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EX-23.1 - EXHIBIT 23.1 - Arcis Resources Corp | mtnrenewabless1a2x231_102209.htm |
As filed with the Securities and
Exchange Commission on October 30, 2009
Registration
No. 333-159577
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON
D.C. 20549
____________________________
FORM S-1/A
(Amendment No.2 )
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
_____________________________
Mountain
Renewables, Inc.
(Name of
small business issuer in its charter)
Nevada
|
3433
|
37-1563401
|
(State
or other Jurisdiction of Incorporation
|
(Primary
Standard Industrial Classification Code
Number)
|
(I.R.S.
Employer Identification No.)
|
or Organization)
|
|
Mountain
Renewables, Inc.
1772
Grape Street
Denver,
Colorado 80220
(Address
and telephone number of principal executive offices and principal place of
business)
Richard
Giannotti, President
Mountain
Renewables, Inc.
1772
Grape Street
Denver,
Colorado 80220
(720)
341-8235
(Name,
address and telephone number of agent for service)
APPROXIMATE
DATE OF PROPOSED SALE TO THE PUBLIC:
From time
to time after this Registration Statement becomes effective.
If any
securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X ]
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. ________
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. _________
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. _________
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
Registrant
is a development stage company with minimal operations and may be deemed a
“Shell Company” as defined by Rule 405
Title
of each class of securities to be registered
|
Number
of Shares
to
be registered
|
Proposed
maximum offering price
per
share(1) (2)
|
Proposed
maximum aggregate
offering
price
|
Amount
of
registration
fee
|
||||||||||||
Common
Stock, $0.001 par value
|
5,515,000
|
$
|
0.10
|
$
|
551,500
|
$
|
75.00
|
|||||||||
|
|
|
||||||||||||||
Total
Registration Fee
|
|
$ |
0.10
|
$ |
551,500
|
$
|
75.00
|
|
____________________
(1)
|
Estimated
solely for purposes of calculating the registration fee in accordance with
Rule 457(e) under the Securities Act of 1933.
|
(2)
|
Calculated
in accordance with Rule 457(g)(1). Paid
previously.
|
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
The
information in this Prospectus is not complete and may be
changed. The selling stockholders may not sell these securities until
the registration statement is filed with the Securities and Exchange Commission
and becomes effective. This Prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any state
where the sale is not permitted.
PRELIMINARY
PROSPECTUS SUBJECT TO COMPLETION, DATED _____________________.
Mountain
Renewables, Inc.
5,515,000
Shares of
Common
Stock
This
prospectus relates to the re-sale of up to 5,515,000 shares of our common
stock. This is the initial registration of shares of our common
stock. The selling stockholders will sell the shares from time to
time at a fixed price of $0.10 per share.
Our
common stock is not traded on any national securities exchange and is not quoted
on any over-the-counter market. If our shares become quoted on the
Over-The-Counter Bulletin Board, sales will be made at prevailing market prices
or privately negotiated prices. We cannot provide any assurance that
our common stock will ever be traded on the OTC Bulletin Board or on any stock
exchange.
We will
not receive any proceeds from the re-sale of the common stock.
The
significant shareholders are deemed “underwriters’ and will sell their shares at
$0.10 per share for the duration of this offering.
Investing in these securities involves significant risks. See
"Risk Factors" beginning on page 5. Registrant is a development stage
company with minimal operations and may be deemed a “Shell Company” as defined
by Rule 405 and have incurred substantial losses since inception. The report our
auditor’s report notes that there is substantial doubt of our ability to
continue as a going concern.
We may
amend or supplement this prospectus from time to time by filing amendments or
supplements as required. You should read the entire prospectus and any
amendments or supplements carefully before you make your investment
decision.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is _____, 2009.
-
2 -
Table
of Contents
Page
|
||
Prospectus
Summary
|
4
|
|
Risk
Factors
|
5
|
|
Use
of Proceeds
|
14
|
|
Market
for Common Equity and Related Stockholder Matters
|
14
|
|
Management’s
Discussion and Analysis or Plan of Operation
|
15
|
|
Business
|
18
|
|
Employees
|
21
|
|
Legal
Proceedings
|
21
|
|
Management
|
21
|
|
Executive
Compensation
|
23 | |
Certain
Relationships and Related Transactions
|
24 | |
Security
Ownership of Certain Beneficial Owners and Management
|
24 | |
Description
of Securities to be Registered
|
24 | |
Indemnification
for Securities Act Liabilities
|
25 | |
Plan
of Distribution
|
25 | |
Selling
Stockholders
|
26
|
|
Legal
Matters
|
28
|
|
Experts
|
28
|
|
Available
Information
|
28
|
|
Index
to Financial Statements
|
29
|
|
Signatures
|
I-4
|
-
3 -
PROSPECTUS
SUMMARY
The
following summary highlights selected information contained in this prospectus.
This summary does not contain all the information you should consider before
investing in the securities. Before making an investment decision, you should
read the entire prospectus carefully, including the "risk factors" section, the
financial statements and the notes to the financial statements. As
used throughout this prospectus, the terms “Mountain” the “Company,” “we,” “us,”
and “our” refer to Mountain Renewables, Inc.
MOUNTAIN
RENEWABLES, INC.
We are a
development stage company with minimal operations and may be deemed a “Shell
Company” as defined by Rule 405. 405 We have incurred substantial losses
since inception and our auditor’s report notes that there is substantial doubt
of our ability to continue as a going concern. We are currently focused selling
our inventory of refurbished solar collectors. We are also selling a package of
collector mounting hardware specifically designed for our solar collectors. The
mounting hardware was just added to our product line and our most recent sale
included mounting hardware. To date, we have generated only minimal revenues
from the sale of refurbished solar collectors which directly convert sunlight
into heat. We presently have only a verbal supply
agreement with the refurbisher of the solar collectors which we sell. We believe
the cash we have in the bank will be sufficient for the next year and we
presently have no plan to raise additional capital to support
our business plan. Our auditor's report states that there is
substantial doubt that we will be able to continue as a going
concern.
We have had substantial losses since inception and minimal cash reserves. We may
be unable to continue as a going concern and in the event that we are forced to
reduce operations or in any way curtail our business, an investor will lose all
money invested.
We intend to focus our sales
efforts in Denver, Colorado, where government incentives have accelerated solar.
Our ads run over the internet at little or no cost to us. We anticipate that our
customers will be owners of residential properties (both single and muli-family
dwellings ) who would purchase the solar panels and consume the resultant heat
energy output.
There
is currently no public market for our common stock. We plan to open a
discussion with market makers in order to arrange for an application to be made
with respect to our common stock, to be approved for quotation on the
Over-The-Counter Bulletin Board upon the effectiveness of this
prospectus. There is no guarantee that we will be listed on the
Over-The-Counter Bulletin Board.
Our offices are
located in the home of our president at 1772 Grape Street, Denver Colorado
80220, and our collector warehouse is located on East Evans Avenue in Denver.
Our telephone number is: (720-341-8235). We are a Nevada
corporation.
Common
stock outstanding before the offering
|
Prior
to this Offering, we have 13,515,000 shares of Common Stock
outstanding.
|
Securities
offered by the Selling Shareholders
|
Up
to 5,515,000 shares of common stock.
This
number represents 40.8% of our current outstanding
stock.
|
Common
stock to be outstanding after the offering
|
Up
to 13,515,000 shares.
|
Use
of proceeds
|
We
will not receive any proceeds from the sale of the common
stock.
|
The above information regarding common stock to be
outstanding after the offering is based on 13,515,000 shares of common stock
outstanding as of September 30, 2009 and as of the date of this
prospectus
Description of Private
Placements. None.
During March 2009, we issued
140,000 shares of common stock to Sonja Gouak, for future contracted services
valued at $35,000.
All of the
shares of common stock that are being registered for resale pursuant to this
prospectus have been issued.
-
4 -
Summary
Financial Information
(in
thousands, except per share
information)
|
The following information as of September 30 and as of the date of
this prospectus has been derived from our financial statements which
appear elsewhere in this prospectus. We are a development stage company with
minimal operations and may be deemed a “Shell Company” as defined by Rule 405.
We have incurred substantial losses since inception and the report our
auditor notes that there is substantial doubt of our ability to continue as a
going concern.
Nine
Months
Ended
September
30, 2009
|
March
27, 2008
(inception)
thru
September
30, 2009
|
|||||||
Revenues
|
$
|
810
|
$
|
810
|
||||
Total
Operating Expenses
|
$
|
8,688
|
$
|
9,286
|
||||
Net
income (loss)
|
$
|
(7.878)
|
$
|
(8,476)
|
||||
Income
(loss) per share (basic and diluted)
|
$
|
**)
|
$
|
(**)
|
||||
Weighted
average shares of common stock outstanding (basic and
diluted)
|
13,476,000
|
11,913,000
|
______________
** Less
than $(.01) per share
Balance
Sheet Information:
September
30, 2009 Unaudited
|
Dec
31, 2008 Audited
|
|||||||
Working
capital
|
$
|
13,813
|
$
|
21,226
|
||||
Total
assets
|
49,228
|
22,076
|
||||||
Total
liabilities
|
30
|
0
|
||||||
Accumulated
deficit during development stage
|
(8,476)
|
(598)
|
||||||
Stockholders’
equity (deficit)
|
$
|
49,198
|
$
|
22,076
|
RISK
FACTORS
This
investment has a high degree of risk. Before you invest you should carefully
consider the risks and uncertainties described below and the other information
in this prospectus. If any of the following risks actually occur, our business,
operating results and financial condition could be harmed and the value of our
stock could go down. This means you could lose all or a part of your
investment.
-
5 -
Our
Auditor’s report states that there is substantial doubt that we will be able to
continue as a going concern.
We
have had substantial losses since inception and minimal cash reserves. We may be
unable to continue as a going concern and in the event that we are forced to
reduce operations or in any way curtail our business, an investor will lose all
money invested.
We
have a limited operating history, there is no certainty that we will ever
generate revenue and achieve profitability.
We are a development stage
company with minimal operations and may be deemed a “Shell Company” as defined
by Rule 405. We currently have no significant business operations and have
incurred operating losses since our inception totaling $8,476. We have incurred
significant losses from operations. As shown in our financial statements, as of
the periods ended December 31, 2008 and September 30, 2009, we have incurred
cumulative net losses of $ 598 and $8,476, respectively from operations. We
expect to incur significant increasing operating losses for the foreseeable
future, primarily due to the expansion of our operations. The negative cash flow
from operations is expected to continue and to accelerate in the foreseeable
future. Our ability to achieve profitability depends upon our ability to acquire
and resell refurbished solar collectors and collector mounting hardware. We
currently do not have any recurring revenues and have only very limited products
in our inventory. There can be no assurance that we will ever achieve
significant revenues or profitable operations from the sale of refurbished solar
collectors.
SINCE WE HAVE HAD ONLY $810 IN REVENUES SINCE INCEPTION AND OUR
COMPANY IS NEW AND HAS ONLY RECENTLY COMENCED PLANNED OPERATIONS, WE MAY NOT BE
ABLE TO GENERATE PREDICTABLE AND CONTINIOUS REVENUE IN THE NEAR FUTURE. FURTHER,
THERE IS NO ASSURANCE THAT WE WILL EVER GENERATE SIGNIFICANT REVENUE. WE
HAVE GENERATED ONLY SPORADIC REVENUE SINCE INCEPTION AND WE HAVE
EXPERIANCED LOSSES SINCE INCEPTION. FAILURE TO GENERATE SUFFICIENT REVENUE TO
PAY EXPENSES AS THEY COME DUE WILL MAKE US ANABLE TO CONTINUE AS A GOING CONCERN
AND RESULT IN THE FAILURE OF OUR COMPANY AND THE COMPLETE LOSS OF ANY MONEY
INVESTED TO PURCHASE OUR SHARES.
We estimate that the money we have in
the bank will be sufficient to sustain our business plan as a public company for
a maximum of one year.
We
may be unable to manage our growth, if any, or implement our expansion
strategy.
We may not
be able to purchase or resell refurbished solar collectors on a volume basis and
results of operations could be materially and adversely affected by low sales
volume.
AS A
PUBLIC COMPANY, OUR COST OF DOING BUSINESS WILL INCREASE BECAUSE
OF NECESSARY EXPENSES WHICH INCLUDE, BUT ARE
NOT LIMITED TO, ANNUAL AUDITS, LEGAL COSTS, SEC REPORTING COSTS, COSTS OF A
TRANSFER AGENT AND THE COSTS ASSOCIATED WITH NASD FEES AND COMPLIANCE. FURTHER,
OUR MANAGEMENT WILL NEED TO INVEST SIGNIFICANT TIME AND ENERGY TO STAY CURRENT
WITH THE PUBLIC COMPANY RESPOSIBILITIUES OF OUR BUSINES AND WILL THEREFORE MAY
HAVE DIMINISHED TIME AVAIABLE TO APPLY TO OTHER TASKS NECESSARY TO OUR SURVIVAL.
IT IS THEREFORE POSSIBLE THAT THE BURDEN OF OPERATING AS A PUBLIC COMPANY WILL
CAUSE US TO FAIL TO ACHIEVE PROFITABLILITY. IF WE EXSHAUST OUR FUNDS,
OUR BUSINESS WILL FAIL AND OUR INVESTORS WILL LOOSE ALL MONEY INVESTED IN OUR
STOCK.
We
are a development stage company with minimal operations and may be deemed a
“Shell Company” as defined by Rule 405 It is essential that we grow our
business to sell at minimum, 100 collectors per quarter and to achieve profits
and maintain adequate cash flow to pay the cost of remaining public. If we fail
to pay public company costs, as such costs are incurred, we will become
delinquent in our reporting obligations and our shares may no longer remain
qualified for.
The
issuance of additional shares of our common stock may be necessary for the
implementation of our growth strategy.
