---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2010

OR

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

For the transition period from __________ to __________

Commission file number 333-119715

CAROLYN RIVER PROJECTS LTD.(Exact name of registrant as specified in its charter)

|Nevada                                                               | N/A                              
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

2640 Tempe Knoll Drive, North Vancouver, British Columbia,
Canada V6C 1V5(Address of principal executive offices) (zip
code)

604.908.0233(Registrants telephone
number, including area code)

Not Applicable(Former name, former
address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
[X]    No [   ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and
post such files). Yes [   ]    No [  
]

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):

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- 2 -

|Large accelerated filer [   ] |                                                     | Accelerated
      filer                  
      [   ]
|----------------------------- | --------------------------------------------------- | -----------------------------------------------------
|Non-accelerated filer   [   ] | (Do not check if a smaller
      reporting company) | Smaller reporting company
[X]                        

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

Yes[X]     No [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common stock, as of the latest practicable date:

54,990,000 common shares issued and outstanding as of
April 7, 2010.

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- 3 -

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

It is
the opinion of management that the interim financial statements for the quarter
ended February 28, 2010 include all adjustments necessary in order to ensure
that the interim financial statements are not misleading.

---





CAROLYN RIVER PROJECTS LTD.

(A Development Stage Company)

FINANCIAL STATEMENTS

February 28, 2010





F-1

---

CAROLYN RIVER PROJECTS LTD.(A Development Stage
Company)BALANCE SHEETS(Unaudited)

|                                                                                                                                                                        |   | February 28, |   |   | May
      31, |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | - | - | ------------- | -
|                                                                                                                                                                        |   | 2010         |   |   | 2009          |  
|                                                                                                                                                                        |   |              |   |   |               |  
|ASSETS                                                                                                                                                                  |  
|                                                                                                                                                                        |   |              |   |   |               |  
|Current                                                                                                                                                                 |   |              |   |   |               |  
|Cash                                                                                                                                                                    | $ | -            |   | $ | 2,265         |  
|                                                                                                                                                                        |   |              |   |   |               |  
|                                                                                                                                                                        |   |              |   |   |               |  
|LIABILITIES AND
      STOCKHOLDERS DEFICIT                                                                                                                             |  
|                                                                                                                                                                        |   |              |   |   |               |  
|Current                                                                                                                                                                 |   |              |   |   |               |  
|Accounts payable and accrued liabilities                                                                                                                                | $ | 11,331       |   | $ | 22,617        |  
|Short term debt (Note 2)                                                                                                                                                |   | -            |   |   | 61,546        |  
|Due
      to related party                                                                                                                                              |   | 66,550       |   |   | 31,550        |  
|                                                                                                                                                                        |   | 77,881       |   |   | 115,713       |  
|                                                                                                                                                                        |   |              |   |   |               |  
|Shareholders Deficit                                                                                                                                                   |   |              |   |   |               |  
|Common stock    
      585,000,000 shares authorized,
    $0.001 par value,    
    54,990,000 shares issued and outstanding 
           (May 31, 2009
    -54,990,000) |   | 30,000       |   |   | 30,000        |  
|Deficit
      accumulated during the development stage                                                                                                                  |   | (107,881     | ) |   | (143,448      | )
|                                                                                                                                                                        |   | (77,881      | ) |   | (113,448      | )
|                                                                                                                                                                        |   |              |   |   |               |  
|                                                                                                                                                                        | $ | -            |   | $ | 2,265         |  

The accompanying notes are an integral part of these financial
statements.

