chief Operating Officer

3 years; renewable for 1 year on mutual consent

$
175,000

Board Discretionary
Twelve (12) months salary and benefits for termination without cause.Robert P. Crabb

Secretary, Chief Marketing Officer

3 years; renewable for 1 year on mutual consent

$
60,000

Board Discretionary
Twelve (12) months salary and benefits for termination without cause.John W. Hanback

Chief Technology Officer

3 years; renewable for 1 year on mutual consent

$
175,000

Board Discretionary
NoneItzhak Tepper

P.E. Chief Structural Engineer

3 years; renewable for 1 year on mutual consent

$
150,000

Board Discretionary
NoneOwnkar Persaud

Chief Financial Officer

3 years; renewable for 1 year on mutual consent

$
100,000

Board Discretionary
Three (3) months salary and benefits for termination due to a change of control




9




The foregoing descriptions of the employment agreements do not purport to be complete and are qualified in their entirety by reference to such employment agreements which are included as exhibits to this Form 10-Q, were filed with the SEC on Form 8-K on December 30, 2010.




Litigation





The Company is subject to legal proceedings and claims from time to time which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.





NOTE G – FAIR VALUE MEASUREMENTS





Our short-term financial instruments, including cash, other assets and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their current maturity.




NOTE H – SUBSEQUENT EVENTS





Common Stock To Be issued




The 6,000,000 shares of common stock for consulting services provided during the merger of Clean Wind Energy Tower, Inc. with Clean Wind Energy have not been issued as of March 31, 2011.




During the months of March and April, 2011, the Company  has received signed Subscription Agreements from potential investors to purchase an aggregate of 10,000,000 shares of the Company’s common stock at a strike price of $0.10 per share for an aggregate purchase price of $1,000,000. The Company has received payments of $824,000 from certain investors as of May 13, 2011.




10




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





The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the accompanying financial statements and related notes thereto for the quarter ended March 31, 2011, as well as the Company’s consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations in the Company’s Form 10-K for the year ended December 31, 2010 filed on April 12, 2011.





Business





Clean Wind Energy Tower, Inc. (the “Company”(formerly known as Superior Silver Mines, Inc.) was incorporated in the State of Idaho on January 22, 1962 as Superior Mines Company and then changed its name to Superior Silver Mines, Inc.  The Company reincorporated as a Nevada corporation on December 27, 2010.  The Company has been dormant for a number of years, and has no known mineral reserves.




On December 29, 2010, pursuant to an Agreement and Plan of Merger, dated December 29, 2010 (the “Merger Agreement”), the Company consummated a reverse merger (the “Merger”) with Clean Wind Energy, Inc., a corporation formed under the laws of the State of Delaware on July 26, 2010 (“Clean Wind Energy”).  In connection with the Merger, the Company issued to the stockholders of Clean Wind Energy in exchange for their Clean Wind Energy Common Stock, the right to receive an aggregate of 300,000,000 shares of the Company’s Common Stock.  The Merger was accounted for as a “reverse merger”, since the stockholders of Clean Wind Energy owned a majority of the Company’s common stock immediately following the transaction and their management has assumed operational, management and governance control.




For accounting purposes, Clean Wind Energy was the surviving entity. The transaction was accounted for as a recapitalization of Clean Wind Energy pursuant to which Clean Wind Energy was treated as the surviving and continuing entity although the Company is the legal acquirer rather than a reverse acquisition.  The Company did not recognize goodwill or any intangible assets in connection with this transaction.  Accordingly, the Company’s historical financial statements are those of Clean Wind Energy immediately following the consummation of the reverse merger.




The Company plans to design, develop, and construct large downdraft towers that use benevolent, non-toxic natural elements to generate electricity and clean water economically (“Downdraft Towers”) by integrating and synthesizing numerous proven as well as emerging technologies. In addition to constructing Downdraft Towers in the United States and abroad, the Company intends to be prepared to establish partnerships at home and abroad to propagate these systems and meet increasing global demand for clean water and electricity




On January 21, 2011, the Company changed its name to Clean Wind Energy Tower, Inc.  In addition, effective January 24, 2011, the Company’s quotation symbol on the Over-the-Counter Bulletin Board was changed from “SSVM” to” CWET”.




Until the consummation of the Merger, the Company’s purpose was to seek, investigate and, if such investigation warranted, acquire an interest in business opportunities presented to it by persons or firms who, or which, desire to seek the perceived advantages of a publicly registered corporation.  Because the Company had no operations and only nominal assets until the Merger, it was considered a shell company under rules promulgated by the U.S. Securities and Exchange Commission.




