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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURUTIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 2011
Commission file number 333-165381
Unseen Solar, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 27-1662208
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
505 Camino Elevado
Bonita, CA 91902
Telephone (619)247-9630 Facsimile (619)421-2653
(Address of Principal Executive Offices, Zip Code & Telephone Number)
Abby L. Ertz, Esq.
The Ertz Law Group
2534 State Street, Suite 203
San Diego, CA 92101
Telephone (619)840-4566 Facsimile (619)795-8400
(Name, Address and Telephone Number of Agent for Service)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, $0.0001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
As of April 21, 2011, the registrant had 3,000,000 shares of common stock issued
and outstanding. No market value has been computed based upon the fact that no
active trading market had been established.
UNSEEN SOLAR, INC.
TABLE OF CONTENTS
Page
No.
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Part I
Item 1. Business 3
Item 1A. Risk Factors 7
Item 2. Properties 10
Item 3. Legal Proceedings 10
Item 4. [Removed and Reserved] 10
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 11
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
Item 8. Financial Statements and Supplementary Data 14
Item 9A. Controls and Procedures 27
Item 9B. Other Information 28
Part III
Item 10. Directors and Executive Officers 29
Item 11. Executive Compensation 30
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 31
Item 13. Certain Relationships and Related Transactions 32
Item 14. Principal Accounting Fees and Services 33
Part IV
Item 15. Exhibits 34
Signatures 34
2
PART I
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this annual report on Form 10-K contain or may contain
forward-looking statements that are subject to known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. These
forward-looking statements were based on various factors and were derived
utilizing numerous assumptions and other factors that could cause our actual
results to differ materially from those in the forward-looking statements. These
factors include, but are not limited to, our ability to consummate a merger or
business combination, economic, political and market conditions and
fluctuations, government and industry regulation, interest rate risk, U.S. and
global competition, and other factors. Most of these factors are difficult to
predict accurately and are generally beyond our control. You should consider the
areas of risk described in connection with any forward-looking statements that
may be made herein. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report.
Readers should carefully review this annual report in its entirety, including
but not limited to our financial statements and the notes thereto. Except for
our ongoing obligations to disclose material information under the Federal
securities laws, we undertake no obligation to release publicly any revisions to
any forward-looking statements, to report events or to report the occurrence of
unanticipated events. For any forward-looking statements contained in any
document, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
ITEM 1. BUSINESS
GENERAL INFORMATION
Unseen Solar, Inc. was incorporated in the State of Delaware on January 8, 2010.
We have purchased a patent for a solar heating system from Edward F. Myers II,
the Company's President, Director and majority shareholder. We are a development
stage company with no revenues and a limited operating history. Our fiscal year
end if January 31st.The principal executive offices are located at 505 Camino
Elevado, Bonita, CA 91902. The telephone number is (619)247-9630.
We received our initial funding of $5,000 through the sale of common stock to
our officer and director who purchased 2,000,000 shares of our common stock at
$0.0025 per share on January 12, 2010. On November 26, 2010 we completed an
offering of 1,000,000 shares of common stock pursuant to the S-1 Registration
Statement we filed with the US Securities and Exchange Commission. Total
proceeds from the offering were $20,000.
Our financial statements from inception (January 8, 2010) through January 31,
2011 report no revenues and a net loss of $17,612. Our independent auditor has
issued an audit opinion for Unseen Solar, Inc. which includes a statement
expressing substantial doubt as to our ability to continue as a going concern.
There is no current public market for our securities. As our stock is not
publicly traded, investors should be aware they probably will be unable to sell
their shares and their investment in our securities is not liquid.
We have a total of 100,000,000 authorized common shares with a par value of
$0.0001 per share with 3,000,000 common shares issued and outstanding as of
January 31, 2011. We have a total of 20,000,000 authorized preferred shares with
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a par value of $0.0001 per share with no preferred shares issued and outstanding
as of January 31, 2011.
EXECUTIVE SUMMARY
Unseen Solar, Inc. is a development stage company incorporated on January 8,
2010 in the State of Delaware to enter into the solar energy industry.