F-2

---

|CAROLYN RIVER PROJECTS LTD.   
|------------------------------
|(A Development Stage Company) 
|STATEMENTS OF
      OPERATIONS
|(Unaudited)                   

Cumulative fromThree months
      
    
      Three months
      
    
    Nine months
      
    
    Nine months
      
    
      February 2, 2004ended
      
    
      ended
      
    
    ended
      
    
    ended
      
    
      (Inception) toFebruary 28,
      
    
      February 28,
      
    
    February 28,
      
    
    February 28,
      
    
      February 28,2010
      
    
      2009
      
    
    2010
      
    
    2009
      
    
      2010ExpensesAccounting and audit fees
    $
      3,296
      
    $
      4,896
      
    $
    12,814
      
    $
    12,387
      
    $
      89,511Bank charges and interest
    
      27
      
    
      18
      
    
    109
      
    
    54
      
    
      712Filing fees
    
      573
      
    
      775
      
    
    5,030
      
    
    1,924
      
    
      14,816Interest expense
    
      -
      
    
      1,375
      
    
    1,470
      
    
    3,335
      
    
      9,202Legal fees
    
      3,677
      
    
      705
      
    
    11,456
      
    
    6,695
      
    
      45,390Mineral property costs
    
      -
      
    
      -
      
    
    -
      
    
    -
      
    
      12,500Office and general expenses
    
      320
      
    
      -
      
    
    320
      
    
    -
      
    
      916Transfer agent fees
    
      -
      
    
      -
      
    
    -
      
    
    500
      
    
      1,600Loss from Operation
    
      (7,893
      )
    
      (7,769
      )
    
    (31,199
      )
    
    (24,895
      )
    
      (174,647
      )Other ItemsForgiveness of debt
    
      -
      
    
      -
      
    
    66,766
      
    
    -
      
    
      66,766$
      (7,893
      )
    $
      (7,769
      )
    $
    35,567
      
    $
    (24,895
      )
    $
      (107,881
      )Net Earnings (Loss) per Share - Basic and Diluted
    $
      (0.00
      )
    $
      (0.00
      )
    $
    0.00
      
    $
    (0.00
      )Weighted Average Number of Shares Outstanding 
      Basic and Diluted
    
      54,990,000
      
    
      54,990,000
      
    
    54,990,000
      
    
    54,990,000


The accompanying notes are an integral part of these financial
statements.

F-3

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CAROLYN RIVER PROJECTS LTD.(A Development Stage
Company)STATEMENTS OF CASH FLOWS(Unaudited)

|                                                                           |   |              |   |   |              |   |   | Cumulative from  |  
|-------------------------------------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ---------------- | -
|                                                                           |   | Nine months  |   |   | Nine months  |   |   | February 2, 2004 |  
|                                                                           |   | ended        |   |   | ended        |   |   | (Inception) to   |  
|                                                                           |   | February 28, |   |   | February 28, |   |   | February 28,     |  
|                                                                           |   | 2010         |   |   | 2009         |   |   | 2010             |  
|                                                                           |   |              |   |   |              |   |   |                  |  
|Cash Used in Operating Activities                                          |   |              |   |   |              |   |   |                  |  
|Net income (loss)                                                          | $ | 35,567       |   | $ | (24,895      | ) | $ | (107,881         | )
|Adjustment to reconcile
      net loss to net used in operating activities |   |              |   |   |              |   |   |                  |  
|Accrued interest                                                           |   | 1,470        |   |   | -            |   |   | 7,980            |  
|Gain on
      forgiveness of debt                                          |   | (66,766      | ) |   | -            |   |   | (66,766          | )
|Changes in non cash working
      capital items                            |   |              |   |   |              |   |   |                  |  
|Accounts payable and
      accrued liabilities                             |   | (11,286      | ) |   | 2,496        |   |   | 11,331           |  
|Net Cash Used in Operating Activities                                      |   | (41,015      | ) |   | (22,399      | ) |   | (155,336         | )
|                                                                           |   |              |   |   |              |   |   |                  |  
|Cash From Financing Activities                                             |   |              |   |   |              |   |   |                  |  
|Proceeds from sale and
      issuance of common stock                      |   | -            |   |   | -            |   |   | 30,000           |  
|Increase in due to related
      party                                     |   | 35,000       |   |   | -            |   |   | 66,550           |  
|Short term debt                                                            |   | 3,750        |   |   | 22,345       |   |   | 58,786           |  
|Net Cash Provided by Financing Activities                                  |   | 38,750       |   |   | 22,345       |   |   | 155,336          |  
|                                                                           |   |              |   |   |              |   |   |                  |  
|Decrease in Cash                                                           |   | (2,265       | ) |   | (54          | ) |   | -                |  
|                                                                           |   |              |   |   |              |   |   |                  |  
|Cash, Beginning                                                            |   | 2,265        |   |   | 3,033        |   |   | -                |  
|                                                                           |   |              |   |   |              |   |   |                  |  
|Cash, Ending                                                               | $ | -            |   | $ | 2,979        |   | $ | -                |  
|                                                                           |   |              |   |   |              |   |   |                  |  
|Supplemental Cash Flow Information                                         |   |              |   |   |              |   |   |                  |  
|Cash paid for:                                                             |   |              |   |   |              |   |   |                  |  
|Interest                                                                   | $ | -            |   | $ | -            |   | $ | -                |  
|Income taxes                                                               | $ | -            |   | $ | -            |   | $ | -                |  

