Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10Q
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(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2009
__ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
For the transition from ______ to _______
COMMISSION FILE NUMBER: 000-53451
ALTERNATE ENERGY HOLDINGS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 20-5689191
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(STATE OF INCORPORATION) (IRS EMPLOYER ID NUMBER)
911 E. WINDING CREEK DR., SUITE 150, EAGLE, ID 83616
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
208-939-9311
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(REGISTRANT'S TELEPHONE NUMBER)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the filing requirements for
the past 90 days.
Yes[__] No[_X_]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
Yes[__] No[__]
Indicate by check mark whether the registrant is a large accelerated file, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [___] Accelerated filer [___]
Non-accelerated filer [___] Smaller reporting company [_X_]
(Do not check if a smaller
reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes[__] No[_X_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of November 11, 2009, there were 116,026,442 shares of the registrant's
common stock issued and outstanding.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheets -September 30, 2009 (Unaudited) and
December 31, 2008 (Audited) 2
Consolidated Income Statements (Unaudited) - For the Three and
Nine Months Ended September 30, 2009 and 2008 and From August 29,
2005 (Inception) to September 30, 2009 3
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited) - For the Nine Months Ended September 30, 2009 and
2008 and From August 29, 2005 (Inception) to September 30, 2009 5
Consolidated Statements of Cash Flows (Unaudited) - For the Nine
Months Ended September 30, 2009 and 2008 and From August 29, 2005
(Inception) to September 30, 2009 7
Notes to the Consolidated Financial Statements (Unaudited) 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk - Not Applicable 15
Item 4. Controls and Procedures 15
Item 4T. Controls and Procedures - Not Applicable 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - Not Applicable 16
Item 1A. Risk Factors - Not Applicable 16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16
Item 3. Defaults Upon Senior Securities - Not Applicable 16
Item 4. Submission of Matters to a Vote of Security Holders - Not Applicable 16
Item 5. Other Information - Not Applicable 16
Item 6. Exhibits 17
SIGNATURES 18
PART I
ITEM 1. FINANCIAL STATEMENTS
-1-
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2009 (Unaudited) AND DECEMBER 31, 2008
ASSETS
September 30, December 31,
2009 2008
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Unaudited
CURRENT ASSETS:
Cash and Cash Equivalents $ 136,623 $ 112,519
Deposit 27,500 55,000
Prepaid Expenses 20,000 26,417
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Total Current Assets 184,123 193,936
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OTHER ASSET
Security Deposit 3,000 3,000
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TOTAL ASSETS $ 187,123 $ 196,936
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 50,248 $ 32,259
Due to Officer 45,000 -
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Total Current Liabilities 95,248 32,259
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STOCKHOLDERS' EQUITY:
Common Stock, par value $.001,
150,000,000 shares authorized;
113,419,192 issued and 113,019,192
outstanding and 78,187,040 issued
and 77,787,040 outstanding,
respectively 113,418 78,187
Additional Paid in Capital 10,564,085 8,816,694
Treasury Stock (400,000 shares at cost) (20,000) (20,000)
Deficit Accumulated During Development Stage (10,565,628) (8,710,204)
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Total Stockholders' Equity 91,875 164,677
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TOTAL LIABILITY AND STOCKHOLDERS' EQUITY $ 187,123 $ 196,936
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The accompanying notes are an integral part of these financial statements.
- 2 -
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
AND THE PERIOD FROM INCEPTION (AUGUST 29, 2005) THROUGH SEPTEMBER 30, 2009
(Unaudited)
Three Months Nine Months Inception to
September September September
2009 2009 2009
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REVENUES $ - $ - $ -
------------- ------------ -------------
OPERATING EXPENSES:
General and Administrative Expenses 397,423 1,861,003 11,601,263
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NET LOSS FROM OPERATIONS (397,423) (1,861,003) (11,601,263)
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OTHER INCOME (EXPENSE)
Interest Income 11 100 32,094
Miscellaneous Income - 5,479 5,479
Gain on Sales of Investments - - 1,627
Interest Expense - - (3,565)
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Total Other Expense 11 5,579 35,635
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LOSS BEFORE NON-CONTROLLING INTEREST
IN VARIABLE INTEREST ENTITY (397,412) (1,855,424) (11,565,628)
Non-Controlling Interest in Variable
Interest Entity - - 1,000,000
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Net Loss $ (397,412) $ (1,855,424) $ (10,565,628)
BASIC AND DILUTED
NET LOSS PER COMMON STOCK $ (0.00) $ (0.02)
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WEIGHTED AVERAGE SHARES OUTSTANDING 108,638,264 99,955,948
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The accompanying notes are an integral part of these financial statements.
