UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K /A
(Mark One)
x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______ to_____
Commission file number: 000-5225
SOLAR ACQUISITION CORP.
(Name of small business issuer in its charter)
| Florida | 20-5080271 | |
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.) |
215 Dino Drive Ann Arbor MI 48103
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (734) 320-7628
Securities registered under Section 12(b) of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, $0.001 PAR VALUE
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 such filing requirements for the past 90 days. Yesx Noo
Check if no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.x
State issuer's revenues for its most recent fiscal year: $ 0
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days: $0 as of February 18, 2009.
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:11,541,000 as of May 10, 2010.
Transitional Small Business Disclosure Format (Check one): Yes o No x
CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR PROVISIONS" OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
Certain statements contained in this Annual Report on Securities and Exchange Commission ("SEC") Form 10-KSB ("Form 10-K") constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different than any expressed or implied by these forward-looking statements. These statements may be contained in our filings with the Securities and Exchange Commission, press releases, and written or oral presentations made by our representatives to analysts, rating agencies, stockholders, news organizations and others. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "intend", "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Although we believe that the expectations in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
OUR BUSINESS
|
(a)
|
Business Development
|
Solar Acquisition Corp. (“we”, “us”, “our”, the “Company” or the “Registrant”) was incorporated in the State of Nevada on June 3, 2006. Since inception through June 2008, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination and has made no efforts to identify a possible business combination. In June 2008, we entered into a letter of intent with Solay Teyin/ Hyundai Heavy Industries Iberica (Solar Teyin) to market solar products.We have not concluded a formal contract as of this time. We intend to offer solar products sourced through Solar Teyin to customers in the United States upon consummation of a final contract. There can be no assurance we will conclude such a contract.
|
(b)
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Business of Issuer
|
Solar Acquisition intends to become a United States sales and marketing representative for Solar Teyin. Initially, we intend to utilize the Internet to market their solar products and services to U.S. customers. We expect to expand to dealers and sales representatives as our business and funding grows. Because we commenced operations in May of this year, we currently have no products for sale and will not until we conclude our contract with Solar Teyin or a comparable vendor of solar products and develop our website.
We intend to offer turnkey services to our customers, including the design, procurement, installation, grid connection, monitoring, maintenance and referrals for solar energy systems offered through Solar Teyin.
Our business model is built on multiple revenue streams from a variety of industry participants interested in marketing their services to our consumer audience. We intend to generate revenues primarily from sales commissions, referral fees, and advertising fees for consumer and dealer services. In the future, we also intend to generate revenues from sales of solar products to a dealer network.
2
RISKS THAT MAY AFFECT FUTURE RESULTS
The following risk factors and other information included in this Annual Report should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business, financial condition and operating results could be materially adversely affected.
We are a development stage company organized in June 2006 and have recently commenced operations, which makes an evaluation of us extremely difficult. At this stage of our business operations, even with our good faith efforts, we may never become profitable or generate any significant amount of revenues, thus potential investors have a high probability of losing their investment. Our auditor’s have substantial doubt about our ability to continue as a going concern. Additionally, our auditor’s report reflects the fact that the ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately the achievement of significant operating revenues. If we are unable to continue as a going concern, you will lose your investment.
We were incorporated in June 2006 as a Florida corporation. As a result of our start-up operations we have; (i) generated no revenues, (ii) accumulated deficits of $9,350 for the year ended December 31, 2008 and $1,001,924 for the year ended December 31, 2009, (iii) we have incurred losses of $1,0000 for the year ending December 31, 2008, and (iv) incurred losses of $992,574 for the year ended December 31, 2009 due to issuance in stock for services rendered and have been focused on organizational and start-up activities, business plan development, and website design since we incorporated.
We have not established a website and commenced the selling of solar products. There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. Our future operating results will depend on many factors, including our ability to raise adequate working capital, demand for our service, the level of our competition and our ability to attract and maintain key management and employees. Additionally, our auditor’s report reflects that the ability of Solar Acquisition to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. If we are unable to continue as a going concern, you will lose your investment. You should not invest in this offering unless you can afford to lose your entire investment.
We are significantly dependent on our sole officer and director, who has limited experience. The loss or unavailability to Solar Acquisition of Mr. Klamka’s services would have an adverse effect on our business, operations and prospects in that we may not be able to obtain new management under the same financial arrangements, which could result in a loss of your investment.
3
Our business plan is significantly dependent upon the abilities and continued participation of Peter C. Klamka, our sole officer and director. It would be difficult to replace Mr. Klamka at such an early stage of development of Solar Acquisition. The loss by or unavailability to Solar Acquisition of Mr. Klamka’s services would have an adverse effect on our business, operations and prospects, in that our inability to replace Mr. Klamka could result in the loss of one’s investment. There can be no assurance that we would be able to locate or employ personnel to replace Mr. Klamka, should his services be discontinued. In the event that we are unable to locate or employ personnel to replace Mr. Klamka we would be required to cease pursuing our business opportunity, which would result in a loss of your investment.
Mr. Klamka has limited experience in framing an online solar energy marketing company. The lack of experience in framing an online solar energy marketing business could limit or eliminate your return on investment.