The accompanying notes are an integral part of these financial
statements.

F-4

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|Note 1 | Basis of
      Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | Unaudited Interim Financial
      Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | The accompanying unaudited interim financial statements
      have been prepared in accordance with generally accepted accounting
      principles for interim financial information and in accordance with the
      rules and regulations of the Securities and Exchange Commission. They may
      not include all information and footnotes required by generally accepted
      accounting principles for complete financial statements. However, except
      as disclosed herein, there has been no material changes in the information
      disclosed in the notes to the financial statements for the year ended May
      31, 2009, included in the Companys Form 10-K filed with the Securities
      and Exchange Commission. The unaudited interim financial statements should
      be read in conjunction with those financial statements included in the
      Form 10-K. In the opinion of Management, all adjustments considered
      necessary for a fair presentation, consisting solely of normal recurring
      adjustments, have been made. Operating results for the nine months ended
      February 28, 2010 are not necessarily indicative of the results that may
      be expected for the year ending May 31, 2010.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | The Company has evaluated subsequent events through its
      financial statement filing date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Note 2 | Short Term Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | During the year ended May 31, 2008, the Company arranged
      a credit facility with a lender for an amount up to $100,000. During the
      nine months ended February 28, 2010, the lender has forgiven all principal
      and interest accrued in the amount of $66,766, including total accrued
      interest of $7,980 (May 31, 2009: $6,510).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-5

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- 4 -

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

FORWARD-LOOKING STATEMENTS

This
quarterly report contains forward-looking statements as that term is defined in
Section 27A of the United States Securities Act of 1933 and Section 21E of the
United States Securities Exchange Act of 1934. These statements relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as may, should, expects,
plans, anticipates, believes, estimates, predicts, potential or
continue or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
Risk 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. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Except as
required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform
these statements to actual results.

Financial
information contained in this quarterly report and in our unaudited interim
financial statements is stated in United States dollars and is prepared in
accordance with United States generally accepted accounting principles. The
following discussion should be read in conjunction with our unaudited interim
financial statements and the related notes that appear elsewhere in this
quarterly report.

As
used in this quarterly report, and unless otherwise indicated, the terms we,
us and our mean Carolyn River Projects Ltd., unless otherwise indicated.

Corporate History

We
were incorporated on February 2, 2004 under the laws of the state of Nevada.

Effective
June 15, 2007, we completed a merger with our subsidiary Parmasters Golf
Training Centers, Inc. As a result, we changed our name from Quorum Ventures,
Inc. to Parmasters Golf Training Centers, Inc.

In
addition, effective June 15, 2007, we effected a seven point eight (7.8) for one
(1) forward stock split of our authorized, issued and outstanding common stock.
As a result, our authorized capital increased from 75,000,000 shares of common
stock with a par value of $0.001 to 585,000,000 shares of common stock with a
par value of $0.001. Our issued and outstanding share capital increased from
7,050,000 shares of common stock to 54,990,000 shares of common stock.

Effective
August 24, 2007, we completed a merger with our subsidiary, Carolyn River
Projects Ltd. As a result, we changed our name from Parmasters Golf Training
Centers, Inc. to Carolyn River Projects Ltd. We changed the name of our
company to better reflect the direction and business of our company.