The issuance by us
of any additional securities pursuant to any future fundraising activities
undertaken by us would dilute the ownership of existing shareholders and may
reduce the price of our common stock. Furthermore,
debt financing, if available, will require payment of interest and may involve
restrictive covenants that could impose limitations on our operating
flexibility. Our failure to successfully obtain additional future funding may
jeopardize our ability to continue our business and operations. We have no
present plan to issue additional common stock or undertake additional
financing.
The
loss of our current executive officer or our inability to attract and retain the
necessary personnel could have a material adverse effect upon our business,
financial condition or results of operations
Our success
is heavily dependent on the continued active participation of our current
executive officer listed under “Management.” Loss of the services of our officer
could have a material adverse effect upon our business, financial condition or
results of operations. Further, our success and achievement of our growth plans
depend on our ability to recruit, hire, train and retain other highly qualified
technical and managerial personnel. Competition for qualified employees among
companies in the technology industry is intense, and the loss of any of such
persons, or an inability to attract, retain and motivate any additional highly
skilled employees required for the expansion of our activities, could have a
materially adverse effect on us. The inability on our part to attract and retain
the necessary personnel and consultants and advisors could have a material
adverse effect on our business, financial condition or results of
operations.
We
are controlled by our current officer and director.
Our director, executive officer
and principal stockholder beneficially owns approximately 29.6% of the
outstanding shares of Common Stock. Accordingly, our executive officer and
director may have the ability to control the election of our Board of Directors
of the Company and the outcome of issues submitted to our
stockholders.
-
6 -
SINCE WE
HAVE ONLY ONE DIRECTOR WHO ALSO SERVES AS OUR PRESIDENT, CHIEF FINANCIAL OFFICER
AND SECRETARY, DECISIONS WHICH AFFECT THE COMPANY WILL BE MADE BY ONLY ONE
INDIVIDUAL. IT IS LIKELY THAT CONFLICTS OF INTEREST WILL ARRISE IN
THE DAY-TO- DAY OPERTATIONS OF OUR BUSINESS. SUCH CONFLICTS, IF NOT
PROPERLY RESOLVED, COULD HAVE MATERIAL NEGATIVE IMPACT ON OUR
BUSINESS.
In the past the company has
issued shares for cash and services at prices which were solely determined by
Richard Giannotti. At that time, Richard Giannotti made a determination of both
the value of services exchanged for our shares, and, as well, the price per
share used as compensation. Transactions of this nature were not made
at arms length and were made without input from a knowledgeable and
non-interested third party. Future transactions of a like nature could dilute
the percentage ownership of the company represented by shares purchased in this
offering. While the company believes its past transactions were appropriate, and
plans to act in good faith in the future, an investor in our shares will have no
ability to alter such transactions as the may occur in the future and, further,
will not be consulted by the company in advance of any such transactions. An
investor who is unwilling to endure such potential dilution should not purchase
our shares.
We
have insufficient financial resources to take advantage of supply opportunities
as they may arise.
. The
inability to obtain sufficient refurbished solar collectors would adversely
affect our ability to meet future customer demand for products and could impair
our ability to enter this market. We are a development stage company with
minimal operations and may be deemed a “Shell Company” as defined by Rule
405
Our
dependence on our single present supplier of refurbished solar collectors could
prevent us from delivering our products which could result in substantial harm
to our business .
We intend to
initially purchase our refurbished solar collectors from a single third-party
supplier. If we fail to maintain our relationships with this source
or to secure additional supply sources from others, we may be unable to provide
our products or our products may be available only at a higher cost or after a
long delay, which could prevent us from delivering our products to our customers
within required timeframes, and we may experience order cancellations and our
business may fail. In order to obtain required supplies, we may need to make
large inventory purchases on short notice, and prior to having purchase orders
or deposits from our customers. We may not have sufficient financial resources
to make these purchases, which may exacerbate supply shortages.
Our operating results will be subject
to fluctuations and our stock price may decline significantly.
Our
quarterly revenue, if any, and operating results will be difficult to predict
from quarter to quarter. It is possible that our operating results in some
quarters will be below market expectations. Our quarterly operating results will
be affected by a number of factors, including:
•
|
the
average selling price of our solar collectors;
|
||
•
|
the
availability, pricing and timeliness of delivery solar
panels;
|
||
•
|
the
impact of seasonal variations in demand and/or revenue recognition linked
to construction cycles and weather conditions and
the retail price of natural gas;
|
||
•
|
timing,
availability and changes in government incentive
programs;
|
||
•
|
unplanned
additional expenses;
|
||
•
|
acquisition
costs;
|
||
•
|
unpredictable
volume and timing of customer orders, which are not fixed by
contract;
|
||
•
|
foreign
currency fluctuations;
|
||
•
|
our
ability to establish and expand customer relationships;
|
||
•
|
the
availability, pricing and timeliness of delivery of other products, such
as pumps and controls necessary for our solar products to
function;
|
||
•
|
the
timing of new product or technology announcements or introductions by our
competitors and other developments in the competitive
environment;
|
||
•
|
increases
or decreases in natural gas and electric rates due to changes in fossil
fuel prices or other factors; and
|
||
•
|
Shipping
and other factors causing business
delays.
|
If
revenue for a particular quarter is lower than we expect, we likely will be
unable to proportionately reduce our operating expenses for that quarter, which
would harm our operating results for that quarter. If we fail to meet investor
expectations or our own future guidance, even by a small amount, our stock price
could decline, perhaps substantially.
-
7 -
Existing regulations and policies and
changes to these regulations and policies may present technical, regulatory and
economic barriers to the purchase and use of solar collectors, which may
significantly reduce demand for our products.
The
market for solar hot water is influenced by U.S. federal, state and local
government regulations and policies concerning the utility industry, as well as
policies promulgated by electric utilities. These regulations and policies often
relate to natural gas and electricity pricing and technical interconnection of
customer-owned electricity generation. In the U.S. and in a number of other
countries, these regulations and policies are being modified and may continue to
be modified. Investment in the alternative energy sources, including solar hot
water, could be deterred by these regulations and policies, which could result
in a significant reduction in the potential demand for our solar products. For
example, loss of certain major incentive programs and/or the regulatory
mandated exception for solar collectors, our business, prospects, results of
operations and financial condition would be harmed.
We
anticipate that our solar products and their installation will be subject to
oversight and regulation in accordance with national and local ordinances
relating to building codes, safety and environmental protection. It is difficult
to track the requirements of individual states. Any new government regulations
could cause a significant reduction in demand for our refurbished solar
collectors.
The
reduction or elimination of government and economic incentives could cause our
revenue to decline.
Today,
the cost of heat from solar collectors exceeds retail natural gas and electric
rates in many locations. As a result, federal, state and local government bodies
in many countries, most notably Germany, Japan, Spain, Italy, Portugal, South
Korea and the United States, have provided incentives in the form of
feed-in tariffs, rebates, tax credits and other incentives to end users,
distributors, system integrators and manufacturers of solar power products to
promote the use of solar energy in and to reduce dependency on other forms of
energy. These government economic incentives could be reduced or eliminated
altogether. For example, Germany has been a strong supporter of solar power
products and systems and political changes in Germany could result in
significant reductions or eliminations of incentives, including the reduction of
feed-in tariffs more rapidly than required by current law. Some solar program
incentives expire, decline over time, are limited in total funding or require
renewal of authority. Net metering and other operational policies in California,
Japan or other markets could limit the amount of solar power installed there.
Reductions in, or eliminations or expirations of, governmental incentives could
result in decreased demand for and lower revenue from our products. Changes in
the level or structure of a renewable portfolio standard could also result in
decreased demand for and lower revenue from our products.
Changes
in tax laws or fiscal policies may decrease the return on investment for
customers of our business which could decrease demand for our
products and harm our business.
We anticipate that a major
portion of our future revenues will be derived from sales of solar collectors to
individual homeowners. In deciding whether to purchase and install our
refurbished solar collectors prospective customers may evaluate their projected
return on investment. Such projections are based on current and proposed
federal, state and local laws, particularly tax legislation. Changes to these
laws, including amendments to existing tax laws or the introduction of new tax
laws, tax court rulings as well as changes in administrative guidelines,
ordinances and similar rules and regulations could result in different tax
assessments and may adversely affect a homeowner’s projected return on
investment, which could have a material adverse effect on our business and
results of operations.
Problems
with product quality or product performance, including defects, in the
refurbished solar collectors we sell could result in a decrease in customers and
revenue, unexpected expenses and loss of market share.
The
refurbished solar collectors we have purchased to date may contain undetected
errors or defects. If we deliver refurbished panels with errors or
defects our credibility and the market acceptance and sales of our solar
products could be harmed.
-
8 -
The
development of a successful market for the products we intend to distribute may
be adversely affected by a number of factors, some of which are beyond our
control, including:
•
|
our
failure to offer products that compete favorably against other solar power
collectors on the basis of cost, quality and
performance;
|
•
|
our
failure to offer products that compete favorably against conventional
energy sources and alternative distributed-generation technologies, such
as wind, biomass and solar photovoltaic, on the basis of cost, quality and
performance;
|
If the
products we intend to distribute fail to gain market acceptance, we will be
unable to achieve sales and market share.
Recent refinements in technology
may have caused the products we intend to distribute to become uncompetitive or
obsolete, which could prevent us from achieving market share and sales. The
solar industry is rapidly evolving and highly competitive. A variety of
competing solar technologies may be under development or available now that
could result in lower manufacturing costs or higher product performance than
those products selected by us. These development efforts may render obsolete the
products we have selected to offer, and other technologies may prove more
advantageous.
Existing
regulations and changes to such regulations may present technical, regulatory
and economic barriers to the purchase and use of solar power products, which may
significantly reduce demand for our products.
The market for electricity
generation products is heavily influenced by foreign, federal, state and local
government regulations and policies concerning the electric utility industry, as
well as internal policies and regulations promulgated by electric and natural
gas utilities. These regulations and policies often relate to electricity
pricing and technical interconnection. In the United States these regulations
and policies are being modified and may continue to be modified. We anticipate
that our solar thermal products and their installation will be subject to
oversight and regulation in accordance with national and local ordinances
relating to building codes, safety, environmental protection, and related
matters. Any new government regulations or utility policies pertaining to
our solar power products may result in significant additional expenses to us
and as a result, could cause a significant reduction in demand for our
solar products.
If our solar technology is not
suitable for widespread adoption or sufficient demand for solar products does
not develop or takes longer to develop than we anticipate, we would be unable to
achieve sales.
We are a development stage company with minimal operations and may be deemed a
“Shell Company” as defined by Rule 405
The market
for solar products is emerging and rapidly evolving, and its future success is
uncertain. If solar technology proves unsuitable for widespread deployment or if
demand for our solar products fails to develop sufficiently, we would be unable
to achieve sales and market share. In addition, demand for solar products in the
markets and geographic regions we target may not develop or may develop more
slowly than we anticipate. Many factors will influence the widespread adoption
of solar technology and demand for solar power products, including:
•
|
cost-effectiveness
of solar technologies as compared with conventional and competitive
alternative energy technologies;
|
•
|
performance
and reliability of solar products as compared with conventional and
non-solar alternative energy products;
|
•
|
success
of alternative distributed generation technologies such as hydrogen fuel
cells, wind turbines, bio-diesel generators and large-scale solar thermal
technologies;
|
•
|
fluctuations
in economic and market conditions that impact the viability of
conventional and competitive alternative energy
sources;
|
•
|
increases
or decreases in the prices of oil, coal and natural
gas;
|
•
|
capital
expenditures by customers, which tend to decrease when the domestic or
foreign economies slow;
|
•
|
continued
deregulation of the electric power industry and broader energy industry;
and
|
•
|
availability
and or effectiveness of government subsidies and
incentives.
|
-
9 -
The
reduction or elimination of government economic incentives could prevent us from
achieving sales and market share.
The
reduction or elimination of government economic incentives may adversely affect
the growth of this market or result in increased price competition, which could
prevent us from achieving sales and market share.
Today, the cost of solar exceeds the
cost of energy furnished by the electric utility grid in many locations. As a
result, federal, state and local government bodies in many countries, most
notably Germany, Japan and the United States, have provided incentives in the
form of rebates, tax credits and other incentives to end users, distributors,
system integrators and manufacturers of solar products to promote the use of
solar energy to reduce dependency on fossil fuels. These government economic
incentives could be reduced or eliminated altogether, which would significantly
harm our business.
Most of our competitors are
substantially larger than we are, have longer operating histories and have
substantially greater financial, technical, manufacturing and other resources
than we do. We are a development stage company with minimal operations and may
be deemed a “Shell Company” as defined by Rule 405. Our competitors' greater
sizes in some cases provides them with competitive advantages with respect to
manufacturing costs due to their ability to allocate fixed costs across a
greater volume of production and purchase raw materials at lower prices. They
also have far greater name recognition, an established distribution network and
an installed base of customers. In addition, many of our competitors have
well-established relationships with current and potential resellers, which have
extensive knowledge of our target markets. As a result, our competitors will be
able to devote greater resources to the research, development, promotion and
sale of their products and may be able to respond more quickly to evolving
industry standards and changing customer requirements than we
can.
A
substantial number of our issued shares are, or are being made available for
sale on the open market. The resale of these securities might adversely affect
our stock price.
The sale of
a substantial number of shares of our common stock being registered under this
registration statement, or the market's anticipation of such sales, could make
it more difficult for us to sell equity or equity-related securities in the
future at a time and at a price that we might otherwise wish to effect
sales.
. Availability
of these shares for sale in the public market could also impair our ability to
raise capital by selling equity securities.
SINCE
THERE IS PRESENTLY NO TRADING MARKET FOR OUR SHARES, AN INVESTMENT IN OUR SHARES
IS TOTALLY ILLIQUID. AN INVESTOR PURCHASING OUR SHARES WILL NOT BE
ABLE TO RESELL THEIR SHARES UNLESS A MARKET FOR OUR SHARES DEVELOPES
AT SOME POINT IN THE FUTURE. THERE CAN BE NO ASSURANCE THAT SUCH A MARKET WILL
EVER DEVELOP. THEREFORE, INVESTORS WHO PURCHASE OUR SHARES COULD LOOSE THEIR
ENTIRE INVESTMENT.