As a result of our reliance on Mr. Klamka and his lack of experience in developing an online solar energy marketing company, our investors are at risk in losing their entire investment. Mr. Klamka intends to hire personnel in the future, when sufficiently capitalized, who may have the experience required to manage our company, such management is not anticipated until the occurrence of future financing. Since this offering will not sufficiently capitalize our company, future offerings will be necessary to satisfy capital needs. Until such future offering occurs, and until such management is in place, we are reliant upon Mr. Klamka to make the appropriate management decisions.
Mr. Klamka is involved with other businesses including other public companies and there can be no assurance that he will continue to provide services to us. Mr. Klamka’s limited time devotion of less than 20 hours per month to Solar Acquisition could have the effect on our operations of preventing us from being a successful business operation, which ultimately could cause a loss of your investment.
As compared to many other public companies, we do not have the depth of managerial or technical personnel. Mr. Klamka is currently involved in other businesses, which have not, and are not expected in the future to interfere with Mr. Klamka’s ability to work on behalf of our company. Mr. Klamka may in the future be involved with other businesses and there can be no assurance that he will continue to provide services to us. Mr. Klamka will devote only a portion, less than 20 hours per month, of his time to our activities. As our sole officer and director, decisions are made at his sole discretion and not as a result of compromise or vote by members of a board.
We need to complete our agreement with Solar Teyin/Hyundai Heavy Industries, as currently we have no legal mechanism is place that will guarantee the participation of any supplier, named or otherwise
We currently do not have a contract with our principal supplier. At the present time, we only have a letter of intent to form a joint venture with Solar Teyin. No business entity or arraignment has been negotiated or created in furtherance of the intended joint venture. Alternatively, we have not made any efforts to further seek any alternatives to Solar Teyin.
4
The public offering price of the Shares will be substantially higher than the net tangible book value of the Common Stock. Investors participating in this offering will incur immediate and substantial dilution in the per share net tangible book value of their investment from the initial public offering price of approximately $0.30. See “Dilution”
Because of market pressures from competitors with more resources, we may fail to implement our business model profitably.
The business of advertising and marketing on the Internet in general is highly fragmented and extremely competitive. The market for customers is intensely competitive and such competition is expected to continue to increase. There are no substantial barriers to entry in this market and we believe that our ability to compete depends upon many factors within and beyond our control, including the timing and market acceptance of new solutions and enhancements to existing solutions developed by us, our competitors, and their advisors.
We are dependent on the popularity of consumer acceptance of solar energy.
Our ability to generate revenue and be successful in implementation of our business plan is dependent on consumer acceptance of solar energy.
A drop in the retail price of conventional energy or non-solar renewable energy sources may negatively impact our business.
The demand for our solar energy systems depends in part on the price of conventional energy, which affects return on investment resulting from the purchase of solar energy systems. Fluctuations in economic and market conditions that impact the prices of conventional and non-solar renewable energy sources, such as decreases in the prices of oil and other fossil fuels, could cause the demand for solar energy systems to decline, which would have a negative impact on our business. Changes in utility electric rates could also have a negative effect on our business.
The reduction, elimination or expiration of government subsidies and economic incentives for solar energy systems could reduce the demand for our products.
Government subsidies are an important factor in the economic determination to purchase a solar energy system. Certain states, including California and Colorado, localities and utilities offer incentives to offset a portion of the cost of qualified solar energy systems. These incentives can take many forms, including direct rebates, state tax credits, system performance payments and renewable energy credits, or RECs. The reduction or elimination of such incentives or delays or interruptions in the implementation of favorable federal or state laws could substantially increase the cost of our systems to our customers, resulting in a significant reduction in demand for our solar energy systems, which would negatively impact our business.
5
Existing regulations, and changes to such regulations, may present technical, regulatory and economic barriers to the installation of solar energy systems, which may significantly reduce demand for our solar energy systems.
The installation of solar energy systems is subject to oversight and regulation under local ordinances; building, zoning and fire codes; environmental protection regulation; utility interconnection requirements for metering; and other rules and regulations. We attempt to keep up-to-date about these requirements on a national, state and local level and must design and install our solar energy systems to comply with varying standards. Certain cities may have ordinances that prevent or increase the cost of installation of our solar energy systems. In addition, new government regulations or utility policies pertaining to the installation of solar energy systems are unpredictable and may result in significant additional expenses or delays, which could cause a significant reduction in demand for solar energy systems.
Existing regulations and policies pertaining to electricity pricing and technical interconnection of customer-owned electricity generation and changes to these regulations and policies may deter the purchase and use of solar energy systems and negatively impact development of the solar energy industry.
The market for solar energy systems is heavily influenced by foreign, federal, state and local government regulations and policies concerning the electric utility industry, as well as policies adopted by electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation. For example, currently, metering caps exist in certain jurisdictions, which limit the aggregate amount of power that may be sold by solar power generators into the electric grid. These regulations and policies have been modified in the past and may be modified in the future in ways that could deter purchases of solar energy systems and investment in the research and development of solar energy technology. For example, without a mandated regulatory exception for solar energy systems, utility customers are often charged interconnection or standby fees for putting distributed power generation on the electric utility grid. Such fees could increase the cost to our customers of using solar energy systems and make them less desirable, thereby harming our business, operating results and financial condition. Changes in net metering policies could also deter the purchase and use of solar energy systems. In addition, electricity generated by solar energy systems competes primarily with expensive peak hour electricity rates rather than with the less expensive average price of electricity. Modifications to the peak hour pricing policies of utilities, such as to a flat rate, would require solar energy systems to achieve lower prices in order to compete with the price of electricity.