Our
companys first acquisition occurred on April 1, 2004, when we entered into an
agreement with Mr. Glen Macdonald of Vancouver, British Columbia, whereby he
agreed to sell to us a total of three mineral claims located approximately 44
miles east-northeast of Yellowknife, Northwest Territories, that have the
potential to contain gold and silver mineralization or deposits. Neither we nor
our management have any relationship or affiliation with Mr. Macdonald. In order
to acquire a 90% interest in these claims, subject to a 2% net smelter returns
royalty, we paid $7,500 to Mr. Macdonald from our cash on hand. These claims
lapsed on May 27, 2007.

Our Current Business

Management
of our company believes that there are perceived benefits to being a reporting
company with a class of publicly-traded securities. These are commonly thought
to include: (i) the ability to use registered securities to acquire assets or
businesses; (ii) increased visibility in the financial community; (iii) the
facilitation of borrowing from financial institutions; (iv) improved trading
efficiency; (v) stockholder liquidity; (vi) greater ease in subsequently raising capital; (vii) compensation of key
employees through stock options; (viii) enhanced corporate image; and (ix) a
presence in the United States capital market.

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- 5 -

We
may seek a business opportunity with entities who have recently commenced
operations, or entities who wish to utilize the public marketplace in order to
raise additional capital in order to expand business development activities, to
develop a new product or service, or for other corporate purposes. We may
acquire assets and establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.

In
implementing a structure for a particular business acquisition or opportunity,
we may become a party to a merger, consolidation, reorganization, joint venture,
or licensing agreement with another corporation or entity. We may also acquire
stock or assets of an existing business. Upon the consummation of a transaction,
it is likely that our present management will no longer be in control of our
company. In addition, it is likely that our officers and directors will, as part
of the terms of the acquisition transaction, resign and be replaced by one or
more new officers and directors.

As
of the date hereof, management has not entered into any formal written
agreements for a business combination or opportunity. When any such agreement is
reached, we intend to disclose such an agreement by filing a current report on
Form 8-K with the Securities and Exchange Commission.

We
anticipate that the selection of a business opportunity in which to participate
will be complex and without certainty of success. Management believes that there
are numerous firms in various industries seeking the perceived benefits of being
a publicly registered corporation. Business opportunities may be available in
many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex. We can provide no assurance that
we will be able to locate compatible business opportunities.

As
an exploration stage company, we are not able to fund our cash requirements
through our current operations. Historically, we have been able to raise a
limited amount of capital through private placements of our equity stock, but we
are uncertain about our continued ability to raise funds privately. Further, we
believe that our company may have difficulties raising capital until we locate a
prospective property through which we can pursue our plan of operation. If we
are unable to secure adequate capital to continue our acquisition efforts, our
shareholders may lose some or all of their investment and our business may fail.

RESULTS OF OPERATIONS

You
should read the following discussion of our financial condition and results of
operations together with the unaudited interim consolidated financial statements
and the notes to the unaudited interim consolidated financial statements
included in this quarterly report. This discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results may
differ materially from those anticipated in these forward-looking statements.

For the three month periods ended February 28, 2010 and
February 28, 2009

Our
interim financial statements report a net loss of $7,893 for the three month
period ended February 28, 2010 as compared to a net loss of $7,769 for the three
month period ended February 28, 2009.

During
the three months ended February 28, 2010, we incurred expenses of $7,893
compared to $7,769 during the three months ended February 28, 2009. The increase
in expenses during the three months ended February 28, 2010 was largely due to
increases in legal fees and office and general expenses and offset by decreases
in accounting and audit fees, filing fees and interest expense.

For the nine month periods ended February 28, 2010 and
February 28, 2009

Our
interim financial statements report a net income of $35,567 for the nine month
period ended February 28, 2010 as compared to a net loss of $24,895 for the nine
month period ended February 28, 2009. Our net income for the nine months ended
February 28, 2010 resulted from the forgiveness of short term debt in the amount
of $66,766. Our accumulated net loss for the period from February
2, 2004, our date of inception, to February 28, 2010 was $107,881.

