UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 x           QUARTERLY REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the
quarter ended Novrm
 
 o     
 TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the
transition period from _____ to _____
 
 Commission
File Number: 000-53269
 
 GREENCHEK TECHNOLOGY
INC.
 (Exact
name of small business issuer as specified in its charter)
 
 Nevada(State
      of incorporation)
 
 
 101
California Street, Suite 2450
 San Francisco, California
94111
 (Address
of principal executive offices)
 
 (888)
775-7579
 (Issuer's
telephone number)
 
 ________________________________________________________________
 (Former
name, former address and former fiscal year, if changed since last
report)
 
 Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes xNo 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
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
 
 As of
January 11, 2010, 66,181,333 shares of common stock, par value $0.00001 per
share, were issued and outstanding.
   
  
 TABLE
OF CONTENTS
 
 PagePART
      IItem
      1.  Financial Statements
              1Item
      2.  Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
              13Item
      3.  Quantitative and Qualitative Disclosures About Market
      Risk
              21Item
      4. Controls and Procedures
              21PART
      IIItem
      1. Legal Proceedings
              22Item
      IA. Risk Factors
              22Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
              22Item
      3. Defaults Upon Senior Securities
              22Item
      4. Submission of Matters to a Vote of Security Holders
              22Item
      5. Other Information
              22Item
      6. Exhibits
              23
 
 
 
 
 
 
 
 PART
I
 FINANCIAL
INFORMATION
 
 Item
1.       Financial Statements.
 
   GreenChek
      Technology Inc.(A
      Development Stage Company)Balance
      Sheets(Expressed
      in US Dollars)November
      30,
                
                
                February
      29,2009
                
                
                2009(Unaudited)ASSETSCurrent
      AssetsCash
                
                $
                5,503
                
                
                $
                391Prepaid
      expenses
                
                
                17,338
                
                
                
                7,706Inventory
                
                
                85,230
                
                
                
                -Total
      current assets
                
                
                108,071
                
                
                
                8,097License
      agreement costs, net of accumulatedamortization
      and allowance for impairment (Note 3)
                
                
                -
                
                
                
                -Equipment,
      net (Note 4)
                
                
                3,176
                
                
                
                -Total
      Assets
                
                $
                111,247
                
                
                $
                8,097LIABILITIES
      AND STOCKHOLDERS' DEFICIENCYCurrent
      LiabilitiesAccounts
      payable and accrued liabilities
                
                $
                36,918
                
                
                $
                65,780Loan
      payable
                
                
                36,470
                
                
                
                -Derivative
      liability (Note 6)
                
                
                243,566
                
                
                
                -Due
      to related parties (Note 6)
                
                
                315,075
                
                
                
                362,585Amount due to licensor of license agreement, net of unamortizated debt
      discounts (Note 7)
                
                
                4,000,000
                
                
                
                3,103,806Total
      Liabilities
                
                
                4,632,029
                
                
                
                3,532,171Stockholders'
      DeficiencyPreferred
      Stock, $0.00001 par value;authorized
      100,000,000 shares, none issued and outstanding
                
                
                -
                
                
                
                -Common
      Stock, $0.00001 par value; authorized 100,000,000 shares,issued
      66,181,333 and 64,288,000 shares, respectively
                
                
                662
                
                
                
                643Additional
      paid-in capital
                
                
                346,119
                
                
                
                252,157Treasury Stock, 35,000,000 shares held at November 30, 2009 and February
      28, 2009
                
                
                (100,000
                )
                
                
                (100,000
                )Deficit
      accumulated during the development stage
                
                
                (4,767,563
                )
                
                
                (3,676,874
                )Total
      Stockholders' Deficiency
                
                
                (4,520,782
                )
                
                
                (3,524,074
                )Total
      Liabilities and Stockholders' Deficiency
                
                $
                111,247
                
                
                $
                8,097
   See
notes to financial statements.
 -1-
  GreenChek
      Technology Inc.(A
      Development Stage Company)Statements
      of Operations(Expressed
      in US Dollars)(Unaudited)For
      the three months ended November 30, 2009
                
                
                For
      the three months ended November 30, 2008
                
                
                For
      the nine months ended November 30, 2009
                
                
                For
      the nine months ended November 30, 2008
                
                
                Period
      from September 12, 2006 (Inception) To November 30, 2009Revenue
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Costs
      and expensesGeneral and
      administrative expenses
                
                
                87,255
                
                
                
                127,012
                
                
                
                218,419
                
                
                
                147,303
                
                
                
                346,126Research and
      development
                
                
                -
                
                
                
                -
                
                
                
                32,942
                
                
                
                -
                
                
                
                122,011Amortization of
      license agreement costs
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                20,394
                
                
                
                20,394Provision for
      impairment of license agreement costs
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,081,184
                
                
                
                3,081,184Total
      costs and expenses
                
                
                87,255
                
                
                
                127,012
                
                
                
                251,361
                
                
                
                3,248,881
                
                
                
                3,569,715Loss
      From Operations
                
                
                (87,255
                )
                
                
                (127,012
                )
                
                
                (251,361
                )
                
                
                (3,248,881
                )
                
                
                (3,569,715
                )Imputed
      interest expense
                
                
                -
                
                
                
                (128,903
                )
                
                
                (96,194
                )
                
                
                (199,697
                )
                
                
                (398,422
                )Interest
      expense on loans
                
                
                (2,411
                )
                
                
                -
                
                
                
                (2,411
                )
                
                
                -
                
                
                
                (2,411
                )Interest
      expense in connection with amendmentto
      License Agreement
                
                
                -
                
                
                
                -
                
                
                
                (800,000
                )
                
                
                -
                
                
                
                (800,000
                )Gain
      on forgiveness of debt
                
                
                64,366
                
                
                
                -
                
                
                
                64,366
                
                
                
                -
                
                
                
                64,366Loss
      on change in fair value of conversion feature
                
                
                (5,089
                )
                
                
                -
                
                
                
                (5,089
                )
                
                
                -
                
                
                
                (5,089
                )Loss
      from continuing operations
                
                
                (30,389
                )
                
                
                (255,915
                )
                
                
                (1,090,689
                )
                
                
                (3,448,578
                )
                
                
                (4,711,271
                )Discontinued
      operations (Note 10)
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (6,907
                )
                
                
                (56,292
                )Net
      Loss
                
                $
                (30,389
                )
                
                $
                (255,915
                )
                
                $
                (1,090,689
                )
                
                $
                (3,455,485
                )
                
                $
                (4,767,563
                )Net
      loss per share - basic and dilutedContinuing
      Operations
                
                $
                (0.00
                )
                
                $
                (0.01
                )
                
                $
                (0.04
                )
                
                $
                (0.06
                )Discontinued
      Operations
                
                
                (0.00
                )
                
                
                (0.00
                )
                
                
                (0.00
                )
                
                
                (0.00
                )Total
                
                $
                (0.00
                )
                
                $
                (0.01
                )
                
                $
                (0.04
                )
                
                $
                (0.06
                )Weighted
      Average Shares OutstandingBasic and
      Diluted
                
                
                31,181,000
                
                
                
                48,595,000
                
                
                
                30,146,000
                
                
                
                58,908,000
   See
notes to financial statements.
 -2-
  GreenChek
      Technology Inc.(A
      Development Stage Company)Statements
      of Stockholders' Equity (Deficiency)For
      the Period September 12, 2006 (Inception) to November 30,
    2009(Expressed
      in US Dollars)(Unaudited)Deficit
                
                
                Total
      Stockholders' EquityAccumulatedCommon
      Stock, $0.00001 par value
                
                
                Additional
                
                
                
                
                
                
                
                
                During
      thePaid-in
                
                
                Treasury
      Stock
                
                
                DevelopmentShares
                
                
                Amount
                
                
                Capital
                
                
                Shares
                
                
                Amount
                
                
                Stage
                
                
                (Deficiency)Common
      shares sold for cash at $0.00014 per share
                
                
                35,000,000
                
                
                $
                350
                
                
                $
                4,650
                
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                5,000Common
      shares sold for cash at $0.00143 per share,less offering costs of
      $12,500
                