We will require additional financing in order to implement our business plan. In the event we are unable to acquire additional financing, we may not be able to implement our business plan resulting in a loss of revenues and ultimately the loss of your investment.
Due to our start-up nature, we will have to incur the costs of advertising which is intended to generate revenue from sales and advertising, in addition to hiring new employees and commencing additional marketing activities. To fully implement our business plan we will require substantial additional funding. This offering, if successful, will only enable us to commence a modest website. Proceeds will also assist us in further developing our initial business operations, including the enhancement of our website; however will not be sufficient to allow us to expand our business meaningfully. Additionally, since the net offering proceeds have been earmarked for advertising expenses, some website development fees, and minimal working capital, we will not be capitalized sufficiently to hire or pay employees.
6
Following this offering we will need to raise additional funds to expand our operations. We plan to raise additional funds through private placements, registered offerings, debt financing or other sources to maintain and expand our operations. Adequate funds for this purpose on terms favorable to us may not be available, and if available, on terms significantly more adverse to us than are manageable. Without new funding, we may be only partially successful or completely unsuccessful in implementing our business plan, and our stockholders will lose part or all of their investment.
As a result of our deficiency in working capital at December 31, 2008 and other factors, our auditors have included a paragraph in their report regarding substantial doubt about our ability to continue as a going concern.
|
(c)
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Reports to security holders. |
(1) The Company is not required to deliver an annual report to security holders and at this time does not anticipate the distribution of such a report.
(2) The Company will file reports with the SEC. The Company will be a reporting company and will comply with the requirements of the Exchange Act once this Registration Statement becomes effective which will be automatically be 60 days after filing..
(3) The public may read and copy any materials the Company files with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.
EMPLOYEES
As of December 31, 2009, we had a total of One Part -time employee. This part-time employee is not covered by a collective bargaining agreement.
We currently maintain our executive offices, consisting of approximately 300 square feet of space, 215 Dino Drive Ann Arbor, MI 48103
The company is not party to any legal proceedings .
None.
7
(a) 1,500,000 shares of the Company’s common stock have previously been registered with the Securities and Exchange Commission (the Commission@ or any state securities agency or authority. The Company shares are quoted on the OTC Bulletin Board.
The Company is not aware of any existing trading market for its common stock. The Companys common stock has never traded in a public market. There are no plans, proposals, arrangements or understandings with any person(s) with regard to the development of a trading market in any of the Company=s securities.
If and when the Company’s common stock is traded in the over-the-counter market, most likely the shares will be subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the Exchange Act@), commonly referred to as the A penny stock@ rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be a penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the Commission; authorized for quotation on The NASDAQ Stock Market; issued by a registered investment company; excluded from the definition on the basis of price (at least $5.00 per share) or the issuer=s net tangible assets; or exempted from the definition by the Commission. If the Company=s shares are deemed to be a penny stock, trading in the shares will be subject to additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors, generally persons with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such securities and must have received the purchaser=s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the securities. Finally, the monthly statements must be sent disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks. Consequently, these rules may restrict the ability of broker dealers to trade and/or maintain a market in the Company=s common stock and may affect the ability of shareholders to sell their shares.
(b) Holders. As of December 31, 2009, there was 31 record holder of 11,541,000 shares of the Company's Common Stock.
(c) Dividends. The Registrant has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Registrant's business.
SALES OF UNREGISTERED SECURITIES
In 2008 the company issued 9,900,000 shares of restricted stock for services rendered or to be rendered in connection with the development of the company’s business plan.
8
FORWARD LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Shareholders are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, our ability to fully establish our proposed websites and our ability to conduct business with Palm, Inc. and be successful in selling products. Although we believe the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the report will prove to be accurate.
GENERAL
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related footnotes for the year ended December 31, 2009 elsewhere in this Annual Report on Form 10-K. The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future.
The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. In June 2008, we entered into a letter of intent with Solar Teyin to provide solar products for sale through the Internet via a website which we intend to establish.
We intend to become a marketer of solar energy products initially through the Internet. We hope to develop a dealer network as well as a referral network for consumers seeking installations and technical support.
Significant Accounting Policies and Estimates
Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experiences and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of the Company's financial statements relate to the allowance for doubtful accounts. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the consolidated financial statements included in this Annual Report on Form l0-K for the year ended December 31, 2008.
9
Results of Operations
For the Years Ended December 31, 2009 and December 31, 2008
There was no revenue for the year ended December 31, 2009or December 31, 2008 as the Company has had no business activity.
Selling, general and administrative expenses for the year ended December 31, 2009 was $87,411and $0 for the year ended December 31, 2008.
Professional fees for the year ended December 31, 2009 were $3,750 for accounting fees and $2,500for the year ended December 31, 2008 for accounting related fees.
Consulting fees of $263,220 for the year ended December 31, 2009 were paid to various officers, directors and other individuals. .
Interest expense and financing costs for the years ended December 31, 2009 and December 31, 2008 was $0
In 2009, we raised $450,000 from the sale of our common stock .
We have incurred net losses since our inception of $1,356,305. In order for us to continue in existence, we will have to raise additional capital through the sale of equity or debt or generate sufficient profits from operations, or a combination of both.
We registerd for sale 1,500,000 shares of our common stock on a best efforts basis to provide us with up to $450,000 of additional capital.