- 3 -
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
AND THE PERIOD FROM INCEPTION (AUGUST 29, 2005) THROUGH SEPTEMBER 30, 2009
(Unaudited)
Three Months Nine Months
September 30, September 30,
2008 2008
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REVENUES $ - $ -
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OPERATING EXPENSES:
General and Administrative Expenses 389,294 3,259,090
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NET LOSS FROM OPERATIONS (389,294) (3,259,090)
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OTHER INCOME (EXPENSE)
Interest Income 1,792 10,431
Miscellaneous Income - -
Gain on Sales of Investments - -
Interest Expense - -
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Total Other Expense 1,792 10,431
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LOSS BEFORE NON-CONTROLLING INTEREST
IN VARIABLE INTEREST ENTITY (387,502) (3,248,659)
Non-Controlling Interest in Variable
Interest Entity - -
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Net Loss $ (387,502) $(3,248,659)
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BASIC AND DILUTED
NET LOSS PER COMMON STOCK $ (0.01) $ (0.06)
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WEIGHTED AVERAGE SHARES OUTSTANDING 73,934,002 58,709,269
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The accompanying notes are an integral part of these financial statements.
- 4 -
ALTERNATE ENERGY HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
AND THE PERIOD FROM INCEPTION (AUGUST 29, 2005)
THROUGH SEPTEMBER 30, 2009 (UNAUDITED)
Number of Additional
Price per Common Common Paid in Treasury Net
Share Shares Issued Stock Capital Stock Loss Total
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Founder Shares issued August 29, 2005 0.00 14,800,000 $ 14,800 $ (14,800) $ - $ - $ -
Issuance of Common Stock for Services
October 0.05 3,249,999 3,250 54,250 - - 57,500
Amortization of common stock for services
October - - 8,750 - - 8,750
November - - 8,750 - - 8,750
December - - 8,750 - - 8,750
Issuance of Common Stock for Payable:
September 0.04 600,000 600 24,400 - - 25,000
November 0.05 300,000 300 14,700 - - 15,000
Net Loss - - - - (100,692) (100,692)
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Balances, December 31, 2005 18,949,999 18,950 104,800 - (100,692) 23,058
Nussential Holdings Inc. shareholders
prior to merger 0.00 4,252,088 4,252 (4,252) - - -
Issuance of Common Stock for Services
September 1.01 1,149,999 1,150 1,157,599 - - 1,158,749
November 0.90 100,000 100 89,900 - - 90,000
Amortization of common stock for services
January - - 8,750 - - 8,750
February - - 8,750 - - 8,750
March - - 8,750 - - 8,750
April - - 8,750 - - 8,750
May - - 8,750 - - 8,750
June - - 8,750 - - 8,750
July - - 8,750 - - 8,750
August - - 8,750 - - 8,750
Issuance of Common Stock for Cash
March 0.05 1,000,000 1,000 49,000 - - 50,000
May 0.05 400,000 400 19,600 - - 20,000
June 0.05 100,000 100 4,900 - - 5,000
October 0.65 273,000 273 176,227 - - 176,500
November 0.33 116,000 116 38,550 - - 38,666
December 0.42 75,000 75 31,758 - - 31,833
Purchase of Treasury Stock - - - (20,000) - (20,000)
Net Loss - - - - (1,394,711) (1,394,711)
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Balances, December 31, 2006 26,416,086 26,416 1,738,082 (20,000) (1,495,403) 249,095
Issuance of Common Stock for Services
February 0.50 920,000 920 459,080 - - 460,000
March 0.50 300,000 300 149,700 - - 150,000
April 0.25 100,000 100 24,900 - - 25,000
June 0.25 550,000 550 136,950 - - 137,500
August 0.40 531,552 532 212,089 - - 212,621
September 0.11 4,583,200 4,583 478,697 - - 483,280
October 0.40 366,400 366 146,194 - - 146,560
November 0.15 457,000 457 65,943 - - 66,400
December 0.10 57,500 58 5,692 - - 5,750
Issuance of Common Stock for Cash
January 0.53 23,000 23 12,227 - - 12,250
February 0.50 55,000 55 27,445 - - 27,500
March 0.50 10,000 10 4,990 - - 5,000
April 0.40 25,000 25 9,975 - - 10,000
May 0.25 206,000 206 51,294 - - 51,500
June 0.24 180,000 180 42,820 - - 43,000
July 0.25 2,591,000 2,591 645,159 - - 647,750
August 0.25 2,521,036 2,521 626,238 - - 628,759
September 0.25 64,000 64 15,936 - - 16,000
October 0.25 20,000 20 4,980 - - 5,000
November 0.20 287,500 287 57,213 - - 57,500
December 0.10 2,451,000 2,451 242,649 - - 245,100
Net Loss - - - - (3,394,200) (3,394,200)
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Balances, December 31, 2007 42,715,274 $ 42,715 $ 5,158,253 $ (20,000) $ (4,889,603) $ 291,365
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The accompanying notes are an integral part of these financial statements.