                
                27,090,000
                
                
                
                271
                
                
                
                25,929
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                26,200Donated
      services and expenses
                
                
                -
                
                
                
                -
                
                
                
                4,500
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,500Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (11,777
                )
                
                
                (11,777
                )Balance
      - February 28, 2007
                
                
                62,090,000
                
                
                
                621
                
                
                
                35,079
                
                
                
                -
                
                
                
                -
                
                
                
                (11,777
                )
                
                
                23,923Common
      stock sold for cash at 0.00143 per shareless offering costs of
      $10,000
                
                
                1,890,000
                
                
                
                19
                
                
                
                (7,319
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (7,300
                )Donated
      services and expenses
                
                
                -
                
                
                
                -
                
                
                
                9,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                9,000Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (37,608
                )
                
                
                (37,608
                )Balance
      - February 29, 2008
                
                
                63,980,000
                
                
                
                640
                
                
                
                36,760
                
                
                
                -
                
                
                
                -
                
                
                
                (49,385
                )
                
                
                (11,985
                )Units
      sold for cash at $0.75 per Unit
                
                
                308,000
                
                
                
                3
                
                
                
                230,997
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                231,000Finders'
      fee
                
                
                -
                
                
                
                -
                
                
                
                (23,100
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (23,100
                )Donated
      services and expenses
                
                
                -
                
                
                
                -
                
                
                
                7,500
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                7,500Purchase
      of treasury stock
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (35,000,000
                )
                
                
                (100,000
                )
                
                
                -
                
                
                
                (100,000
                )Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (3,627,489
                )
                
                
                (3,627,489
                )Balance
      - February 28, 2009
                
                
                64,288,000
                
                
                
                643
                
                
                
                252,157
                
                
                
                (35,000,000
                )
                
                
                (100,000
                )
                
                
                (3,676,874
                )
                
                
                (3,524,074
                )Units
      sold for cash at $0.75 per Unit
                
                
                26,667
                
                
                
                -
                
                
                
                20,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                20,000Finders'
      fee
                
                
                -
                
                
                
                -
                
                
                
                (2,950
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (2,950
                )Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (138,121
                )
                
                
                (138,121
                )Balance
      - May 31, 2009
                
                
                64,314,667
                
                
                
                643
                
                
                
                269207
                
                
                
                (35,000,000
                )
                
                
                (100,000
                )
                
                
                (3,814,995
                )
                
                
                (3,645,145
                )Stock-based
      compensation
                
                
                1,866,666
                
                
                
                19
                
                
                
                68,481
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                68,500Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (922,179
                )
                
                
                (922,179
                )Balance
      – August 31, 2009
                
                
                66,181,333
                
                
                $
                662
                
                
                $
                337,688
                
                
                
                (35,000,000
                )
                
                $
                (100,000
                )
                
                $
                (4,737,174
                )
                
                $
                (4,498,824
                )Fair
      value of warrantsauthorized
      in connection with convertible loan payable
                
                
                -
                
                
                
                -
                
                
                
                8,431
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                8,431Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (30,389
                )
                
                
                (30,389
                )Balance
      – November 30, 2009
                
                
                66,181,333
                
                
                $
                662
                
                
                $
                346,119
                
                
                
                (35,000,000
                )
                
                $
                (100,000
                )
                
                $
                (4,767,563
                )
                
                $
                (4,520,782
                )
   See
notes to financial statements.
 -3-
  GreenChek
      Technology Inc.(A
      Development Stage Company)Statements
      of Cash Flows(Expressed
      in US Dollars)(Unaudited)For
      the nine months ended November 30, 2009
                
                
                For
      the nine months ended November 30, 2008
                
                
                Period
      from September 12, 2006 (Date of Inception) To November 30,
      2009Cash
      Flows from Operating ActivitiesNet
      loss
                
                $
                (1,090,689
                )
                
                $
                (3,455,485
                )
                
                $
                (4,767,563
                )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:Amortization
      of license agreement costs
                
                
                -
                
                
                
                20,394
                
                
                
                20,394Depreciation
      of equipment
                
                
                751
                
                
                
                -
                
                
                
                751Provision
      for impairment of license agreement costs
                
                
                -
                
                
                
                3,081,184
                
                
                
                3,081,184Imputed
      interest expense
                
                
                96,194
                
                
                
                199,697
                
                
                
                398,422Non-cash
      interest expense
                
                
                2,411
                
                
                
                -
                
                
                
                2,411Donated
      services and expenses
                
                
                -
                
                
                
                6,000
                
                
                
                21,000Impairment
      of mineral property costs
                
                
                -
                
                
                
                -
                
                
                
                3,300Interest expense in connection with amendment to License
      Agreement
                
                
                800,000
                
                
                
                -
                
                
                
                800,000Stock
      -based compensation
                
                
                59,750
                
                
                
                -
                
                
                
                59,750Gain
      on re-valuation of derivative liability
                
                
                5,089
                
                
                
                -
                
                
                
                5,089Gain
      on forgiveness of debt
                
                
                64,366
                
                
                
                -
                
                
                
                64,366Changes
      in operating assets and liabilities:Inventory
                
                
                (85,230
                )
                
                
                -
                
                
                
                (85,230
                )Accounts
      payable and accrued liabilities
                
                
                (63,229
                )
                
                
                15,468
                
                
                
                2,551Due
      to related party
                
                
                76,000
                
                
                
                -
                
                
                
                76,000Prepaid
      expenses
                
                
                (882
                )
                
                
                (754
                )
                
                
                (8,588
                )Net
      cash used in operating activities
                
                
                (135,469
                )
                
                
                (133,496
                )
                
                
                (326,163
                )Cash
      Flows from Investing ActivitiesMineral
      property acquisition costs
                
                
                -
                
                
                
                -
                
                
                
                (3,300
                )Purchase
      of equipment
                
                
                (3,927
                )
                
                
                -
                
                
                
                (3,927
                )Net
      cash used in investing activities
                
                
                (3,927
                )
                
                
                -
                
                
                
                (7,227
                )Cash
      Flows from Financing ActivitiesProceeds
      from sales of common stock
                
                
                17,050
                
                
                
                189,900
                
                
                
                271,350Purchase
      of treasuary stock
                
                
                -
                
                
                
                (100,000
                )
                
                
                (100,000
                )Offering
      costs incurred
                
                
                -
                
                
                
                -
                
                
                
                (22,500
                )Due
      to related parties
                
                
                83,827
                
                
                
                44,001
                
                
                
                146,412Proceeds
      from loans payable
                
                
                43,631
                
                
                
                -
                
                
                
                43,631Net
      cash provided by financing activities
                
                
                144,508
                
                
                
                133,901
                
                
                
                338,893Increase
      in cash
                
                
                5,112
                
                
                
                405
                
                
                
                5,503Cash
      - beginning of period
                
                
                391
                
                
                
                688
                
                
                
                -Cash
      - end of period
                
                $
                5,503
                
                
                $
                1,093
                
                
                $
                5,503Supplemental
      disclosures of cash flow information:Interest
      paid
                
                $
                -
                
                
                $
                -
                
                
                $
                -Income
      taxes paid
                
                $
                -
                
                
                $
                -
                
                
                $
                -Non-cash
      investing activity:Acquisition
      of license agreement in exchange for debt due seller, less imputed
      interest
                
                $
                -
                
                
                $
                3,101,578
                
                
                $
                3,101,578Non-cash
      financing activity:Repayment
      of amount due licensor of license agreementin
      exchange for increase in due to related party
                
                $
                -
                
                
                $
                300,000
                
                
                $
                300,000
   See
notes to financial statements.
 -4-
 GreenChek
Technology Inc.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 November
30, 2009
 (Unaudited)
 
 
 Note
1.   Development Stage Company
 
 The
Company was incorporated in the State of Nevada on September 12, 2006 under the
name Ridgestone Resources, Inc. and changed its name to GreenChek Technology
Inc. on August 5, 2008.  From inception to May 31, 2008, the Company’s
principal business was the acquisition and exploration of mineral resources. On
July 14, 2008, the Company entered into a licensing agreement to acquire patent
and intellectual rights relating to the manufacturing, marketing, and
distributing of products designed to reduce gas emissions by motor vehicles
through the use of hydrogen technology (see Note 3).
  These
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has never generated revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity
financing to continue operations, and the attainment of profitable operations.
As at November 30, 2009, the Company has accumulated losses of $4,767,563 since
inception. These factors raise substantial doubt regarding the Company’s ability
to continue as a going concern. These financial statements do not include any
adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
  Note
2.   Interim Financial Information
 