Even if a market for our
shares does develop at a future date, the volume of trading will be small and on
many days the volume will be zero. Our share price will likely be volatile and
will likely fall rapidly should an investor attempt to liquidate even as small
number of shares. These conditions are likely to persist and could prevent
resale of our shares.
We
are subject to new corporate governance and internal control reporting
requirements, and our costs related to compliance with, or our failure to comply
with existing and future requirements, could adversely affect our
business.
We face new
corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well
as new rules and regulations subsequently adopted by the SEC and the Public
Company Accounting Oversight Board. These laws, rules and regulations continue
to evolve and may become increasingly stringent in the future. In particular,
under new SEC rules we will be required to include management's report on
internal controls as part of our 2009 annual report pursuant to Section 404
of the Sarbanes-Oxley Act. Furthermore, under the proposed rules, an attestation
report on our internal controls from our independent registered public
accounting firm will be required as part of our annual report for the year
ending in 2009. We are in the process of evaluating our control structure to
help ensure that we will be able to comply with Section 404 of the
Sarbanes-Oxley Act. The financial cost of compliance with these laws, rules and
regulations is expected to be substantial. We cannot assure you that we will be
able to fully comply with these laws, rules and regulations that address
corporate governance, internal control reporting and similar matters. Failure to
comply with these laws, rules and regulations could materially adversely affect
our reputation, financial condition and the value of our
securities.
-
10 -
We
will continue to be dependent on a limited number of third-party suppliers,
which could prevent us from delivering our products to our customers within
required timeframes, which could result in installation delays, cancellations
and loss of market share.
In addition to our reliance on
our one supplier for our solar panels, our customers will rely on
third-party suppliers for key components for our solar systems, such
controls and pumps.
If we fail to develop or maintain
our relationships with our sole supplier, we may be unable to purchase our
products or our products may be available only at a higher cost or after a long
delay, which could prevent us from delivering our products to our customers
within required timeframes and we may experience order cancellation and loss of
market share. To the extent the processes that our supplier uses to manufacture
components are proprietary, we may be unable to obtain comparable components
from alternative suppliers. The failure of a supplier to supply components in a
timely manner, or to supply components that meet our quality, quantity and cost
requirements, could impair our ability to manufacture our products. If we
cannot obtain substitute materials on a timely basis or on acceptable terms, we
could be prevented from delivering our products to our customers within required
timeframes, which could result in installation delays, cancellations and loss of
market share, any of which could have a material adverse effect on our business
and results of operations.
Because the markets in which we
compete are highly competitive and many of our competitors have greater
resources, we may not be able to compete successfully and we may lose or be
unable to gain market share.
We expect to face increased
competition in the future. Further, many of our competitors are developing and
are currently producing products based on new solar technologies that
may ultimately have costs similar to, or lower than, our projected costs. We are
a development stage company with minimal operations and may be deemed a “Shell
Company” as defined by Rule 405.
Our solar products compete
against other power generation sources including conventional fossil fuels
supplied by utilities, other alternative energy sources such as wind, biomass,
CSP and emerging distributed generation technologies such as micro-turbines,
sterling engines and fuel cells. In the large-scale on-grid solar power systems
market, we will face direct competition from a number of companies that
manufacture, distribute, or install solar. Potential competitors in the solar
power market include universities and research institutions. We also expect that
future competition will include new entrants to the solar power market offering
new technological solutions. As we enter new markets and pursue additional
applications for our products and services, we expect to face increased
competition, which may result in price reductions, reduced margins or
loss of market share.
Competition
is intense, and many of our competitors have significantly greater access to
financial, technical, manufacturing, marketing, management and other resources
than we do. Many also have greater name recognition, a more established
distribution network and a larger installed base of customers. In addition, many
of our competitors have well-established relationships with our potential
suppliers, resellers and their customers and have extensive knowledge of our
target markets. As a result, these competitors may be able to devote greater
resources to the research, development, promotion and sale of their products and
respond more quickly to evolving industry standards and changing customer
requirements than we will be able to. Consolidation or strategic alliances among
such competitors may strengthen these advantages and may provide them greater
access to customers or new technologies. To the extent that government funding
for research and development grants, customer tax rebates and other programs
that promote the use of solar and other renewable forms of energy are limited,
we will compete for such funds, both directly and indirectly, with other
renewable energy providers and their customers.
If we cannot
compete successfully in the solar industry, our operating results and financial
condition will be adversely affected. Furthermore, we expect competition in the
targeted markets to increase, which could result in lower prices or reduced
demand for our product and service offerings and may have a material adverse
effect on our business and results of operations.
-
11 -
The
demand for products is affected by general economic
conditions.
The United
States and international economies have recently experienced a period of slowing
economic growth. A sustained economic recovery is uncertain. In particular,
terrorist acts and similar events, continued turmoil in the Middle East or war
in general could contribute to a slowdown of the market demand for products that
require significant initial capital expenditures, including demand for
solar collectors and solar systems and new residential and
commercial buildings. In addition, increases in interest rates may increase
financing costs to customers, which in turn may decrease demand for our
solar products. If the economic recovery slows down as a result of the
recent economic, political and social turmoil, or if there are further terrorist
attacks in the United States or elsewhere, we may experience decreases in the
demand for our solar products, which may harm our operating
results.
Compliance
with environmental regulations can be expensive, and noncompliance with these
regulations may result in adverse publicity and potentially significant monetary
damages and fines for us.
We are
required to comply with all foreign, U.S. federal, state and local laws and
regulations regarding pollution control and protection of the environment. In
addition, under some statutes and regulations, a government agency, or other
parties, may seek recovery and response costs from operators of property where
releases of hazardous substances have occurred or are ongoing, even if the
operator was not responsible for such release or otherwise at fault. In the
course of future business we may use, generate and discharge toxic, volatile and
otherwise hazardous chemicals and wastes in our operations or related research
and development and manufacturing activities. Any failure by us to control the
use of, or to restrict adequately the discharge of, hazardous substances could
subject us to potentially significant monetary damages and fines or suspensions
in our business operations. In addition, if more stringent laws and regulations
are adopted in the future, the costs of compliance with these new laws and
regulations could be substantial. If we fail to comply with present or future
environmental laws and regulations we may be required to pay substantial fines,
suspend production or cease operations.
There
are restrictions on the transferability of the securities.
Until
registered for resale, investors must bear the economic risk of an investment in
the Shares for an indefinite period of time. Rule 144 promulgated under the
Securities Act (“Rule 144”), which provides for an exemption from the
registration requirements under the Securities Act under certain conditions,
requires, among other conditions, a six month holding period prior to
the resale (in limited amounts) of securities acquired in a non-public offering
without having to satisfy the registration requirements under the Securities
Act. However, our securities currently are not eligible for the Rule 144
exemption. There can be no assurance that we will fulfill any reporting
requirements in the future under the Exchange Act or disseminate to the public
any current financial or other information concerning us, as is required by Rule
144 as part of the conditions of our availability.
If
the Company uses its stock in acquisitions of other entities there may be
substantial dilution at the time of a transaction.
The $0.10 per share offering
price of the common stock being sold under this prospectus has been arbitrarily
set. The price does not bear any relationship to our assets, book value,
earnings or net worth and it is not an indication of actual
value. Registrant is a development stage company with minimal operations
and may be deemed a “Shell Company” as defined by Rule 405. Accordingly, if you
purchase shares in this offering, you may experience substantial dilution. You
may also suffer additional dilution in the future from the sale of additional
shares of common stock or other securities or if the Company’s shares are issued
to purchase other entities assets.
-
12 -
There
is presently no market for our common stock, any failure to develop or maintain
a trading market could negatively affect the value of our shares and make it
difficult or impossible for you to sell your shares.
Prior to
this offering, there has been no public market for our common stock and a public
market for our common stock may not develop upon completion of this
offering. While we will attempt to have our common stock quoted on
the Over-The-Counter Bulletin Board, since the OTC Bulleting Board is a dealer
system we will have to seek market-makers to provide quotations for the common
stock and it is possible that no market-maker will want to provide such
quotations. Failure to develop or maintain an active trading market could
negatively affect the value of our shares and make it difficult for you to sell
your shares or recover any part of your investment in us. Even if a
market for our common stock does develop, the market price of our common stock
may be highly volatile. In addition to the uncertainties relating to
our future operating performance and the profitability of our operations,
factors such as variations in our interim financial results, or various, as yet
unpredictable factors, many of which are beyond our control, may have a negative
effect on the market price of our common stock.
Even if our
common stock is quoted on the OTC Bulletin Board under a symbol, the OTC
Bulletin Board provides a limited trading market. Accordingly, there can be no
assurance as to the liquidity of any markets that may develop for our common
stock, the ability of holders of our common stock to sell our common stock, or
the prices at which holders may be able to sell our common stock.
Our
common stock will be subject to the “Penny Stock” rules of the SEC.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:
·
|
that
a broker or dealer approve a person's account for transactions in penny
stocks; and the broker or dealer receive from the investor a
written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be
purchased.
|
In order to
approve a person's account for transactions in penny stocks, the broker or
dealer must:
·
|
obtain
financial information and investment experience objectives of the person;
and make a reasonable determination that the transactions in penny
stocks are suitable for that person and the person has sufficient
knowledge and experience in financial matters to be capable of evaluating
the risks of transactions in penny
stocks.
|
·
|
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
·
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our common stock and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
-
13 -
Should
our stock become listed on the OTC Bulletin Board, if we fail to remain current
on our reporting requirements, we could be removed from the OTC Bulletin Board
which would limit the ability of broker-dealers to sell our securities and the
ability of stockholders to sell their securities in the secondary
market.
Companies trading on the
Over-The-Counter Bulletin Board, such as us are seeking to become
reporting issuers under Section 12 of the Securities Exchange Act of 1934,
as amended, and must be current in their reports under Section 13, in order to
maintain price quotation privileges on the OTC Bulletin Board. If we fail to
remain current on our reporting requirements, we could be removed from the OTC
Bulletin Board. As a result, the market liquidity for our securities could be
severely adversely affected by limiting the ability of broker-dealers to sell
our securities and the ability of stockholders to sell their securities in the
secondary market. In addition, we may be unable to get
re-listed on the OTC Bulletin Board, which may have an adverse material effect
on our Company. Registrant is a development stage company with minimal
operations and may be deemed a “Shell Company” as defined by Rule
405.
USE OF PROCEEDS
This
prospectus relates to shares of our common stock that may be offered and sold
from time to time by the selling stockholders. We will not receive any proceeds
from the sale of shares of common stock in this
offering.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market
for Securities
There is currently no public trading market for our common stock.
Registrant is a development stage company with minimal operations and may be
deemed a “Shell Company” as defined by Rule 405.
As
of December 31, 2008, September 30, 2009 and the date of this prospectus,
we had 13,375,000, 13,515,000 and 13,515,000 shares respectively of
common stock issued and outstanding and approximately 41,42 and 42 stockholders
respectively of record of our common stock.
Dividend Policy
The payment
by us of dividends, if any, in the future rests within the discretion of our
Board of Directors and will depend, among other things, upon our earnings,
capital requirements and financial condition, as well as other relevant
factors. We have not paid any dividends since our inception and we do
not intend to pay any cash dividends in the foreseeable future, but intend to
retain all earnings, if any, for use in our business.
Equity
Compensation Plan Information
As
of December 31, 2008 and September 30, 2009 and the date of this prospectus we
have not adopted an equity compensation plan under which our common stock is
authorized for issuance.
-
14 -
Forward-Looking
Statements
The
information in this prospectus contains forward-looking
statements. All statements other than statements of historical fact
made in this prospectus are forward looking. In particular, the
statements herein regarding industry prospects and future results of operations
or financial position are forward-looking statements. These
forward-looking statements can be identified by the use of words such as
“believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,”
“projects,” “expects,” “may,” “will,” or “should” or other variations or similar
words. No assurances can be given that the future results anticipated
by the forward-looking statements will be achieved. Forward-looking
statements reflect management’s current expectations and are inherently
uncertain. Our actual results may differ significantly from
management’s expectations.
The
following discussion and analysis should be read in conjunction with our
financial statements, included herewith. This discussion should not
be construed to imply that the results discussed herein will necessarily
continue into the future, or that any conclusion reached herein will necessarily
be indicative of actual operating results in the future. Such
discussion represents only the best present assessment of our
management.
Limited
Operating History
There is limited
historical financial information about our Company upon which to base an
evaluation of our future performance. Registrant is a development stage company
with minimal operations and may be deemed a “Shell Company” as defined by Rule
405. Our Company has generated only limited revenues from operations.
We cannot guarantee that we will be successful in our business. We are subject
to risks inherent in a small company, including limited capital
resources, delays in product delivery, and possible cost overruns due to
price and cost increases. There is no assurance that future financing will be
available to our company on acceptable terms. Additional equity financing could
result in dilution to existing shareholders.
Company
Description and Overview
Mountain Renewables, Inc. was formed on March 27, 2008. The
founder, director and officer of our company is Richard Giannotti.. Registrant
is a development stage company with minimal operations and may be deemed a
“Shell Company” as defined by Rule 405.
We
are currently focused on procuring and reselling refurbished solar collectors
and mounting hardware. We are seeking solar collectors that have the
highest conversion efficiency, a measurement of the amount of sunlight converted
by the solar collector into heat
We commenced operations on October 3,
2008, when we purchased our first inventory of refurbished collectors. This
inventory was delivered to our warehouse which we rented on November 6, 2008.
Our advertising was commenced in November 2008. Our first sale was during March
of 2009. We locate and purchase, refurbish and
resell collectors. Our sales operations have been
continuous since October of 2008..Recently we expanded our product offering to
include a package of fixed collector mounting hardware and we are now stocking
the mounting package at our warehouse. Our most recent sale of collectors
included the mounting hardware package. This will greatly simplify the work to
attach our collectors to a roof or mount them on the ground as
appropriate.
Since
inception of operations, we have pursued efforts to sell our inventory of
refurbished collectors. We maintain a log of all contact with potential buyers.
