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 June 30,
2010.


or





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





For the
transition period from _______________________ to
___________________________





Commission
File Number:  000-32735





COLOMBIA
CLEAN POWER & FUELS, INC.


(Exact
name of registrant as specified in its charter)





Nevada
            
            87-0567033(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)4265
      San Felipe Street, Suite 1100, Houston, Texas
            
            77027(Address
      of principal executive offices)
            
            (Zip
      Code)





(832)
327-7417


(Registrant’s
telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the 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. x Yes  oNo





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes o  No o





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





Large
accelerated filer o


Accelerated
filer o





Non-accelerated
filer o


Smaller
reporting company x





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


o  Yes x No





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of August 13,
2010: 20,280,001









COLOMBIA
CLEAN POWER & FUELS, INC.


FORM
10-Q


JUNE 30,
2010





INDEX




PagePART
      I-FINANCIAL INFORMATIONItem
      1. Financial Statements
            
            3Condensed
      Consolidated Balance  Sheets (Unaudited) as of June
      30, 2010 and December 31, 2009
            
            3Condensed
      Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
      for the Three Months Ended June 30, 2010 and 2009 and for the Six Months
      Ended June 20, 2010 and 2009 and From  Inception on November 6,
      1996 through June 30, 2010.
            
            4Condensed
      Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended
      June 30, 2010 and 2009 and From Inception on November 6, 1996 through June
      30, 2010.
            
            5Notes
      to Condensed Consolidated Financial Statements (Unaudited)
            
            6Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
            
            13Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk.
            
            14Item
      4. Controls and Procedures
            
            14PART
      II - OTHER INFORMATIONItem
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
            
            15Item
      6. Exhibits
            
            15Signatures
            
            16




2




PART
I.


Financial
Information




Item
1. Financial Statements




COLOMBIA
CLEAN POWER & FUELS, INC.


(A
DEVELOPMENT STAGE COMPANY)


UNAUDITED
CONDENSED BALANCE SHEETS




June
      30,2010
                
                
                December
      31,2009(unaudited)
                
                
                (1)ASSETSCurrent
      AssetsCash and
      Cash Equivalents
                
                $
                459,011
                
                
                $
                89Other
      Current Assets
                
                
                36,689
                
                
                
                -Total
      Current Assets
                
                
                495,700
                
                
                
                89Property and
      EquipmentMining
      Concession
                
                
                9,471
                
                
                
                -TOTAL
      ASSETS
                
                $
                505,171
                
                
                $
                89LIABILITIES
      & STOCKHOLDERS' EQUITY (DEFICIT)LiabilitiesCurrent
      LiabilitiesAccounts
      Payable and Accrued Liabilities
                
                $
                87,722
                
                
                $
                6,681Accrued
      Interest Related Party
                
                
                -
                
                
                
                1,339Loans
      from Officers & Directors
                
                
                5,100
                
                
                
                117,000Total
      Current Liabilities
                
                
                92,822
                
                
                
                125,020Long
      Term LiabilitiesConvertible
      Notes - Related Party
                
                
                -
                
                
                
                5,000Convertible
      Notes Payable (Net of Issuance Discount)
                
                
                491,575
                
                
                
                -Total
      Long Term Liabilities
                
                
                491,575
                
                
                
                5,000Total
      Liabilities
                
                
                584,397
                
                
                
                130,020Stockholders'
      Equity (Deficit)Preferred
      stock, $.001 par value, 5,000,000 shares authorized, no shares issued
      and outstanding
                
                
                -
                
                
                
                -Common
      Stock, $.001 par value, 100,000,000 shares authorized, 20,280,000
      shares and 1,120,000 shares issued and outstanding,
      respectively
                
                
                20,280
                
                
                
                1,120Additional
      Paid in Capital
                
                
                249,605
                
                
                
                94,556Deficit
      Accumulated during the Development Stage
                
                
                (350,435
                )
                
                
                (225,607
                )Other
      Comprehensive Income
                
                
                1,324
                
                
                
                -Total
      Stockholders' Equity (Deficit)
                
                
                (79,226
                )
                
                
                (129,931
                )TOTAL
      LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
                
                $
                505,171
                
                
                $
                89








3




COLOMBIA
CLEAN POWER & FUELS, INC.


(A
DEVELOPMENT STAGE COMPANY)


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS


(Unaudited)




Three
                                                                                        
                                                                                        
                                                                                        Six
                                                                                        
                                                                                        
                                                                                        From Inception onMonths Ended
                                                                                        
                                                                                        
                                                                                        Months Ended
                                                                                        
                                                                                        
                                                                                        Nov. 6, 1996June 30,
                                                                                        
                                                                                        
                                                                                        June 30,
                                                                                        
                                                                                        
                                                                                        through June 30,2010
                                                                                        
                                                                                        
                                                                                        2009
                                                                                        
                                                                                        
                                                                                        2010
                                                                                        
                                                                                        
                                                                                        2009
                                                                                        
                                                                                        
                                                                                        2010Revenue
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        3,560ExpensesDepreciation
      and Amortization
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        4,174General
      and Administrative
                                                                                        
                                                                                        
                                                                                        112,861
                                                                                        
                                                                                        
                                                                                        