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- 6 -

During
the nine months ended February 28, 2010, we incurred expenses of $31,199
compared to $24,895 during the nine months ended February 29, 2010. The increase
in expenses during the nine months ended February 29, 2010 was largely due to
increases in accounting and audit fees, legal fees, filing fees and office and
general expenses and offset by decreases in interest expense and transfer agent
fees.

Liquidity and Capital Resources

We
had no cash as of February 28, 2010 and a working capital deficit of $77,881.
Our total liabilities as of February 28, 2010 were $77,881, as compared to total
liabilities of $115,713 of May 31, 2009. The change was due primarily to a
decrease in accounts payable and accrued liabilities, the forgiveness of short
term debt and an increase in amounts due to a related party.

To
date, we have had negative cash flows from operations and we have been dependent
on sales of our equity securities and debt financing to meet our cash
requirements. We expect this situation to continue for the foreseeable future.
We anticipate that we will have negative cash flows during the next twelve month
period ended February 28, 2011.

We
incurred income of $35,567 for the nine month period ended February 28, 2010 due
the forgiveness of short term debt. As indicated in our annual report on Form
10-K for the fiscal year ended May 31, 2009 filed on August 24, 2009, our
estimated working capital requirements and projected operating expenses for the
twelve month period ending May 31, 2010 are $55,000. As we do not have the funds
necessary to cover our projected operating expenses for the next twelve month
period, we will be required to raise additional funds through the issuance of
equity securities or through debt financing. There can be no assurance that we
will be successful in raising the required capital or that actual cash
requirements will not exceed our estimates. We intend to fulfill any additional
cash requirement through the sale of our equity securities.

Given
that we are an exploration stage company and have not generated revenues to
date, our cash flow projections are subject to numerous contingencies and risk
factors beyond our control, including exploration and development risks,
competition from well-funded competitors, and our ability to manage growth. We
can offer no assurance that our company will generate cash flow sufficient to
meet our cash flow projections or that our expenses will not exceed our
projections. If our expenses exceed estimates, we will require additional monies
during the next twelve months to execute our business plan.

There
are no assurances that we will be able to obtain funds required for our
continued operation. There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain additional financing
on a timely basis, we will not be able to meet our other obligations as they
become due and we will be forced to scale down or perhaps even cease the
operation of our business.

There
is substantial doubt about our ability to continue as a going concern as the
continuation of our business is dependent upon obtaining further financing. The
issuance of additional equity securities by us could result in a significant
dilution in the equity interests of our current stockholders. Obtaining
commercial loans, assuming those loans would be available, will increase our
liabilities and future cash commitments.

Cash Flow Used in Operating Activities

Operating
activities used cash of $41,015 for the nine month period ended February 28,
2010, compared to using $22,399 for the nine month period ended February 28,
2009. The increase in cash used during the nine month period ended February 28,
2010 was commensurate with an adjustment on the gain on forgiveness of debt
offset by net income.

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- 7 -

Cash Flow Provided by Financing Activities

Financing
activities generated cash of $38,750 for the nine month period ended February
28, 2010, compared to generating $22,345 for the nine month period ended
February 28, 2009. All of the cash generated from financing activities for the
nine month period ended February 28, 2010 was from short term debt and advances
from a related party.

Product Research and Development

We
do not anticipate that we will spend any significant monies on research and
development over the twelve month period ending February 28, 2011.

Purchase of Significant Equipment

We
do not intend to purchase any significant equipment over the twelve month period
ending February 28, 2011.

Off-Balance Sheet Arrangements

As
of February 28, 2010, our company had no off-balance sheet arrangements,
including any outstanding derivative financial statements, off-balance sheet
guarantees, interest rate swap transactions or foreign currency contracts. Our
company does not engage in trading activities involving non-exchange traded
contracts.

Employees

We
currently have no employees, other than our executive officers, and we do not
expect to hire any employees in the foreseeable future. We presently conduct our
business through agreements with consultants and arms-length third parties.