 The
unaudited financial statements as of November 30, 2009 and for the three and
nine months ended November 30, 2009 and 2008 and for the period September 12,
2006 (inception) to November 30, 2009 have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information and with instructions to Form 10-Q. In the opinion of
management, the unaudited financial statements have been prepared on the same
basis as the annual financial statements and reflect all adjustments, which
include only normal recurring adjustments, necessary to present fairly the
financial position as of November 30, 2009 and the results of operations and
cash flows for the periods then ended. The financial data and other information
disclosed in these notes to the interim financial statements related to these
periods are unaudited. The results for the nine month period ended November 30,
2009 is not necessarily indicative of the results to be expected for any
subsequent quarter of the entire year ending February 28, 2010. The balance
sheet at February 29, 2009 has been derived from the audited financial
statements at that date.
  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to the Securities and
Exchange Commission’s rules and regulations. These unaudited financial
statements should be read in conjunction with our audited financial statements
and notes thereto for the year ended February 29, 2009 as included in our Form
10-K filed with the Securities and Exchange Commission on June 15,
2009.
  -5-
  GreenChek
Technology Inc.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 November
30, 2009
 (Unaudited)
  Note
3.  License Agreement Costs, Net
 License
agreement costs, net, at November 30, 2009 and February 28, 2009 consist
of:
  License
      price, less $398,422 discount for imputed interest
                
                $
                3,101,578Less
      accumulated amortization
                
                
                (20,394
                )Less
      allowance for impairment
                
                
                (3,081,184
                )License
      agreement costs, net
                
                $
                -
  On July
14, 2008, the Company entered into an Agreement with China Bright Technology
Development Limited (the Licensor) and Lincoln Parke (the Principal), and
acquired a Comprehensive License to use certain patent and intellectual rights
for the purpose of manufacturing, marketing, and distributing products designed
to reduce gas emissions by motor vehicles.  The territory covered by
the license is the European Union and the United States of America. The price
for the license was $3,500,000, payable as follows: $300,000 on August 13, 2008
(deemed paid); $1,000,000 by December 31, 2008 (unpaid); $1,000,000 by March 31,
2009 (unpaid); and, $1,200,000 by August 31, 2009 (unpaid).
  Provided
that the $1,200,000 payment is made, the Company is to issue the Principal an
amount equal to the value of 60% of the Company’s issued and outstanding common
shares by way of allotment and issuance to the Principal of 43,470,000 of the
Company’s common shares representing 60% of the total issued and outstanding
shares of the Company as at such time, as soon as the License Price is met in
accordance with all applicable laws. The Company must also use its best efforts
to provide $3,500,000 of funding for business development payable on the same
schedule as the license fee payments noted above.  The Company must
also use its best efforts to fund a $2,000,000 product and investor awareness
marketing campaign through the issuance of shares.
  On July
10, 2009, the Company amended the license agreement with the Licensor. The
license agreement was amended to extend payment dates as follows:
  1.
                Payment
      of $1,000,000 due on December 31, 2008 extended to December 31,
      2009,
  2.
                Payment
      of $1,000,000 due on March 31, 2009 extended to March 31,
      2010,
  3.
                Payment
      of $1,200,000 due on August 31, 2009 extended to August 31,
      2010.
  In
consideration for deferring the license payments, the Company was to make the
following additional payments in cash or in shares issuable at a 15% discount
from market price:
  1.
                $500,000
      payable on August 9, 2009, (unpaid at November 30, 2009);
    and
  2.
                $300,000
      payable on August 31, 2010 (unpaid at November 30,
  2009).
  On
December 31, 2009 (see note 12(b)), the Company entered into amendment no. 2 to
the license agreement with the Licensor and the Principal.  Pursuant
to this amendment, the $1,000,000 due December 31, 2009 and the $500,000 due
August 9, 2009 (of the $4,000,000 total due to the Licensor of the License
Agreement at November 30, 2009) was amended to a total of $550,000 due January
14, 2010. If the Company fails to make the $550,000 payment to Licensor by
January 14, 2010, Licensor has the right to immediately terminate the license
agreement.
 
 -6-
 
 GreenChek
Technology Inc.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 November
30, 2009
 (Unaudited)
   Note
3.   License Agreement Costs, Net (continued)
  The term
of the Comprehensive License is 20 years. In the event of failure by the Company
to fulfill any of its obligations under the Agreement, the Agreement and
Comprehensive License may be terminated by the Licensor with 120 days notice. On
July 15, 2008, the Principal was appointed Chief Executive Officer, Chief
Financial Officer, and director of the Company.
  The
Agreement did not state any interest on the $3,500,000 total amounts due the
Licensor between August 13, 2008 and August 31, 2009. Accordingly, the Company
recorded the license price at the $3,101,578 present value (discounted at an 18%
annual interest rate) of the $3,500,000 total payments due and recorded
amortization expense of $20,394 for the period July 14, 2008 to August 31, 2008
(using the straight line method over the 20 years term of the
Agreement).
  As of
August 31, 2008, the Company reviewed the then remaining $3,081,184 carrying
value of the license agreement costs for potential impairment. Considering all
facts and circumstances, the Company concluded that it was not more likely than
not that any of the $3,081,184 carrying costs were recoverable. Accordingly, the
Company expensed a $3,081,184 provision for impairment of license agreement
costs at August 31, 2008 and reduced the license agreement costs, net to
$0.
  In the
three months ended August 31, 2009, the Company recognized the additional
liability of $800,000 resulting from the July 10, 2009 amendment to the license
agreement as interest expense.
  Note
4.   Equipment, Net
 
 Equipment,
net, at November 30, 2009 consists of:
  Equipment
                
                $
                3,927Less
      accumulated depreciation
                
                
                (751
                )Equipment,
      net
                
                $
                3,176
 
 Note
5.   Loan Payable
 
 On
November 1, 2009, the Company entered into a loan agreement for a loan of up to
$50,000.  The loan is non interest bearing and due on April 30,
2010.  Pursuant to the loan agreement the Company has agreed to issue
500,000 common share purchase warrants exercisable for two years at an exercise
price of $0.05 for the first year and $0.10 for the second year.  As
at November 30, 2009, the Company had received loans of $43,631.  On
November 1, 2009, the Company recognized the fair value of the warrants of
$8,431 as additional paid-in capital and an equivalent discount that reduced the
carrying value of the loan to $35,200.  The discount will be expensed
over the term of the loan increasing the carrying value to the face value of the
loan.  As at November 30, 2009, the carrying value of the loan was
$36,470 and interest expense of $1,270 had been recorded.  At November
30, 2009, the Company had not issued the warrants.
   -7-
  GreenChek
Technology Inc.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 November
30, 2009
 (Unaudited)
  Note
6.   Due to Related Parties
 
 Due to
related parties consist of:
  November
      30, 2009
                
                
                February
      28, 2009Due
      to chief executive officer:Amount
      due relating to the deemed payment of the $300,000license
      agreement installment due August 13, 2008,non-interest
      bearing, due the earlier of (1) the closing of afinancing
      of $1,000,000 or more or (2) July 14, 2010,convertible
      at the option of the Principal commencingNovember
      28, 2009 and convertible at the option of theCompany
      on the due date into common stock at a priceequal
      to 75% of the closing price on the date of conversion
                
                $
                300,000
                
                
                $
                300,000Discount
      relating to the fair value of the embedded beneficialconversion
      feature at November 28, 2009
                
                
                (238,477
                )
                
                
                -Accretion
      of discount from November 28, 2009 to November30,
      2009
                
                
                1,141
                
                
                
                -Net
                
                
                62,664
                
                
                
                300,000Accrued
      management fee
                
                
                52,498
                
                
                
                11,633Other
                
                
                97,580
                
                
                