From this log of sales interviews we learned that potential buyers would prefer
to purchase collectors that are easily installed. There appeared to be a demand
for mounting components that were durable, cost efficient, flexible
in application, sized for our collectors and available at our warehouse. Base
upon those criteria our collector supplier fabricated and delivered our initial
mounting hardware. To date our sales efforts have met with only very limited
success but we believe that having mounting hardware in stock will lead to
better results in the future.
-
15 -
We are
working to locate and purchase or otherwise obtain additional collectors
suitable for refurbishment and resale. Based upon the working relationship we
are developing with our present supplier, we believe we can expand our business
without any written supplier contract. To date have not encountered any business
situation where it would be in our best interest, due to slack sales results to
negotiate or execute formal contracts in connection with our business. We
believe that to obtain a written agreement we would have to commit to purchase
well in excess of the quantity we are presently able to sell. However, we
utilize a written purchase order in connection with sales to document our terms
of sale and physical delivery. We anticipate greater sales volume as the economy
improves, as we gain experience in selling and as our initial customers complete
the installation of the collectors they have purchased. We have initiated a
sales commission incentive to management. Our business plan is to continue and
refine our present operations to purchase inventory and resell refurbished solar
collectors, and accordingly, we have no present plan, arrangement, commitment or
understanding to engage in a merger or acquire another
company.
Over the
last 18 months, general economic conditions have deteriorated, unemployment is
up and people are spending less on their homes. Furthermore, the slack economy
has caused the price of natural gas to drop. We believe that these two factors
have combined to greatly reduce the demand for solar equipment. We believe that
by maintaining our inventory and operations we will be ready to expand and show
profits once the economy improves.
Our Expected Cash flow. We estimate that our quarterly cash flow,
without allowances for extraordinary events will be positive once we
sell an average of 100 collectors per quarter. . We have
adopted a sales incentive to reward the sales performance of management and we
project we will generate revenue sufficient to sustain our
business.
We plan to use the funds we now have, and without a requirement for additional
funds.
Quarterly
Gross Profit from collector and mounting sales
|
|||||
$40 gross profit per
collector X 100 collectors
|
$ | 4,000 | |||
$20 gross profit per mounting
package X 30 packages
|
600 | ||||
Quarterly
Operating Expense
|
195 | ||||
Sales
Commission, 7%
|
1,000 | ||||
Quarterly
Public Company Expense (1)
|
3,000 | ||||
|
|||||
Less
Total Quarterly Expenses
|
(4,195 | ) | |||
Estimated
Quarterly Cash Flow
|
$ | 405 | |||
(1)Estimated
Public Company Expense
|
|||||
One-time
legal costs, Form S-1
|
$ | 1,500 | |||
Annual
Audit, Form 10-K, Form 10Qs
|
7,400 | ||||
Annual
Transfer agent
|
3,600 | ||||
Annual
legal
|
1,000 | ||||
Total
Annual Public Company Expense
|
$12,000 or an average of $3,000 per quarter |
The supplier of our
present inventory of refurbished collectors, James Wiegand, has stated that due
to an incident of theft at his storage site, he will not be able to provide us
with 100 collectors per quarter on a continuous basis. Once we have sold those
collectors available from Mr. Wiegand, we will advertise on the internet to
purchase used and refurbished collectors. We believe additional inventory will
become available us on terms we judge favorable. However, because our business
is subject to market supply and demand for building supply prices and commodity
prices, for example, volatile prices paid for scrap copper and aluminum, and are
unable to predict our future sales or the margins we may generate on
sales.
Consequently, we may sell significantly less than 100 refurbished
collectors each quarter because we are unable to locate or otherwise provide
adequate refurbished inventory or because we are unable to sell the collectors
which we add to our inventory. Therefore, we are unable to predict the cash flow
of our business.
-
16 -
Our
Potential for Growth. Our business model indicates we can achieve a positive
cash flow as a public company if and when we can successfully sell, each
quarter, 100 collectors. We believe our business model is scalable up to 150
collectors per month, but that past that volume we will need to expand to a
larger warehouse space. We believe that such a larger space will not be
difficult to locate, but we have no present plan to increase the size of our
collector warehouse during the next year. We believe that a large percentage of
the solar thermal systems that were installed nationally in response to the
solar tax credit offered through 1985, are now inoperative and
eligible for removal or rehabilitation. While this view his is based solely on
our experience in the Denver area, we believe that a similar market conditions
is likely outside our region. Over the longer term, once our business model
is profitable locally we will evaluate its suitability to a larger
region and expand outside Colorado.
For
the year ended December 31, 2008, we had generated no revenues and
we incurred losses of $598. For the period from
inception thru September 30, 2009, we generated $810 in revenues
and we incurred losses of $8,476. Our operating
expenses included significant legal, consulting and accounting expenses. We are
considered a development stage company. We expect to generate cash in
our operating activities as we expand sales.
Results
of Operations
See the
Financial Statements for comparison data to prior periods.
We
have financed our operations since inception primarily through cash contributed
and raised by our officer and director. As of September 30, 2009, we
had $13,813 in cash, and working capital of
$13,485.
The following table sets forth
our statements of operations data for the nine months ended September 30, 2009
and the period from inception, March 27, 2008 through September 30, 2009. Registrant is a development
stage company with minimal operations and may be deemed a “Shell Company” as
defined by Rule 405.
Summary
Income Statement
Nine
Months
Ended
September
30, 2009
|
Period
form
Inception
March
27, 2008 through
September
30,, 2009
|
|||||||
Revenues,
net
|
$
|
810
|
$
|
810
|
||||
Gross
profit (loss)
|
260
|
260
|
||||||
Selling,
general and administrative expenses
|
||||||||
Research
& development expenses
|
-
|
-
|
||||||
Total
operating expenses
|
8,688
|
9,286
|
||||||
Loss
from operations
|
||||||||
Other
Income (expense)
|
-
|
-
|
||||||
Loss
from operations before income taxes
|
(7,878)
|
(8,476
|
)
|
|||||
Income
tax provision
|
-
|
-
|
||||||
Net
loss
|
$
|
(7,878
|
)
|
$
|
(8,476
|
)
|
Revenues
For the period from inception
through September 30, 2009 we had $810 in revenues.
Total Operation
Expenses
Total
Operation Expenses for the period from inception through September 30, 2009
were $9,286.
-
17 -
Our net loss for the period from inception through September 30,
2009 was $8,476 .
The net loss
reflects our expenses relating to this registration statement. These expenses
have been incurred ahead of our ability to recognize material revenues from our
new strategy.
Liquidity
and Capital Resources
As of September 30, 2009, we had cash and cash equivalents
of $13,813 and working capital of $13,485. Since inception we funded our
operations from cash contributed by our officer, private sales of equity
securities and cash received from our transaction with Ambermax. The
purpose of our transaction with Ambermax was to increase our cash reserves and
initiate operations.
Registrant is a development stage company with minimal operations and may be
deemed a “Shell Company” as defined by Rule 405. We have incurred
substantial losses since inception and the report our auditor’s report notes
that there is substantial doubt of our ability to continue as a going concern.
The supplier of our present inventory of refurbished collectors has
stated that he will not be able to provide us with our projected requirement of
100 collectors per quarter on a continuous basis. Once we have sold our present
inventory of refurbished collectors, and in the event that our present supplier
proves unable to continue as our sole supplier, we will advertise on the
internet and purchase used collectors as they become available to
us. Consequently, we may sell significantly less than 100
collectors each quarter because we are unable to locate adequate
refurbished inventory and/or for other causes. We may be unable to sell any of
the collectors in inventory. Therefore, we are unable to predict the cash flow
of our business. Our cash flow, if any, will be sporadic during the next year.
In the event that our sales are disappointing, our liquidity may diminish
substantially.
There were
no significant capital expenditures
Critical
Accounting Policies
The
preparation of financial statements in conformity with United States generally
accepted accounting principles requires management of our company to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods.
Our
management routinely makes judgments and estimates about the effects of matters
that are inherently uncertain. As the number of variables and assumptions
affecting the probable future resolution of the uncertainties increase, these
judgments become even more subjective and complex. Our significant accounting
policies are discussed in Note 1 to our financial statements.
Overview
Overview
and Day to Day Business Operations
We are a development stage company with minimal operations and may be deemed a
“Shell Company” as defined by Rule 405 Our company was
incorporated in the State of Nevada on March 27,
2008.
We commenced operations on
October 3, 2008, when we purchased our first inventory of refurbished
collectors. This inventory was delivered to our warehouse which we rented on
November 6, 2008. Our advertising was commenced in November 2008. Our first sale
was during March of 2009. We purchased our first mounting hardware during
September 2009 and our second sale consisting of collectors and mounting
hardware occurred during September 2009.
We utilize an office in
the home of our president. The office is 150 square feet. The value of the
office space is $100 per month. Use of the space is contributed by our
President. During the next year, We foresee no need to increase the size of our
office space or relocate.
-
18 -
We rent
approximately 80 square feet of warehouse space at Public Storage. Located on
East Evans Avenue in Denver , Colorado, on a month to month
basis. The rental cost of the space is $ 65 per month. We have no
lease. We plan to utilize this space for the next year or until such time as we
require a larger space. We anticipate that we can easily locate and arrange for
the use of a larger space in the vicinity of our present space at a similar cost
per square foot.
Our
business is to market and sell solar products. Specifically, we engage in the
following operations
●
|
Procure refurbished solar collectors and mounting ;
and
|
●
|
Sell
solar collectors using free local advertising on the
internet.
|
Day to
Day activities of Mr. Giannotti directly associated with the above operations
include:
1.
|
Post
advertising on the internet
|
2.
|
Answer
calls from prospective
customers
|
3.
|
Meet
with potential customers to help plan solar
installations
|
4.
|
Show
potential customers our products at our warehouse and close
sales
|
5.
|
Prepare
sales projections and inventory
purchases
|
6.
|
Purchase
inventory
|
7.
|
Pay
bills and keep books
|
8.
|
Do
banking
|
9.
|
Meet
with bookkeeper and
auditor
|
Past,
Present and Future Executive Activities of Mr. Giannotti
include:
1.
|
Attend
meetings of solar
association
|
2.
|
Locate
grants
|
3.
|
Research
solar technology and visit solar installations and production facilities.
Example: Tracking mounts.
|
4.
|
Locate
equity investors. Examples: Bristlecone and
Ambermax
|
5.
|
Meet
with Securities Attorney
|
6.
|
Draft
and File Registration
Statement
|
Registrant is a development stage company with
minimal operations and may be deemed a “Shell Company” as defined by Rule 405.
The supplier of our present inventory of refurbished collectors,
James Wiegand, has stated that due to an incident of theft at his storage site,
he will not be able to provide us with 100 collectors per quarter on a
continuous basis. Once we have sold those collectors available from Mr. Wiegand,
should a future need arise, we will advertise on the internet to purchase used
and refurbished collectors from other sources. Mr. Wiegand is the supplier of
our mounting hardware. Some elements of the hardware is custom fabricated for
sale and use with our solar collectors. We have recently started to offer this
mounting hardware for use with our solar collectors. We believe that our verbal
agreement with Mr. Wiegand provides us with all mounting hardware we may require
with no minimum purchase commitment. We believe additional collector
inventory will become available to us on terms we judge
favorable.
We believe that solar collectors will operate at higher efficiency when
installed on mounts that track the sun. Accordingly, we are researching solar
tracking technology, both available and under development, which can be used
with our collectors or adapted for use with any solar collector. We have been
assisted in this research by Mr. Wiegand, who is developing a proprietary solar
tracking mount system. We are negotiating with Mr. Wiegand to obtain the
non-exclusive right to sell such a tracking system in the event that
Mr. Wiegand should elect to commercialize his technology at some future date.
There is no assurance such efforts will lead to an agreement. We believe that
all experimental tracking mounts developed and tested by Mr. Wiegand as of the
date of this prospectus have failed to perform to expectations
and not yet ready for commercialization. We have not undertaken any
market analysis to investigate any aspect of the future market for solar
tracking mounts.
Our business is subject to supply and demand for building supplies and commodity
prices.
-
19 -
The
Energy Industry
Fossil fuels
are non-renewable resources, meaning that at some point the world will exhaust
all known oil and natural gas reserves. The electrical utility industry and
traditional oil and gas companies face many challenges in meeting the growing
worldwide demand for energy, including the following:
·
|
Fossil Fuel Supply
Constraints: A large portion of the world's electricity
is generated from fossil fuels such as coal, oil and natural gas. Limited
fossil fuel supply and escalating demand for electricity should continue
to drive up wholesale electricity prices, creating a need to develop new
technologies for power generation. Due to a slowing of the United States
economy, Colorado is currently experiencing a record surplus of natural
gas with a consequent drop in wholesale prices. Should prices fail to
recover we may experience depressed sales of solar
components.
|
·
|
Infrastructure
Constraints: In many parts of the world, the existing
electricity generation and transmission infrastructure is insufficient to
meet projected demand. Developing and building a centralized power supply
and delivery infrastructure is capital intensive. This has left the
electricity supply insufficient to meet demand in some areas, resulting in
both scheduled and unscheduled
blackouts.
|
·
|
Desire for Energy
Security: Given the political and economic instability
in the major oil and gas producing regions of the world, governments are
trying to reduce their dependence on foreign sources of fossil
fuels.
|
In addition
to the fundamental challenges described above, the energy industry has
increasingly become the target of environmental concerns. Government regulators
have strengthened air and water emissions control requirements over the past
decade. New U.S. power plants are required to install emission control
technologies, which can be costly. This expense causes electricity from new
fossil fuel-fired plants to cost more than electricity from existing power
plants, which increases retail electric rates over time. To date, concerns
regarding negative environmental impacts have slowed oil and gas exploration in
such resource asset areas as the Alaskan Wildlife Preserve, the California
coastal waters, and many other locations around the world. At the
same time, climate change risks have created international political momentum to
implement green house gas reduction strategies.