                                                                                        2,620
                                                                                        
                                                                                        
                                                                                        
                                                                                        119,264
                                                                                        
                                                                                        
                                                                                        
                                                                                        10,751
                                                                                        
                                                                                        
                                                                                        
                                                                                        285,125Research
      and Development
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        15,674Impairment
      of Long - Lived Assets
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        21,285Total
      Expenses
                                                                                        
                                                                                        
                                                                                        112,861
                                                                                        
                                                                                        
                                                                                        
                                                                                        2,620
                                                                                        
                                                                                        
                                                                                        
                                                                                        119,264
                                                                                        
                                                                                        
                                                                                        
                                                                                        10,751
                                                                                        
                                                                                        
                                                                                        
                                                                                        326,258Loss
      Before Other Income(Expense)
                                                                                        
                                                                                        
                                                                                        (112,861
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (2,620
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (119,264
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (10,751
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (322,698
                                                                                        )Other
      Income (Expense)Interest
      Expense, net
                                                                                        
                                                                                        
                                                                                        (3,122
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (2,282
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (5,564
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (4,457
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (31,613
                                                                                        )Gain
      on Settlement of Debt
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        4,097Total
      Other Income (Expense)
                                                                                        
                                                                                        
                                                                                        (3,122
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (2,282
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (5,564
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (4,457
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (27,516
                                                                                        )Loss
      Before Income Taxes
                                                                                        
                                                                                        
                                                                                        (115,983
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (4,902
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (124,828
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (15,208
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (350,214
                                                                                        )Current
      Tax Expense
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -Deferred
      Tax Expense
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -Net
      Loss Before Cumulative Effect of Change in GAAP
                                                                                        
                                                                                        
                                                                                        (115,983
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (4,902
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (124,828
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (15,208
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (350,214
                                                                                        )Cumulative
      Effect of Change in GAAP
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        (221
                                                                                        )Net
      Loss
                                                                                        
                                                                                        
                                                                                        (115,983
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (4,902
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (124,828
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (15,208
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (350,435
                                                                                        )Other
      Comprehensive IncomeGain
      on Foreign Currency Translation
                                                                                        
                                                                                        
                                                                                        1,324
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        1,324
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        1,324Total
      Comprehensive Loss
                                                                                        
                                                                                        $
                                                                                        (114,659
                                                                                        )
                                                                                        
                                                                                        $
                                                                                        (4,902
                                                                                        )
                                                                                        
                                                                                        $
                                                                                        (123,504
                                                                                        )
                                                                                        
                                                                                        $
                                                                                        (15,208
                                                                                        )
                                                                                        
                                                                                        $
                                                                                        (349,111
                                                                                        )Basic
      and Diluted Loss per Common Share
                                                                                        
                                                                                        $
                                                                                        (0.01
                                                                                        )
                                                                                        
                                                                                        $
                                                                                        (0.00
                                                                                        )
                                                                                        
                                                                                        $
                                                                                        (0.02
                                                                                        )
                                                                                        
                                                                                        $
                                                                                        (0.01
                                                                                        )Weighted
      Average Common Shares
                                                                                        
                                                                                        
                                                                                        12,489,670
                                                                                        
                                                                                        
                                                                                        
                                                                                        1,120,000
                                                                                        
                                                                                        
                                                                                        
                                                                                        6,836,243
                                                                                        
                                                                                        
                                                                                        
                                                                                        1,120,000







4




COLOMBIA
CLEAN POWER & FUELS, INC.


(A
DEVELOPMENT STAGE COMPANY)


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)




Six Months EndedJune
      30
                                
                                
                                From Inception onNovember 6,
      1996through2010
                                
                                
                                2009
                                
                                
                                June 30, 2010Cash flows from operating
      activities:Net loss
                                
                                $
                                (124,828
                                )
                                
                                $
                                (15,208
                                )
                                
                                $
                                (350,435
                                )Adjustments to reconcile net loss
      to net cash used by operating activities:
                                
                                
                                
                                
                                
                                
                                
                                -Stock compensation
      cost
                                
                                
                                17,904
                                
                                
                                
                                -
                                
                                
                                
                                17,904Amortization of discount on note
      payable
                                
                                
                                246
                                
                                
                                
                                -
                                
                                
                                
                                246Depreciation and
      amortization
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                4,174Loss on impairment of long-lived
      assets
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                21,285Effect of change in accounting
      principle
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                221Gain on settlement of
      debt
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (4,097
                                )Changes in assets and
      liabilities:
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                -Other current
      assets
                                
                                
                                (11,689
                                )
                                
                                
                                
                                
                                
                                
                                (11,689
                                )Accounts payable and accrued
      liabilities
                                
                                
                                81,141
                                
                                
                                
                                4,570
                                
                                
                                
                                119,184Net cash used in operating
      activities
                                
                                
                                (37,226
                                )
                                
                                
                                (10,638
                                )
                                
                                
                                (203,207
                                )Cash flows from investing
      activities:Increase in property and
      equipment
                                
                                
                                (9,471
                                )
                                
                                
                                -
                                
                                
                                
                                (11,213
                                )Increase in in manuscripts and
      other
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (23,938
                                )Net cash used in investing
      activities
                                