                2,306Due
      to former majority stockholder and chief executive
officer:Amount
      due relating to the Company's purchase of treasury stock
                
                
                25,000
                
                
                
                25,000Other,
      non-interest bearing, no repayment terms
                
                
                16,637
                
                
                
                16,164Due
      to former director and chief strategy officer for consulting
      services
                
                
                4,737
                
                
                
                3,930Due
      to former director and chief financial officer
                
                
                55,959
                
                
                
                3,552Total
                
                $
                315,075
                
                
                $
                362,585
  During
the year ended February 28, 2009, the Company, the Licensor (a corporation
formerly controlled by the Company’s chief executive officer), and the Principal
(chief executive officer of the Company) agreed to deem the $300,000 license
agreement instalment due August 13, 2008 as paid in exchange for the Company’s
agreement to pay $300,000 to the Principal. Pursuant to the agreement the amount
is non interest bearing and payable on the earlier of July 14, 2010 or the
closing of a financing in excess of $1,000,000.  On November 28, 2009,
the amount became convertible at the option of the Principal at 75% of the
closing price of the Company’s common stock on the date of
conversion.  The Company recognized the fair value of the embedded
beneficial conversion feature of $238,477 as a derivative liability and reduced
the carrying value of the convertible loan to $61,523.  The discount
on the convertible loan will be accreted over the term of the convertible loan,
increasing the carrying value to the face value of $300,000. As at November 30,
2009, the carrying value of the convertible debt was $62,664 and interest
expense of $1,141 had been accreted.  The fair value of the derivative
liability at November 30, 2009 was $243,566 and a loss of $5,089 was recorded on
the change in the fair value of the derivative liability.
   -8-
  GreenChek
Technology Inc.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 November
30, 2009
 (Unaudited)
 Note
7.   Amount due to Licensor of License Agreement
 
 Amount
due to licensor of license agreement, net, at November 30, 2009, consists
of:
  Amount
      due December 31, 2009
                
                $
                1,000,000Amount
      due March 31, 2010
                
                
                1,000,000Amount
      due August 31, 2010
                
                
                1,200,000Amounts
      due under Amendment  to LicenseAgreement
      dated July 10, 2009:Amount
      due August 9, 2009
                
                
                500,000Amount
      due August 31, 2010
                
                
                300,000Total
                
                $
                4,000,000
  On
December 31, 2009 (see note 12(b)), the Company entered into amendment no, 2 to
the license agreement with the Licensor and the Principal. Pursuant to this
amendment, the $1,000,000 due December 31, 2009 and the $500,000 due August 9,
2009 (of the $4,000,000 total due to the Licensor of License Agreement at
November 30, 2009) was amended to a total of $550,000 due January 14,
2010.
 
 Note
8.   Common Stock
  a)
                On
      May 28, 2007, the Company effected a 7 to 1 forward stock split of the
      issued and outstanding common stock. As a result, the issued and
      outstanding shares at that time increased from 9,140,000 shares of common
      stock to 63,980,000 shares of common stock. All share amounts have been
      retroactively adjusted for all periods
  presented.
  b)
                On
      October 21, 2008, the Company entered into a Return to Treasury Agreement
      with Pardeep Sarai, former majority stockholder and chief executive
      officer of the Company (“Sarai”), whereby the Company agreed to purchase
      35,000,000 shares of the Company common stock owned by Sarai for $100,000.
      Pursuant to this agreement, the Company paid $75,000 to Sarai on October
      21, 2008. The agreement provides that the 35,000,000 shares are to be
      returned to Sarai if the Company fails to pay the remaining $25,000 to
      Sarai by March 1, 2009 (which date has been extended to June 30, 2009
      under an Amendment to Agreement dated May 19, 2009 between the Company and
      Sarai and further extended under a verbal agreement) or if certain
      transactions contemplated by the License Agreement do not
      occur.
  c)
                On
      May 8, 2009, pursuant to a Subscription Agreement dated September 17,
      2008, the Company sold 26,667 Units to Noyz Management Corp. at $0.75 per
      unit for gross proceeds of $20,000. After deducting $2,950 in finder’s
      fees, the net proceeds to the Company were $17,050. Each Unit consists of
      one share of common stock and one warrant to purchase one share of common
      stock at an exercise price of 0.75 per share to September 17,
      2009.
   -9-
  GreenChek
Technology Inc.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 November
30, 2009
 (Unaudited)
  d)
                On
      July 30, 2009, the Company issued 1,866,666 restricted shares of common
      stock with a fair value of $68,500 to DC Consulting LLC (DC Consulting)
      pursuant to the consulting agreements described in Note 11 (b) and
      (c).
 
 Note
9.   Income Taxes
 
 Based on
management’s present assessment, the Company has not yet determined it to be
more likely than not that a deferred tax asset of $160,390 at November 30, 2009
attributable to the future utilization of the net operating loss carryforward of
$458,257 will be realized.  Accordingly, the Company has provided a
100% allowance against the deferred tax asset in the financial
statements.  The Company will continue to review this valuation
allowance and make adjustments as appropriate.  The $458,257 net
operating loss carryforward expires $7,277 in 2027, $28,608 in 2028, $236,577 in
2029 and $185,795 in 2030.
 
 Current
tax laws limit the amount of loss available to be offset against future taxable
income when a substantial change in ownership occurs.  Therefore, the
amount available to offset future taxable income may be limited.
 
 Note 10.
Discontinued Operations
 
 On May
31, 2008, the Company discontinued its mineral property acquisition and
exploration operations.
    Period
      fromFor
      the three month period Ended
                
                
                For
      the three month period Ended
                
                
                For
      the nine month period Ended
                
                
                For
      the nine month period Ended
                
                
                September
      12, 2006
                  (Date
      of Inception) toNovember
                  30,
                
                
                November
                  30,
                
                
                November
                  30,
                
                
                November
                  30,
                
                
                November
                  30,2009
                
                
                2008
                
                
                2009
                
                
                2008
                
                
                2009Revenues
                
                $
                –
                
                
                $
                –
                
                
                $
                –
                
                
                $
                –
                
                
                $
                –Cost
      and expensesGeneral
      and administrative expenses
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                6,907
                
                
                
                51,925Impairment
      of mineral property costs
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                3,300Mineral
      property exploration and carrying costs
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                1,067Total
      costs and expenses
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                6,907
                
                
                
                56,292Net
      Loss
                
                $
                –
                
                
                $
                –
                
                
                $
                –
                
                
                $
                (6,907
                )
                
                $
                (56,292
                )
  
 -10-
 
 GreenChek
Technology Inc.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 November
30, 2009
 (Unaudited)
  Note
11. Commitments and Contingencies
 