- 5 -
ALTERNATE ENERGY HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
FOR THE PERIOD FROM INCEPTION (AUGUST 29, 2005) THROUGH SEPTEMBER 30, 2009 (UNAUDITED)
Number of Additional
Price per Common Common Paid in Treasury Net
Share Shares Issued Stock Capital Stock Loss Total
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Issuance of Common Stock for Services
January 0.10 1,312,250 1,312 129,913 - - 131,225
February 0.10 70,000 70 6,930 - - 7,000
March 0.10 183,250 183 18,142 - - 18,325
April 0.10 20,000 20 1,980 - - 2,000
May 0.10 14,556,875 14,557 1,441,131 - - 1,455,688
June 0.10 4,365,342 4,365 432,169 - - 436,534
July 0.20 798,625 798 158,927 - - 159,725
August 0.20 71,500 72 14,228 - - 14,300
September 0.20 25,430 25 5,061 - - 5,086
October 0.20 207,147 207 41,222 - - 41,429
November 0.20 10,853 11 2,160 2,171
December 0.10 3,140,777 3,141 310,934 314,075
Issuance of Common Stock for Cash -
January 0.10 7,720,000 7,720 764,280 - - 772,000
February 0.10 1,120,750 1,121 110,954 - - 112,075
March 0.10 225,000 225 22,275 - - 22,500
April 0.10 250,000 250 24,750 - - 25,000
May 0.10 50,000 50 4,950 - - 5,000
June 0.10 576,000 576 57,024 - - 57,600
July 0.10 307,301 308 31,072 - - 31,380
August 0.15 182,000 182 28,018 - - 28,200
September 0.20 153,666 154 39,946 - - 40,100
December 0.10 125,000 125 12,375 - - 12,500
Net Loss - - - - (3,820,601) (3,820,601)
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Balances, December 31, 2008 78,187,040 78,187 8,816,694 (20,000) (8,710,204) 164,677
================================================================================
Issuance of Common Stock for Services
January 0.10 395,290 395 39,134 - - 39,529
March 0.05 138,065 138 6,765 - - 6,903
April 0.05 18,425,000 18,425 802,825 - - 921,250
May 0.05 945,400 945 46,325 - - 47,270
June 0.05 718,500 719 35,206 - - 35,925
July 0.05 755,000 755 36,995 - - 37,750
August 0.05 1,567,957 1,568 76,830 - - 78,398
September 0.05 1,431,340 1,431 70,136 - - 71,567
Issuance of Common Stock for Cash
January 0.10 25,000 25 2,475 - - 2,500
February 0.05 800,000 800 39,200 - - 40,000
March 0.05 330,600 330 16,200 - - 16,530
April 0.05 1,745,000 1,745 85,505 - - 87,250
May 0.05 700,000 700 34,300 - - 35,000
June 0.05 4,345,000 4,345 212,905 - - 217,250
August 0.05 440,000 440 21,560 - - 22,000
September 0.05 2,470,000 2,470 121,030 - - 123,500
Net Loss - - - - (1,855,424) (1,855,424)
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Balances, September 30, 2009 113,419,192 $ 113,418 $10,564,085 $ (20,000) $(10,565,628) $ 91,875
================================================================================
The accompanying notes are an integral part of these financial statements.