                                
                                (9,471
                                )
                                
                                
                                -
                                
                                
                                
                                (35,151
                                )Cash flows from financing
      activities:Net proceeds from issuance of
      convertible notes payable
                                
                                
                                475,000
                                
                                
                                
                                -
                                
                                
                                
                                495,000Net proceeds from issuance of
      common stock
                                
                                
                                100,000
                                
                                
                                
                                -
                                
                                
                                
                                154,750Advances (repayments) from
      officers, directors and shareholders
                                
                                
                                (70,705
                                )
                                
                                
                                10,000
                                
                                
                                
                                46,295Net cash provided by financing
      activities
                                
                                
                                504,295
                                
                                
                                
                                10,000
                                
                                
                                
                                696,045Effect of exchange rate currency
      changes on cash and cash equivalents
                                
                                
                                1,324
                                
                                
                                
                                -
                                
                                
                                
                                1,324Net increase in cash and cash
      equivalents
                                
                                
                                458,922
                                
                                
                                
                                (638
                                )
                                
                                
                                459,011Cash and cash equivalents at
      beginning of period
                                
                                
                                89
                                
                                
                                
                                809
                                
                                
                                
                                -Cash and cash equivalents at end
      of period
                                
                                $
                                459,011
                                
                                
                                $
                                171
                                
                                
                                $
                                459,011Supplemental disclosure of noncash
      financing activities:Issuance of stock warrants in
      connection with debt
                                
                                $
                                8,671
                                
                                
                                $
                                -
                                
                                
                                $
                                8,671Issuance of common stock in
      connection with conversion of note payable
                                
                                $
                                6,439
                                
                                
                                $
                                -
                                
                                
                                $
                                6,439Extinguishment of payable to a
      related party treated as equity contribution
                                
                                $
                                38,853
                                
                                
                                $
                                -
                                
                                
                                $
                                38,853




5




COLOMBIA
CLEAN POWER & FUELS, INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




1.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION




Overview




Colombia
Clean Power & Fuels, Inc. (the “Company”) is a development stage company
engaged in the business of acquiring and developing coal mining assets, and the
mining and sale of coal, coke and coal by-products using traditional and clean
coal technologies, initially in Colombia, South America.  The Company
anticipates that its initial operations will include the mining of
high-grade, metallurgical coal and coal coking, and that, within the next
several years, its operations will include power generation and alternative
energy production, such as coal gasification and coal-to-liquids. The
Company adopted its new operating strategy based on the size of the Colombia
coal market, and opportunities it has identified to acquire substantial coal
resources and to build mines in Colombia.




Colombian
coal is recognized worldwide for its high-heat-value, low-ash and low-sulfur
contents.  As the nation’s second largest export item after oil,
investment and development of sustainable coal mining is an important priority
for the Colombian government.  In Colombia, the state owns all
hydrocarbon reserves and private companies operate coal mines under concession
contracts with the state. The Company is in the process of securing concessions
in the Santander region of Colombia.  The Company has established an
initial target to control over 300 million tons of metallurgical coal through
concessions.  The Santander region was selected because of its large
metallurgical coal resources, its location on the Magdalena River with river
access for shipping, and its proximity to Colombia’s main pipeline and several
other refined products pipelines. Colombia
is the world’s tenth largest producer and fourth largest exporter of coal, with
an estimated 7 billion metric tons (“MT”) of recoverable reserves and 17 billion
MT of potential reserves





The
Company’s current operations are focused on exploration and development
activities.  The Company has retained leading engineering and
geological services firms in the U.S. and Colombia to conduct exploration work
in selected concessions under consideration for acquisition by the
Company.  The Company’s team of executives, advisors and partners is
comprised of experienced entrepreneurs and business professionals in the U.S.,
Colombia and China that have a broad breadth of experience in coal mining and
clean coal technologies as well as substantial industry
relationships.





Through a
wholly-owned subsidiary, the Company owns 100% of Energia Andina Santander
Resources S.A.S., a Colombian company established to acquire and develop coal
concessions.  Energia Andina Santander Resources S.A.S. has
established a corporate office in Bogota and is in the process of recruiting its
team of operations, technical, financial, logistics, mining and marketing
employees and consultants.




6




History
and Basis of Reporting




The
accompanying unaudited consolidated financial statements should be read in
conjunction with the Company's audited financial statements and
accompanying notes in the Company's Annual Report on Form 10-K for the
year ended December 31, 2009 filed with the U.S. Securities and Exchange
Commission (“SEC”) on February 24, 2010. The accompanying (a) balance sheet as
of December 31, 2009, which has been derived from audited financial statements,
and (b) unaudited consolidated financial statements have been prepared pursuant
to SEC Rule 10-01 of Regulation S-X. Certain information and note disclosures
normally included in annual financial statements prepared in accordance with
generally accepted accounting principles in the United States of America
(“GAAP”) have been condensed or omitted pursuant to those rules and regulations,
although it believes that the disclosures made are adequate to make the
information not misleading.
  The
unaudited results of operations for the interim periods shown in these financial
statements are not necessarily indicative of operating results for the entire
year. In the opinion of management, the accompanying unaudited consolidated
financial statements recognize all adjustments of a normal recurring nature
considered necessary to fairly state the Company's consolidated
financial position as of June 30, 2010, and its consolidated results of
operations and comprehensive loss, and cash flows for the three months and six
months ended June 30, 2010.
  The
consolidated financial statements have been prepared in accordance accounting
principles generally accepted in the United States applicable to a going
concern. Except as otherwise disclosed, these principles assume that assets will
be realized and liabilities will be discharged in the ordinary course of
business.