10
GRUBER & COMPANY, LLC
Report of Independent Registered Public Accounting Firm
To the Board of Directors
Solar Acquisition, Corp.
(A Development Stage Company)
We have audited the accompanying balance sheets of Solar Acquisition, Corp,(a development stage company), as of December 31, 2009 and 2008, and the related statements of operations, stockholders' equity, and cash flows for the years then ended and for the period from June 3, 2006 (date of inception) through December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. 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. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Solar Acquisition corp., (a development stage company), as of December 31, 2009 and 2008 and the results of its operations and its cash flows for the years then ended and for the period June 3, 2006 (date of inception) through December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has a no significant operations and a deficit accumulated during the development stage, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Gruber & Company, LLC
Lake Saint Louis, Missouri
May 10, 2010
F-1
SOLAR ACQUISITION CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
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December 31,
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December 31,
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|||||||
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2009
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2008
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|||||||
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ASSETS
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||||||||
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CURRENT
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||||||||
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Cash
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$ | 90,935 | $ | 26 | ||||
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OTHER ASSETS
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||||||||
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Other assets
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3,210 | - | ||||||
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TOTAL ASSETS
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$ | 94,145 | $ | 26 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
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CURRENT
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||||||||
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Accounts payable
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$ | - | $ | 6,000 | ||||
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Note payable
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7,850 | 5,850 | ||||||
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TOTAL LIABILITIES
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7,850 | 11,850 | ||||||
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STOCKHOLDERS’ EQUITY
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||||||||
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Common stock, authorized, 100,000,000 shares, par value $.001
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||||||||
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- issued and outstanding, 11,533,333(December 31, 2008 - 10,000,000)
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11,533 | 10,000 | ||||||
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Preference shares, authorized, 1,000,0000
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||||||||
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- issued and outstanding - nil (December 31, 2008 - nil)
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- | - | ||||||
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Additional paid in capital
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1,431,067 | 980,100 | ||||||
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Deficit accumulated during development stage
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(1,356,305 | ) | (1,001,924 | ) | ||||
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Total Stockholders’ Equity(Deficit)
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86,295 | (11,824 | ) | |||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 94,145 | $ | 26 | ||||
The accompanying notes are an integral part of these financial statements.
F-2
SOLAR ACQUISITION CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
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June 3, 2006
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||||||||||||
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YEAR ENDED
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(Inception)
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|||||||||||
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DECEMBER 31,
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To Dec 31,
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|||||||||||
|
2009
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2008
|
2009
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||||||||||
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REVENUE
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$ | - | $ | - | $ | - | ||||||
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OPERATING EXPENSES
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||||||||||||
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Professional fees
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3,750 | 2,500 | 15,250 | |||||||||
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Consulting fees
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263,220 | 990,000 | 1,253,220 | |||||||||
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General and administrative
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87,411 | 74 | 87,835 | |||||||||
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Total Operating Expenses
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354,381 | 992,574 | 1,356,305 | |||||||||
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NET INCOME(LOSS)
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$ | (354,381 | ) | $ | (992,574 | ) | $ | (1,356,305 | ) | |||
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WEIGHTED AVERAGE NUMBER OF SHARES
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10,662,666 | 5,875,000 | ||||||||||
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BASIC AND DILUTED LOSS PER SHARE
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$ | (0.03 | ) | $ | (0.17 | ) | ||||||
The accompanying notes are an integral part of these financial statements.
F-3
SOLAR ACQUISITION CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
|
June 3, 2006
|
||||||||||||
|
YEAR ENDED
|
(Inception)
|
|||||||||||
|
DECEMBER 31,
|
To Dec 31,
|
|||||||||||
|
2009
|
2008
|
2009
|
||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
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Net income(loss)
|
$ | (354,381 | ) | $ | (992,574 | ) | $ | (1,356,305 | ) | |||
|
Changes in assets and liabilities
|
||||||||||||
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Stock issued for services
|
- | 990,000 | 990,000 | |||||||||
|
Increase(decrease) in accounts payable
|
(6,000 | ) | (500 | ) | - | |||||||
|
Cash Used In Operating Activities
|
(360,381 | ) | (3,074 | ) | (366,305 | ) | ||||||
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CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
|
Issuance of common stock
|
452,500 | - | 452,600 | |||||||||
|
Advances to related party
|
(3,210 | ) | - | (3,210 | ) | |||||||
|
Increase in note payable
|
2,000 | 3,000 | 7,850 | |||||||||
|
Cash Provided By Financing Activities
|
451,290 | 3,000 | 457,240 | |||||||||
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NET CHANGE IN CASH
|
90,909 | (74 | ) | 90,935 | ||||||||
|
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
26 | 100 | - | |||||||||
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CASH AND CASH EQUIVALENTS - June 30
|
$ | 90,935 | $ | 26 | $ | 90,935 | ||||||
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SUPPLEMENTARY INFORMATION
|
||||||||||||
|
Interest paid
|
$ | 108 | $ | - | $ | 108 | ||||||
|
Income taxes paid
|
$ | - | $ | - | $ | - | ||||||
The accompanying notes are an integral part of these financial statements.