Dr. Myers' serves as officer and director of our company from inception (January
8, 2010) to current date. No other person other than Dr. Myers has acted as a
promoter of Unseen Solar since our inception. Other than Dr. Myers' purchase of
2,000,000 shares of our common stock on January 12, 2010, and his assignment of
all his rights in Provisional patent EFS ID 5425605 and EFS ID 61347235 to
Unseen Solar, Inc., and an agreement to loan money to the Company, Dr. Myers has
not entered into any agreement with the Company in which he is to receive from
us or provide to us anything of value. Dr. Myers purchased the 2,000,000 shares
of our common stock at a price of $.0025 per share for a total of $5,000.
PRODUCT HISTORY
In 1980 Dr. Myers ("the Inventor") was deciding what type of solar heating
system to use on the swimming pool in his backyard. The typical pool solar at
that time was tubes of black plastic on the house roof on the side facing the
sun. In the inventor's case this was the side facing the street. The Inventor's
wife did not like the appearance and stated that the only solar system to be
allowed was one that could not be seen, hence the development of this product.
PRODUCT OVERVIEW
The Unseen Solar swimming pool heating system creates a blend of green energy
harvesting while maintaining your home aesthetics.
Our product heats swimming pools while hiding the system's components underneath
tile roofs leaving rooftops free of unsightly hardware. Homeowners not only get
the benefit of a heated pool while saving on energy costs but they get to
preserve their home's appearance in the process.
How it works:
1. Install the Unseen Solar Pool Heating System in your tile roof. The
Unseen Solar Pool Heating System is specifically designed to fit in
the contours of a traditional tile roof.
2. Pool water is pumped through copper & plastic lines embedded under the
roof tiles and attic area.
3. The Sun heats up the roof tiles and transfers the heat to the Unseen
Solar heating system.
4. Warmer water is then cycled back into the swimming pool. Pool water is
heated to 78(degree)F - 84(degree)F.
The Unseen Solar pool heating systems comes with a limited 20 year warranty
against part defects.
We recommend hiring a local licensed roofing contractor to install the Unseen
Solar heating system to insure correct installation of the product. Unseen Solar
is currently seeking to build alliances with roofing contractors to help market
our products and to service installation requests.
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During the hot summer months you can easily bypass the Unseen Solar heating
system by closing the supply valve. Locate the supply valve shut off handle and
turn clockwise to bypass and counter clockwise to open.
INDUSTRY BACKGROUND
Solar pool heating systems have definitely come a long way since 1980. The most
efficient and economical methods commonly used in the industry involve long life
polypropylene plastic materials in exterior panels, generally on roof tops. The
payback period (time it takes to recoup original investment) has dropped
considerably and now pool builders are offering solar heating systems more
frequently than ever before.
Because desirable pool temperatures for swimming are between 78 degrees and 84
degrees, (much lower than temperatures for house water heating), a pool solar
heating system is very efficient. The panels are also less costly than domestic
water heating solar systems.
The best location for solar panels is on roof tops facing south. When that
location is not feasible, panels can be mounted on the ground in the most
favorable position. Automatic controls can route the water through the solar
system when the pool water temperature falls below the desirable set
temperature.
General life expectancy of a pool solar heating system is 20 years or longer.
The collectors are lightweight and impervious to rust; corrosion and scale build
up and are not sensitive to pool chemicals. With pool owners suffering the
increased cost of natural gas heating, the alternative to solar, it is
reasonable to assume that solar pool heating systems will continue to be
improved upon and alternative styles made available.
COMPETITIVE STRENGTHS & STRATEGY
The main selling point for Unseen Solar is that it cannot be seen from the
outside of the house. Aesthetics will be the main selling point for our system.
Unseen Solar has available for demonstration the system built by the inventor,
Dr. Myers and installed at his home in Bonita CA. This system was installed in
1980 and has been in operation since that date.
Existing solar heating systems for pools consist of panels on roof tops or
installed on the ground in strategic angle to the sun. They require purchase of
ready-made panels of polypropolene plastic, dark in color, to absorb sunlight.
Panels and appropriate plumbing need to be installed by plumbers or general
contractors.
Unseen Solar has acquired a patent for a unique concept for an effective,
economical solar heating system which is not visible from the outside of any
house or yard. The obvious desirability is appearance. Black panels on rooftops
are not particularly attractive. The one disadvantage is that the system can
only be used on a tile roof. The move away from shake and other more flammable
roof types is most likely resulting in an increasing percentage of tile roofs,
especially in the fire belt areas of the country.