Challenges
Facing Solar Power
The
solar industry must overcome the following challenges to achieve
widespread commercialization of its products:
·
|
Decrease
Per Kilowatt-hour Cost to Customer. In most
cases, the current cost of heat from solar is greater than the cost
of heat from retail electricity from the utility network. While government
programs and consumer preference have accelerated the use of solar, cost
remains one of the largest impediments to growth. To provide an
economically attractive alternative to heat from conventional electricity,
the solar industry must continually reduce manufacturing and installed
costs.
|
·
|
Achieve
Higher Conversion Efficiencies. Increasing
the efficiency of solar collectors reduces the material and
assembly costs required to build a solar panel with a given heat
collection capacity. Increased efficiency also reduces the amount of
rooftop space required for a solar system, thus lowering the cost of
installation per consumer.
|
·
|
Improve
Product Appearance. We believe that
aesthetics are a barrier to wider adoption of solar, particularly among
residential consumers. Historically, residential and commercial customers
have resisted solar products, in part, because most solar panels are
perceived as unattractive.
|
Solar
Thermal Design and Installation
We do not
provide design, installation, maintenance or other
support to customers. We expect our current residential
customers to be generally highly educated, high-income professionals who are
concerned about the environment and also have the disposable income and skill to
design and install a solar system. We may however direct our
customers to a third party contacts for their system design and
engineering.
Our
Strategy
Registrant is a development stage company with minimal operations and may be
deemed a “Shell Company” as defined by Rule 405. We will concentrate on selling
solar collectors over the internet. We believe the solar power
industry is at an early stage of its growth and is highly fragmented with many
smaller companies. Our principal objective in our business is to be
the leader in the low cost solar collector sales.
-
20 -
Accordingly,
our growth strategy primarily includes:
·
|
Providing solar
collectors for rooftop installations in residential
applications.
|
·
|
Reducing
installation costs by selling collectors at low
cost.
|
·
|
Promoting
and enhancing a reputation for lowest cost
collectors.
|
·
|
Selling
our solar collectors in a limited geographic market until
we can profitably expand.
|
The market
for solar thermal collectors is competitive and continually evolving. We expect
to face increased competition, which may result in our inability to sell our
refurbished solar collectors. Many of our competitors have established a
stronger market position than ours and have larger resources and recognition
than we have. In addition, the solar market in general competes with other
sources of renewable energy and conventional power generation.
We
believe that the key competitive factors in the market for
solar panels include:
•
|
Efficiency
and performance;
|
||
•
|
Price;
|
||
•
|
Aesthetic
appearance of solar panels.
|
We may also
face competition from groups we have not yet identified who may develop products
or technologies which are competitive with our products.
Environmental
Regulations
We are
subject to a variety of foreign, federal, state and local governmental laws and
regulations related to the purchase, storage, use and disposal of hazardous
materials. If we fail to comply with present or future environmental laws and
regulations, we could be subject to fines, suspension of production or a
cessation of operations. In addition, under some foreign, federal, state and
local statutes and regulations, a governmental agency may seek recovery and
response costs from operators of property where releases of hazardous substances
have occurred or are ongoing, even if the operator was not responsible for the
release or otherwise was not at fault.
We believe
that we will apply for and receive all environmental permits necessary to
conduct our business We are not aware of any pending or threatened
environmental investigation, proceeding or action by foreign, federal, state or
local agencies, or third parties involving our current facilities. Any failure
by us to control the use of or to restrict adequately the discharge of,
hazardous substances could subject us to substantial financial liabilities,
operational interruptions and adverse publicity, any of which could materially
and adversely affect our business, results of operations and financial
condition.
EMPLOYEES
As of
September 30, 2009 and the date of this prospectus,, our sole officer and
director is responsible for all procurement, sales, general and administrative
functions. We have no other employees. Going forward, we will pay our employee a
commission on sales. Registrant is a development stage company with minimal
operations and may be deemed a “Shell Company” as defined by Rule
405.
LEGAL
PROCEEDINGS
We are not
presently a party to any pending material litigation nor, to the knowledge of
our management, is any litigation threatened against us.
-
21 -
DIRECTORS
AND EXECUTIVE OFFICERS
Our
executive officers and directors and their respective ages and positions as
of September 30, 2009 and the date of this prospectus are as
follows:
Name
|
Age
|
|
Position
|
|
Richard
Giannotti (1)
|
62
|
President,
Chief Financial Officer and Director
|
||
_______________ |
(1)
|
Our
President, founder and director
|
|
Richard F. Giannotti, President, is a business
graduate from American University in Washington, DC. He served as an
Assistant National Bank Examiner with the U.S. Treasury Department before moving
to Colorado. Mr. Giannotti has had extensive experience in both the
securities and insurance industries over the last thirty years. His
sales and marketing background had him employed with companies ranging in size
from start-ups to a billion dollar international company. For the
past several years, he has been involved with a start-up bio medical company and
is presently engaged with MetLife Home Loans in Denver,
Colorado.
Board
of Directors
Our
Directors are elected by the vote of a majority in interest of the holders of
our voting stock and hold office until the expiration of the term for which he
or she was elected and until a successor has been elected and
qualified.
A majority
of the authorized number of directors constitutes a quorum of the Board for the
transaction of business. The directors must be present at the meeting to
constitute a quorum. However, any action required or permitted to be
taken by the Board may be taken without a meeting if all members of the Board
individually or collectively consent in writing to the action.
Directors
may receive compensation for their services and reimbursement for their expenses
as shall be determined from time to time by resolution of the Board. Presently
our sole directors receives no compensation for his service on our
Board of Directors.
Director &
Officer Compensation
During
March 2008 Mountain Renewables, Inc. sold 4,000,000 initial founders
shares of common stock to founding shareholder, Richard
Giannotti, for $5,000 cash. At the time of the sale Mr.
Giannotti constituted the entire board of
directors.
During
March 2008 Mountain Renewables, Inc. sold 6,000,000 shares
of our common stock to Bristlecone Associates, LLC for $5,000
cash.
On
November 14, 2008 we consummated a “share exchange agreement” with Ambermax IV.
The purpose of this transaction was to increase our cash so that we could
initiate operations.
The following
shares, totaling 530,000 shares, owned by Mr. Giannotti are being registered in
this registration statement:
30,000
shares obtained from consummation of our share exchange agreement with
Ambermax IV.
500,000
shares of the 4,000,000 shares purchased by Mr. Giannotti during March of
2008.
-
22 -
We have no director compensation
policy. Directors may be reimbursed for their expenses incurred for attending
each board of directors meeting and may be paid a fixed sum for attendance at
each meeting of the directors or a stated salary as director. No policy or
payment precludes any director from serving us in any other capacity and
being compensated for the service. Members of special or standing committees may
be allowed like reimbursement and compensation for attending committee meetings.
During the year ended December 31, 2008 and the period form inception until
September 30, 2009 and the date of this prospectus,, none of our directors were
paid any fees to attend director meetings.
EXECUTIVE
COMPENSATION
There
were no executives who received annual and/or long-term compensation for more
than $100,000 per year at the end of the last completed fiscal
year. Further, our chief executive officer for the year ended
December 31, 2008 and the nine months ended September 30,
2009, and as of the date of this prospectus did not receive any compensation.
Going forward, we will pay Mr. Giannotti a commission of 7% of sales, however we
have not executed a written agreement in connections with this arrangement.
Registrant is a development stage company with minimal operations and may be
deemed a “Shell Company” as defined by Rule 405.
Summary
Compensation Table
The
following table sets forth certain information concerning compensation paid
during years ended December 31, 2008. During 2009 and as of
the date of this prospectus, Mr. Giannotti has also received no
compensation. Going forward, Mr. Giannotti will receive a commission of 7% of
gross sales, however, no written agreement in connection with the sales
commission to be paid Mr. Giannotti has been executed. Mr. Giannotti has no
relationship with Ambermax IV, Bristlecone Associates or any of the shareholders
or management of Bristlecone or Ambermax IV. See “Certain Relationships and
Related Transactions.”
Name
and
principal
position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||||||||
Richard Giannotti
|
2008
|
—
|
—
|
—
|
—
|
—
|
—
|
|
—
|
—
|
No stock options were granted to
the Named Executives for the year ended December 31, 2008 and as of the date of
this prospectus.
Aggregated
Option Exercises in Last Fiscal Year and Year-End Option Values
No stock
options were exercised or held for exercise.
Equity
Compensation Plan Information
There is
currently no stock option executive compensation plan in place.
Employment
and Consulting Agreements
The
Company has no agreement for employment. The company has a written agreement for
certain future financial printing services for which 140,000 shares of its
common stock have been issued. Going forward, we will pay Mr. Giannotti a
commission of 7% of sales, however we have not executed a written agreement in
connections with this arrangement. Registrant is a development stage company
with minimal operations and may be deemed a “Shell Company” as defined by Rule
405
-
23 -
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
We believe
that we have execut.ed all of the transactions set forth below on terms no less
favorable to us than terms we could have obtained from unaffiliated third
parties. It is our intention to ensure that all future transactions between us
and our officers, directors and principal stockholders and their affiliates, are
approved by a majority of the board of directors, including a majority of the
independent and disinterested members of the board of directors, and are on
terms no less favorable to us than those that we could obtain from unaffiliated
third parties.
Our President,
Mr. Giannotti, purchased 10,000 shares of Ambermax IV Corporation during July of
2006 for $400. Under the terms of the Share Exchange agreement consummated
during November 2008 between Ambermax IV and Mountain Renewables, Inc. Mr.
Giannotti exchanged his 10,000 shares of Ambermax IV for 30,000 shares of
Mountain Renewables, Inc. A copy of the Share Exchange Agreement, signed by all
shareholders of Ambermax IV, including Mr. Giannotti, is contained
in Exhibit 10.1.
Likewise, on consummation of the Share Exchange Agreement with Ambermax IV, all
of the 38 additional shareholders of Ambermax IV each received three shares of
the company’s common stock in exchange for each share of the commons stock of
Ambermax IV and the company received$12,871 in cash, which was
the only asset of Ambermax IV. The purpose of our transaction with Ambermax was
to increase our cash reserves and initiate operations. See Signatory page of
“Share Exchange Agreement” for a complete list of the former shareholders of
Ambermax IV. A copy of the “Share Exchange Agreement” signed by all shareholders
of Ambermax IV, including Mr. Giannotti, is contained in Exhibit
10.1 previously filed.”
Mr. Giannotti has no relationship with any shareholder of the
company.
Mr. Giannotti has no relationship with any of the previous shareholders of
Ambermax IV Corporation. Mr. Giannotti is not associated with Bristlecone
Associates or its management.
Our President, Mr. Giannotti purchased 4,000,000 shares of the Common Stock of
Mountain Renewables for $5,000 cash during March of 2008.
Rosewind issued Sonja Gouak 140,000
shares during March 2009_for future services as Rosewind’s financial
printer. The services are valued at $35,000. There is no relationship
between Sonja Gouak and any of the other selling
shareholders.
The
following table sets forth certain information, as of September 30, 2009 and as
of the date of this prospectus, with respect to the beneficial ownership of the
outstanding common stock by (i) any holder of more than five (5%) percent; (ii)
each of our executive officers and directors; and (iii) our directors and
executive officers as a group. Except as otherwise indicated, each of the
stockholders listed below has sole voting and investment power over the shares
beneficially owned. Registrant is a development stage company with minimal
operations and may be deemed a “Shell Company” as defined by Rule
405
Title
of Class
|
Name ofBeneficial Owner
(1)
|
Number
of Shares Beneficially Owned (2)
|
Percentage
Ownership(2)
|
Common
Stock
|
Richard
Giannotti
|
4,030,000
|
29.8%
|
|
|||
Common
Stock
|
Bristlecone
Associates, LLC
38113
Fruitland Mesa Road
Crawford,
CO 81415
|
6,000,000
|
44.4%
|
|
|||
|
|||
Common
Stock
|
All Executive Officers and Directors as a Group (1 person)
|
4,030,000
|
29.8%
|
____________________
(1)
|
Except
as otherwise indicated, the address of each beneficial owner is c/o
Mountain Renewables, Inc., 1770 Grape St, Denver, CO
80220.
|
(
2)
|
Applicable
percentage ownership is based on 13,515,000 shares of common stock
outstanding as of September 30, 2009 and as of the date of this
prospectus. Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to
securities.
|
COMMON
STOCK
Description
of Securities
Authorized capital stock consists
of 100,000,000 shares of a single class of common stock, having a $0.001 par
value. Registrant is a development stage company with minimal operations and may
be deemed a “Shell Company” as defined by Rule 405.
-
24 -
The holders of our common stock:
·
|
have
equal ratable rights to dividends from funds legally available therefore,
when, as and if declared by our Board of
Directors;
|
·
|
are
entitled to share ratably in all of our assets available for distribution
to holders of common stock upon liquidation, dissolution or winding up of
our affairs;
|
|
|
·
|
do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights are entitled to one vote per share on all matters on which stockholders may vote |
Non-Cumulative
Voting
Holders of shares of our common stock do
not have cumulative voting rights, which means that the holders of more than 50%
of the outstanding shares, voting for the election of directors, can elect all
of the directors to be elected, if they so choose, and, in such event, the
holders of the remaining shares will not be able to elect any of our
directors.
Cash
Dividends
As of the date of this Prospectus, we not
paid any cash dividends to stockholders. The declaration of any future
cash dividend will be at the discretion of our board of directors and will
depend upon our earnings, if any, capital requirements and financial position,
general economic conditions, and other pertinent
conditions.
We will not to pay any cash dividends in
the foreseeable future, but rather reinvest earnings, if any, in our
business operations.
Reports
After this offering, we will furnish its
shareholders with annual financial reports certified by our independent
accountants, and may, in our discretion, furnish unaudited quarterly financial
reports.
INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our articles and bylaws provide for the
indemnification of our directors and officers against all claims and liability
by reason of serving as a director or officer. It shall be within the
discretion of our Board of Directors whether to advance any funds in advance of
disposition incurred by any director or officer in connection with that
proceeding. We are not, however, required to reimburse any legal
expenses in connection with any proceeding if a determination is made that the
director or officer did not act in good faith or in a manner reasonably believed
to be in our best interests. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the "Act" or "Securities Act") may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable.