 a)
                On
      August 1, 2008, the Company entered into a Management Contract with
      Lincoln Parke (“Parke”), the Company’s chief executive officer. Under the
      agreement, Parke is to perform certain services for the Company and the
      Company is to pay monthly management fees of 5,000 Canadian dollars
      (approximately $4,737 translated at the November 30, 2009, exchange rate)
      to Parke. Either party can terminate the agreement with 30 days written
      notice.
  b)
                On
      July 22, 2009, the Company entered into an agreement with DC Consulting
      LLC (DC Consulting) for consulting services for a period of one year in
      consideration for the issue of 500,000 restricted shares of the Company’s
      common stock.  The Company has the option to repurchase the
      shares issued to DC Consulting at a price per share equal to the closing
      price of the Company’s common stock on the day the shares were issued, or
      $0.065 per share. The Company issued 500,000 restricted shares of common
      stock with a fair value of $15,000 on July 30, 2009 and at November 30,
      2009, $8,750 was included in prepaid
expenses.
  c)
                On
      July 22, 2009, the Company entered into an agreement with DC Consulting
      for investor relation services for an initial period of 90 days in
      consideration for the following:
  i)
                A
      monthly retainer fee of $9,500 in cash or quarterly retainer fee of
      $25,000 payable in cash or stock with the first payment due upon the
      execution of the contract.  The Company issued 416,666
      restricted shares of common stock with a fair value of $25,000 on July 30,
      2009.
  ii)
                950,000
      restricted shares of the Company’s common stock due within 30 days of the
      execution of the contract. The Company issued 950,000 restricted shares of
      common stock with a fair value of $28,500 on July 30,
  2009.
  iii)
                Warrants
      to purchase 750,000 shares of the Company’s common stock at an exercise
      price of $0.40 per share. The warrants have not been delivered to DC
      Consulting as at November 30, 2009.
  iv)
                Warrants
      to purchase 750,000 shares of the Company’s common stock at an exercise
      price of $1.00 per share. The warrants have not been delivered to DC
      Consulting as at November 30, 2009.
  v)
                An
      advisory fee of 7% of the gross proceeds of any financing transaction
      arranged by DC Consulting.
  d)
                On
      August 25, 2009, the Company entered into a Common Stock Purchase
      Agreement and a Registration Rights Agreement (collectively the
      “Agreements”) dated August 25, 2009, with Bodie Investment Group Inc.
      (“Bodie”). Pursuant to the agreements, subject to volume limitations, the
      Company has the right to sell Bodie over a two year period up to
      $6,000,000 of the Company’s common stock at a price per share equal to 90%
      of the average of the three lowest closing bids during the twenty days
      prior to the put date.  In consideration of the foregoing, the
      Company is obligated to issue Bodie 3,000,000 restricted shares of common
      stock on or before the first closing date. Prior to Bodie’s obligation to
      purchase any shares, the shares are to be registered in an effective
      registration statement filed with the
SEC.
  e)
                On
      October 14, 2009, the Company entered into a Lease Agreement for space in
      Ontario Canada. The lease commenced on November 1, 2009 for a term of
      three years ending on October 31,
2012.
   -11-
 
  GreenChek
Technology Inc.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 November
30, 2009
 (Unaudited)
  The lease
provides for monthly rentals ranging from 4,414 Canadian dollars (approximately
$4,182 translated at the November 30, 2009 exchange rate) to 4,743 Canadian
dollars (approximately $4,494 translated at the November 30, 2009 exchange
rate). Future noncancellable lease payments at November 30, 2009
are:
  
 Year
      Ending February 28
                
                Amount2010
                
                $
                12,5462011
                
                
                50,7962012
                
                
                52,6572013
                
                
                35,942Total
                
                $
                151,941
  Note 12.
Subsequent Events
 
 In June
2009 the Company implemented Accounting Standards Codification (“ASC”) 855,
Subsequent Events. This
standard establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued. The adoption of ASC 855 did not impact the Company’s financial
position or results of operations. The Company evaluated all events or
transactions that occurred after November 30, 2009 up through January 19, 2010,
the date the Company issued these financial statements.  During this
period, the Company did not have any material recognizable subsequent events,
except as disclosed below:
 
 a)
                On
      December 8, 2009, the Company entered into a Consulting
      Agreement.  Under the terms of the agreement the Consultant
      shall provide advice and consulting services in consideration for the
      issuance of 200,000 common shares of the Company within 60 days after the
      execution of this agreement.  In addition, upon the
      implementation of an Incentive Stock Option Plan by the Company, the
      Consultant will be eligible to receive stock options, the number to be
      determined by March 31, 2010.  This agreement will be in effect
      for a period of 12 months and is renewable upon reasonable terms and
      conditions agreed to by the Company and the
  Consultant.
 
 b)
                On
      December 31, 2009, the Company entered into a second amendment to the
      license agreement referred to in Note 3.  Pursuant to the
      amendment the $1,000,000 payment due on December 31, 2009 and the $500,000
      owing after the signing of the first amendment shall be reduced to
      $550,000 which shall represent payment in full of these
      amounts.  The remaining $950,000 of the $1,500,000 aggregate
      principal amount shall be forgiven by the Licensor. On January 14, 2010, a
      third party tendered a check to Licensor on behalf of the Company in the
      amount of 4,265,420 Hong Kong dollars (equivalent to
      $550,000).
 -12-
 
 Forward-Looking
Statements
 
 The
following discussion should be read in conjunction with our unaudited condensed
consolidated financial statements, which are included elsewhere in this Form
10-Q (the “Report”). This Report contains forward-looking statements which
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as “may,” “should,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential” or “continue” or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties, and other factors that may cause our or our industry’s
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements.
 
 The
following discussion should also be read in conjunction with our audited
consolidated financial statements and Form 10-K filed on June 15,
2009.
  Although
we have attempted to identify important factors that could cause actual results
to differ materially from those contained in forward-looking information, there
may be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not place undue
reliance on forward-looking information. GreenChek does not undertake to update
any forward-looking information that is incorporated by reference herein, except
in accordance with applicable securities laws.
 
 We have
not yet generated or realized any revenues from our business
activities.
 
 Our
auditors have issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our expenses. This is
because we have not generated any revenues and no revenues are anticipated until
we begin selling our product, the ERD-2.0. Accordingly, we must raise cash from
loans, private placements, or other financings. Our only source for cash at this
time is through loans made by our chief executive officer and director and a
private investor.  Our success or failure will be determined in the
short term by additional loans or equity financings and, in the long term by the
number of ERD-2.0 units we sell and the net income we realize.
 
 Company
Overview
 
 We are a
technology company headquartered in San Francisco,
California.  Pursuant to a July 14, 2008 license agreement with China
Bright Technology Development Limited, a Chinese corporation located in Hong
Kong (“China Bright”), we have theright to use allof China
Bright’s patent and intellectual rights for the purpose of manufacturing,
marketing, and distributing products designed to reduce gas emissions by motor
vehicles. The China Bright patents and intellectual rights are directed at the
use of hydrogen technology to reduce gas emissions in motor vehicles. The
territory to be covered by the license is the European Union and the United
States of America.  A payment of $1,000,000 was due to China Bright on
December 31, 2009 and another payment of $1,000,000 is due on March 31, 2010.
The agreement with China Bright was amended to provide that if $550,000 is not
paid in full to China Bright by January 14, 2009, China Bright shall have the
right to immediately terminate the license agreement. If such payment is made,
China Bright will forgive the $950,000 owed by the Company.
   -13-
 
 The
device we are developing, manufacturing and marketing, pursuant to our licensing
agreement, is the Emission Reduction Device 2.0 (“ERD-2.0”). The ERD-2.0 is
designed for installation on all vehicles with an internal combustion engine
(“ICE”). The compact, self-contained ERD-2.0 includes a proprietary modular
multiple cell Electrolyser (creates electrolysis) Unit for an internal
combustion engine that can be retrofitted to any type of ICE to enhance the
combustion process, independent of the fuel used (gasoline, diesel, ethanol or
propane/natural gas). The ERD-2.0 product generates hydrogen by means of
electrolysis. Water molecules are spontaneously split into hydrogen and oxygen
gases of high purity, the resulting gases can then be distributed according to
the user’s requirements.
 
 On August
25, 2009, we entered into a Common Stock Purchase Agreement and a Registration
Rights Agreement (collectively the “Agreements”) with Bodie Investment Group
Inc. (“Bodie”). Pursuant to the Agreement, we have the right to sell and Bodie
may purchase up to $6,000,000 of the Company’s common stock at 90% of the
average of the three lowest closing bids during the twenty days prior to the
purchase with a minimum purchase price of $0.05 per share.  This floor
price provision can be altered at any time by GreenChek with thirty (30) days
written notice to Bodie.  In consideration of the foregoing, we issued
Bodie 3,000,000 restricted shares of common stock and cashless warrants to
acquire an additional 9,000,000 restricted shares of common
stock.   Prior to Bodie’s obligation to purchase any
shares, all of the shares and warrants must be registered in an effective
registration statement filed with the SEC and applicable states.  We
have not yet commenced work on our registration statement.
 
 On
November 1, 2009, we entered into a $50,000.00 Loan Agreement (“Loan”) with a
private investor. The Loan bears no interest and is repayable within six (6)
months.  Furthermore, we are to issue the private investor 500,000
common share purchase warrants, which warrants have an exercise price of $0.05
for the first year and $0.10 for the second year from the date of the Loan. In
the short term, we require additional funding in order to operate and meet our
day to day corporate and operational costs.  Other than as described
above, we are pursuing other short term financing options.
 