The
Company was incorporated in the State of Nevada on November 6, 1996 under the
name “Freedom Resources Enterprises, Inc.” to research and publish a
self-improvement book based on the insights and understandings of major world
cultures.  The working title for the proposed book was Personal Freedom and
Prosperity.  The Company did not publish the book, but instead
used materials gathered during our research to develop a series of eight
self-help workshops.  Each self-taught workshop consisted of an
audiotape and a workbook.  The workshops were sold online under a
marketing agreement with Life Discovery Institute, a related party that
maintained a website dedicated to self-improvement products and
education.  As of September 30, 2005, however, the Company had
generated total revenue of only $3,560 since inception.  Because the
Company had not generated the expected revenue, in October 2005 it ceased all
business operations and decided to pursue other business
opportunities.




From
October 2005 to early May 2010, the Company did not engage in any business
activities.  Prior to this period, the Company’s management had been
evaluating potential business opportunities that might be available to the
Company to preserve its shareholder’s investment in its common
shares.




On May 6,
2010, the Company entered into a subscription agreement (the “Subscription
Agreement”) with LIFE Power & Fuels, LLC (“LIFE”), pursuant to which it
issued to LIFE 47,700,000 shares of its common stock, which shares represented
approximately 94.1% of its issued and outstanding shares of common stock at such
time, elected one new director to its board of directors and changed its
management team.  Concurrently with the closing of the transactions
contemplated by the Subscription Agreement, the Company ceased to
be a shell company, as defined in Rule 12b-2 of the Exchange Act, and
adopted a new plan of operations. See Note 2. Subsequently, LIFE sold
approximately 11,700,000 shares of the Company's common stock to certain related
parties. As of June 30, 2010, LIFE owned approximately 71.1% of the outstanding
shares of the Company.




In July
2010, the Company effected a reverse stock split of two shares for
every five shares of common stock outstanding. Accordingly,
outstanding shares of common stock and stock options were adjusted to account
for the effects of the reverse stock split.




Effective
July 28, 2010, the Company changed its name from Freedom Resources Enterprises,
Inc. to “Colombia Clean Power & Fuels, Inc.”




Principles
of Consolidation




The
accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.




Use
of Estimates




The
preparation of the financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amount 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 reporting period. Actual results could differ from those
estimates.




7




Concentrations
and Risks




Substantially
all of the Company's assets are located in the USA and in Colombia.




Cash
and Cash Equivalents




The
Company considers all highly-liquid investments with maturities of three months
or less, at the date of purchase, to be cash equivalents.




Fair
Value of Financial Instruments





The
Company’s financial instruments include cash and cash equivalents and
convertible notes payable. The Company believes its financial instruments
approximate their fair values due to their short-term maturities or the nature
and terms of the notes.





Other
Current Assets





Other
current assets include direct expenses incurred as a result of the Company’s
Note financing, for which the first closing was held on June 9, 2010 (see Note
4).  Placement agent fees and other direct costs incurred in this
transaction were paid immediately but are amortized over the life of the
Notes.




Property
and Equipment




Property
and equipment consist of a deposit on a mining concession in Santander,
Colombia.  The Company placed a deposit on the mining concession in
June 2010, and subsequently completed the acquisition of the concession in July
2010. The deposit on the mining concession is being valued at cost.




Derivative
Instruments




The
Company does not utilize derivative or hedge instruments in its financing
activities.




Foreign
Currency Translation




The
Company and its wholly-owned British Virgin Islands Subsidiary Energia Andina
Santander Ltd., maintain accounting records using U.S. dollars. Energia Andina
Santander Resources S.A.S., the Company’s Colombian subsidiary, maintains
accounting records using the Colombian Peso.




Foreign
currency transactions during the year are translated to their functional
currencies at the approximate rates of exchange on the dates of
transactions.  Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are translated at the approximate rates of
exchange at that date.  Non-monetary assets and liabilities are
translated at the rates of exchange prevailing at the time the asset or
liability was acquired.  Exchange gains or losses are recorded in the
statement of operations.




The
financial statements of Energia Andina Santander Resources S.A.S. (whose
functional currency is the Peso) are translated into U.S. dollars using the
closing rate method.  The balance sheet items are translated into U.S.
dollars using the exchange rates at the respective balance sheet
dates.  The capital account is translated at the historical exchange
rate prevailing at the time of the transactions while income and expenses items
are translated at the average exchange rate for the year.  All
exchange differences are recorded as currency translation adjustment within the
“stockholder’s equity.”




8




Comprehensive
Income




The
foreign currency translation gain or loss resulting from the translation of the
financial statements expressed in Peso to U.S. dollars is reported as currency
translation adjustment in the statements of operations and comprehensive loss
and stockholders’ equity (deficit).