- 6 -
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
AND THE PERIOD FROM INCEPTION (AUGUST 29, 2005) THROUGH SEPTEMBER 30, 2009 (Unaudited)
Nine Months Nine Months Inception to
September 30, September 30, September 30,
2009 2008 2009
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (1,855,424) $ (3,248,659) $(10,565,628)
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Adjustments to reconcile Net Loss to Net Cash
Used by Operating Activities -
Common stock issued for services 1,238,592 2,229,879 6,955,760
Loss from Variable Interest Entity - - (1,000,000)
Change in operating Assets and Liabilities -
Deposits 27,500 (3,000) (27,500)
Prepaid Expenses 6,417 (10,000) (20,000)
Security Deposits - - (3,000)
Accounts Payable 17,989 9,953 50,248
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Total Adjustments 1,290,498 2,226,832 5,955,508
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Net Cash Used by Operating Activities (564,926) (1,021,827) (4,610,120)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Receipt of Cash for Common Stock 544,030 1,093,855 3,721,743
Cash Received from Non-Controlling Members - - 1,000,000
Purchase of Treasury Stock - - (20,000)
Due to Officer 45,000 - 45,000
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Net Cash Provided by Financing Activities 589,030 1,093,855 4,746,743
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NET INCREASE IN CASH 24,104 72,028 136,623
CASH - BEGINNING 112,519 269,431 -
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CASH - ENDING $ 136,623 $ 341,459 $ 136,623
============= ============== =============
Supplemental Disclosures:
Cash paid for Income Taxes $ - $ - $ -
============= ============== =============
Cash paid for Interest $ - $ - $ 3,565
============= ============== =============
Non-Cash Investing and Financing Activities:
Receivable for Sale of Common Stock $ - $ - $ 40,000
============= ============== =============
The accompanying notes are an integral part of these financial statements.
- 7 -
ALTERNATE ENERGY HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
Alternate Energy Holdings, Inc., (and its subsidiaries Idaho Energy Complex
Corporation, International Reactors, Inc., Energy Neutral, Inc. and Reactor
Development, LLC) formerly Nussentials Holdings Inc., is a development stage
enterprise focused on the purchase, optimization and construction of green
energy sources - primary nuclear power plants.
Sunbelt Energy Resources Inc. was formed on August 29, 2005 to operate in the
alternate energy industry and has limited operational activity. In September
2006, Sunbelt acquired Nussential Holdings, Inc. by exchanging 17,900,000 shares
of Sunbelt which represented 100% for 21,399,998 shares of common stock of
Nussential Holdings Inc. As a result of the acquisition, the shareholders of
Sunbelt owned a majority of the voting stock of Nussentials Holdings, Inc. which
changed its name to Alternate Energy Holdings, Inc. The merger has been
accounted for as a reverse merger whereby Alternate Energy Holdings, Inc. is the
accounting acquirer resulting in a recapitalization of Alternate Energy
Holdings, Inc.'s equity. In connection with and simultaneous to the reverse
merger, Nussentials Corporation, a wholly owned subsidiary of Nussentials
Holdings Inc. was transferred to Nussential Holdings, Inc. majority shareholder
through issuance of 4,252,088 shares of common stock.
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 reported amounts of assets, liabilities,
revenues and expenses and the and disclosures of contingent assets and
liabilities. Accordingly, actual results could differ from those estimates.
BASIS OF PRESENTATION
The condensed consolidated financial statements of Alternate Energy Holdings,
Inc. (The Company) included herein have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (the SEC). Certain information and footnote disclosures normally
included in the financial statements prepared in conjunction with generally
accepted principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make information presented not misleading. These condensed consolidated
financial statements should be read in conjunction with the annual audited
financial statements and the notes thereto included in the Company's
registration statement, Form 10-K and other reports filed with the SEC.
The accompanying unaudited interim consolidated financial statements reflect all
adjustments of a normal and recurring nature which are, in the opinion of
management, necessary to present fairly the financial position, results of
operations and cash flows of the Company for the interim periods presented. The
results of operations for these periods are not necessarily comparable to, or
indicative of, results of any other interim period or for the fiscal year taken
as a whole. Certain information that is not required for interim financial
reporting purposes has been omitted
- 8-
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
CASH AND CASH EQUIVALENTS
Alternate Energy Holdings, Inc. considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents. Cash
equivalents are stated at cost, which approximates fair value. The Federal
Deposit Insurance Corporation insures up to $250,000 balances at September 30,
2009 and December 31, 2008. The uninsured balances at September 30, 2009 and
December 31, 2008 were $ -0- and $ -0-, respectively.
BASIC AND DILUTED NET LOSS PER SHARE
Basic and diluted net loss per share calculations are presented in accordance
with FASB ASC 260-10 (Prior authoritative literature FAS 128 "Earning per
Share"), and are calculated on the basis of the weighted average number of
common shares outstanding during the year. They include the dilutive effect of
common stock equivalents in years with net income. Basic and diluted net loss
per share is the same due to the absence of common stock equivalents.
