UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
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 November
30, 2009
  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):
  
 
 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 December 22, 2009.
 
  2
  PART
I  -  FINANCIAL INFORMATION
  Item
1.  Financial Statements.
  It is the opinion of management that
the interim financial statements for the quarter ended November 30, 2009 include
all adjustments necessary in order to ensure that the interim financial
statements are not misleading.
  
   
   3
  
 
 
 
 
 
 CAROLYN
RIVER PROJECTS LTD.
  (A
Development Stage Company)
  FINANCIAL
STATEMENTS
  November
30, 2009
  
  
  
  
  
  
  
  
  
  
  F-1
  CAROLYN
RIVER PROJECTS LTD.
 (A
Development Stage Company)
 BALANCE
SHEETS
 (Unaudited)
 November
      30,
            
            
            May
      31,2009
            
            
            2009ASSETSCurrentCash
            
            $
            157
            
            
            $
            2,265LIABILITIES AND STOCKHOLDERS’
      DEFICITCurrentAccounts
      payable and accrued liabilities
            
            $
            26,595
            
            
            $
            22,617Short
      term debt
            
            
            -
            
            
            
            61,546Due
      to related party
            
            
            43,550
            
            
            
            31,55070,145
            
            
            
            115,713Shareholders’
      DeficitCommon
      stock585,000,000
      shares authorized, $0.001 par value,54,990,000
      shares issued and outstanding
            
            
            30,000
            
            
            
            30,000(May
      31,  2009 -54,990,000)Deficit
      accumulated during the exploration stage
            
            
            (99,988
            )
            
            
            (143,448
            )(69,988
            )
            
            
            (113,448
            )$
            157
            
            
            $
            2,265The
      accompanying note is an integral part of these financial
      statements.
 
  
  F-2
  CAROLYN RIVER PROJECTS
LTD.
 (A
Development Stage Company)
 STATEMENTs
OF OPERATIONS
 (Unaudited)
   Three
      months
            
            
            Three
      months
            
            
            Six
      months
            
            
            Six
      months
            
            
            February
      2, 2004ended
            
            
            ended
            
            
            ended
            
            
            ended
            
            
            (Inception)
      toNovember
      30,
            
            
            November
      30,
            
            
            November
      30,
            
            
            November
      30,
            
            
            November
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008
            
            
            2009ExpensesAccounting
      and audit fees
            
            $
            3,760
            
            
            $
            2,225
            
            
            $
            9,518
            
            
            $
            7,491
            
            
            $
            86,215Bank
      charges and interest
            
            
            18
            
            
            
            18
            
            
            
            82
            
            
            
            36
            
            
            
            685Filing
      fees
            
            
            425
            
            
            
            472
            
            
            
            4,457
            
            
            
            1,149
            
            
            
            14,243Interest
      expense
            
            
            -
            
            
            
            1,060
            
            
            
            1,470
            
            
            
            1,960
            
            
            
            9,202Legal
      fees
            
            
            3,300
            
            
            
            3,005
            
            
            
            7,779
            
            
            
            5,990
            
            
            
            41,713Mineral
      property costs
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            12,500Office
      and general expenses
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            596Transfer
      agent fees
            
            
            -
            
            
            
            500
            
            
            
            -
            
            
            
            500
            
            
            
            1,600Loss
      from operations
            
            
            (7,503
            )
            
            
            (7,280
            )
            
            
            (23,306
            )
            
            
            (17,126
            )
            
            
            (166,754
            )Other
      itemsForgiveness
      of debt
            
            
            66,766
            
            
            
            -
            
            
            
            66,766
            
            
            
            -
            
            
            
            66,766Net
      Income (Loss)
            
            $
            59,263
            
            
            $
            (7,280
            )
            
            $
            43,460
            
            
            $
            (17,126
            )
            
            $
            (99,988
            )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
            
            
            
            54,990,000The
      accompanying note is an integral part of these financial
      statements.
 
 
  F-3
  CAROLYN
RIVER PROJECTS LTD.
 (A
Development Stage Company)
 STATEMENTS
OF CASH FLOWS
 (Unaudited)
 Six
      months
              ended
              November
      30,
            
            
            Six
      months
              ended
              November
      30,
            
            
            February
      2, 2004 (Inception) to
              November
      30,2009
            
            
            2008
            
            
            2009Cash
      Used in Operating ActivitiesNet
      income (loss)
            
            $
            43,460
            
            
            $
            (17,126
            )
            
            $
            (99,988
            )Adjustment
      to reconcile net loss to net cash used in operating
    activitiesAccrued
      interest
            
            
            1,470
            
            
            
            1,960
            
            
            
            7,980Gain
      on forgiveness of debt
            
            
            (66,766
            )
            
            
            -
            
            
            
            (66,766
            )Changes
      in non cash working capital itemsAccounts
      payable and accrued liabilities
            
            
            3,978
            
            
            
            (3,880
            )
            
            
            26,595Net
      Cash Used in Operating Activities
            
            
            (17,858
            )
            
            
            (19,046
            )
            
            
            (132,179
            )Cash
      From Financing ActivitiesProceeds
      from sale and issuance of common stock
            
            
            -
            
            
            
            -
            
            
            
            30,000Increase
      in due to related party
            
            
            12,000
            
            
            
            -
            
            
            
            43,550Short
      term debt
            
            
            3,750
            
            
            
            19,010
            
            
            
            58,786Net
      Cash Provided by Financing Activities
            
            
            15,750
            
            
            
            19,010
            
            
            
            132,336Increase
      (Decrease) in Cash
            
            
            (2,108
            )
            
            
            (36
            )
            
            
            157Cash,
      Beginning
            
            
            2,265
            
            
            
            3,033
            
            
            
            -Cash,
      Ending
            
            $
            157
            
            
            $
            2,997
            
            
            $
            157Supplemental
      Cash Flow Information:Cash
      paid for:Interest
            
            $
            -
            
            
            $
            -
            
            
            $
            -Income
      taxes
            
            $
            -
            
            
            $
            -
            
            
            $
            -The
      accompanying note is an integral part of these financial
      statements.
 