While existing systems may be easier to acquire because of their established
place in the market and the number of companies who sell and install such
systems, the advantages of Unseen Solar's product, for many households, may
outweigh any disadvantages. As the company becomes established, the system can
be made easily available for purchase by any interested household.
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BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
REORGANIZATION, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business except for the purchase of a patent. On January 12, 2010 the Company
purchased the rights to a Provisional Patent for a solar energy system, for the
price of $1.00, from Edward F. Myers II, the Company's majority shareholder.
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to comply with all regulations, rules and directives of
governmental authorities and agencies applicable to the normal course of
business in the United States and the State of California.
PATENTS, TRADEMARKS, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR LABOR
CONTRACTS
On January 12, 2010 the Company's President and major shareholder, for the
amount of $1.00 assigned all his rights in a Provisional patent EFS ID 5425605
titled "Unseen Solar" to Unseen Solar, Inc. This Provisional patent is valid
until May 29, 2010. On May 21, 2010 Dr. Myers obtained an additional provisional
patent EFS ID 61347235 for an upgraded version of the precious provisional
patent using automatic controls. In accoudance with the sales agreement this
provisional patent is owned by the Company. This new provisional patent expires
on May 20, 2011. It is the Company's intention is to file for a conventional
patent on this invention. A short description of the product is that; water is
pumped from the swimming pool to a space under the red tile roof. The pool water
is then allowed to flow though cooper pipes which are under each row of pipes
placed in the cavity between the tiles and the roof. If these provisional
patents expire before the Company obtains a full patent it is the Company's
intention to continue the business since it sees being first with the idea gives
it a competitive advantage.
NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCT
We are not required to apply for or have any government approval for our
product.
RESEARCH AND DEVELOPMENT COSTS DURING THE LAST TWO YEARS
We have not expended funds for research and development costs since inception.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
Our only employee is our sole officer, Edward F. Myers II who currently devotes
2 hours per week to company matters and after receiving funding he plans to
devote as much time as the board of directors determines is necessary to manage
the affairs of the company. There are no formal employment agreements between
the company and our current employee.
REPORTS TO SECURITY HOLDERS
We voluntarily make available an annual report including audited financials on
Form 10-K to security holders. We file the necessary reports with the SEC
pursuant to the Exchange Act, including but not limited to, the report on Form
8-K, annual reports on Form 10-K, and quarterly reports on Form 10-Q.
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The public may read and copy any materials filed with the SEC at the SEC's
Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports,
proxy and information statements, and other electronic information regarding the
Company and filed with the SEC at http://www.sec.gov.
ITEM 1A. RISK FACTORS
WE ARE A DEVELOPMENT STAGE COMPANY AND HAVE NO OPERATING HISTORY OR GENERATED
ANY REVENUES. AN INVESTMENT IN OUR SHARES IS HIGHLY RISKY.
Unseen Solar, Inc. was incorporated January 8, 2010 and we have only recently
commenced our business operations, and we have not realized any revenues. Based
upon current plans, we expect to incur operating losses in future periods as we
incur expenses associated with the initial startup of our business. Further, we
cannot guarantee that we will be successful in realizing revenues or in
achieving or sustaining positive cash flow at any time in the future. Any such
failure could result in the possible closure of our business or force us to seek
additional capital through loans or additional sales of our equity securities to
continue business operations, which would dilute the value of our currently
issued shares.
WE HAVE ONLY A PROVISION PATENT AT THE PRESENT TIME. THIS PROVISIONAL PATENT
DOES NOT PROVIDE THE CONTINUING PROTESTION OF A FULL PATENT.
Unseen Solar, Inc. has the rights to a provisional patent not a full patent. A
provisional patent is only effective for twelve months from filing. The
provisional patent rights that the Company has expire on May 20, 2011. Unless
the Company files for a standard patent before that date, the Company will lose
all protection on its product.
BECAUSE OUR CURRENT OFFICER AND DIRECTOR HAS OTHER BUSINESS INTERESTS, HE MAY
NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Dr. Myers, our sole officer and director, currently devotes approximately 2
hours per week providing management services to us. While he presently possesses
adequate time to attend to our interest, it is possible that the demands on him
from other obligations could increase, with the result that he would no longer
be able to devote sufficient time to the management of our business. This could
negatively impact our business development.