STOCK BASED COMPENSATION
Alternate Energy Holdings, Inc.'s non-employees, share-based expense is recorded
in accordance with FASB ASC 505-50 (Prior authoritative with Emerging Issues
Task Force No. 96-18, "Accounting for Equity Instruments That are Issued to
Other than Employees for Acquisition, or in Conjunction with Selling, Goods or
Services.") Alternate Energy Holdings, Inc. has not issued any stock options or
stock warrants since its inception through September 30, 2009.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Alternate Energy Holdings, Inc. does not expect the adoption of any recently
issued accounting pronouncements to have a significant impact on their financial
position, results of operations, or cash flow.
NOTE 2 - INCOME TAXES
Alternate Energy Holdings, Inc. uses the liability method, where deferred tax
assets and liabilities are determined based on the expected future tax
consequences of temporary differences between the carrying amounts of assets and
liabilities for financial and income tax reporting purposes. Alternate Energy
Holdings, Inc. incurred net losses in the nine months ending September 30, 2009
and 2008 and therefore, has no tax liability. The deferred tax asset generated
by the carry-forward is approximately $ 5,691,634 at September 30, 2009 and will
expire in 2029.
Components of deferred tax assets at September 30, 2009 are as follows:
Deferred tax asset - net operating loss
Carry-forwards $ 5,691,634
Valuation Allowance (5,691,634)
--------------
Net deferred tax asset $ -0-
==============
- 9 -
NOTE 3 - COMMON STOCK
During 2006, Alternate Energy Holdings, Inc.
- Issued 4,252,088 shares of common stock to the Nussential Holdings
shareholders in the reverse merger - See Note 1 for the details.
- Issued 1,249,999 shares of common stock valued at $ 1,318,749 for services.
- Issued 1,964,000 shares of common stock for cash received in the amount of
$321,999.
- Purchase 400,000 shares of treasury stock for cash in the amount of
$20,000.
During 2007, Alternate Energy Holdings, Inc.
- Issued 7,865,652 shares of common stock valued at $ 1,687,111 for services.
- Issued 8,433,536 shares of common stock for cash received in the amount of
$ 1,749,359.
During 2008, Alternate Energy Holdings, Inc.
- Issued 24,762,049 shares of common stock valued at $ 2,587,558 for
services.
- Issued 10,709,717 shares of common stock for cash received in the amount of
$ 1,106,355.
During 2009, Alternate Energy Holdings, Inc.
- Issued 24,376,552 shares of common stock valued at $ 1,238,592 for
services.
- Issued 10,855,600 shares of common stock for cash received in the amount of
$ 544,030.
NOTE 4 - COMMITMENTS
Alternate Energy Holdings, Inc leases its office space under a one-year lease
and on a month-to-month basis under another lease. The one year lease is dated
June 9, 2009 and expires August 2010. Rent expense for the nine months ending
September 30, 2009 and 2008 was $ 38,935 and $ 23,684, respectively.
NOTE 5 - GOING CONCERN
Alternate Energy Holdings, Inc's financial statements have been presented on the
basis that it is a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. The
Company has an accumulated deficit of $10,565,628 at September 30, 2009.
The Company's continued existence is dependent upon its ability to raise capital
or to successfully market and sell its products. The financial statements do not
include any adjustments that might be necessary should the Company be unable to
continue as a going concern.
NOTE 6 - VARIABLE INTEREST ENTITY
FASB ASC 810 (Prior authoritative literature FASB Interpretation No. 46
"Consolidation of Variable Interest Entities") requires consolidation of certain
entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. Reactor Development, LLC was formed for the purpose
of developing and managing an energy complex. Alternate Energy Holdings, Inc.
invested $1,000,000 which represents approximately 50% of Reactor Development
LLC's capital structure as of December 31, 2007. Furthermore, the daily
operating decisions of Reactor
- 10 -
NOTE 6 - VARIABLE INTEREST ENTITY - CONTINUED
Development, LLC are made by the members of Alternate Energy Holdings, Inc.'s
management. Under FASB ASC 810 (Prior authoritative literature FASB
Interpretation No 46 " Consolidation of Variable Interest Entities"), Reactor
Development, LLC is deemed a variable Interest Entity to Alternate Energy
Holding, Inc. and as such Reactor Development, LLC's financial information has
been consolidated with Alternate Energy Holdings, Inc.
The consolidated financial statements includes the full operating activities of
Reactor Development, LLC, with amounts allocated to Reactor Development, LLC
disclosed under "Non-Controlling Interest in Variable Interest Entity" in the
accompanying consolidated income statement. Assets and liabilities of Reactor
Development, LLC were $ -0- and $ -0-, respectively, at September 30, 2009 and
December 31, 2008, respectively.