 We have
an operating lease which expires on October 31, 2012 with respect to our
research, testing and manufacturing warehouse located in Ontario, Canada. The
future annual minimum lease payments are approximately $151,941.
 
 Other
than as described in the above paragraph, we do not own any interest in any
property. We currently lease our two (2) corporate office spaces located in San
Francisco, California, USA and Toronto, Ontario, Canada.
 
 We do not
have any employees at this time however as we grow our business, it is our
intention to hire employees in the near future.
 
 Our
Business
 
 General:We are a
development stage technology business incorporated under the laws of the State
of Nevada on September 12, 2006.  Through a licensing agreement, we
are currently manufacturing and marketing one product, an emissions reducing and
fuel enhancing device called the ERD-2.0.
 
 The
mobile space we are focused on includes any transportation vehicle that utilizes
an internal combustion engine, regardless of fuel source. Heavy emission
emitters - trucks, ships and railway lines are being heavily penalized per
government regulations and requirements by not meeting emission targets. Our
ERD-2.0 has been proven reliable for a test period exceeding two years. These
tests have demonstrated in proven third party results that our technology lowers
emissions by a minimum of 10%, reduces fuel consumption, increases horsepower,
improves engine life, reduces maintenance costs, and requires minimal driver
maintenance and intervention.
  -14-
  
 Furthermore,
millions of existing high polluting trucks and trains will not be replaced or
discarded with new low polluting and more fuel-efficient units anytime soon. The
high emission output vehicles will be with us for years to come and these
vehicles need a lower cost solution to high gas prices and emission reduction
without replacing the vehicle.  We believe our ERD technology
specifically responds to and provides relief to globally rising fuel
costs.
 
 License:   We
manufacture and sell the ERD-2.0 pursuant to a license from China Bright
Technology Development Limited (“China Bright”), a Chinese corporation located
in Hong Kong.  We have the right to use all of China Bright’s patent
and intellectual rights for the purpose of manufacturing, marketing, and
distributing products designed to reduce gas emissions by motor vehicles. The
China Bright patents and intellectual rights are directed at the use of hydrogen
technology to reduce gas emissions in motor vehicles. The territory to be
covered by the license is the European Union and the United States of America.
The fee for the license is $3,500,000 payable as follows: $300,000 on August 13,
2008, $1,000,000 by December 31, 2008; $1,000,000 by March 31, 2009; and,
$1,200,000 by August 31, 2009. In addition we are obligated to issue to China
Bright, an amount of common stock equal to the value of 60% of our total
outstanding common shares.
 
 On July
10, 2009, we amended the license agreement with the Licensor. The license
agreement is amended to extend payment dates as follows: payment of $1,000,000
due on December 31, 2008 extended to December 31, 2009; payment of $1,000,000
due on March 31, 2009 extended to March 31, 2010 and; payment of $1,200,000 due
on August 31, 2009 extended to August 31, 2010.
 
 On
December 31, 2009 the agreement with China Bright was further amended. Pursuant
to the amendment the $1,000,000 payment due on December 31, 2009 and the
$500,000 owing after signing of the first amendment shall be reduced to $550,000
which shall represent payment in full of these amounts. If $550,000 is not paid
in full to China Bright by January 14, 2009, China Bright shall have the right
to immediately terminate the license agreement. If such payment is made, China
Bright will forgive the $950,000 owed by the Company.  At time of
filing, a third party had made the $550,000 on behalf of the
Company.
 
 Our Product:The
device we are developing, manufacturing and marketing, pursuant to our licensing
agreement, is the Emission Reduction Device 2.0 (“ERD-2.0”). The ERD-2.0 is
designed for installation on all vehicles with an internal combustion engine
(“ICE”). The compact, self-contained ERD-2.0 includes a proprietary modular
multiple cell Electrolyser (creates electrolysis) Unit for an internal
combustion engine that can be retrofitted to any type of ICE to enhance the
combustion process, independent of the fuel used (gasoline, diesel, ethanol or
propane/natural gas). The ERD-2.0 product generates hydrogen by means of
electrolysis. Water molecules are spontaneously split into hydrogen and oxygen
gases of high purity, the resulting gases can then be distributed according to
the user’s requirements.
 
 Specifically
focused on ICE integration, the ERD unit produces an amalgamation of hydrogen
and oxygen gases, exclusively on demand, at miniscule pressure, only when the
engine is operational.  These gases are transported to the engine
where they are entirely exhausted in the combustion procedure.  The
ERD unit ameliorates engine performance efficiency by generating augmented
combustion of the air-fuel amalgam.  The combustion intensity
valuation of the hydrogen is not viewed as noteworthy, when contrasted with the
operational benefit observed.  The supplemental hydrogen is
functioning as an octane adjunct.  As well, the hydrogen acts as a
dissemination minimization factor in regards to greenhouse gases propagated by
the combustion procedure.
   -15-
 
 The ERD
2.0 is engineered to operate in a modular format for greater efficiency. The
ability to link units together contribute to our ability to service larger
engines, obtain further fuel cost savings and greater emission reduction, at the
same time maintaining durability and overall quality.  Our ERD-2.0
system offers a programmable controller with fault detection and provides
extensive diagnostics, which allows the user to remotely monitor and measure
performance of the ERD-2.0.  The product has a two year
warranty.
 
 History:   We
have invented and developed, over the last five years, a proprietary process of
hydrogen generation using environmentally safe materials and techniques that can
take place onboard the vehicle.  Management believes that the addition
of this onboard hydrogen generating technology eliminates the need for hydrogen
storage on the vehicle, potentially making the vehicle lighter and safer, and
reducing its reliance on an infrastructure to provide hydrogen.
 
 There is
a great deal of interest in hydrogen-supplemented engines, which are considered
to be environmentally friendly.  These engines create substantially
less emissions than purely fossil fuel operated ICEs.  It has become
apparent that human technological innovations and fossil fuel utilizing
advancements are the basis of the majority of the increased heat-trapping gases,
also known as greenhouse gases (GHG).  Most industrialized nations
have enacted environmental initiatives with a view to decreasing GHG, many of
which are generated from fossil fuel emissions.
 
 Management
believes that our model of onboard hydrogen generation for supplemented
combustion, as carried out by our proprietary process, results in a procedure
for generating hydrogen that is both safe in operation because of the use of
small portions of hydrogen and hydrogen is only generated while the engine is in
operation (generated only upon demand).  In our tests, as well as
independent third party testing, we believe that the increased efficiency of the
ICE energy is excellent as well the observance of decreased emissions while the
unit is in operation.  The operating costs for the system are
small.
 
 Third-Party Testing and
Validation:The ERD technology is the outcome of five years of
experimentation and testing. Third party testing of the ERD technology was
conducted at a testing facility in Buffalo, New York and completed in February
2008.  From this test, a report was generated, which includes emission
reduction and fuel reduction data for the ERD, quantified in real
time.  Four (4) components of vehicle exhaust and the fuel consumption
rate were measured. The pollutants measured are oxides of nitrogen (NOx), total
hydrocarbons (HC), carbon monoxide (CO), and carbon dioxide (CO2). NOx is a
common product of ICEs caused by the oxidation of nitrogen from the air used for
the intake air supply to the engine. Hydrocarbons results from incomplete
combustion, originating from the fuel supply. CO and CO2 are created by the
bonding of the carbon in the fuel combining with the oxygen in the intake air.
CO2 is the main product of combustion while CO is a more toxic component which
is produced at two orders of magnitude smaller than CO2.
 
 The
Company focused particular attention to the environmental safety of the hydrogen
being produced, with the main focus being the development of the knowledge
needed to properly utilize hydrogen in an ICE safely as well as ensure that the
ERD unit is stable and can operate in extreme environments without
failure.
 