F-4
SOLAR ACQUISITION CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDER EQUITY
FROM INCEPTION(JUNE 3, 2006) TO DECEMBER 31, 2009
|
ADDITIONAL
|
ACCUM-
|
|||||||||||||||||||
|
COMMON STOCK
|
PAID IN
|
ULATED
|
||||||||||||||||||
|
SHARES
|
AMOUNT
|
CAPITAL
|
DEFICIT
|
TOTAL
|
||||||||||||||||
|
Balance - June 3, 2006
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
|
Common stock issued
|
100,000 | 100 | - | - | 100 | |||||||||||||||
|
Net loss
|
- | - | - | (9,350 | ) | (9,350 | ) | |||||||||||||
|
Balance - December 31, 2006
|
100,000 | 100 | - | (9,350 | ) | (9,250 | ) | |||||||||||||
|
Net income(loss) - December 31, 2007
|
- | - | - | - | - | |||||||||||||||
|
Balance - December 31, 2007
|
100,000 | 100 | - | (9,350 | ) | (9,250 | ) | |||||||||||||
|
Issuance of stock for services
|
9,900,000 | 9,900 | 980,100 | - | 990,000 | |||||||||||||||
|
Net income(loss) - December 31, 2008
|
- | - | - | (992,574 | ) | (992,574 | ) | |||||||||||||
|
Balance - December 31, 2008
|
10,000,000 | 10,000 | 980,100 | (1,001,924 | ) | (11,824 | ) | |||||||||||||
|
Issuance of stock for cash
|
1,533,333 | 1,533 | 450,967 | - | 452,500 | |||||||||||||||
|
Net income(loss) - December 31, 2009
|
- | - | - | (354,381 | ) | (354,381 | ) | |||||||||||||
|
Balance - December 31, 2009
|
11,533,333 | $ | 11,533 | $ | 1,431,067 | $ | (1,356,305 | ) | $ | 86,295 | ||||||||||
The accompanying notes are an integral part of these financial statements.
F-5
SOLAR ACQUISITION CORP.
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
|
(a)
|
Organization and Business:
|
SOLAR ACQUISITION CORP. (the “Company”) was incorporated in the State of Florida on June 3, 2006 for the purpose of raising capital that is intended to be used in connection with its business plans which may include a possible merger, acquisition or other business combination with an operating business.
The Company is currently in the development stage. All activities of the Company to date relate to its organization, initial funding and share issuances.
|
(b)
|
Basis of Presentation
|
The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has adopted a year end of December 31.
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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.
The Company has had no significant operations, assets or liabilities since inception and, accordingly, is fully dependent either future sales of securities or upon its current management and/or advances or loans from significant stockholders or corporate officers to provide sufficient working capital to preserve the integrity of the corporate entity. Because of these factors, our auditors have issued an audit opinion for the Company which includes a statement describing our going concern status. This means, in our auditor’s opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion.
The Company’s continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.
The Company anticipates offering future sales of equity securities. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.
F-6
|
(c)
|
Use of Estimates:
|
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
|
(d)
|
Cash and Cash Equivalents:
|
For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
|
(e)
|
Income Taxes:
|
The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.
Any deferred tax asset is considered immaterial and has been fully offset by a valuation allowance because at this time the Company believes that it is more likely than not that the future tax benefit will not be realized as the Company has no current operations.
|
(f)
|
Loss per Common Share:
|
Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments.
|
(g)
|
Fair Value of Financial Instruments:
|
The carrying value of cash and cash equivalents, advances to a related party and accrued expenses approximates fair value due to the short period of time to maturity. The note payable approximates fair value based on market rates available to the Company for financing with similar terms.
NOTE 2 - NOTE PAYABLE:
Notes payable from a related party is unsecured, non-interest bearing and has no fixed terms of repayment.
F-7
NOTE 3 - CAPITAL STOCK:
The total number of shares of capital stock which the Company shall have authority to issue is seventy-five million (50,000,000) common shares with a par value of $.001. On June 9, 2006, the company issued 100,000 shares at par value of $.001 for $100.
Holders of shares of Common stock shall be entitled to cast one vote for each share held at all stockholders' meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights.
No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.
On May 15, 2008, the Company increased its authorized share capital to 100,000,000 shares of common stock and 1,000,000 shares of preferred stock having voting rights of 100 shares of common stock for each share of preferred stock.
On June 1, 2008, the Company issued an additional 9,900,000 shares of common stock for consulting services rendered having a value of $990,000.
During the quarter ended June 30, 2009, the Company raised a total of $335,200 through the sale of 1,117,333 of common shares at a price of $0.30 per share.
During the quarter ended September 30, 2009. the Company raised a total $117,300 through the sale of 416,000 common shares at a price of $0.30 per share.
NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS:
In April 2009, FASB issued FSP 115-2 and FSP 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (now codified within ASC 320, “Investments—Debt and Equity Securities”). ASC 320 provides greater clarity about the credit and noncredit component of an other-than-temporary impairment event and more effectively communicates when an other-than-temporary impairment event has occurred. ASC 320 amends the other-than-temporary impairment model for debt securities. The impairment model for equity securities was not affected. Under ASC 320, an other-than-temporary impairment must be recognized through earnings if an investor has the intent to sell the debt security or if it is more likely than not that the investor will be required to sell the debt security before recovery of its amortized cost basis. This standard was effective for interim periods ending after June 15, 2009. The adoption of ASC 320 did not have a material impact on the Company's results of operations or financial position.