NOTE 7 - RECLASSIFICATION
Certain amounts in the 2008 financial statements have been reclassified to
conform to the 2009 presentation.
NOTE 8 - DUE TO OFFICER
An Officer of the Company has advanced the Company $ 50,000. There are no formal
repayment terms for the advance. No interest is being charged or accrued on the
advance. The outstanding balance at September 30, 2009 and December 31, 2008 was
$ 45,000 and $ -0-, respectively.
NOTE 9 - SUBSEQUENT EVENTS
Subsequent events were evaluated through November 13, 2009, the date the
financial statements were issued.
- 11 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED
FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN. IN CONNECTION WITH, AND
BECAUSE WE DESIRE TO TAKE ADVANTAGE OF, THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WE CAUTION READERS REGARDING
CERTAIN FORWARD LOOKING STATEMENTS IN THE FOLLOWING DISCUSSION AND ELSEWHERE IN
THIS REPORT AND IN ANY OTHER STATEMENT MADE BY, OR ON OUR BEHALF, WHETHER OR NOT
IN FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING
STATEMENTS ARE STATEMENTS NOT BASED ON HISTORICAL INFORMATION AND WHICH RELATE
TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS.
FORWARD LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS
THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY
OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE.
THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING
STATEMENTS MADE BY, OR ON OUR BEHALF. WE DISCLAIM ANY OBLIGATION TO UPDATE
FORWARD-LOOKING STATEMENTS.
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON THE COMPANY'S
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, AND FOR EACH OF THE YEARS IN THE
TWO-YEAR PERIOD THEN ENDED, INCLUDES A "GOING CONCERN" EXPLANATORY PARAGRAPH,
THAT DESCRIBES SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A
GOING CONCERN.
PLAN OF OPERATIONS
Alternate Energy Holdings, Inc. (AEHI or the Company) is a development stage
enterprise focused on the purchase, optimization and construction of green
energy sources - primary nuclear power plants. The Company is in the business of
serving the electric power generation industry by acquiring and developing
nuclear plant sites and obtaining licenses for their construction and operation
throughout the United States, specifically Idaho. The Company plans to evolve
with the growing needs of the energy market to provide reliable, low cost,
large-scale power production on a national scale. In addition, we will provide
demand-side technology to reduce energy consumption by homes and businesses
using renewables and power management.
While the success of the nuclear facility project does not depend on financial
assistance from the government, management believes that through the 2005 Energy
Policy Act, the nuclear facility project may be eligible for an 80% federal loan
guarantee for the construction of new nuclear facilities, and an applicable
federal tax credit of $1 billion over eight years that should be sufficient to
cover all operating expenses during that timeframe. Furthermore, the excess heat
from this plant will be used to produce bio-fuels from local crops and
agricultural waste.
The intended use of the funds for the Reactor Development, LLC project is
approximately 8% of the total shown below.
$M
-------------------------------------------------------------------- ----------
PAYMENT TO OWNER FOR SITE LAND 15
-------------------------------------------------------------------- ----------
PAYMENT FOR COLA PLUS 10% PRICE ESCALATION DUE TO DELAYS 37
-------------------------------------------------------------------- ----------
PAYMENTS FOR THIRD PARTY PROJECT MANAGEMENT AND G&A 12
-------------------------------------------------------------------- ----------
ADDITIONAL WATER RIGHTS 6
-------------------------------------------------------------------- ----------
TOTAL $70M
- 12 -
The Company anticipates using the funds raised to pay listed categories as set
forth. The Company will have complete discretionary control over the actual
utilization of said funds.
Although the Company reserves the right to reallocate the funds according to
field experience, AEHI believes that the net proceeds from the planned Offering
will be sufficient to fund its initial capital requirements for the next year
for operations. The foregoing assumes the Offering will be fully subscribed, but
there can be no assurance AEHI will not require additional funds if unforeseen
issues arise. Any additional required funds over the maximum Offering amount
will need to be financed as a loan. The availability and terms of any future
financing will depend on market and other conditions. The amount of proceeds and
uses are based upon the projections by Management, which may also change
according to unforeseen future events and market changes. There are no
commitments for loans as of this date.
PROJECT ECONOMICS
AEHI believes that if it is able to raise $70 million, it may develop a site
licensed for construction of the advanced reactor by the end of 2012. AEHI
believes that by acquiring and permitting the proposed site now, its ability to
offer a Site and an NRC license 3 to 4 years sooner than might otherwise be
achievable, will offer additional value to the Idaho site due to earlier power
generation/revenue potential of the site.