 The
development of the ERD technology also focused on creating a stable, viable
electrochemical process and gathering data from testing.  The expected
results of the development fell into several key categories:
   -16-
 
 1. The
conversion of an entirely fossil fuel operated conventional ICE to an ICE
equipped with the ERD and an ICE which now operates on hydrogen and fossil fuel
mixture instead of only fossil fuel such as diesel or
gasoline;
 
 2. The
collection of test data obtained from the ERD equipped engines described in (1)
above;
 
 3.    The
collection of test data from the ERD equipped vehicle described in (2)
above;
 
 4.    
Gaining third party certification for the internal combustion engines tested on
the road;
 
 5. The
development of the project design of a series of ERD units using real-world data
obtained from the above-mentioned tests.
 
 The tests further established
that our ERD improves fuel economy and reduces carbon monoxide and hydrocarbon
emissions.
 
 Real-World Pilot
Testing:In early summer 2008, we installed our ERD units in
transportation vehicles in the United Kingdom and France. Testing, verification
and validation of the efficacy of the ERD technology on European transportation
engines remains ongoing and is expected to complete in late first quarter of
2010.
 
 Manufacturing:  We are
currently manufacturing the ERD 2.0 in Tianjin, China. We believe there are a
number of manufacturers who are capable of manufacturing a product similar to
the ERD.
 
 Our
ERD-2.0 is assembled by Tianjin Shenma Science and Technology Development
Company Ltd. (“Tianjin”) located in Tianjin, China pursuant to a verbal
agreement. Tianjin obtains the parts required to manufacture our ERD-2.0 from
various parts manufacturers throughout China, however, Tianjin is not dependent
on a particular vendor, as the parts are generic and available from multiple
parts supply sources. Our manufacturing operations are not dependent on us
sourcing high quality electronic and mechanical components from reliable and
timely suppliers. We design our product so as not to be dependent on the
continuing availability of specialty parts or processes.
 
 We also
have a verbal agreement with Tianjin to lease a 4,000 square foot facility in
Tianjin, China, for the manufacture of our ERD technology. The maximum
production capacity for the facility is expected to be 1,050 units per month.
With additional investment in assembly stations and machines, the Company
believes it can increase the monthly production capacity if required to meet the
needs of its future customers.
 
 The
majority of the ERD-2.0 is assembled in China and completed at our warehouse
facility in Ontario, Canada before being shipped to customers in Asia, Europe
and North America as directed by the Company. We aim to design and manufacture
our product to perform reliably for the life of the product and system into
which they are integrated. We seek to achieve high reliability through the
application of proprietary technologies and rigorously controlled design,
development, manufacturing and test processes.
 
 Planning and
Implementation:Our main focus is on the commercial sale of
our ERD-2.0 units and further developing our technology for use as an onboard
power source for ICEs.
 
 The
following activities are planned and are expected to take up to nine months
based on financing:
   -17-
   1. Complete
third party testing in England and France and commencement of commercial sales
of ERD units throughout Europe in the second quarter 2010.
 
 2. Commence
ERD-2.0 testing in California and various other states with alternative energy
technology incentives in the second quarter 2010.
 
 3.  Secure
agreements to distribute our ERD-2.0 in China in the fourth quarter
2010.
 
 GreenChek’s
primary market for the ERD-2.0 is on those who want to reduce their cost of
fuel, as well as GHGs and particulate matter.  Our strategy is to
provide a product that achieves these goals and provides a return on purchaser’s
investment.  We believe there is a great demand for our ERD technology
regardless of fuel source and prices.
 
 Marketing
and Distribution
 
 Europe
 We have
secured distribution partners in Europe, such as Technical Environment Solutions
Ltd. (“TESEL”), who have the financial resources and marketing ability to
attract customers throughout the European Union. TESEL is a large,
European-based sale and distribution company, with extensive worldwide
experience in environmental technologies and their
applications.  TESEL specializes in emissions reduction technologies
and will assist GreenChek to achieve the commercialization of the ERD-2.0 in
Europe. Through our relationship with TESEL, we have begun discussions with some
of the world’s largest transportation companies as well as German, Irish and
Slovakian companies to distribute and sell our ERD-2.0 units.  We
anticipate commencing product sales in Europe in the second quarter of
2010.
 
 North
America
 Currently,
we market our ERD-2.0 only in Europe however, subsequent to the third quarter
ending November 30, 2009 we entered into a twelve (12) month contract with an
Arizona company (“AZCO”) in December 2009.  AZCO is a private company
with extensive knowledge and experience in the regulatory environment of the
United States and, in particular, regarding rules and regulations of certifying
and/ verifying emissions reduction technologies through various United States
governmental agencies.  Under the terms of this contract, AZCO is to
assist GreenChek through the verification process for its ERD technology in the
State of California and various other states with alternative energy technology
incentives.  Furthermore, AZCO is to research and implement a long
term marketing and sales strategy that is aimed at achieving commercialization
of the ERD technology in North America, Mexico, Central America and South
America.
 
 China
 We are
actively in discussions with various Chinese companies to market and distribute
our ERD-2.0
 
 GreenChek
is continuing to identify, qualify and establish direct dealers, distributor
arrangements and agents to market our product.
 
 Competition:We
compete against existing and emerging technologies in our targeted markets for
mobile and stationary applications. We compete primarily on the basis of safety,
reliability, efficiency, cost and environmental
considerations.  Currently, there are only two (2) competitors that we
are aware of that are developing electrolysis based hydrogen cell technology for
the mobile and stationary markets.
 
 We also
compete against PEM fuel cells. A PEM fuel cell is a device that produces
electricity through an electrochemical reaction in which hydrogen and oxygen are
combined to generate electricity, with usable heat and water as the principal
by-products. An example of a PEM fuel cell company would be Ballard Power
Systems Inc.  A number of major manufacturing and automotive companies
also have in-house PEM fuel cell development efforts. Many corporations are
engaged in the area of alternative power generation in the United States, Canada
and abroad, including, among others, major electric, oil, chemical, natural gas
and specialized electronic firms, as well as universities, research institutions
and foreign government-sponsored corporations. Many of these companies have
substantially greater financial, research and development, manufacturing and
marketing resources than we do.
   -18-
 
 We also
compete with corporations that are building other types of fuel cells. These
include phosphoric acid fuel cells, molten carbonate fuel cells, solid oxide
fuel cells and alkaline fuel cells are generally thought to have viable
commercial potential. These fuel cells can be differentiated in regard to cell
materials and temperature while operating. While all fuel cell types have
probable environmental and efficiency advantages over traditional power sources,
we believe that our ERD-2.0 is ready for immediate commercialization in mobile
transportation sector, does not require hydrogen storage, and can be
manufactured less expensively and is more efficient and more practical in mobile
and stationary applications than our competition.
 
 Lastly,
with millions of transportation trucks throughout Europe, North America and
Asia, we believe there is ample market for a proven product such as our
ERD-2.0.
 
 Patents and
Trademarks:We currently own no patents or trademarks but we
have begun the process of patenting the unique aspects of our
technology.
 
 Limited
Operating History and Need for Additional Capital
 
 There is
no historical financial information about us upon which to base an evaluation of
our performance. We have just started our current operations and have not
generated any revenues from our activities. We cannot guarantee we will be
successful in our business activities. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources, possible delays in manufacturing our product, and possible cost
overruns due to price and cost increases in services.  Because we have
no operating history we cannot reliably forecast our future
operations.
 
 The
development and marketing of new technology is capital intensive.  We
have funded our current operations either from the sale of our common stock or
through loans made by our chief executive officer and directors and, more
recently, from a private investor.  We have utilized funds obtained to
date for corporate organizational purposes, license payments and parts and
supplies purchases to manufacture our ERD product.
 
 
 In the
short term, we require additional funding for legal and auditing fees for
preparation and filing of our registration statement, manufacturing costs of our
ERD-2.0 and general operating expenses.
 
 To become
profitable and competitive, we must sell a sufficient number of ERD-2.0 units to
generate revenues and profits.
 
 We have
no assurance that short term financing will be available to us on satisfactory
terms. If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our activities.
 
  -19-
  Results
of Operations
 
 Net Loss. We incurred a net
loss of $1,090,689, or $0.04 per share for the nine months ended November 30,
2009, compared to a net loss of $3,455,485, or $0.06 per share for the nine
months ended November 30, 2008. We had incurred losses since inception and had a
working capital deficiency of $4,523,958 through November 30, 2009.
 