WE CANNOT PREDICT WHEN OR IF WE WILL PRODUCE REVENUES, WHICH COULD RESULT IN A
TOTAL LOSS OF YOUR INVESTMENT IF WE ARE UNSUCCESSFUL IN OUR BUSINESS PLANS.
We have not yet generated any revenues from operations. There can be no
assurance that we will generate revenues or that revenues will be sufficient to
maintain our business. As a result, our shareholders could lose all of their
investment.
A FAILURE TO MEET CUSTOMER SPECIFICATIONS OR EXPECTATIONS COULD RESULT IN LOST
REVENUES, INCREASED EXPENSES, NEGATIVE PUBLICITY, CLAIMS FOR DAMAGES AND HARM TO
OUR REPUTATION AND CAUSE DEMAND FOR OUR PRODUCT TO DECLINE.
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In addition, our customers may have additional expectations about our product.
Any failure to meet customers' specifications or expectations could result in:
* delayed or lost revenue;
* requirements to provide additional services to a customer at reduced
charges or no charge;
* negative publicity about us, which could adversely affect our ability
to attract or retain customers; and
* claims by customers for substantial damages against us, regardless of
our responsibility for such failure, which may not be covered by
insurance policies and which may not be limited by contractual terms.
OUR ABILITY TO SUCCESSFULLY MARKET OUR PRODUCT COULD BE SUBSTANTIALLY IMPAIRED
IF OUR PRODUCT AND ITS APPLICATIONS DO NOT PROVE TO BE RELIABLE, EFFECTIVE AND
COMPATIBLE.
We may experience difficulties that could delay or prevent the successful
development, introduction or marketing of our product. If our product suffers
from reliability, quality or compatibility problems, market acceptance of our
product could be greatly hindered and our ability to attract customers could be
significantly reduced. We cannot assure you that our product will be free from
any reliability, quality or compatibility problems. If we incur increased costs
or are unable, for technical or other reasons, to install and manage our
product, our ability to successfully market our product could be substantially
limited.
IF WE ARE UNABLE TO MAINTAIN EXISTING AND DEVELOP ADDITIONAL RELATIONSHIPS WITH
CONTRACTORS AND BUILDERS, THE SALES AND MARKETING OF OUR PRODUCT MAY BE
UNSUCCESSFUL. OUR DEPENDENCE ON THIRD PARTIES INCREASES THE RISK THAT WE WILL
NOT BE ABLE TO MEET OUR FUTURE CUSTOMERS' NEEDS ON A TIMELY OR COST-EFFECTIVE
BASIS, WHICH COULD RESULT IN THE LOSS OF CUSTOMERS.
Our services will rely on products and services of third-party contractors.
There can be no assurance that we will not experience operational problems. Our
product and services will be provided through third-party contractors. Currently
the Company has no plans or agreements to manufacture, distribute, market (other
than our web site) or install our product.
THE LOSS OF DR. MYERS COULD SEVERELY IMPACT OUR BUSINESS OPERATIONS AND FUTURE
DEVELOPMENT OF OUR PRODUCTS, WHICH COULD RESULT IN A LOSS OF REVENUES AND YOUR
ABILITY TO EVER SELL ANY SHARES YOU PURCHASE IN THIS OFFERING.
Our performance is substantially dependent upon the professional expertise of
our President, Dr. Myers. We are dependent on his ability to develop and market
our product. If he were unable to perform his services, this loss couldhave an
adverse effect on our business operations, financial condition and operating
results if we are unable to replace him with another individual qualified to
develop and market our product. The loss of his services could result in a loss
of revenues, which could result in a reduction of the value of any shares you
purchase in this offering.
8
COST OF MATERIALS COULD MAKE OUR PRODUCT UNECONOMICAL.
A major component of our product is copper. Copper is a commodity and as such
has a very uncertain price.
THE TRADING IN OUR SHARES WILL BE REGULATED BY THE SECURITIES AND EXCHANGE
COMMISSION RULE 15G-9 WHICH ESTABLIHES THE DEFINITION OF A "PENNY STOCK."