Earnings
(Loss) Per Share




Earnings
(loss) per share in accordance with the provisions of the Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 260,
"Earnings Per Share." ASC 260 requires presentation of basic and diluted
earnings per share in conjunction with the disclosure of the methodology used in
computing such earnings per share. Basic earnings per share excludes dilution
and is computed by dividing income available to common stockholders by the
weighted average common shares outstanding during the period. Diluted earnings
per share takes into account the potential dilution that could occur if
securities or other contracts to issue common stock were exercised and converted
into common stock using the treasury method.




The
Company's potentially dilutive common shares include convertible notes, stock
options and stock warrants. As of June 30, 2010, the Company had 360,000 stock
warrants and stock options exercisable to purchase, and convertible notes
that were convertible into, an aggregate of 360,000 shares of common
stock that were considered potentially dilutive common shares, and stock
warrants and stock options exercisable to purchase, and convertible notes that
were convertible into, an aggregate of 780,000 shares of common stock that
were considered anti-dilutive. However, the basic and diluted earnings per share
are the same for the three months and six months ended June 30, 2010 and 2009
because the Company was in a net loss position. See Note 5.




Earnings
(loss) per share are reflective of a two-for-five reverse stock split that
occurred on July 28, 2010. Per ASC 260, “if the
number of common shares outstandingdecreases as a result of a reverse
stock split, the computations of basic and diluted earnings per
share shall be adjusted retroactively for all periods presented to reflect
that change in capital structure.”




Segments




The
Company operates in one business segment.




Reclassification
 
 Certain
balances in the prior period financial statements were reclassified to conform
to the current period presentation.




2.           PRIVATE
PLACEMENT





On May 6,
2010, the Company entered into a Subscription Agreement with
LIFE.  Pursuant to the Subscription Agreement, the Company sold an
aggregate of 47,700,000 shares (the “Shares”) of its common stock, to LIFE for
an aggregate purchase price of $100,000, which funds were used to eliminate the
Company’s then current liabilities.  The Shares represented 94.1% of
the Company’s issued and outstanding shares of common stock immediately
following the transaction, and the transaction resulted in a change in control
of the Company.




At the
closing, Neil Christiansen resigned as the Company’s President, effective
immediately, and Edward Mooney was appointed the Company’s President and Chief
Executive Officer and as a member of the Company’s board of
directors.  At the closing, Daniel Carlson was also appointed the
Company’s Chief Financial Officer, Secretary and Treasurer.





Simultaneous
with the closing of the Subscription Agreement, the following transactions
occurred to reflect the payment of $100,000 of the purchase price to reduce the
Company’s liabilities as follows:  $10,664 to pay accounts payable;
$8,689 to pay expenses incurred subsequent to March 31, 2010; and $80,647 to pay
advances to related parties.  Related parties forgave $38,853 of loans
due to them, which has been recorded as a capital contribution.





Also
simultaneous with the closing of the Subscription Agreement, the Company issued
200,000 shares of its common stock upon conversion of a note payable in the
amount of $5,000 and related accrued interest of $1,439.




9




Subsequent
to the above-referenced transactions, the Company had 50,700,000 shares
outstanding prior to the reverse split of July 28, 2010. As of June 30, 2010,
the adjusted shares outstanding were 20,280,000.





3.           CURRENT
LIABILITIES




Accounts
Payable and Accrued Liabilities




Accounts
payable and accrued liabilities of $87,722 existed at June 30,
2010.  This figure represented professional fees incurred during May
and June, 2010 related to the purchase of a controlling interest
in the Company by LIFE, as well as fees incurred by auditors and financial
professionals.




4.           CONVERTIBLE
NOTES PAYABLE




Notes
Payable





On June
9, 2010, the Company issued $500,000 aggregate principal amount of 10%
convertible promissory notes (the “Notes”) to accredited investors in a private
placement transaction.  The proceeds of the offering of promissory
notes are being used to fund development stage activities of the Company,
including the identification, analysis and negotiation for coal resources in
Colombia that meet the Company’s criteria for mining, processing and export
potential.  The Company may seek to issue up to an additional $2
million in Notes and utilize net proceeds to expand operations and acquire
coal concessions.





This
transaction was exempt from registration pursuant to Section 4(2) of the
Securities and Exchange Act of 1933, as amended, and Regulation D promulgated
thereunder.  The Notes accrue interest at an annual rate of
10%.  Principal and interest are due on June 30, 2012.  The
Notes can be converted at any time into common stock at a rate equal to $2.50 of
principal for each share of common stock. At the closing of the Note issuance,
the Company issued to the Note investors a total of 200,000 five-year warrants
with a strike price of $0.01 per share. The discount on Notes Payable of
$8,671 reflects the Black-Scholes Fair Market Value of these warrants,
which was also reflected as an increase in Additional Paid in
Capital.  The discount on Notes Payable is amortized over the life of
the notes and appears in the Statement of Operations and Comprehensive Loss as
an interest expense.