Going Concern

Due
to the uncertainty of our ability to meet our current operating and capital
expenses, in their report on the annual financial statements for the year ended
May 31, 2010, our independent auditors included an explanatory paragraph
regarding concerns about our ability to continue as a going concern.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Use of Estimates and Assumptions

The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.

Loss Per Share

Basic
net loss per share is computed by dividing net loss attributable to common
stockholders by the weighted average number of shares outstanding during the
period. Diluted net loss per share takes into consideration shares of common
stock outstanding (computed under basic loss per share) and potentially dilutive
shares of common stock. Because we do not have any potentially dilutive
securities, our financial statements include only basic loss per share.

Financial instruments

Our
financial instruments consist of cash, accounts payable and accrued liabilities
and advances from a related party. The fair values of these financial
instruments approximate their carrying values due to the short-term maturity of those instruments. In managements opinion, we are
not exposed to significant interest rate, currency exchange rate or credit risk
arising from these financial instruments. We are not party to any derivative
instruments.

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RECENT ACCOUNTING PRONOUNCEMENTS

In
June 2009, the Financial Accounting Standards Board (FASB) issued SFAS No.168,
FASB Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles, a replacement of SFAS No. 162 (Statement 168).
Statement 168 establishes the FASB Accounting Standards Codification as the
source of authoritative accounting principles recognized by the FASB to be
applied in the preparation of financial statements in conformity with generally
accepted accounting principles. Statement 168 explicitly recognizes rules and
interpretive releases of the Securities and Exchange commission (SEC) under
federal securities laws as authoritative GAAP for SEC registrants. Statement 168
is effective for financial statements issued for fiscal years and interim
periods ending after September 15, 2009.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

Not
Applicable.

Item 4T. Controls and Procedures.

We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commissions rules and forms, and that such information is accumulated and
communicated to our management, including our President and our Secretary to
allow for timely decisions regarding required disclosure. In designing and
evaluating our disclosure controls and procedures, our management recognizes
that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and our management is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.

As
of February 28, 2010, the three month period covered by this report, we carried
out an evaluation, under the supervision and with the participation of our
management, including our President and our Secretary, of the effectiveness of
the design and operation of our disclosure controls and procedures. Based on the
foregoing, our President and our Secretary concluded that our disclosure
controls and procedures were not effective as of the end of the period covered
by this quarterly report. We have insufficient resources to adequately ensure
that information is reported within the time periods specified in the SECs
rules and forms. We do not have the funds necessary to cover our projected
operating expenses over the next 12 month period. We are seeking to raise
additional funds through the issuance of equity securities. There can be no
assurance that we will be successful in raising the capital required to continue
our operations and comply with our reporting requirements.

There
have been no significant changes in our internal controls over financial
reporting that occurred during the three month period ended February 28, 2010
that have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We
know of no material, existing or pending legal proceedings against our company,
nor are we involved as a plaintiff in any material proceeding or pending
litigation. There are no proceedings in which any of our directors, officers or
affiliates, or any registered or beneficial shareholder, is an adverse party or
has a material interest adverse to our interest.

Item 1A. Risk Factors.

RISK FACTORS

Much
of the information included in this quarterly report includes or is based upon
estimates, projections or other forward-looking statements. Such forward looking
statements include any projections or estimates made by us and our management in
connection with our business operations. While these forward-looking statements,
and any assumptions upon which they are based, are made in good faith and
reflect our current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any estimates,
predictions, projections, assumptions or other future performance suggested
herein.

Such
estimates, projections or other forward-looking statements involve various risks
and uncertainties as outlined below. We caution the reader that important
factors in some cases have affected and, in the future, could materially affect
actual results and cause actual results to differ materially from the results
expressed in any such estimates, projections or other forward-looking
statements. Prospective investors should consider carefully the risk factors set
out below.