Forward Looking Statements





This report may contain “forward-looking statements,” which represent the Company’s expectations or beliefs, including, but not limited to, statements concerning industry performance and the Company’s results, operations, performance, financial condition, plans, growth and strategies, which include, without limitation, statements preceded or followed by or that include the words “may,” “will,” “expect,” “anticipate,” “intend,” “could,” “estimate,” or “continue” or the negative or other variations thereof or comparable terminology. Any statements contained in this report or the information incorporated by reference that are not statements of historical fact may be deemed to be forward-looking statements. These statements by their nature involve substantial risks and uncertainties, some of which are beyond the Company’s control, and actual results may differ materially depending on a variety of important factors, including those risk factors discussed under “Trends, Risks and Uncertainties”, many of which are also beyond the Company’s control. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except to the extent such updates and/or revisions are required by applicable law.




11




Critical Accounting Policies and Estimates





Revenue Recognition





The Company recognizes revenue in accordance with FASB’s Accounting Standards Codification (“ASC”) 605-10, and ASC Topic 13 guidelines that require that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company did not have any revenue during the period ended March 31, 2011.




Fair Value of Financial Instruments





The Company adopted the provisions under FASB for Fair Value Measurements, which define fair value for accounting purposes, establishes a framework for measuring fair value and expands disclosure requirements regarding fair value measurements. The Company’s adoption of these provisions did not have a material impact on its consolidated financial statements. Fair value is defined as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and require less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generally measured at fair value using valuation models that require more judgment. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency of the asset, liability or market and the nature of the asset or liability. The Company has categorized its financial assets and liabilities measured at fair value into a three-level hierarchy in accordance with these provisions.





New Accounting Pronouncements





For information regarding recent accounting pronouncements and their effect on the Company, see “New Accounting Pronouncements” in Note B of the Notes to Unaudited Condensed Consolidated Financial Statements contained herein.





RESULTS OF OPERATIONS





Revenue





The Company has not generated revenue since inception.





Operating Expenses


During the three months ended March 31, 2011, the aggregate operating expenses were $480,749, there is no prior quarter to compare to since the Company was incorporated on July 26, 2010. The operating expenses for the period ended March 31, 2011 consists of legal and accounting fees of $76,461, consulting fees of $50,000, general administrative expenses of $243,140 and research and development of $111,148.
 
 For the period from July 26, 2010 (date of inception) to March 31, 2011, the aggregate operating expenses were $1,318,906; this consists of, legal and accounting fees of $266,998, consulting fees of $493,972, general administrative expenses of $373,229 and research and development of $184,707. The Company anticipates continued increase in its operating expenses for the remainder of 2011 as it continues to increase its initiatives to develop and expands it business plans to achieve its goal of producing wind energy for consumption and growth opportunities.




12


General Administrative Expenses





For the Three months ended March 31, 2011


For the Period from July 26, 2010 (date of inception) to March 31, 2011Salaries and benefits

$
136,323


$
228,919Rent


28,467



37,637Investor Relations


26,516



26,516Marketing


3,500



3,500General and administrative


48,334



76,657Total General and Administrative Expenses

$
243,140


$
373,229





The Company was incorporated on July 26, 2010 and does not have any prior quarter to compare the general administrative expense for the quarter ended March 31, 2011.


Research and Development





Our research and development costs for the quarter ended was $111,148, are associated with the continued development of its technology of designing and construct “Downdraft Towers”, these costs are expensed in the period incurred. The Company anticipates modest growth of research and development costs in 2011.




Liquidity and Capital Resources





We have financed our operations since inception primarily through private offerings of our equity securities.





Working Capital





Our working capital deficit increased by ( $343,058) during the three months ended March 31, 2011 from a working capital deficit (current liabilities in excess of current assets) of $196,826 at December 31, 2010 to a working capital deficit of $539,884 at March 31, 2011. The increase in working capital deficit for the three months ended March 31, 2011 is due to a combination of reasons, of which the significant factors include:





●
Cash had a net decrease from working capital by $146,531 for the three months ended March 31, 2011. The most significant uses and proceeds of cash were:





o
Approximately $264,156 of cash consumed in continuing operating activities;





o
A repayment of $25,000 for advances from shareholder/director;o
Proceeds of $120,000 from issuance of Private Placement Memorandum Subscription for Common stock





Of the total current assets of $61,153 as of March 31, 2011, cash represented $48,653. Of the total current assets of $224,481 as of December 31, 2010, cash represented $195,184.





Proceeds from the issuance of common stock





During the three months ended March 31, 2011, the Company received $120,000 from the issuance of Private Placement Memorandum Subscriptions for the sale of its common stock.