PLAN
OF DISTRIBUTION
No
market currently exists for our shares. Registrant is a development stage
company with minimal operations and may be deemed a “Shell Company” as defined
by Rule 405. The price reflected in this prospectus of $0.10 per share is the
initial offering price of the shares of common stock upon the effectiveness of
this prospectus. Significant selling shareholders, Giannotti and
Bristlecone should be deemed “underwriters,” and will offer their shares at a
fixed price of $0.10 per share for the duration of the offering. The
selling stockholders (other than significant shareholders Giannotti and
Bristlecone), may, from time to time, sell any or all of their shares of common
stock covered by this prospectus in private transactions at a price of $0.10 per
share or on any stock exchange, market or trading facility on which the shares
may then be traded. If our shares are quoted on the Over-the-Counter Bulletin
Board ("OTCBB"), the selling stockholders may sell any or all of their shares at
prevailing market prices or privately negotiated prices. The term "selling
stockholders" includes donees, pledgees, transferees or other
successors-in-interest selling shares received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or
other non-sale related transfer. We will pay the expense incurred to
register the shares being offered by the selling stockholders for resale, but
the selling stockholders will pay any underwriting discounts and brokerage
commissions associated with these sales. The selling stockholders may use any
one or more of the following methods when selling
shares:
-
25 -
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
·
|
privately
negotiated transactions; and
|
·
|
a
combination of any such methods of
sale.
|
The $0.10
per share offering price of the shares of common stock being sold under this
prospectus has been arbitrarily set. The price does not bear any relationship to
our assets, book value, earnings or net worth and it is not an indication of
actual value. Additionally, the offering price of our shares is higher than the
price paid by our founders, and exceeds the per share value of our net tangible
assets. Therefore, if you purchase shares in this offering, you will experience
immediate and substantial dilution. You may also suffer additional dilution in
the future from the sale of additional shares of common stock or other
securities, if the need for additional financing forces us to make such sales.
Investors should be aware of the risk of judging the real or potential future
market value, if any, of our common stock by comparison to the offering
price.
In offering
the shares covered by this prospectus, the selling stockholders may be deemed to
be "underwriters" within the meaning of the Securities Act in connection with
such sales. Any broker-dealers who execute sales for the selling stockholders
will be deemed to be underwriters within the meaning of the Securities
Act. Any profits realized by the selling stockholders and the
compensation of any broker-dealer may be deemed to be underwriting discounts and
commissions.
Each selling
stockholder and any other person participating in a distribution of securities
will be subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Regulation M, which may
restrict certain activities of, and limit the timing of purchases and sales of
securities by, selling stockholders and other persons participating in a
distribution of securities. Furthermore, under Regulation M, persons engaged in
a distribution of securities are prohibited from simultaneously engaging in
market making and certain other activities with respect to such securities for a
specified period of time prior to the commencement of such distributions,
subject to specified exceptions or exemptions. All of the foregoing may affect
the marketability of the securities offered hereby.
Any
securities covered by this prospectus that qualify for sale pursuant to Rule 144
under the Securities Act may be sold under that rule rather than pursuant to
this prospectus.
The
table below sets forth information concerning the resale of the shares of common
stock by the selling stockholders. We will not receive any proceeds from the
resale of the common stock by the selling stockholders. Assuming all the shares
registered below are re-sold by the selling stockholders, none of the selling
stockholders, other than Bristlecone and Giannotti, will continue to own
any shares of our common stock.
The following table
also sets forth the name of each person who is offering the resale of shares of
common stock by this prospectus, the number of shares of common stock
beneficially owned by each person, the number of shares of common stock that may
be sold in this offering and the number of shares of common stock each person
will own after the offering, assuming they resell all of the shares
offered.
Registrant is a development stage company with minimal operations
and may be deemed a “Shell Company” as defined by Rule
405.
-
26 -
Name
of Selling Stockholder
|
Common
|
Total
Shares
|
Number
of Shares Owned
|
||
and
Position, Office or
|
Shares
owned by
|
Registered
Pursuant
|
Issued
and
|
by
Selling Stockholder After
|
|
Material
Relationship with
|
the
selling
|
to
this
|
Outstanding
Shares
|
Offering
and Percent of Total
|
|
Mountain
Renewables, Inc.
|
Stockholder
(1)
|
Offering
|
before
Offering
|
Issued
and Outstanding (2)
|
|
|
%
of Class
|
#
of Shares
|
%
of Class
|
||
Bristlecone
Associates, LLC (3)
|
6,000,000
|
1,500,000
|
44.4
|
4,500,000
|
33.3
|
Richard
Giannotti**
|
4,030,000
|
530,000
|
29.8
|
3,500,000
|
25.8
|
Corey
Wiegand
|
600,000
|
600,000
|
4.4
|
Nil
|
Nil
|
Michael
Wiegand
|
600,000
|
600,000
|
4.4
|
Nil
|
Nil
|
Martha
S. Sandoval
|
600,000
|
600,000
|
4.4
|
Nil
|
Nil
|
Dustin
Sandoval
|
150,000
|
150,000
|
1.1
|
Nil
|
Nil
|
Jessica
Sandoval
|
150,000
|
150,000
|
1.1
|
Nil
|
Nil
|
Andrew
Peterson
|
150,000
|
150,000
|
1.1
|
Nil
|
Nil
|
Lacey
Rosales
|
150,000
|
150,000
|
1.1
|
Nil
|
Nil
|
Craig
Bordon
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Craig
K. Olson
|
60,000
|
60,000
|
*
|
Nil
|
Nil
|
David
Callaham
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
David
Zallar
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Larry
Willis
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Shirley
Hale
|
60,000
|
60,000
|
*
|
Nil
|
Nil
|
Craig
Kimbal
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Delos
Elmer
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Craig
A. Olson
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Kiva
Stack
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Stacy
Thomas
|
7,500
|
7,500
|
*
|
Nil
|
Nil
|
Katherine
Vacha
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Michelle
Vacha
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Anthony
Clanton
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Gordon
and Lahna Crabtree JTWROS
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Kimberley
Manning
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Nathan
and Jana Faris JTWROS
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Michael
Willis
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Grant
Willis
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
William
Gofigan
|
7,500
|
7,500
|
*
|
Nil
|
Nil
|
Kent
Florence
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Ryan
Kaszycki
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Teri
Tabor
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Jeffery
and Heather Christainsen JTWROS
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Ruth
Harrison Revocable Trust
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Tom
Menten
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Frederich and
Cheryl Johnston
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Francis
Acedo
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Steven
Crouch
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Chris
Crouch
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Beau
Brooks
|
30,000
|
30,000
|
*
|
Nil
|
Nil
|
Sonja
Gouak
|
140,000
|
140,000
|
1%
|
Nil
|
Nil
|
Total Shares Being Registered | 5,515,000 | ||||
_______________
* Less
than one percent.
**
Officer and/or director. Reflects 4,000,000 founders shares purchased for $
5,000 cash during March 2008 plus and additional 30,000 shares upon which Mr.
Giannotti’s cost basis was $400, issued in connection with our transaction with
Ambermax IV during November 2008. Mr. Giannotti should be deemed and
“underwriter.”
-
27 -
Our
President, Mr. Giannotti, purchased 10,000 shares of Ambermax IV Corporation
during July of 2006 for $400. Under the terms of the Share Exchange agreement
consummated during November 2008 between Ambermax IV and Mountain Renewables,
Inc. Mr. Giannotti exchanged his 10,000 shares of Ambermax IV for 30,000 shares
of Mountain Renewables, Inc. A copy of the Share Exchange Agreement, signed by
all shareholders of Ambermax IV, including Mr. Giannotti, is contained
in Exhibit 10.1.
Likewise,
on consummation of the Share Exchange Agreement with Ambermax IV, all of the 38
additional shareholders of Ambermax IV each received three shares of the
company’s common stock in exchange for each share of the commons stock of
Ambermax IV and the company received $12,871 in cash, which was
the only asset of Ambermax IV. See Signatory page of “Share Exchange Agreement”
for a complete list of the former shareholders of Ambermax IV. A copy of the
“Share Exchange Agreement” signed by all shareholders of Ambermax IV, including
Mr. Giannotti, is contained in Exhibit 10.1 previously
filed.”
Mr.
Giannotti has no relationship with any shareholder of the company.
Mr.
Giannotti has no relationship with any of the previous shareholders of Ambermax
IV Corporation.
Our
President, Mr. Giannotti purchased 4,000,000 shares of the Common Stock of
Mountain Renewables for $5,000 cash during March of 2008.
(1) The
number and percentage of shares beneficially owned is determined in accordance
with Rule 13d-3 of the Securities Exchange Act of 1934, and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the selling
stockholders has sole or shared voting power or investment power and also any
shares, which the selling stockholders has the right to acquire within 60
days.
(3)
Bristlecone Associates, LLC a Colorado Limited Liability Company, is controlled
by Anna Collins. Bristlecone Associates, LLC is not a broker-dealer or affiliate
of a broker-dealer. Bristlecone Associates, LLC should be deemed an
“underwriter.” There is no relationship between Anna Collins and any of the
other selling shareholders. Bristlecone purchased the 6,000,000 shares being
resold during November of 2008 for $5,000 cash
(4) Sonja
Gouak is not a broker-dealer or affiliate of a broker-dealer. There
is no relationship between Sonja Gouak and any of the other selling
shareholders. Rosewind issued Sonja
Gouak 140,000 shares during March of 2009 for
future services as Rosewind’s financial printer. The services are valued at
$35,000.
LEGAL
MATTERS
Law Offices of
Davidson and Shear, PLC have issued an opinion with respect to the validity of
the shares of common stock being offered hereby.
EXPERTS
Our audited
financial statements for December 31, 2008 and March 31, 2009, unaudited, have
been included herein in reliance upon the report of Larry O’Donnell, CPA, P.C.
independent registered public accountant, appearing elsewhere herein, and upon
authority of said firm as experts in accounting and auditing.
AVAILABLE
INFORMATION
We have not previously been
required to comply with the reporting requirements of the Securities Exchange
Act. We have filed with the SEC a registration statement on Form S-1
to register the securities offered by this prospectus. Registrant is a
development stage company with minimal operations and may be deemed a “Shell
Company” as defined by Rule 405. For future information about us and the
securities offered under this prospectus, you may refer to the registration
statement and to the exhibits filed as a part of the registration
statement.
In addition, after
the effective date of this prospectus, we will be required to file annual,
quarterly, and current reports, or other information with the SEC as provided by
the Securities Exchange Act. You may read and copy any reports, statements or
other information we file at the SEC's public reference facility maintained by
the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing
to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference room. Our SEC filings are also available to
the public through the SEC Internet site at http\\www.sec.go
-
28 -
INDEX
TO FINANCIAL STATEMENTS
Year
ended December 31, 2008
|
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F
1
|
Financial
Statements:
|
|
Balance
Sheets
|
F
2
|
Statements
of Operations
|
F
3
|
Statements
of Changes in Stockholders’ Equity
|
F
4
|
Statements
of Cash Flows
|
F
5
|
Notes
to Financial Statements
|
F6
– F9
|
Nine
Months ended September 30, 2009
|
|
Financial
Statements:
|
|
Balance
Sheets
|
F
10
|
Statements
of Operations
|
F
11
|
Statements
of Changes in Stockholders’ Equity
|
F
12
|
Statements
of Cash Flows
|
F
13
|
Notes
to Financial Statements
|
F14
– F17
|
-
29 -
Larry
O’Donnell, CPA, P.C.
Telephone (303) 745-4545 |
2228 South Fraser Street
|
|
Fax (303)369-9384 |
Unit I
|
|
E-mail larryodonnellcpa@msn.com |
Aurora, Colorado 80014
|
|
www.larryodonnellcpa@msn.com |
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of
Directors
Mountain
Renewables, Inc.
I have
audited the accompanying balance sheet of Mountain Renewables, Inc. as of
December 31, 2008 the related statements of operations, changes in stockholders’
equity and cash flows for the period from inception, March 27, 2008 through
December 31, 2008. These financial statements are the responsibility of the
Company’s management. My responsibility is to express an opinion on
these financial statements based on my audits.
I
conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that I plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. I believe
that my audits provide a reasonable basis for my opinion.
In my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Mountain Renewables, Inc. as of
December 31, 2008, the results of its operations and cash flows for the period
from inception, March 27, 2008 through December 31, 2008 in conformity with
generally accepted accounting principles in the United States of America.
/s/
Larry O’Donnell, CPA, P.C.
Larry
O'Donnell
CPA, P.C.
April 27,
2009
F
- 1
MOUNTAIN
RENEWABLES, INC.
Balance
Sheets
December
31, 2008
ASSETS
|
||||
Current
assets
|
||||
Cash
|
$ | 21,226 | ||
Inventory
|
850 | |||
Total
assets
|
$ | 22,076 | ||
STOCKHOLDERS’
EQUITY
|
||||
Stockholders’
equity:
|
||||
Common
stock; $.001 par value; authorized
|
||||
100,000,000 shares; issued and outstanding
|
||||
13,375,000 shares,
respectively
|
$ | 13,375 | ||
Additional
paid-in capital
|
9,299 | |||
Accumulated
deficit during the development
stage
|
(598 | ) | ||
Total
stockholders’ deficit
|
$ | 22,076 |
See notes
to financial statements.
F
- 2
MOUNTAIN
RENEWABLES, INC.
Statements
of Operations
Period
from inception, March 27, 2008 to December 31, 2008
General
and administrative expenses
|
$ | 598 | ||
Net
loss
|
$ | (598 | ) | |
Basic
and diluted net loss per common share
|
$ | ** | ||
Weighted
average number of common shares outstanding
|
10,530,000 |
_______________
** Less than $(.01) per
share.
See notes
to financial statements.
F
- 3
MOUNTAIN
RENEWABLES, INC.