Risks Related To Our Financial Condition and Business Model

Scarcity of and Competition for Business Opportunities and
Combinations

We
are, and will continue to be, an insignificant participant amongst numerous
other companies seeking a suitable business opportunity or business combination.
A large number of established and well-financed entities, including venture
capital firms, are actively seeking suitable business opportunities or business
combinations which may also be desirable target candidates for us. Virtually all
such entities have significantly greater financial resources, technical
expertise and managerial capabilities than we do. We are, consequently, at a
competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination. We
will also compete with numerous other small public companies seeking suitable
business opportunities or business combinations.

The worldwide macroeconomic downturn may reduce the ability
of our company to obtain the financing necessary to continue our business and
may reduce the number of viable businesses that we may wish to acquire.

In
2008 and 2009, there has been a downturn in general worldwide economic
conditions due to many factors, including the effects of the subprime lending
and general credit market crises, volatile but generally declining energy costs,
slower economic activity, decreased consumer confidence and commodity prices,
reduced corporate profits and capital spending, adverse business conditions,
increased unemployment and liquidity concerns. In addition, these macroeconomic
effects, including the resulting recession in various countries and slowing of
the global economy, will likely result in decreased business opportunities as
potential target companies face increased financial hardship. Tightening credit
and liquidity issues will also result in increased difficulties for our company
to raise capital for our continued operations and to consummate a business
opportunity with a viable business.

We have had negative cash flows from operations and if we
are not able to obtain further financing, our business operations may fail.

We
had cash in the amount of $Nil and a working capital deficit of $77,881 as of
February 28, 2010. We anticipate that we will require additional financing while
we are seeking a suitable business opportunity or business combination. Further, we anticipate that we will not have
sufficient capital to fund our ongoing operations for the next twelve months. We
may be required to raise additional financing for a particular business
combination or business opportunity. We would likely secure any additional
financing necessary through a private placement of our common shares.

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There
can be no assurance that, if required, any such financing will be available upon
terms and conditions acceptable to us, if at all. Our inability to obtain
additional financing in a sufficient amount when needed and upon terms and
conditions acceptable to us could have a material adverse effect upon our
company. We will require further funds to finance the development of any
business opportunity that we acquire. There can be no assurance that such funds
will be available or available on terms satisfactory to us. If additional funds
are raised by issuing equity securities, further dilution to existing or future
shareholders is likely to result. If adequate funds are not available on
acceptable terms when needed, we may be required to delay, scale back or
eliminate the development of any business opportunity that we acquire.
Inadequate funding could also impair our ability to compete in the marketplace,
which may result in the dissolution of our company.

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our
operations.

A
prolonged decline in the price of our common stock could result in a reduction
in the liquidity of our common stock and a reduction in our ability to raise
capital. Because our operations have been primarily financed through the sale of
equity securities, a decline in the price of our common stock could be
especially detrimental to our liquidity and our continued operations. Any
reduction in our ability to raise equity capital in the future would force us to
reallocate funds from other planned uses and would have a significant negative
effect on our business plans and operations, including our ability to develop
new products and continue our current operations. If our stock price declines,
we may not be able to raise additional capital or generate funds from operations
sufficient to meet our obligations.

We have a limited operating history and if we are not
successful in continuing to grow our business, then we may have to scale back or
even cease our ongoing business operations.

We
have a limited operating history on which to base an evaluation of our business
and prospects. Our prospects must be considered in light of the risks,
uncertainties, expenses and difficulties frequently encountered by companies
seeking to acquire or establish a new business opportunity. Some of these risks
and uncertainties relate to our ability to identify, secure and complete an
acquisition of a suitable business opportunity.

We
cannot be sure that we will be successful in addressing these risks and
uncertainties and our failure to do so could have a materially adverse effect on
our financial condition. In addition, our operating results are dependent to a
large degree upon factors outside of our control. There are no assurances that
we will be successful in addressing these risks, and failure to do so may
adversely affect our business.

It
is unlikely that we will generate any or significant revenues while we seek a
suitable business opportunity. Our short and long-term prospects depend upon our
ability to select and secure a suitable business opportunity. In order for us to
make a profit, we will need to successfully acquire a new business opportunity
in order to generate revenues in an amount sufficient to cover any and all
future costs and expenses in connection with any such business opportunity. Even
if we become profitable, we may not sustain or increase our profits on a
quarterly or annual basis in the future.