In April 2009, the FASB issued guidance on determining fair value when the volume and level of activity for an asset or liability has significantly decreased and identifying transactions that are not orderly (originally issued as FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”, and subsequently codified within FASB ASC Topic 820). The guidance provides additional guidance to expand on the factors that should be considered in estimating fair value when there has been a significant decrease in market activity for an asset or liability. The guidance is effective for interim and annual periods ending after June 15, 2009. The adoption did not have any impact on the Company’s financial position or results of operations at the date of adoption.
F-8
In April 2009, FASB issued FSP 107-1 and Accounting Principles Board 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (now codified within ASC 825, “Financial Instruments”). ASC 825 requires disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. ASC 825 was effective for interim periods ending after June 15, 2009. The adoption of ASC 825 did not have a material impact on the Company's consolidated results of operations or financial position.
In May 2009, the FASB issued guidance on subsequent events (originally issued as SFAS 165, “Subsequent Events”, and subsequently codified into FASB ASC Topic 855). Topic 855 addresses the accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. Topic 855 is effective for interim or annual periods ending after June 15, 2009. The adoption of Topic 855 did not have any impact on the Company’s financial position or results of operations at the date of adoption.
Effective July 1, 2009, the FASB issued the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC or Codification), “Generally Accepted Accounting Principles - Overall” (ASC Topic 105-10). The Codification established one source for all U.S. GAAP. The Codification supersedes, but does not change, all then-existing non-SEC accounting and reporting standards. Throughout this report, references provided to applicable portions of the Codification also include reference to the original FASB standard (SFAS), staff position (FSP) or consensus of the Emerging Issues Task Force (EITF).
In June 2009, the FASB issued SFAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (subsequently codified into FASB ASC Topic 105) which established the FASB ASC as the single source of authoritative accounting principles for U.S. GAAP issued by the FASB. The Codification supersedes all existing non-SEC accounting and reporting standards and subsequent to adoption, the FASB will issue new standards in the form of ASUs, and no longer as SFASs, FASB Staff Positions or Emerging Issues Task Force Abstracts. The Codification is effective for reporting periods ending on or after September 15, 2009. The adoption of the Codification did not have any impact on the Company’s financial position or results of operations at the date of adoption.
In August 2009, FASB issued Accounting Standards Updates (“ASU”) 2009-5, “Fair Value Measurements and Disclosures - Measuring Liabilities at Fair Value”. ASU 2009-5 provides amendments to Subtopic 820-10, “Fair Value Measurements and Disclosures-Overall”, for the fair value measurement of liabilities. ASU 2009-5 clarifies that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value. ASU 2009-5 was effective for the Company for interim and annual periods ending after October 3, 2009. The adoption of ASU 2009-5 did not have a material impact on the Company's results of operations or financial position.
In August 2009, FASB issued ASU 2009-4, “Accounting for Redeemable Equity Instruments—an Amendment to Section 480-10-S99”). ASU 2009-4 represents a SEC update to Section 480-10-S99, Distinguishing Liabilities from Equity. The adoption of guidance within ASU 2009-4 did not have an impact on the Company's results of operations or financial position.
F-9
In October, 2009, the FASB issued ASU 2009-15, “Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing (amendments to ASC Topic 470, “Debt”)”, and provides guidance for accounting and reporting for own-share lending arrangements issued in contemplation of a convertible debt issuance. At the date of issuance, a share-lending arrangement entered into on an entity’s own shares should be measured at fair value in accordance with Topic 820 and recognized as an issuance cost, with an offset to additional paid-in capital. Loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs. The amendments also require several disclosures including a description and the terms of the arrangement and the reason for entering into the arrangement. The effective dates of the amendments are dependent upon the date the share-lending arrangement was entered into and include retrospective application for arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009. The Company is currently evaluating the potential impact of ASU 2009-15 on its financial statements.
In December 2009, FASB issued ASU 2009-16, “Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets”. ASU 2009-16 amends the FASB ASC for the issuance of SFAS 166, “Accounting for Transfers of Financial Assets—an amendment of SFAS 140”. The amendments in ASU 2009-16 improve financial reporting by eliminating the exceptions for qualifying special-purpose entities from the consolidation guidance and the exception that permitted sale accounting for certain mortgage securitizations when a transferor has not surrendered control over the transferred financial assets. In addition, the amendments require enhanced disclosures about the risks that a transferor continues to be exposed to because of its continuing involvement in transferred financial assets. ASU 2009-16 is effective as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009. The Company expects the adoption of ASU 2009-16 will have a material impact on the Company’s results of operations or financial position.
In December 2009, FASB issued ASU 2009-17, “Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities”. ASU 2009-17 amends the FASB ASC for the issuance of SFAS 167, “Amendments to FASB Interpretation No. 46(R”). The amendments in ASU 2009-17 replace the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. ASU 2009-17 also requires additional disclosures about an enterprise's involvement in variable interest entities. ASU 2009-17 is effective as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009. The Company expects the adoption of ASU 2009-17 will not have a material impact on the Company’s results of operations or financial position.
In January 2010, FASB issued ASU 2010-2, “Accounting and Reporting for Decreases in Ownership of a Subsidiary- a Scope Clarification”. ASU 2010-2 addresses implementation issues related to the changes in ownership provisions in the Consolidation—Overall Subtopic (Subtopic 810-10) of the FASB ASC, originally issued as SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements”. Subtopic 810-10 establishes the accounting and reporting guidance for noncontrolling interests and changes in ownership interests of a subsidiary. An entity is required to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary. Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary at fair value. The gain or loss includes any gain or loss associated with the difference between the fair value of the retained investment in the subsidiary and its carrying amount at the date the subsidiary is deconsolidated. In contrast, an entity is required to account for a decrease in ownership interest of a subsidiary that does not result in a change of control of the subsidiary as an equity transaction. ASU 2010-2 is effective for the Company starting January 3, 2010. The Company expects the adoption of ASU 2010-2 will not have a material impact on the Company's results of operations or financial position.