13


Cashflow analysis





Cash used in continuing operations was $264,156 during the period ended March 31, 2011. During the period ended March 31, 2011, our primary capital needs were for operating expenses, including funds to support our business strategy, which primarily includes working capital necessary to fund operations and reducing our trade payables.





We utilized cash for investing activities from continuing operations of $2,375 for equipment purchase for research and development.





Cash provided from financing activities was $120,000 from private placement subscription of the Company common stock during the period ended March 31, 2011. The company made $25,000 repayments on advance from shareholders/director.




The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has reported a net loss from continuing operations of $(480,749) for the three months period ended March 31, 2011, accumulated deficit of $(1,318,906) and total current liabilities in excess of current assets of $(539,884) as of March 31, 2011.





The Company is in a development stage and does not have any revenues from operations and will be dependent on funds raise to satisfy its ongoing capital requirements for at least the next 12 months. The Company will require additional financing in order to execute its operating plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events, the Company may be unable to implement its current plans for expansion or respond to competitive pressures, any of these circumstances would have a material adverse effect on its business, prospects, financial condition and results of operations.





Management expects that global economic conditions will continue to present a challenging operating environment through 2011. To the extent permitted by working capital resources, management intends to continue making targeted investments in strategic operating and growth initiatives. Working capital management will continue to be a high priority for 2011.





While we have been able to manage our working capital needs with the current credit facilities, additional financing is required in order to meet our current and projected cash flow requirements from operations. We cannot predict whether this new financing will be in the form of equity or debt. We may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments.





Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and the downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.





Inflation





We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.




Off-Balance sheet Arrangements





We do not maintain off-balance sheet arrangements nor do we participate in any non-exchange traded contracts requiring fair value accounting treatment.




14




Acquisition or Disposition of Property and Equipment





During the three months ended March 1, 2011, there were $2,375 of expenditures on fixed assets. The Company does not anticipate the sale or purchase of any significant property, plant or equipment during the next twelve months, other than computer equipment and peripherals to be used in the Company’s day-to-day operations.





The Company leases approximately 100 square feet of office space at 1997 Annapolis Exchange Parkway, Suite 300, Annapolis, Maryland 21401 pursuant to a lease that expires October 31, 2011 and leases approximately 8,435 square feet of commercial space in Warrenton, Virginia pursuant to a lease that expires November 30, 2013.




The Company maintains one unpatented lode mining claim, #IMC39643, claim name-Abbatoir, which is leased to U.S. Silver Corporation.




Number of Employees





As of April 10, 2011, the Company had 7 full time employees.





Disclosure of Contractual Obligations





The Company does not have any significant contractual obligations which could negatively impact our results of operations and financial condition.





Item 3.  Quantitative and Qualitative Disclosures About Material Risk








Item 4. Controls and Procedures.





As of March 31, 2011, the Company performed an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer (Principal Accounting Officer), of the effectiveness of the design and operation of its disclosure controls and procedures as defined in Rules 13a - 15(e) or 15d - 15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation and due to the lack of segregation of duties and failure to implement accounting controls, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report.





The reason for the ineffectiveness of our disclosure controls and procedures was the result of having a limited number of employees and not having proper segregation of duties based on the cost benefit of hiring additional employees solely to address the segregation of duties issue. We compensate for the lack of segregation of duties by employing close involvement of management in day-to-day operations.





Limitations on Effectiveness of Controls and Procedures




Our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.




Changes in Internal Controls




During the fiscal quarter ended March 31, 2011, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.




15




PART II. OTHER INFORMATION





Item 1. Legal Proceedings.





The Company is subject to legal proceedings and claims from time to time, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.





Item 1A. Risk Factors.





The Company’s results of operations, financial condition and cash flows can be adversely affected by various risks. These risks include, but are not limited to, the principal factors listed below and the other matters set forth in this quarterly report on Form 10-Q. You should carefully consider all of these risks.





The Company has a history of operating losses and an accumulated deficit and expects to continue to incur losses for the foreseeable future.





Since inception through March 31, 2011, the Company has incurred cumulative losses of $(1,318,906) and has never generated enough funds through operations to support its business. The Company has a limited operating history and has primarily engaged in operations relating to the development of its business plan.Additional capital may be required in order to provide working capital requirements for the next twelve months.





Our independent auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.





In their report dated April 12, 2011, our independent auditors stated that our financial statements for the year ended December 31, 2010 were prepared assuming that we would continue as a going concern, and that they have substantial doubt about our ability to continue as a going concern. Our auditors’ doubts are based on our net losses and deficits in cash flows. We continue to experience net operating losses since the Company is still in a development stage. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including by the sale of our securities, or obtaining loans from financial institutions, where possible. Our continued net operating losses and our auditors’ doubts increase the difficulty of our meeting such goals. If we are not successful in raising sufficient additional capital, we may not be able to continue as a going concern and our stockholders may lose their entire investment.





Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.





During the three months ended March 31, 2010, the Company issued 200,000 shares of common stock to consultants for services performed and services accrued in fiscal year 2010. These shares were valued at $27,000, which approximated the fair value of the shares when they were issued. The Company issued 300,000,000 shares of common stock to the shareholders of its Subsidiary, Clean Wind Energy pursuant to the Merger on December 29, 2010, in exchange for their Clean Wind Energy Common Stock. These issuances of shares were made in reliance upon an exemption from registration under Section 4 (2) of the Securities Act, and Regulation D promulgated thereunder.




On December 29, 2010, the Company consummated the Merger pursuant to which the Company agreed to issue to Source Capital 6,000,000 shares for providing financial advisory services to Clean Wind Energy in the transaction. As of the date hereof, the shares have not been issued.





Item 3. Defaults Upon Senior Securities.





None.





Item 4. (Removed and Reserved)











Item 5. Other Information.





Code of Ethics




The Company had stated in its 10K for the period ended December 31, 2010, filed on April 12, 2011, that it will adopt a Code of Business Conduct and Ethics that applies to all directors, officers and employees of the Company, including its principal executive officer, principal financial officer and principal accounting officer. A copy of the Company Code of Business Conduct and Ethics is attached, see Exhibit 14.1.




16





Item 6. Exhibits.





Exhibit

Description2.1

Agreement and Plan of Merger, dated as of December 29, 2010, by and among Superior Silver Mines, Inc., Superior Silver Mines Acquisition Corp., and Clean Wind Energy, Inc. (1)2.2

Plan of Domestication of Superior Silver Mines, Inc., dated December 21, 2010 (1)2.3

Nevada Articles of Domestication of Superior Silver Mines, Inc., dated December 27, 2010 (1)2.4

Idaho Statement of Domestication of Superior Silver Mines, Inc., dated December 22, 2010 (1)2.5

Articles of Merger by and between Clean Wind Energy Tower, Inc. and Superior Silver Mines, Inc. (2)3.1

Articles of Incorporation of Clean Wind Energy Tower, Inc. (1)3.2

Amended Bylaws of Clean Wind Energy Tower, Inc. (3)4.1

Form of Common Stock Certificate (4)10.1

Letter Agreement between Clean Wind Energy, Inc. and Source Capital Group, Inc., dated November 22, 2010 (1)10.2

Deed of Lease, dated December 1, 2010, by and between CKP One, LLC and Clean Wind Energy, Inc. (1)10.3

Lease Agreement, dated October 20, 2010, and effective November 1, 2010, by and between Office Suites PLUS at Annapolis and Clean Wind Energy, Inc. (1)10.4

Director and Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Ronald Pickett, and Amendment dated November 22, 2010 (1)10.5

Director and Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Stephen Sadle, and Amendment dated November 22, 2010 (1)10.6

Director and Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Robert Crabb, and Amendment dated November 22, 2010 (1)10.7

Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and John W. Hanback, and Amendment dated November 22, 2010 (1)10.8

Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Itzhak Tepper, PE, and Amendment dated November 22, 2010 (1)10.9

Executive Employment Agreement, dated September 22, 2010, by and between Clean Wind Energy, Inc. and Ownkar Persaud, and Amendment dated November 22, 2010 (1)10.10

Form of Director and Officer Indemnification Agreement (4)14.1

Code of Business Conduct and Ethics


21.1

Subsidiaries of the Registrant (4)31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ronald W. Pickett31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ownkar Persaud32.1

Certification of Ronald W. Pickett pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2

Certification of Ownkar Persaud pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002




(1)
Filed with the registrant's Form 8-K filed with the Securities and Exchange Commission on December 30, 2010 and incorporated herein by reference.


(2)
Filed with the registrant's Form 8-K filed with the Securities and Exchange Commission on January 21, 2011 and incorporated herein by reference.


(3)
Filed with the registrant's Form 8-K filed with the Securities and Exchange Commission on December 28, 2010 and incorporated herein by reference.


(4)
Filed with the registrant's Form 10-K for the year ended December 31, 2011filed with the Securities and Exchange Commission on April 12, 2011 and incorporated herein by reference.





17





SIGNATURES





In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





Clean Wind Energy Tower, Inc.

RegistrantDate: May 13, 2011
By:
/s/ Ronald PickettRonald Pickett

President and Chief Executive Officer

(Principal Executive Officer)