5.           EARNINGS
(LOSS) PER SHARE




The
elements for calculation of earnings (loss) per share for the three and six
months ended June 30, 2010 and 2009 were as follows:




Three
      Months Ended
                June
      30
            
            
            Six
      Months Ended
                June
      302010
            
            
            2009
            
            
            2010
            
            
            2009Net
      loss for basic and diluted earnings (loss) per share
            
            $
            (115,983
            )
            
            $
            (4,902
            )
            
            $
            (124,828
            )
            
            $
            (15,208
            )Weighted
      average shares used in basic and diluted computation
            
            
            12,489,670
            
            
            
            1,120,000
            
            
            
            6,836,243
            
            
            
            1,120,000Earnings
      (loss) per share:Basic
      and diluted
            
            $
            (0.01
            )
            
            $
            (0.01
            )
            
            $
            (0.02
            )
            
            $
            (0.01
            )




10




6.           STOCKHOLDERS’
EQUITY




Reverse
Stock Split





On July
28, 2010, the Company executed a reverse stock split of its common stock in
which two new shares of common stock were issued for every five shares of common
stock held as of the date of the reverse stock split. This reverse split has
been applied retrospectively in the financial statements.





Issuance
of Warrants and Options





The
Company is seeking to recruit and retain experienced professionals from the
global energy, natural resource development and mining
industries.  The Company will seek to offer compensation that is
commensurate with the qualifications of future employees and advisors, including
the ability to offer equity participation with vesting provisions typical of
early-stage public companies.  On May 12, 2010, the Board of Directors
adopted the 2010 Equity Incentive Plan (“Incentive Plan”), The Incentive Plan
gives the Company the ability to grant stock options, stock appreciation rights
(“SARs”), restricted stock and stock bonuses (collectively, “Awards”) to
employees or consultants of the Company or of any subsidiary of the Company
and to non-employee members of the Company’s advisory board or the board of
directors of the Company or the Company’s subsidiaries.





The Board
of Directors has authorized  3,300,000 shares of common stock for
issuance under the
Incentive Plan. In the event of any change in the number of shares of Company
common stock outstanding by reason of any stock dividend or split, reverse stock
split, recapitalization, merger, consolidation, combination or exchange of
shares or similar corporate change, the maximum number of shares of common
stock with respect to which the Board of Directors may grant awards, appropriate
adjustments will be made to the shares subject to the Incentive Plan and to any
outstanding Awards. Shares available for Awards under the Incentive Plan may be
either newly-issued shares or treasury shares. If an Award or portion thereof
shall expire or terminate for any reason without having been exercised in full,
the unexercised shares covered by such Award shall be available for future
grants of Awards under the Incentive Plan.




On May
28, 2010, the Company granted options to purchase an aggregate of
740,000 shares of common stock to an independent board member and
various consultants to the Company. The options granted have a five-year term
and a strike price of $0.125 per share, with the exception of the options
granted to CleanTech IR, which options have a strike price of $0.01 per
share.




11








Number
      of shares subject to option 2010
                            
                            
                            Weighted
      average exercise priceOutstanding
      beginning balance
                            
                            
                            0
                            
                            
                            
                            -Granted
      during the period
                            
                            
                            740,000
                            
                            
                            $
                            0.1125Forfeited/Canceled/Expired
      during the period
                            
                            
                            -
                            
                            
                            
                            -Exercised
      during the period
                            
                            
                            0
                            
                            
                            
                            -Outstanding
      at end of period
                            
                            
                            740,000
                            
                            
                            $
                            0.1125Exercisable
      at end of period
                            
                            
                            200,000
                            
                            
                            $
                            0.111




The
aggregate grant date fair value of stock option awards granted were determined
in accordance with ASC Topic 718 (formerly SFAS123(R).  The
Company uses the Black-Scholes Options Pricing Model (Black-Scholes) to estimate
fair value of its stock-based awards.  Black-Scholes requires various
judgmental assumptions, including estimating stock price volatility, expected
option life and forfeiture rates. If the Company had made different assumptions,
the amount of its deferred stock-based compensation, stock-based compensation
expense, net loss and net loss per share amounts could have been significantly
different. The Company believes that it has used reasonable methodologies,
approaches and assumptions to determine the fair value of its common stock and
that deferred stock-based compensation and related amortization were recorded
properly for accounting purposes. If any of the assumptions used change
significantly, stock-based compensation expense may differ materially in the
future from that recorded in the current period.





With
the exception of the 100,000 stock options granted to Cleantech IR, 25% of the
options shall vest immediately on the grant date, 25% of the options vest on the
first anniversary of the grant date, and 25% of the options vest annually on
each of the next two (2) anniversaries of the initial vesting date. 40% of
the 100,000 options granted to CleanTech IR vest immediately; while the
remaining 60% will vest upon meeting the condition that is tie-up to the
Company's financing.  All options have a five year term, and expire on May
27, 2015. The exercise price of the stock options is equal to the greater of
$0.05 per share or the closing price of the common stock on the grant date. The
closing bid price of the common stock on both May 28, 2010 and June 9, 2010 was
$0.05 per share. The aggregate intrinsic value of the outstanding options at
June 30, 2010 was $4,000.  The actual value, if any, an optionee may
realize will depend on the excess of the stock price over the exercise price on
the date the option is exercised. There is no assurance the value realized by an
optionee will be at or near the value estimated by the Black-Scholes pricing
model.