F-10
In January 2010, FASB issued ASU 2010-6, “Improving Disclosures about Fair Measurements". ASU 2010-6 provides amendments to subtopic 820-10 that require separate disclosure of significant transfers in and out of Level 1 and Level 2 fair value measurements and the presentation of separate information regarding purchases, sales, issuances and settlements for Level 3 fair value measurements. Additionally, ASU 2010-6 provides amendments to subtopic 820-10 that clarify existing disclosures about the level of disaggregation and inputs and valuation techniques. ASU 2010-6 is effective for financial statements issued for interim and annual periods ending after December 15, 2010. The Company expects the adoption of ASU 2010-06 will not have a material impact on the Company’s results of operations or financial position.
In February 2010, FASB issued ASU 2010-9 Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements”. ASU 2010-9 amends disclosure requirements within Subtopic 855-10. An entity that is an SEC filer is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between Subtopic 855-10 and the SEC's requirements. ASU 2010-9 is effective for interim and annual periods ending after June 15, 2010. The Company expects the adoption of ASU 2010-06 will not have a material impact on the Company’s results of operations or financial position.
NOTE 5 – INCOME TAXES
The components of income tax (benefit) expense for the year ended December 31, 2009 and December 31, 2008 respectively, are as follows:
| 2009 | 2008 | |||||||
| Federal: | ||||||||
| $ | $ | |||||||
| Current | - | - | ||||||
| Deferred | - | - | ||||||
| State: | ||||||||
| Current | - | - | ||||||
| Deferred | - | - | ||||||
| - | - | |||||||
| $ | - | $ | - | |||||
The Company has a net operating loss carryforward to offset future taxable income of $1,356,305. Subject to current regulations, this carryforward will begin to expire in 2022. The amount and availability of the net operating loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carryforwards.
F-11
The Company’s income tax expense (benefit) for the nine months ended December 31, 2009 and 2008 respectively, differed from the statutory federal rate of 34 percent as follows:
| 2009 | 2008 | |||||||
| Statutory rate applied to loss | ||||||||
| before income taxes | $ | (461,144 | ) | $ | (340,654 | ) | ||
| Increase(decrease) in income taxes resulting from: | ||||||||
| State, income taxes | - | - | ||||||
| Other, including reserve for deferred tax asset | 461,144 | 340,654 | ||||||
| Income Tax Expense | $ | - | $ | - | ||||
Temporary differences due to statutory requirements in the recognition of assets and liabilities for tax and financial reporting purposes, generally including such items as organizational costs, accumulated depreciation and amortization, allowance for doubtful accounts, organizational and start-up costs and vacation accruals. These differences give rise to the financial statement carrying amounts and tax bases of assets and liabilities causing either deferred tax assets or liabilities, as necessary, as of December 31, 2009 and 2008, respectively:
| December 31, | ||||||||
| 2009 | 2008 | |||||||
| Deferred tax assets | ||||||||
| Net operating loss carryforwards | $ | 1,356,305 | $ | 1,001,924 | ||||
| Less: valuation allowances | (1,356,305 | ) | (1,001,924 | ) | ||||
| Net Deferred Tax Asset | $ | - | $ | - | ||||
During the year ended December 31, 2009 and 2008, respectively, the reserve for the deferred current tax asset increased by approximately $120,490 and $337,475, respectively.
F-12
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None
Reference is made to the disclosures below under Item 8A(T) Controls and Procedures.
ITEM 8A(T). CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
Our President being the sole member of our management, in his capacity as our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report (December 31, 2009), as is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Our disclosure controls and procedures are intended to ensure that the information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as the principal executive and financial officers, respectively, to allow timely decisions regarding required disclosures.
Based on that evaluation, our President concluded that, as of the end of the period covered by this Annual Report, our disclosure controls and procedures were effective.
Our management has concluded that the financial statements included in this Form 10-K present fairly, in all material respects our financial position, results of operations and cash flows for the periods presented in conformity with generally accepted accounting principles.
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.
Management’s Annual Report on Internal Control Over Financial Reporting
11
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.
Our President conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as set forth in Internal Control - Integrated Framework. Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2009.
This annual report does not include an audit or attestation report of our registered public accounting firm regarding our internal control over financial reporting. Our management’s report was not subject to audit or attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
ecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Evaluation of Changes in Internal Control over Financial Reporting
Our President also conducted an evaluation of our internal control over financial reporting to determine whether any change occurred during the fourth quarter of 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, our management concluded that there were no changes. As of the end of the period covered by this Annual Report, no deficiencies were identified in our internal controls over financial reporting which constitute a “material weakness.”
We believe that our failure to include this report on internal controls has not negatively impacted the effectiveness of of our disclosure controls and procedures as of December 31, 2009.