 
 
 
 
  F-4
  CAROLYN
RIVER PROJECTS LTD.
 (A
Development Stage Company)
 NOTES
TO THE FINANCIAL STATEMENTS
 November
30, 2009
 (Unaudited)
 
 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 six months
ended November 30, 2009 are not necessarily indicative of the results that may
be expected for the year ending May 31, 2010.
 
 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 six months ended
November 30, 2009, 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).
 
 Note
3            Subsequent
Events
 
 The
Companyhave
evaluated subsequent events through January 13, 2010, the date of issuance of
the unaudited interim financial statements, and did not have any material
recognizable subsequent events.
 
  F-5
  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
  4
  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.
  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 November 30, 2009 and November 30,
2008
  Our interim consolidated financial
statements report net income of $59,263 for the three month period ended
November 30, 2009 as compared to a net loss of $7,280 for the three month period
ended November 30, 2008.  We reported net income during the period
ended November 30, 2009, due to the forgiveness of debt owed by our
company.
  During the three months ended November
30, 2009, we incurred expenses of $7,503 compared to $7,280 during the three
months ended November 30, 2008.  The increase in expenses during the
three months ended November 30, 2009 was largely due to increases in accounting
and audit fees, legal fees and filing fees which were offset by a decrease in
interest expense.
  5
  For
the six month periods ended November 30, 2008 and November 30, 2007
  Our interim consolidated financial
statements report a net income of $43,460 for the six month period ended
November 30, 2009 as compared to a net loss of $17,126 for the six month period
ended November 30, 2008.  Our accumulated net losses for the period
from February 2, 2004, our date of inception, to November 30, 2009 was
$99,988.
  During the six months ended November
30, 2009, we incurred expenses of $23,306 compared to $17,126 during the six
months ended November 30, 2008.  The increase in expenses during the
six months ended November 30, 2009 was largely due to increases in accounting
and audit fees, filing fees and legal fees which were offset by a decrease in
interest expense.
  Liquidity
and Capital Resources
  We had cash of $157 as of November 30,
2009 and a working capital deficit of $69,988.  Our total liabilities
as of November 30, 2009 were $70,145, as compared to total liabilities of
$115,713 as of May 31, 2009.  The decrease in liabilities was
primarily due to the reduction of short-term debt, which was offset by an
increase in amounts due to related parties.
  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 November 30,
2010.  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
$17,858 for the six month period ended November 30, 2009, compared to using
$19,046 for the six month period ended November 30, 2008.  The
decrease in cash used during the six month period ended November 30, 2009 was
commensurate with our net income as a result of the forgiveness of
debt.
  6
  Cash
Flow Provided by Financing Activities
  Financing activities provided cash of
$15,750 for the six month period ended November 30, 2009, compared to $19,010
for the six month period ended November 30, 2008.  The cash provided
from financing activities for the six month period ending November 30, 2009 was
from advances from a related party and short term debt.
  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 November 30, 2010.
  Purchase
of Significant Equipment
  We do not intend to purchase any
significant equipment over the twelve month period ending November 30,
2010.
  Off-Balance
Sheet Arrangements
  As of November 30, 2009, 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 officer, 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, 2009, 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.
  7
  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.
  RECENT
ACCOUNTING PRONOUNCEMENTS
  In February 2007, the FASB issued SFAS
No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities”.  This Statement permits entities to choose to measure
many financial assets and financial liabilities at fair
value.  Unrealized gains and losses on items for which the fair value
option has been elected are reported in earnings. SFAS No. 159 is effective for
fiscal years beginning after November 15, 2007.  We are currently
assessing the impact of SFAS No. 159 on our financial position and results of
operations.
  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 November 30, 2009, 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 November 30, 2009 that have materially or are reasonably
likely to materially affect, our internal controls over financial
reporting.
  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 $157 and a
working capital deficit of $69,988 as of November 30, 2009.  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.
  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
  9
  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.
  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.
  10
  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.
  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.
  11
  Item
2.   Unregistered Sales of Equity Securities and Use of
Proceeds
  None.
  Item
3.  Defaults Upon Senior Securities.
  None.
  Item
4.  Submission of Matters to a Vote of Security Holders.
  None.
  Item
5.  Other Information
  On December 24, 2009, Bryan Markert
resigned as our secretary, treasurer, chief financial officer and a director of
our company.  on that same date we appointed our Steve Bolton, our
president and chief executive officer, as our secretary, treasurer and chief
financial officer.
  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
  12
  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, Principal
 Financial
Officer and Principal Accounting Officer)
  Date:
January 13, 2009
  
  
  13