7.           RELATED
PARTY TRANSACTIONS





As of the
date of this report, LIFE owns approximately 71.1% of the outstanding shares of
the Company.





On June 24,2010, a large stockholder of the
Company through his holdings in our majority shareholder, LIFE, loaned the
Company $5,000 to pay for certain expenses related to mining concession
acquisitions in Colombia.





Edward
Mooney, the Company’s Chief Executive Officer and a Director, is the sole
Managing Member of LIFE.  Daniel Carlson, the Company’s Chief
Financial Officer, is Chief Financial Officer of LIFE.  Messrs. Mooney
and Carlson have entered into employment agreements with the
Company.





On August
3, 2010, the Company entered into a management and services agreement with LIFE
pursuant to which LIFE agreed to provide certain corporate, financial, and
merger and acquisition advisory services to the Company and assistance with
securing equipment leases and other equipment financing.


8.           Recent
Accounting Pronouncements
  There
have been no recent accounting pronouncements or changes in accounting
pronouncements during the three months ended June 30, 2010 as compared to the
recent accounting pronouncements disclosed in the annual report that are of
material significance to the Company.
  9.           Subsequent
Events


In
accordance with the provisions ofFASB
Accounting Standards Codification 855,Subsequent
Events, management evaluated all material events occurring subsequent to
the balance sheet date through the time of filing of this Form 10-Q for events
requiring disclosure or recognition in the Company’s consolidated financial
statements. Other
than the change in name, reverse stock split, and other matters already
disclosed. Management
determined that there were no subsequent events other than the change in name,
reverse stock split and other matters already disclosed.


12




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





Forward-Looking
Statement Notice





This Form
10-Q contains certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. For this purpose, any
statements contained in this Form 10-Q that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,”
“estimate” or “continue” or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending on a
variety of factors, many of which are not within our control. These factors
include, but are not limited to, economic conditions generally and in the
industries in which we may participate; competition within our chosen industry,
including competition from such larger competitors; technological advances and
failure to successfully develop business relationships.





Description
of Business





We
are a development stage company, and currently engage in the business of
acquiring and developing coal mining assets, and the mining and sale of coal,
coke and coal by-products using traditional and clean coal technologies,
initially in Colombia, South America.  The Company anticipates that
its primary operations will include the mining of high-grade, metallurgical
coal, coal coking, power generation and alternative energy production, such as
coal gasification and coal-to-liquids.





We completed
a name change to Colombia Clean Power & Fuels, Inc., effective July 28,
2010.   The name change reflects our proposed new operating
business, which is to acquire and develop coal mining assets, and mine and sell
coal, coke and coal by-products using traditional and clean coal techniques –
primarily in Colombia, South America.





We
were incorporated under the name Freedom Resources Enterprises, Inc. in the
State of Nevada on November 6, 1996 to research and publish a self-improvement
book based on the insights and understandings of major world cultures and
subsequently developed a series of self improvement workshops and materials
that we sold online under a marketing agreement with Life Discovery
Institute, a related party that maintained a website dedicated to
self-improvement products and education.  As of September 30, 2005,
however, we had generated total revenue of only $3,560 since
inception.  Because we had not generated the expected revenue, in
October 2005,management ceased all business operations and decided to pursue
other business opportunities.




On May 6,
2010, we entered into a Subscription Agreement with LIFE Power & Fuels
LLC (“LIFE”), pursuant to which we issued to LIFE 47,700,000 shares of our
common stock, which shares represented approximately 94.1% of our issued and
outstanding shares of common stock at such time, elected one new director to our
board of directors and changed our management team.  Concurrently with
the Closing, we ceased to be a shell company, as defined in Rule 12b-2 of the
Exchange Act, and adopted a new plan of operations.




In July
2010, the Company effected a reverse stock split of two shares for
every five shares of common stock outstanding.  Effective July
28, 2010, the Company also changed its name from Freedom Resources Enterprises,
Inc. to “Colombia Clean Power & Fuels, Inc.”




Critical
Accounting Policies and Estimates
  For a
discussion of our critical accounting policies, see our Annual Report on Form
10-K for the year ended December 31, 2009.
  New
Accounting Standards
  Refer to
Note 8 in the notes to unaudited condensed consolidated financial statements for
a discussion of new accounting standards.





Three-Month
Period Ended June 30, 2010 and 2009





Our
revenues since inception total $3,560 and we have a cumulative net loss of
$350,435 from inception through June 30, 2010. We did not have
any revenues for the three months ended June 30, 2010 or 2009. For the
three months ended June 30, 2010, our net loss was $115,983 compared to $4,902
for the same period in 2009. The increase in our net loss was due to
increased expenses, primarily outside professional services for legal and
accounting services (including options issued to outside professionals as part
of their compensation), related to our recommencing operations during the
second quarter of 2010. Expenses during the three months ended June 30, 2010,
consisted of $112,861 in general and administrative expense and $3,122 in
interest expense. Expenses during the same period in 2009 consisted of $2,282 in
interest expense and $2,620 in general and administrative expenses. We
have $500,000 in convertible notes issued to investors. The notes were
issued in June, 2010 and accrued interest on the notes totaled $1,439 at June
30, 2010.  Loss per share in the three months ended June 30, 2010 was
($0.01) compared to a loss of ($0.00) in the three months ended June 30,
2009.