In the continuance of our business operations we do not intend to purchase or
sell any significant assets, and we do not expect a significant change in the
number of employees of the Company.
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO
THE THREE MONTHS ENDED SEPTEMBER 30, 2008
--------------------------------------------------------------------------------
During the three months ended September 30, 2009 and 2008, we did not recognize
any revenues from our operational activities.
During the three months ended September 30, 2009, we incurred operational
expenses of $397,423 compared to $389,294 during the three months ended
September 30, 2008. The decrease of $8,129 was a result of a decrease of in
officers' compensation and consultants expenses related to shares of common
stock issued for services compared to the per period.
During the three months ended September 30, 2009, we recognized a net loss of
$397,412 compared to a net loss of $387,502 for the three months ended September
30, 2008. The decrease of $9,910 was a result of the $8,129 decrease in
operational expenses discussed in the previous paragraph offset by the $1,781
decrease in interest income.
During the three months ended September 30, 2009 and 2008, the Company has net
loss per share of less than $(0.00) and $(0.01), respectively.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2008
--------------------------------------------------------------------------------
During the nine months ended September 30, 2009 and 2008, we did not recognize
any revenues from our operational activities.
During the nine months ended September 30, 2009, we incurred operational
expenses of $1,861,003 compared to $3,259,090 during the nine months ended
September 30, 2008. The decrease of $1,398,087 was a result of a decrease of
officers' compensation and consultants in the expenses related to shares of
common stock issued for services compared to the per period.
- 13 -
During the nine months ended September 30, 2009, we recognized a net loss of
$1,855,424 compared to a net loss of $3,248,659 for the nine months ended
September 30, 2008. The decrease of $1,393,235 was a result of the $1,398,087
decrease in operational expenses discussed in the previous paragraph combined
with a decrease of $10,331 in interest income and a $5,479 increase in
miscellaneous income. During the nine months ended September 30, 2009 and 2008,
the Company has net loss per share of less than $(0.02) and $(0.06),
respectively.
LIQUIDITY AND CAPITAL RESOURCES
From the Company's inception through September 30, 2009 AEHI has funded its
operations primarily from the following sources:
o Equity proceeds through private placements of AEHI securities;
o Revenue generated from operations;
o Loans and lines of credit; and
o Sales of equity investments.
Cash flow from operations has not historically been sufficient to sustain AEHI
operations without the above additional sources of capital. As of September 30,
2009, the Company had cash and cash equivalents of $136,623.
At September 30, 2009, we had total current assets of $184,123, consisting of
cash and cash equivalents of $136,623, deposits of $27,500 and prepaid expenses
of $20,000. At September 30, 2009, we had total current liabilities of $95,248,
consisting of accounts payable of $50,248 and amounts due to an Officer of
$45,000.
During the nine months ended September 30, 2009, we used cash of $564,926 in our
operating activities. During the nine months ended September 30, 2009, we
recognized a net loss of $1,855,424, which was adjusted for $1,238,592 in
expenses related to shares of our common stock issued for services. During the
nine months ended September 30, 2008, we used cash of $1,021,827 in our
operating activities. During the nine months ended September 30, 2008, we
recognized a net loss of $3,248,659, which was adjusted for $2,229,879 in
expenses related to shares of our common stock issued for services.
During the nine months ended September 30, 2009 and 2008, we did not receive or
use any cash in our investing activities.
During the nine months ended September 30, 2009, we received $589,030 from our
financing activities. During the nine months ended September 30, 2008, we
received $1,093,855 from our financing activities.
During the nine months ended September 30, 2009, we issued 10,855,600 shares of
our common stock in exchange for cash of $544,030, which has been used to
support our operations. During the nine months ended September 30, 2008, we
issued 10,584,717 shares of the Company's common stock in exchange for funds of
$1,093,855 to support our operations.
During the nine months ended September 30, 2009, an officer of the Company
advanced funds of $50,000 to the Company to support operations. The advance
payable is due on demand. During the three months ended June 30, 2009, the
Company repaid $5,000 of the funds. At September 30, 2009, the outstanding
balance is $45,000.
CAPITAL RESOURCES
We have only common stock as our capital resource.
We have no material commitments for capital expenditures within the next year,
however if operations are commenced, substantial capital will be needed to pay
for participation, investigation, exploration, acquisition and working capital.
- 14 -
NEED FOR ADDITIONAL FINANCING
We do not have capital sufficient to meet our cash needs. We will have to seek
loans or equity placements to cover such cash needs. Once exploration commences,
our needs for additional financing is likely to increase substantially.