Our shares are defined as a penny stock under the Securities and Exchange Act of
1934, and rules of the Commission. The Exchange Act and such penny stock rules
generally impose additional sales practice and disclosure requirements on
broker-dealers who sell our securities to persons othim than certain accredited
investors who are, generally, institutions with assets in excess of $4,000,000
or individuals with net worth in excess of $1,000,000 or annual income exceeding
$200,000 ($300,000 jointly with spouse), or in transactions not recommended by
the broker-dealer. For transactions covered by the penny stock rules, a broker
dealer must make certain mandated disclosures in penny stock transactions,
including the actual sale or purchase price and actual bid and offer quotations,
the compensation to be received by the broker-dealer and certain associated
persons, and deliver certain disclosures required by the Commission.
Consequently, the penny stock rules may make it difficult for you to resell any
shares you may purchase, if at all.
DUE TO THE LACK OF A TRADING MARKET FOR OUR SECURITIES, YOU MAY HAVE DIFFICULTY
SELLING ANY SHARES YOU PURCHASE IN THIS OFFERING.
We are not registered on any public stock exchange. There is presently no demand
for our common stock and no public market exists for the shares. We plan to
contact a market maker and apply to have the shares quoted on the
Over-The-Counter Electronic Bulletin Board (OTCBB). The OTCBB is a regulated
quotation service that displays real-time quotes, last sale prices and volume
information in over-the-counter (OTC) securities. The OTCBB is not an issuer
listing service, market or exchange. Although the OTCBB does not have any
listing requirements per se, to be eligible for quotation on the OTCBB, issuers
must remain current in their filing with the SEC or applicable regulatory
authority. Market makers are not permitted to begin quotation of a security
whose issuer does not meet his filing requirement. Securities already quoted on
the OTCBB that become delinquent in their required filings will be removed
following a 30 to 60 day grace period if they do not make their required filing
during that time. We cannot guarantee that our application will be accepted or
approved and our stock listed and quoted for sale. As of the date of this
filing, there have been no discussions or understandings between Unseen Solar
and anyone acting on our behalf, with any market maker regarding participation
in a future trading market for our securities. If no market is ever developed
for our common stock, it will be difficult for you to sell any shares you
purchase in this offering. In such a case, you may find that you are unable to
achieve any benefit from your investment or liquidate your shares without
considerable delay, if at all. In addition, if we fail to have our common stock
quoted on a public trading market, your common stock will not have a
quantifiable value and it may be difficult, if not impossible, to ever resell
your shares, resulting in an inability to realize any value from your
investment.
WE WILL INCUR ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND COMPLIANCE.
WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE, MAKING IT DIFFICULT
FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL.
We plan to contact a market maker and apply to have the shares quoted on the OTC
Electronic Bulletin Board. To be eligible for quotation, issuers must remain
current in their filings with the SEC. In order for us to remain in compliance
we will require future revenues to cover the cost of these filings, which could
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comprise a substantial portion of our available cash resources. If we are unable
to generate sufficient revenues to remain in compliance it may be difficult for
you to resell any shares you may purchase, if at all.
DR. MYERS, THE DIRECTOR OF THE COMPANY, BENEFICIALLY OWNS 66.6% OF THE
OUTSTANDING SHARES OF OUR COMMON STOCK. IF HE CHOOSES TO SELL HIS SHARES IN THE
FUTURE, IT MIGHT HAVE AN ADVERSE EFFECT ON THE PRICE OF OUR STOCK.
Due to the amount of Dr. Myers's share ownership in our company, if he chooses
to sell his shares in the public market, the market price of our stock could
decrease and all shareholders suffer a dilution of the value of their stock. If
he does sell any of his common stock, he will be subject to Rule 144 under the
1933 Securities Act which will restrict his ability to sell his shares.
ITEM 2. PROPERTIES
We do not currently own any property. We are currently operating out of the
premises of our President, Edward F. Myers II on a rent free basis during our
development stage. The office is at 505 Camino Elevado, Bonita, CA 91902. We
consider our current principal office space arrangement adequate and will
reassess our needs based upon the future growth of the company.
We do not have any investments or interests in any real estate. We do not invest
in real estate mortgages, nor do we invest in securities of, or interests in,
persons primarily engaged in real estate activities.
ITEM 3. LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings nor do we have any
knowledge of any threatened litigation.
ITEM 4. [REMOVED AND RESERVED]
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There has been no market established for our common stock.
As of January 31, 2011, we have 3,000,000 shares of $0.0001 par value common
stock issued and outstanding held by 27 shareholders of record.
The stock transfer agent for our securities is Signature Stock Transfer, 2632
Coachlight Court, Plano, TX.