13




Six-Month
Period Ended June 30, 2010 and 2009





We did
not have any revenues for the six months ended June 30, 2010 or 2009.
For the six months ended June 30, 2010, our net loss was $124,828 compared to
$15,208 for the same period in 2009. The increase in our net loss was due
to increased expenses, primarily outside professional services in legal and
accounting (including options issued to outside professionals as part of their
compensation), related to our recommencing operations during the second
quarter of 2010.  Expenses during the six months ended June 30, 2010,
consisted of $119,264 in general and administrative expense and $5,564 in
interest expense. Expenses during the same period in 2009 consisted
of $4,457 in interest expense, and $10,751 in general and administrative
expenses. Loss per share for the six months ended June 30, 2010 was ($0.02)
compared to a similar loss of ($0.01) in the same period of 2009.





Liquidity
and Capital Resources





At June
30, 2010, we had $459,011 in cash and approximately $403,000 in working capital.
At June 30, 2010, we also had total liabilities of $584,397. We anticipate
funding our operation expenses with additional financings of debt and/or equity
securities.




As of
June 30, 2010, our total assets were $505,171 consisting of cash, prepaid
expenses and mining concessions. The increase in assets is a result of our Note
issuance on June 9, 2010 in which we issued $500,000 of notes to investors.
Total liabilities at June 30, 2010 were $584,397 consisting of $10,357 in wages
payable, $74,488 in accounts payable, $2,877 in accrued interest, notes payable
of $491,575 (net of a $8,425 discount on Notes payable due to warrant issuance),
and $5,100 in loans from Officers and Directors. The increase in accounts
payable was a result of the Company recommencing operations in June, 2010.
The loans from Officers and Directors bear no interest, are due on demand, and
were made by the President and a large shareholder of the
Company.




Management
anticipates that we will be dependent, for the near future, on additional
capital to fund our operating expenses and anticipated growth and the report of
our independent registered public accounting firm for the year ended December
31, 2009 expresses doubt about our ability to continue as a going concern. Our
operating losses have been funded through the issuance of equity securities and
borrowings. We will need additional funding in order to continue our
business operations. While we continually look for additional financing sources,
in the current economic environment, the procurement of outside funding is
extremely difficult and there can be no assurance that such financing will be
available, or, if available, that such financing will be at a price that will be
acceptable to us. Failure to generate sufficient revenue or raise additional
capital would have an adverse impact on our ability to achieve our longer-term
business objectives, and would adversely affect our ability to continue
operating as a going concern.


Management
Compensation





During
the second quarter of 2010, no compensation was paid to management.





Off
Balance-Sheet Arrangements





There are
no off-balance sheet arrangements or obligations that are not disclosed in the
financial statements.




Item
3. Qualitative and Quantitative Disclosures About Market Risk





Not
applicable.





Item
4. Controls and Procedures





(a)Evaluation of Disclosure Controls
and Procedures.
Our management, with the participation of our Chief Executive
Officer and our Chief Financial Officer, carried out an evaluation of the
effectiveness of our "disclosure controls and procedures" (as defined in the
Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e) and
15-d-15(e)) as of the end of the period covered by this report (the "Evaluation
Date"). Based upon that evaluation, our Chief Executive Officer and
our Chief Financial Officer concluded that, as of the Evaluation Date, our
disclosure controls and procedures are not effective to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act (i) is recorded, processed, summarized and reported, within the
time periods specified in the SEC's rules and forms and (ii) is accumulated and
communicated to our management, including our Chief Executive
Officer and our Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.




Our lack
of employees results in our inability to have a sufficient segregation of
duties within our accounting and financial activities. This constitutes a
material weakness in our corporate governance structure and internal
controls.




14





(b) Changes in Internal Controls.
There have been no changes in our internal control over financial reporting that
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting subsequent to the date we carried out our most
recent evaluation.




PART
II - OTHER
INFORMATION





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




On June
9, 2010, we issued to various investors in a private placement (i) $500,000
in aggregate principal amount of 10% convertible notes, and (ii) five-year
warrants to purchase 200,000 shares of common stock at an exercise price of
$0.01 per share.   A cash fee of $25,000 was paid as a commission as
part of this capital raising transaction. This transactions was exempt from
registration pursuant to Section 4(2) of the Securities
Act.




Item
6. Exhibits




The
exhibits required by this item are set forth on the Exhibit Index attached
hereto.




15





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) 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.




Colombia
      Clean Power & Fuels, Inc.August
      16, 2010
              By:
              /s/ Edward
      P. MooneyEdward
      P. Mooney, Chief Executive Officer
                (Principal Executive
      Officer)




August
      16, 2010
              By:
              /s/ Daniel
      CarlsonDaniel
      Carlson, Chief Financial Officer
                (Principal
      Financial Officer and
                Principal
      Accounting Officer)




16




EXHIBIT
INDEX





Exhibit
              Number
            
            Description
      of Exhibit31.1
            
            Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.31.2
            
            Certification
      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.32.1
            
            Certification
      of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002 (18 U.S.C. Section 1350).32.2
            
            Certification
      of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002 (18 U.S.C. Section
1350).




17