No commitments to provide additional funds have been made by our management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to us to allow it to cover our expenses as they may be
incurred.
In addition, the United States is experiencing severe instability in the
commercial and investment banking systems which is likely to continue to have
far-reaching effects on the economic activity in the country for an
indeterminable period. The long-term impact on the United States economy and the
Company's operating activities and ability to raise capital cannot be predicted
at this time, but may be substantial.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
NOT APPLICABLE
ITEM 4. CONTROLS AND PROCEDURES
Based upon an evaluation as of the end of the period covered by this report, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective to provide reasonable
assurance that information required to be disclosed by the Company in the
reports that it files or submits under the Securities Exchange Act of 1934 is
(i) recorded, processed, summarized and reported, within the time periods
specified in the SEC's rules and forms and (ii) accumulated and communicated to
the Company's management, including its principal executive and principal
financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure. There have been no changes
in the Company's internal controls over financial reporting, that occurred
during the period covered by this report, that have materially affected, or are
reasonably likely to materially affect the Company's internal controls over
financial reporting.
The Company's disclosure controls and procedures and internal controls over
financial reporting provide reasonable, but not absolute, assurance that all
deficiencies in design or operation of those control systems, or all instances
of errors or fraud, will be prevented or detected. Those control systems are
designed to provide reasonable assurance of achieving the goals of those systems
in light of the Company's resources and nature of the Company's business
operations. The Company's disclosure controls and procedures and internal
control over financial reporting remain subject to risks of human error and the
risk that controls can be circumvented for wrongful purposes by one or more
individuals in management or non-management positions.
ITEM 4T. CONTROLS AND PROCEDURES
MANAGEMENT'S QUARTERLY REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.
This quarterly report does not include a report of management's assessment
regarding internal control over financial reporting or an attestation report of
the Company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission of newly public
companies.
- 15 -
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE.
ITEM 1A. RISK FACTORS
NONE.
ITEM 2. CHANGES IN SECURITIES
The Company made the following unregistered sales of its securities from July 1,
2009 through September 30, 2009.
DATE OF SALE TITLE OF
SECURITIES NO. OF SHARES CONSIDERATION CLASS OF PURCHASER
------------------------- ------------------ --------------- ----------------------------- -----------------------------
July 1, 2009 through Common Stock 2,910,000 $145,500 Business Associates
September 30, 2009
------------------------- ------------------ --------------- ----------------------------- -----------------------------
July 1, 2009 through Common Stock 3,754,297 Services totaling $187,715 Business Associates
September 30, 2009
EXEMPTION FROM REGISTRATION CLAIMED
All of the sales by the Company of its unregistered securities were made by the
Company in reliance upon Section 4(2) of the Securities Act of 1933, as amended
(the "1933 Act"). All of the individuals and/or entities listed above that
purchased the unregistered securities were almost all existing shareholders, all
known to the Company and its management, through pre-existing business
relationships, as long standing business associates, and employees. All
purchasers were provided access to all material information, which they
requested, and all information necessary to verify such information and were
afforded access to management of the Company in connection with their purchases.
All purchasers of the unregistered securities acquired such securities for
investment and not with a view toward distribution, acknowledging such intent to
the Company. All certificates or agreements representing such securities that
were issued contained restrictive legends, prohibiting further transfer of the
certificates or agreements representing such securities, without such securities
either being first registered or otherwise exempt from registration in any
further resale or disposition.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE.
ITEM 5. OTHER INFORMATION
NONE.
- 16 -
ITEM 6. EXHIBITS
EXHIBITS. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
EXHIBIT NO. DESCRIPTION
------------------ -----------------------------------------------------
31.1 Certification of Chief Executive Officer pursuant
to Section 302 of the Sarbanes-Oxley Act
31.2 Certification of Chief Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act
32.1 Certification of Principal Executive Officer
pursuant to Section 906 of the Sarbanes-Oxley Act
32.2 Certification of Principal Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act
- 17 -
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
ALTERNATE ENERGY HOLDINGS, INC.
(REGISTRANT)
Dated: November 13, 2009 By: /s/Donald L. Gillispie
-----------------------------------------
Donald L. Gillispie (Principal Executive Officer,
President and Chief Executive Officer)
Dated: November 13, 2009 By: /s/Rick J. Bucci
-----------------------------------------
Rick J. Bucci, (Chief Financial Officer/Principal
Accounting Officer and Vice President)
- 18