 Our
ability to achieve profitable operations depends on developing revenue through
the sale and distribution of our ERD-2.0 product both domestically and abroad.
Our expectations are that we will not begin to show profitable operating results
before the end of our fiscal year.
 
 Operating Expenses. We
incurred operating expenses of $87,255 for the quarter ended November 30, 2009,
compared to operating expenses of $127,012 for the quarter ended November 30,
2008.
 
 Liquidity
and Capital Resources
 
 As of
November 30, 2009, we had cash of $5,503. Net loss for the nine months ended
November 30, 2009 was $1,090,689, compared to $3,455,485 for the nine months
ended November 30, 2008. The difference was mainly due to a provision for
impairment of the China Bright license costs which in the nine months ended
November 30, 2009 was $0 compared to $3,081,184 for the nine months ended
November 30, 2008.
 
 Net cash
used for operating activities was $135,469 for the nine months ended November
30, 2009 compared to operating activities of $133,496 for the nine months ended
November 30, 2008. We anticipate that overhead costs will increase in the near
term as we continue to implement our operating strategy.
 
 On
September 17, 2008 we sold 400,000 units to Noya Management Corp. in
consideration of $300,000. Each unit consisted of one share of common stock and
one warrant. Each warrant allowed Noya Management Corp. to purchase one
additional share of common stock at a price of $0.75 per share. As of the date
hereof, no warrants have been exercised. The Units were sold to Noya Management
Corp. pursuant to the exemption from registration contained in Regulation S of
the Securities Act of 1933. The transaction took place outside the United States
and Noya Management Corp. is a non-US person.
 
 On
November 1, 2009, we entered into a loan agreement with an investor for a loan
of up to $50,000.  The loan is non interest bearing and due on April
30, 2010.  Pursuant to the loan agreement we have agreed to issue
500,000 common share purchase warrants exercisable for two years at an exercise
price of $0.05 for the first year and $0.10 for the second year. We have used
these proceeds to make technical advancements to our ERD product, secure a lease
on our new warehouse facility in Ontario, Canada and accounts
payable.
 
 Cash
flows used by investing activities were $3,927 for the period ended November 30,
2009 and $-0- for the period November 30, 2008.
 
 Cash
flows provided by financing activities accounted for $144,508 for the nine
months ended November 30, 2009 compared to financing activities of $133,901 for
the nine months ended November 30, 2008.  These cash flows were
related to the i) proceeds from sale of our common stock, which for the period
ending November 30, 2009 was $17,050 and $189,900 for the period ending November
30, 2008; ii) purchase of treasury stock which was $-0- for the period ending
November 30, 2009 and $100,000 for the period ending November 30, 2008; iii)
expenses paid by related parties: $83,827 for November 30, 2009 compared to
$44,001 for November 30, 2008 and; iv) proceeds received from a private investor
of $43,631 for the period ending November 30, 2009 and $-0- for the comparative
period in 2008.
   -20-
 
 We are
currently in discussions with investors to raise the funds to optimally finance
our operations. At the present time, we have no commitments for any additional
financing, and there can be no assurance that, if needed, additional capital
will be available to use on commercially acceptable terms or at all. Our failure
to raise capital as needed would significantly restrict our growth and hinder
out ability to compete. We may need to curtail expenses, and forgo business
opportunities. Additional equity financings are likely to be dilutive to holders
of our common stock and debt financing, if available, may involve significant
payment obligation and covenants that restrict how we operate our
business.
 
 If we are
unable to secure funds to finance our operations, we may examine other
possibilities, including, but not limited to, mergers or
acquisitions.
 
 Management
believes the ability of the Company to continue as a going concern, earn
revenues and achieve profitability is highly dependent on a number of factors
including, but not limited to: our ability to improve and continue to
manufacture our product; obtain sufficient financing; market our product; and to
secure agreements with distributors to distribute a sufficient quantity of our
ERD-2.0 product.  In 2010 our goal is to sell a minimum of 500 ERD 2.0
units.  Assuming this sales level is achieved, we could turn cash flow
positive in early 2011.
 
 Subsequent
Events
 
 In
December 2009, the Company entered into a twelve month Consulting Agreement.
Under the terms of the agreement the Consultant shall provide advice and
consulting services in respect to the ERD-2.0 technical product and assisting
the Company in becoming a verified technology under California law and the laws
and rules administered by the US Environmental Protection Agency.  As
compensation for these services the Company shall issue 200,000 restricted
shares within 60 days after the execution of this agreement.
 
 Off-Balance
Sheet Arrangements
 
 We have
not entered into any transactions with unconsolidated entities in which we have
financial guarantees, subordinated retained interests, derivative instruments or
other contingent arrangements that expose us to material continuing risks,
contingent liabilities or any other obligations under a variable interest in an
unconsolidated entity that provides us with financing, liquidity, market risk or
credit risk support.
 
 As of the
date of this report, we have yet to generate any revenues from our business
activities.
 
 Off-Balance Sheet
Arrangements
 
 We have
no off-balance sheet arrangements.
 
 Item 3.Quantitative and Qualitative
Disclosures About Market Risk.
 
 A smaller
reporting company, as defined by Item 10 of Regulation S-K, is not required to
provide the information required by this item.
 
 Item
4(T).   Controls and Procedures.
 
 Evaluation of Disclosure Controls and
Procedures
 
 Our
disclosure controls and procedures are designed to ensure that information
required to be disclosed in reports that we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the rules and forms of the United States Securities
and Exchange Commission. Our principal executive officer and principal financial
officer has reviewed the effectiveness of our “disclosure controls and
procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)
and 15d-15(e)) within the end of the period covered by this Quarterly Report on
Form 10-Q and has concluded that the disclosure controls and procedures are not
effective because of deficiency in financial reporting/closing; i.e. adjustments
discovered resulting from the review. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the last day they were evaluated by our principal
executive officer and principal financial and accounting officer.
  -21-
  
 Changes
in Internal Controls over Financial Reporting
 
 There
have been no changes in the Company's internal control over financial reporting
during the last quarterly period covered by this report that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
 
 PART
II
 OTHER
INFORMATION
 
 Item
1.         Legal
Proceedings.
 
 There are
no pending legal proceedings to which the Company is a party or in which any
director, officer or affiliate of the Company, any owner of record or
beneficially of more than 5% of any class of voting securities of the Company,
or security holder is a party adverse to the Company or has a material interest
adverse to the Company. The Company’s property is not the subject of any pending
legal proceedings.
 
 Item
1A.      Risk Factors
 
 None
 
 Item
2.         Unregistered Sales of
Equity Securities and Use of Proceeds.
 
 Unregistered
Sales of Equity Securities
 
 On July
30, 2009, we issued 1,866,666 shares to DC Consulting LLC.
 
 Purchases
of equity securities by the issuer and affiliated purchasers
 
 None.
 
 Item
3.         Defaults Upon Senior
Securities.
 
 None.
 
 Item
4.         Submission of Matters to
a Vote of Security Holders.
 
 There was
no matter submitted to a vote of security holders during the three months ended
November 30, 2009.
 
 Item
5.         Other
Information.
 
 None
 
  -22-
  Item
6.         Exhibits
 
 Exhibit
      No.
              
              Description10.1
              
              Lease
      Agreement dated as of October 14, 2009 by and between GreenChek Technology
      Inc., Ellenhall Construction Limited and Drago
Goricanec10.2
              
              Amendment
      No. 2 to License Agreement as of December 31, 2009 by and among Greenchek
      Technology Inc. and China Bright Technology Development Limited and
      Lincoln Park31.1
              
              Rule
      13a-14(a)/15d14(a) Certification of Lincoln Parke, the principal executive
      officer and principal financial officer (attached
  hereto)32.1
              
              Section
      1350 Certification of Lincoln Parke, the principal executive officer and
      principal financial officer (attached
hereto)
 
 SIGNATURES
 
 In
accordance with to requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
  GREENCHEK TECHNOLOGY
      INC.Dated:
      January 19, 2010
                By:
                /s/ Lincoln
      ParkeName:  Lincoln
      ParkeTitle:   
      President and Treasurer
                  (Principal Executive, Financial and
                  Accounting Officer)