We acknowledge that the failure to perform management’s assessment adversely affects the company’s and its shareholders ability to avail themselves of rules and forms that are predicated on the current or timely filing of Exchange Act reports
12
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Our executive officers and directors are:
| Name | Age | Position |
| Peter Klamka | 41 | Chairman of the Board, CEO, PresidentTreasurer and Secretary. |
The business experience, principal occupations and employment, as well as the periods of service, of our sole director and executive officer.
The business experience, principal occupations and employment, as well as the periods of service, of our sole director and executive officer during the last five years are set forth below.
Peter Klamka has been our Chairman of the Board and Chief Executive Officer since our inception. Mr. Klamka has been active in developing, funding, and operating various start up companies over the past twenty years. He is the former Chairman and CEO of GiraSolar Inc., a solar energy company based in Europe that trades on the Pink Sheets. Mr. Klamka is also the CEO of Cephas Holdings Inc., a reporting company, that develops and markets mobile phone applications. He is also a principal officer in several other ventures.
EMPLOYMENT AND CONSULTING AGREEMENTS
We have no employment or other written agreement with Peter Klamka, our President and Chief Executive Officer. Mr. Klamka. The Company believes that Mr. Klamka will continue to waive any salary for the foreseeable future, although no assurance thereof can be given.
Mr. Klamka is involved in other business ventures, including the ownership and management other private and public businesses.
We have no employment or other written agreement with Mr. Klamka.
13
The following table sets forth information as of the date of this report, relating to the beneficial ownership of our common stock by those persons known to us to beneficially own more than 5% of our capital stock, by our director and executive officer, and by all of our directors and executive officers as a group.
|
Name of Beneficial Owner(1)
|
Number Of Shares
|
Percent Ownership
|
|
Barton PK, LLC (2)
Richard Mays
Condor Financial Management, S.A. (3)
Ecorum Limited (4)
liveIR (5)
Susan Radke
Algol (6)
Ajoy Garapati
Joe Eberhard
HW Funds Group, LLC (7)
Dynamic Development (8)
|
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
500,000
|
8.6%
8.6%
8.6%
8.6%
8.6%
8.6%
8.6%
8.6%
8.6%
4.3%
4.3%
|
|
All Directors, Officers and Principal Stockholders as a Group
|
10000000
|
86.6%
|
|
1.)
|
The address of each shareholder is care of Solar Acquisition Corp at 215 Dino Drive, Ann Arbor, MI 48103 unless otherwise stated.
|
|
2.)
|
Peter Klamka, sole director and officer of Solar Acquisition Corp., is a beneficial owner in Barton PK, LLC.
|
|
3.)
|
Joe Eberhard is the Director and the address is P.O. Box 9112 CH-8036 Zurich Switzerland
|
|
4.)
|
Joe Eberhard is the Director and the address is P.O. Box 9112 CH-8036 Zurich Switzerland
|
|
5.)
|
Brandon Wynn is the President and the address is 1919 Van Buren St. #611A, Hollywood, FL 33020
|
|
6.)
|
Carol Wynn Eldred is the President and the address is 2212 South Cypress Bend Drive #201, Pompano Beach, FL 33069
|
|
7.)
|
Joe Logan is the Managing Director and the address is 708 Third Avenue, 11th Floor, New York, NY 10017
|
|
8.)
|
Avi Shapiro is the President and the address is YUNITSMAN 2/523, TEL AVIV YAFO 69360, ISRAEL
|
CODE OF ETHICS
We have not yet adopted a code of ethics that applies to our principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions, since we have been focusing our efforts on obtaining financing for the company. We expect to adopt a code by the end of the current fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors, and persons who beneficially own more than 10% of our common stock to file reports of securities ownership and changes in such ownership with the Securities and Exchange Commission ("SEC"). Officers, directors and greater than 10% beneficial owners are also required by rules promulgated by the SEC to furnish us with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to us, or written representations that no Form 5 filings were required, we believe that during the fiscal period ended December 31, 2006, there was compliance with all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners.
14
None
Directors do not receive compensation but are reimbursed for their expenses for each meeting of the board that they attend.
STOCK OPTION PLANS
None
None
None
NONE.
15
(a) Exhibits to this Form 10-K:
| 3.1 | Articles of incorporation dated June 3, 2006(1) |
| 3.2 | By-Laws(1) |
| 31.1 | Certification |
| 32.1 | Certification |
(1) Incorporated by reference from the Company’s Form 10SB filed September 2006.
AUDIT FEES
For the audited fiscal period ended December 31, 2008, our principal accountants have billed approximately $4,500 (2008- $2,500) for the audit of our annual financial statements and Form 10-KSB and review of financial statements included in our Form 10-Q filings.
AUDIT-RELATED FEES
There were no fees billed for services reasonably related to the performance of the audit or review of our financial statements outside of those fees disclosed above under "Audit Fees".
TAX FEES
There were no fees billed during this fiscal period for tax compliance, tax advice, and tax planning services.
ALL OTHER FEES
There were no fees billed for services by our principal accountant, other than those disclosed above.
Prior to engaging our accountants to perform a particular service, our board of directors obtains an estimate for the service to be performed.
16
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SOLAR ACQUISITION CORP. | |||
|
Date: September 20, 2010
|
By:
|
/s/ Peter Klamka | |
| Peter Klamka, President | |||
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
Date: September 20, 2010
|
By:
|
/s/ Peter Klamka | |
| Peter Klamka | |||
|
Chairman, President,
Secretary and Chief Executive Officer
(Principal Executive and Accounting Officer)
|
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