Statements
of Changes in Stockholders' Equity
Common
Stock
|
Additional
|
Accumulated
|
||||||||||||||
Shares
|
Amount
|
Paid
in capital
|
Deficit
|
|||||||||||||
Issuance
of common stock for cash
|
4,000,000 | $ | 4,000 | $ | 1,000 | $ | - | |||||||||
Issuance
of common stock for cash
|
6,000,000 | 6,000 | (1,000 | ) | - | |||||||||||
Issuance
of common stock for Ambermax
|
3,375,000 | 3,375 | 9,299 | - | ||||||||||||
Net
loss
|
(598 | ) | ||||||||||||||
Balances,
December 31, 2008
|
13,375,000 | $ | 13,375 | $ | 9,299 | $ | (598 | ) |
See notes to financial statements.
F
- 4
MOUNTAIN
RENEWABLES, INC.
Statements
of Cash Flows
Period
from inception, March 27, 2008 to December 31, 2008
Cash
flows from operating activities:
|
||||
Net
loss
|
$ | (598 | ) | |
Adjustments
to reconcile net loss to net cash
|
||||
used
in operating activities:
|
||||
Changes
in operating assets and liabilities:
|
||||
Increase
in inventory
|
(850 | ) | ||
Net
cash used in operating activities
|
(1,448 | ) | ||
Cash
flows from investing activities:
|
||||
Net
cash used in investing activities
|
- | |||
Cash
flows from financing activities:
|
||||
Issuance
of common stock for cash
|
10,000 | |||
Issuance
of common stock for Ambermax
|
12,674 | |||
Net
cash provided by financing activities
|
22,674 | |||
Net
increase (decrease) in cash
|
21,226 | |||
Cash
at beginning of year
|
- | |||
Cash
at end of year
|
$ | 21,226 |
See notes
to financial statements.
F
- 5
MOUNTAIN
RENEWABLES, INC.
Notes
to Financial Statements
Note
1 - Organization and Summary of Significant Accounting Policies
Organization of
Business
Mountain
Renewables, Inc. (the “Company”) was incorporated in Nevada on March 27,
2008.
The
Company is formulating plans to acquire, market and distribute solar
panels.
The
Company has not achieved significant revenues and is a development stage
company.
Inventory
Inventory
consists of finished solar panels and is stated at the lower of cost (first-in,
first-out method), or market value.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reporting amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the periods. Management makes these estimates using the best
information available at the time the estimates are made; however, actual
results could differ materially from these estimates.
Fair Value of Financial
Instruments
The fair
value of the liability due to officer/stockholder is not practicable to
estimate, based upon the related party nature of the underlying
transactions.
Stock-Based
Compensation
The
Company accounts for stock-based compensation in accordance with SFAS No. 123(R)
Share-Based
Payment. Under the fair value recognition provisions of this
statement, stock-based compensation cost is measured at the grant date based on
the fair value of the award and is recognized as expense on a straight-line
basis over the requisite service period, which is the vesting
period. The Company elected the modified-prospective method, under
which prior periods are not revised for comparative purposes. The valuation
provisions of SFAS 123R apply to new grants and to grants that were outstanding
as of the effective date and subsequently modified.
During
the period ended December 31, 2008, there were no stock options granted or
outstanding.
F
- 6
MOUNTAIN
RENEWABLES, INC.
Notes
to Financial Statements
Comprehensive
Income
SFAS No.
130, Reporting Comprehensive
Income, establishes requirements for disclosure of comprehensive income
(loss). During the period ended December 31, 2008, the Company did
not have any components of comprehensive income (loss) to report.
Revenue
recognition
The
Company recognizes revenue on an accrual basis as it invoices for
product. The Company recognizes revenue after the product has been
delivered.
Net Loss Per
Share
SFAS No.
128, Earnings per
Share, requires dual presentation of basic and diluted earnings or loss
per share (“EPS”) for all entities with complex capital structures and requires
a reconciliation of the numerator and denominator of the basic EPS computation
to the numerator and denominator of the diluted EPS
computation. Basic EPS excludes dilution; diluted EPS reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the
entity.
Basic
loss per share is computed by dividing net loss applicable to common
shareholders by the weighted average number of common shares outstanding during
the period. Diluted loss per share reflects the potential dilution
that could occur if dilutive securities and other contracts to issue common
stock were exercised or converted into common stock or resulted in the issuance
of common stock that then shared in the earnings of the Company, unless the
effect is to reduce a loss or increase earnings per share. The
Company had no potential common stock instruments which would result in a
diluted loss per share. Therefore, diluted loss per share is
equivalent to basic loss per share.
Recently Issued Accounting
Pronouncements
In
December 2007, the FASB issued FASB Statement No. 160 “Noncontrolling Interests
in Consolidated Financial Statements - an amendment of ARB No.
51” (“SFAS No. 160”), which causes noncontrolling interests in
subsidiaries to be included in the equity section of the balance
sheet. SFAS No. 160 applies prospectively to business combinations
for which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008, except for the
presentation and disclosure requirements, which shall be applied retrospectively
for all periods presented. The Company will adopt this standard at
the beginning of the Company’s year ending December 31, 2008 for all
prospective business acquisitions. The Company has not determined the
effect that the adoption of SFAS No. 160 will have on the financial results of
the Company.
In
March 2008, the Financial Accounting Standards board (FASB) issued
Statement of Financial Accounting Standards No. 161, “Disclosures about
Derivative Instruments and Hedging Activities” (SFAS 161). SFAS 161 is
effective for fiscal years and interim periods beginning after November 15,
2008. SFAS 161 requires enhanced disclosures about Fund’s derivative and
hedging activities. Management is currently evaluating the impact the
adoption of SFAS 161 will have on the Company’s financial statement
disclosures.
F
- 7
MOUNTAIN
RENEWABLES, INC.
Notes
to Financial Statements
The FASB
has revised SFAS No. 141. This revised statement establishes uniform
treatment for all acquisitions. It defines the acquiring company.
The statement further requires an acquirer to recognize the assets
acquired, the liabilities assumed, and any non-controlling interest in the
acquired at the acquisition date, measured at their fair market values as of
that date. It requires the acquirer in a business combination achieved in
stages to recognize the identifiable assets and liabilities, as well as the
non-controlling interest in the acquired, at the full amounts of their fair
values. This changes the way that minority interest is recorded and modified as
a parent’s interest in a subsidiary changes over time. This statement also
makes corresponding significant amendments to other standards that related to
business combinations, namely, 109, 142 and various EITF’s. This statement
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. The Company believes the implementation of this
standard will have no effect on our financial statements.
In May
2008, FASB issued SFAS 162, “The Hierarchy of Generally Accepted Accounting
Principles”. Effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting Principles. The
Board does not expect that this Statement will result in a change in current
practice. However, transition provisions have been provided in the unusual
circumstance that the application of the provisions of this Statement results in
a change in practice. The Company believes the implementation of this standard
will have no effect on our financial statements.
In May,
2008 FASB issued SFAS 163. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement also clarifies how Statement 60
applies to financial guarantee insurance contracts, including the recognition
and measurement to be used to account for premium revenue and claim liabilities.
Those clarifications will increase comparability in financial reporting of
financial guarantee insurance contracts by insurance enterprises. This Statement
requires expanded disclosures about financial guarantee insurance contracts. The
Company believes the implementation of this standard will have no effect on our
financial statements.
Note
2 - Stockholders' Equity
Common
Stock
The
Company is authorized to issue 100,000,000 shares of $.001 par value common
stock. The Company has 10,000,000 shares of its common stock issued
and outstanding at December 31, 2008. Dividends may be paid on outstanding
shares as declared by the Board of Directors. Each share of common
stock is entitled to one vote.
Note
3 - Income Taxes
The
Company recognizes deferred income tax liabilities and assets for the expected
future tax consequences of events that have been recognized in the financial
statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the differences between the
financial statement carrying amounts and the tax basis of assets and liabilities
using enacted tax rates in effect in the years in which the differences are
expected to reverse.
F
- 8
MOUNTAIN
RENEWABLES, INC.
Notes
to Financial Statements
The
Company incurred no income taxes for the period ended December 31,
2008. The expected income tax benefit for the period ended December
31, 2008 is approximately $100. The difference between the expected
income tax benefit and non-recognition of an income tax benefit in each period
is the result of a valuation allowance applied to deferred tax
assets.
Net
operating loss carryforwards of approximately $598 at December 31, 2008 are
available to offset future taxable income, if any, and expire in
2033. This results in a net deferred tax asset of approximately $100
at December 31, 2008. A valuation allowance in the same amount has
been provided to reduce the deferred tax asset, as realization of the asset is
not assured.
The net
operating loss carryforwards may be limited under the Change of Control
provisions of the Internal Revenue Code section 382.
Note
4 – Acquisition of Ambermax IV Corporation
On
November 14, 2008 the Company acquired 100% of the equity interests
of Ambermax IV Corporation (Ambermax). The income and expenses for
Ambermax from the period November 14, 2008 through December 31, 2008
are included in the statements of operations. Ambermax is a
corporation organized under the laws of the state of Colorado and is
inactive.
The
Company issued 3,375,000 shares of common stock to the stockholders of
Ambermax. The Company received $12,674 in cash from Ambermax which
was its sole asset.
F
- 9
MOUNTAIN
RENEWABLES, INC.
FINANCIAL
STATEMENTS
SEPTEMBER
30, 2009
MOUNTAIN
RENEWABLES, INC.
Financial
Statements
Table
of Contents
Page
|
|
Financial
Statements:
|
|
Balance
Sheets
|
F-10
|
Statements
of Operations
|
F-11
|
Statements
of Changes in Stockholders’ Equity
|
F-12
|
Statements
of Cash Flows
|
F-13
|
Notes
to Financial Statements
|
F-14
|
MOUNTAIN
RENEWABLES, INC.
Balance
Sheets
ASSETS
|
||||||||
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Current
assets
|
||||||||
Cash
|
$ | 13,813 | $ | 21,226 | ||||
Inventory
|
340 | 850 | ||||||
Total
current assets
|
14,153 | 22,076 | ||||||
Deferred
offering costs
|
35,075 |
|
||||||
Total
assets
|
$ | 49,228 | $ | 22,076 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable - related party
|
$ | 30 | $ | |||||
Total
current liabilities
|
30 |
|
||||||
Stockholders'
equity
|
||||||||
Common
stock; $.001 par value; authorized
|
||||||||
100,000,000
shares; issued and outstanding -
|
||||||||
2009
13,515,000 shares 2008 13,375,000,shares
respectively
|
13,515 | 13,375 | ||||||
Additional
paid-in capital
|
44,159 | 9,299 | ||||||
Accumulated
deficit during the development stage
|
(8,476 | ) | (598 | ) | ||||
Total
stockholders' equity
|
49,198 | 22,076 | ||||||
Total
liabilities and stockholders' equity
|
$ | 49,228 | $ | 22,076 |
See notes
to financial statements
F
- 10
MOUNTAIN
RENEWABLES, INC.
Statements
of Operations
For
the nine Months Ended
|
March
27, 2008
|
|||||||||||
September 30,
|
(Inception)
to
|
|||||||||||
2009
|
2008
|
September
30, 2009
|
||||||||||
Sales
|
$ | 810 | $ | - | $ | 810 | ||||||
Cost
of Sales
|
550 | - | 550 | |||||||||
Gross
Profit
|
260 | - | 260 | |||||||||
General
and administrative expenses
|
8,138 | 100 | 8,736 | |||||||||
Net
loss
|
$ | (7,878 | ) | $ | (100 | ) | $ | (8,476 | ) | |||
Basic
and diluted net loss
|
||||||||||||
per
common share
|
$ | - | $ | - | $ | - | ||||||
Weighted
average number of common
|
||||||||||||
shares outstanding (in thousands)
|
13,476 | 10,000 | 11,913 |
_______________
* Less than $(.01) per
share.
See notes
to financial statements
F
- 11
MOUNTAIN
RENEWABLES, INC.
Statements
of Changes in Stockholders' Equity
Common Stock
|
Additional
|
Accumulated
|
||||||||||||||
Shares
|
Amount
|
Paid-in capital
|
Deficit
|
|||||||||||||
Issuance
of common stock for cash
|
4,000,000 | $ | 4,000 | $ | 1,000 | $ | ||||||||||
Issuance
of common stock for cash
|
6,000,000 | 6,000 | (1,000 | ) | ||||||||||||
Issuance
of common stock for Abermax
|
3,375,000 | 3,375 | 9,299 | |||||||||||||
Net
loss
|
|
|
|
(598 | ) | |||||||||||
Balance,
December 31, 2008
|
13,375,000 | 13,375 | 9,299 | (598 | ) | |||||||||||
Issuance
of common stock for services
|
140,000 | 140 | 34,860 | |||||||||||||
Net
loss
|
|
|
|
(7,878 | ) | |||||||||||
Balance,
September 30, 2009
|
13,515,000 | $ | 13,515 | $ | 44,159 | $ | (8,476 | ) |
See notes
to financial statements
F
- 12
MOUNTAIN
RENEWABLES, INC.
Statements
of Cash Flows
For
the Nine Months Ended
|
March
27, 2008
|
|||||||||||
September 30,
|
(Inception)
to
|
|||||||||||
2009
|
2008
|
September
30, 2009
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
loss
|
$ | (7,878 | ) | $ | (100 | ) | $ | (8,476 | ) | |||
Adjustments
to reconcile net loss
|
||||||||||||
to
net cash used in operating activities
|
||||||||||||
Increase
(decrease) in inventory
|
510 | (340 | ) | |||||||||
Increase
in accounts payable
|
30 | 30 | ||||||||||
Net
cash used in operating activities
|
(7,338 | ) | (100 | ) | (8,786 | ) | ||||||
Cash
flows from investing activities:
|
- | - | - | |||||||||
Net
cash used in investing activities
|
- | - | - | |||||||||
Cash
flows from financing activities
|
||||||||||||
Increase
in deferred offering costs
|
(75 | ) | (75 | ) | ||||||||
Issuance
of connom stock for cash
|
100 | 10,000 | ||||||||||
Issuance
of connom stock for Ambermax
|
- | - | 12,674 | |||||||||
Net
cash provided from financing activities
|
(75 | ) | 100 | 22,599 | ||||||||
Net
increase (decrease) in cash
|
(7,413 | ) | 0 | 13,813 | ||||||||
Cash
at beginning of year
|
21,226 | - | - | |||||||||
Net
loss
|
$ | 13,813 | $ | 0 | $ | 13,813 | ||||||
Supplemental
disclosure of noncash
|
||||||||||||
financing and investing activities:
|
||||||||||||
Common
stock issued for
|
||||||||||||
deferred offering costs
|
$ | 35,000 | $ | 35,000 |
See notes
to financial statements
F
- 13
MOUNTAIN
RENEWABLES, INC.