We
will, in all likelihood, sustain operating expenses without corresponding
revenues, at least until we complete a business combination or acquire a
business opportunity. This may result in our company incurring a net operating
loss which will increase continuously until we complete a business combination
or acquire a business opportunity that can generate revenues that result in a
net profit to us. There is no assurance that we will identify a suitable
business opportunity or complete a business combination.

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No Agreement for Business Combination or Other
Transaction/No Standards for Business Combination.

We
have no arrangement, agreement, or understanding with respect to acquiring a
business opportunity or engaging in a business combination with any private
entity. There can be no assurance that we will successfully identify and
evaluate suitable business opportunities or conclude a business combination.
There is no assurance that we will be able to negotiate the acquisition of a
business opportunity or a business combination on terms favorable to us. We have
not established a specific length of operating history or a specified level of
earnings, assets, net worth or other criteria which we will require a target
business opportunity to have achieved, and without which we would not consider a
business combination in any form with such business opportunity. Accordingly, we
may enter into a business combination with a business opportunity having no
significant operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative characteristics.

Risks Associated with Our Common Stock

Trading of our stock may be restricted by the Securities
Exchange Commissions penny stock regulations, which may limit a stockholders
ability to buy and sell our stock.

The
Securities and Exchange Commission has adopted regulations which generally
define penny stock to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities are covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholders ability
to buy and sell our stock.

In
addition to the penny stock rules described above, FINRA has adopted rules
that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.

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Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

Our
common stock currently trades on a limited basis on the OTC Bulletin Board.
Trading of our stock through the OTC Bulletin Board is frequently thin and
highly volatile. There is no assurance that a sufficient market will develop in
our stock, in which case it could be difficult for shareholders to sell their
stock. The market price of our common stock could fluctuate substantially due to
a variety of factors, including market perception of our ability to achieve our
planned growth, quarterly operating results of our competitors, trading volume
in our common stock, changes in general conditions in the economy and the
financial markets or other developments affecting our competitors or us. In
addition, the stock market is subject to extreme price and volume fluctuations.
This volatility has had a significant effect on the market price of securities
issued by many companies for reasons unrelated to their operating performance
and could have the same effect on our common stock.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Removed and Reserved.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibit Number
      Description of Exhibit3.1
      Articles of Incorporation
          (incorporated by reference from our Form SB-2 Registration Statement,
          as amended, originally filed on October 13, 2005)3.2
      Bylaws (incorporated by reference
          from our Form SB-2 Registration Statement, as amended, originally filed
          on October 13, 2005)3.3
      Articles of Merger filed with
          the Secretary of State of Nevada on May 30, 2007 and which is effective
          June 11, 2007 (incorporated by reference from our Current Report on
          Form 8-K, filed on June 21, 2007)3.4
      Certificate of Change filed
          with the Secretary of State of Nevada on May 31, 2007 and which is effective
          June 11, 2007 (incorporated by reference from our Current Report on
          Form 8-K, filed on June 21, 2007)3.5
      Articles of Merger filed with
          the Secretary of State of Nevada on August 17, 2007 and which is effective
          August 24, 2007 (incorporated by reference from our Current Report on
          Form 8-K, filed on August 29, 2007)31.1*
      Certification
          of Principal Executive Officer, Principal Financial Officer and Principal
          Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley
          Act of 200232.1*
      Certification
          of Principal Executive Officer, Principal Financial Officer and Principal
          Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes- Oxley Act of 2002


*Filed herewith

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SIGNATURES

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

CAROLYN RIVER PROJECTS LTD.



By: /s/ Steve Bolton 
  Steve Bolton
President, Chief Executive Officer, Secretary, Treasurer, Chief
Financial Officer and Director(Principal Executive Officer,
PrincipalFinancial Officer and Principal Accounting Officer) Date: April
9, 2010

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