Notes
to Financial Statements
Note
1 - Organization and Summary of Significant Accounting
Policies
Organization of
Business
Mountain
Renewables, Inc. (the “Company”) was incorporated in Nevada on March 27,
2008.
The
Company is formulating plans to acquire, market and distribute solar
panels.
The
Company has not achieved significant revenues and is a development stage
company.
Development Stage
Company
The
Company has not earned significant revenues from planned
operations. Accordingly, the Company’s activities have been accounted
for as those of a “Development Stage Company”, as set forth in Statement of
Financial Accounting Standards No. 7 (“SFAS”). Among the disclosures
required by SFAS No. 7 are that the Company’s financial statements of
operations, stockholders’ equity and cash flows disclose activity since the date
of the Company’s inception.
Interim
Presentation
In the
opinion of the management of the Company, the accompanying unaudited financial
statements include all material adjustments, including all normal and recurring
adjustments, considered necessary to present fairly the financial position and
operating results of the Company for the periods presented. The
financial statements and notes do not contain certain information included in
the Company’s financial statements for the year ended December 31,
2008. It is the Company’s opinion that when the interim financial
statements are read in conjunction with the December 31, 2008 Audited Financial
Statements, the disclosures are adequate to make the information presented not
misleading. Interim results are not necessarily indicative of results
for a full year or any future period.
Inventory
Inventory
consists of finished solar panels and is stated at the lower of cost (first-in,
first-out method), or market value.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reporting amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the periods. Management makes these estimates using the best
information available at the time the estimates are made; however, actual
results could differ materially from these estimates.
F
- 14
MOUNTAIN
RENEWABLES, INC.
Notes
to Financial Statements
Fair Value of Financial
Instruments
The fair
value of the liability due to officer/stockholder is not practicable to
estimate, based upon the related party nature of the underlying
transactions.
Stock-Based
Compensation
The
Company accounts for stock-based compensation in accordance with SFAS No. 123(R)
Share-Based
Payment. Under the fair value recognition provisions of this
statement, stock-based compensation cost is measured at the grant date based on
the fair value of the award and is recognized as expense on a straight-line
basis over the requisite service period, which is the vesting
period. The Company elected the modified-prospective method, under
which prior periods are not revised for comparative purposes. The valuation
provisions of SFAS 123R apply to new grants and to grants that were outstanding
as of the effective date and subsequently modified.
During
the period ended December 31, 2008, there were no stock options granted or
outstanding.
Comprehensive
Income
SFAS No.
130, Reporting Comprehensive
Income, establishes requirements for disclosure of comprehensive income
(loss). During the period ended December 31, 2008, the Company did
not have any components of comprehensive income (loss) to
report.
Net Loss Per
Share
SFAS No.
128, Earnings per
Share, requires dual presentation of basic and diluted earnings or loss
per share (“EPS”) for all entities with complex capital structures and requires
a reconciliation of the numerator and denominator of the basic EPS computation
to the numerator and denominator of the diluted EPS
computation. Basic EPS excludes dilution; diluted EPS reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the
entity.
Basic
loss per share is computed by dividing net loss applicable to common
shareholders by the weighted average number of common shares outstanding during
the period. Diluted loss per share reflects the potential dilution
that could occur if dilutive securities and other contracts to issue common
stock were exercised or converted into common stock or resulted in the issuance
of common stock that then shared in the earnings of the Company, unless the
effect is to reduce a loss or increase earnings per share. The
Company had no potential common stock instruments which would result in a
diluted loss per share. Therefore, diluted loss per share is
equivalent to basic loss per share.
Revenue
recognition
The
Company recognizes revenue on an accrual basis as it invoices for
product. The Company recognizes revenue after the product has been
delivered.
F
- 15
MOUNTAIN
RENEWABLES, INC.
Notes
to Financial Statements
Recently Issued Accounting
Pronouncements
In
December 2007, the FASB issued FASB Statement No. 160 “Noncontrolling Interests
in Consolidated Financial Statements - an amendment of ARB No.
51” (“SFAS No. 160”), which causes noncontrolling interests in
subsidiaries to be included in the equity section of the balance
sheet. SFAS No. 160 applies
prospectively
to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008, except for the presentation and disclosure requirements, which shall
be applied retrospectively for all periods presented. The Company
will adopt this standard at the beginning of the Company’s fiscal year ending
December 31, 2008 for all prospective business acquisitions. The
Company has not determined the effect that the adoption of SFAS No. 160 will
have on the financial results of the Company.
In
March 2008, the Financial Accounting Standards board (FASB) issued
Statement of Financial Accounting Standards No. 161, “Disclosures about
Derivative Instruments and Hedging Activities” (SFAS 161). SFAS 161 is
effective for fiscal years and interim periods beginning after November 15,
2008. SFAS 161 requires enhanced disclosures about Fund’s derivative and
hedging activities. Management is currently evaluating the impact the
adoption of SFAS 161 will have on the Company’s financial statement
disclosures.
The FASB
has revised SFAS No. 141. This revised statement establishes uniform
treatment for all acquisitions. It defines the acquiring company.
The statement further requires an acquirer to recognize the assets
acquired, the liabilities assumed, and any non-controlling interest in the
acquired at the acquisition date, measured at their fair market values as of
that date. It requires the acquirer in a business combination achieved in
stages to recognize the identifiable assets and liabilities, as well as the
non-controlling interest in the acquired, at the full amounts of their fair
values. This changes the way that minority interest is recorded and modified as
a parent’s interest in a subsidiary changes over time. This statement also
makes corresponding significant amendments to other standards that related to
business combinations, namely, 109, 142 and various EITF’s. This statement
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. The Company believes the implementation of this
standard will have no effect on our financial statements.
In May
2008, FASB issued SFAS 162, “The Hierarchy of Generally Accepted Accounting
Principles”. Effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting Principles. The
Board does not expect that this Statement will result in a change in current
practice. However, transition provisions have been provided in the unusual
circumstance that the application of the provisions of this Statement results in
a change in practice. The Company believes the implementation of this standard
will have no effect on our financial statements.
In May,
2008 FASB issued SFAS 163. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement also clarifies how Statement 60
applies to financial guarantee insurance contracts, including the recognition
and measurement to be used to account for premium revenue and claim liabilities.
Those clarifications will increase comparability in financial reporting of
financial guarantee insurance contracts by insurance enterprises. This Statement
requires expanded disclosures about financial guarantee insurance contracts. The
Company believes the implementation of this standard will have no effect on our
financial statements.
F
- 16
MOUNTAIN
RENEWABLES, INC.
Notes
to Financial Statements
Note
2 - Stockholders' Equity
Common
Stock
The
Company is authorized to issue 100,000,000 shares of $.001 par value common
stock. Dividends may be paid on outstanding shares as declared by the
Board of Directors. Each share of common stock is entitled to one
vote.
On March
16, 2009, the Company issued Sonja Gouak 140,000 shares of its common stock in
exchanges of services for processing and filing of its registration
statement. Those services have been valued at Gouak’s usual billing
rate. Should Gouak not perform the services she will be subject to
damages.
Note
3 - Income Taxes
The
Company recognizes deferred income tax liabilities and assets for the expected
future tax consequences of events that have been recognized in the financial
statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the differences between the
financial statement carrying amounts and the tax basis of assets and liabilities
using enacted tax rates in effect in the years in which the differences are
expected to reverse.
The
Company incurred no income taxes for the periods ended September 30,
2009. The expected income tax benefit for the period
ended September 30, 2009 and the period from inception March 18, 2008
through September 30, 2009 is approximately $1,100 and $1,200,
respectively. The difference between the expected income tax benefit
and non-recognition of an income tax benefit in each period is the result of a
valuation allowance applied to deferred tax assets.
Net
operating loss carryforwards of approximately $8,476 at September 30, 2009 are
available to offset future taxable income, if any, and expire in
2033. This results in a net deferred tax asset of approximately $00
at September 30, 2009. A valuation allowance in the same amount has
been provided to reduce the deferred tax asset, as realization of the asset is
not assured.
The net
operating loss carryforwards may be limited under the Change of Control
provisions of the Internal Revenue Code section
382.
F
- 17
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
The
following table sets forth the costs and expenses, other than underwriting
discounts and commissions, if any, payable by the Registrant relating to the
sale of common stock being registered. All amounts are estimates
except the SEC registration fee.
SEC
registration fee
|
$
|
75.00
|
||
Printing
and engraving expenses
|
100.00
|
|||
Legal
fees and expenses
|
1,000.00
|
|||
Accounting
fees and expenses
|
5,000.00
|
|||
Miscellaneous
expenses
|
1,000.00
|
|||
Total
|
$
|
7,175.00
|
ITEM
14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
Indemnification
of Directors and Officers
Our Articles
of Incorporation, its Bylaws, and certain statutes provide for the
indemnification of a present or former director or officer.
The
Securities and Exchange Commission's Policy on Indemnification
Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers, and controlling persons of the Registrant
pursuant to any provisions contained in its Certificate of Incorporation, or
Bylaws, or otherwise, the Registrant has been advised that, in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
During November 2008
the Company issued 4,000,000 shares and 6,000,000 of common stock the founder of
the Company, Richard Giannotti and to Bristlecone Associates, LLC, respectively.
Consideration was $5,000 and $5,000 respectively. The issuance of these
shares was made in reliance upon the exemptions from registration provided by
Section 406 of Regulation D. All cash received was deposited in the company’s
checking account for use in operations.
During March 2008 in connection
with our share exchange transaction with Ambermax IV, the company issued
3,375,000 shares of its common stock to the shareholders of Ambermax. The
consideration was all assets held by Amberbermax IV, which consisted of $12,871
of cash. All cash received was deposited in the company’s checking
account for use in operations.
The Company issued Mr. Giannotti 30,000 shares of our common stock in
exchange for 10,000 shares of Ambermax. This was done as part of our
transaction with each shareholder of Ambermax. The Ambermax shares
tendered to us by Mr. Giannotti were originally purchased from Ambermax by
Mr. Giannotti during June 2006 as part of a Regulation D private placement
undertaken by Ambermax. Mr. Giannotti's cost basis for his 10,000
Ambermax shares was $400. The original issuance of shares sold to
the Ambermax shareholders was made in reliance upon the exemptions from
registration provided by Section 406 of Regulation D.
On March 16, 2009, the Company issued 140,000 shares of common stock valued at
$35,000 as compensation to Sonja Gouak. The consideration was future
services to be provided by Ms. Gouak. The issuance of these shares was made in
reliance upon the exemptions from registration provided by Section 406 of
Regulation D.
I
- 1
* All of the
above offerings and sales were deemed to be exempt under Rule 506 of Regulation
D and/or Section 4(2) of the Securities Act of 1933, as amended. No advertising
or general solicitation was employed in offering the securities. The offerings
and sales were made to a limited number of persons, all of whom were accredited
investors, business associates of the Company or executive officers of the
Company, and transfer was restricted by the Company in accordance with the
requirements of the Securities Act of 1933. In addition to representations by
the above-referenced persons, we have made independent determinations that all
of the above-referenced persons were accredited or sophisticated investors, and
that they were capable of analyzing the merits and risks of their investment,
and that they understood the speculative nature of their investment.
Furthermore, all of the above-referenced persons were provided with access to
our Securities and Exchange Commission filings.
Except as
expressly set forth above, the individuals and entities to which we issued
securities as indicated in this section of the registration statement are
unaffiliated with us.
Exhibit
Number
|
Description
of Exhibit
|
|
3.1*
|
Certificate
of Incorporation.
|
|
3.2*
|
By-Laws.
|
|
5.1*
|
Opinion
of Law Offices of Davidson and Shear, LLC
|
|
10.1*
|
Share
Exchange Agreement
|
|
23.1
|
Consent
of Larry O’Donnell, CPA
|
|
23.2*
|
Consent
of Law Offices of Davidson and Shear, LLC (contained in Exhibit
5.1)
|
* Previously filed
ITEM
17. UNDERTAKINGS.
Registrant is
a development stage company with minimal operations and may be deemed a “Shell
Company” as defined by Rule 405.
The
undersigned Registrant hereby undertakes:
1.
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
(a)
|
To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
|
(b)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
the volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement;
and
|
(c)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
|
2.
|
That,
for the purpose of determining any liability under the Securities Act of
1933, each such post- effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time to be the initial bona fide
offering thereof.
|
3.
|
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
|
I
- 2
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable.
In the
event that a claim for indemnification against such liabilities, other than the
payment by us of expenses incurred or paid by one of our directors, officers, or
controlling persons in the successful defense of any action, suit or proceeding,
is asserted by one of our directors, officers, or controlling persons in
connection with the securities being registered, we will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification is
against public policy as expressed in the Securities Act, and we will be
governed by the final adjudication of such issue.
For the
purposes of determining liability under the Securities Act for any purchaser,
each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first
use.
I
- 3
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Denver, Colorado, on October 30,
2009.
|
Mountain
Renewables, Inc.
|
||
By:
|
/s/
Richard Giannotti
|
||
Richard
Giannotti
|
|||
(Principal
Executive Officer)
|
|||
By:
|
/s/ Richard
Giannotti
|
||
Richard
Giannotti
|
|||
Chief
Financial Officer (Principal Accounting Officer and Principal Financial
Officer)
|
|||
I
- 4