DIVIDENDS
We have never declared or paid any cash dividends on our common stock. For the
foreseeable future, we intend to retain any earnings to finance the development
and expansion of our business, and we do not anticipate paying any cash
dividends on our common stock. Any future determination to pay dividends will be
at the discretion of the Board of Directors and will be dependent upon then
existing conditions, including our financial condition and results of
operations, capital requirements, contractual restrictions, business prospects,
and other factors that the board of directors considers relevant.
SECTION RULE 15(g) OF THE SECURITIES EXCHANGE ACT OF 1934
The Company's shares are covered by Section 15(g) of the Securities Exchange Act
of 1934, as amended that imposes additional sales practice requirements on
broker/dealers who sell such securities to persons other than established
customers and accredited investors (generally institutions with assets in excess
of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouses). For
transactions covered by the Rule, the broker/dealer must make a special
suitability determination for the purchase and have received the purchaser's
written agreement to the transaction prior to the sale. Consequently, the Rule
may affect the ability of broker/dealers to sell our securities and also may
affect your ability to sell your shares in the secondary market.
Section 15(g) also imposes additional sales practice requirements on
broker/dealers who sell penny securities. These rules require a one page summary
of certain essential items. The items include the risk of investing in penny
stocks in both public offerings and secondary marketing; terms important to in
understanding of the function of the penny stock market, such as "bid" and
"offer" quotes, a dealers "spread" and broker/dealer compensation; the
broker/dealer compensation, the broker/dealers duties to its customers,
including the disclosures required by any other penny stock disclosure rules;
the customers rights and remedies in causes of fraud in penny stock
transactions; and, FINRA's toll free telephone number and the central number of
the North American Administrators Association, for information on the
disciplinary history of broker/dealers and their associated persons.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
We do not have any equity compensation plans and accordingly we have no
securities authorized for issuance there under.
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
We did not purchase any of our shares of common stock or other securities during
the year ended January 31, 2011.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
We are a development stage company and have generated no revenues since
inception (January 8, 2010) and have incurred $17,612 in expenses through
January 31, 2011. For the years ended January 31, 2011 and 2010 we incurred
$16,889 and $600, respectively, in general and administrative expenses and for
the year ended January 31, 2011 we incurred $123 in interest expense.
The following table provides selected financial data about our company for the
years ended January 31, 2011 and 2010.
Balance Sheet Data: 1/31/11 1/31/10
------------------- ------- -------
Cash $ 9,979 $ 4,999
Total assets $ 9,979 $ 4,999
Total liabilities $ 2,591 $ 599
Shareholders' equity $ 7,388 $ 4,400
Cash provided by financing activities since inception through January 31, 2011
was $5,000 from the sale of 2,000,000 shares of common stock to our officer and
director in January 2010. On November 26, 2010 we completed an offering of
1,000,000 shares of common stock to 26 individuals pursuant to the S-1
Registration Statement we filed with the US Securities and Exchange Commission.
Total proceeds from the offering were $20,000.
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at January 31, 2011 was $9,979, with $2,591 in outstanding
liabilities, consisting of $68 in accounts payable, $123 in interest payable and
$2,400 in a loan from a related party. If we experience a shortfall of cash our
director has agreed to loan us additional funds for operating expenses, however
he has no legal obligation to do so. Our plan of operation for the next twelve
months is to introduce our product to the contractor industry via direct mail
and our website http://www.unseensolar.com. Total expenditures over the next 12
months are expected to be approximately $20,000.
PLAN OF OPERATION
Unseen Solar plans to introduce its product to the contractor industry via
direct mail and our website http://www.unseensolar.com. The Company plans to
especially target roofing contractors. Unseen Solar feels that its product is
practical both as a retrofit for existing houses and for new construction. The
cost of installing our product at the time the roof is built should be
advantageous. Installing tile roofs on existing properties is financially
rewarding since, due to wild fires, some insurance companies provide incentives
for conversion to tile roofs from flammable shingles.
12
PROPOSED MILESTONES TO IMPLEMENT BUSINESS OPERATIONS
The following milestones are estimates only. The working capital requirements
and the projected milestones are approximations only and subject to adjustment
based on costs and needs. Our 12 month budget is based on minimum operations. If
we begin to generate profits we will increase our sales activity accordingly. We
estimate sales to begin within 12 months. Because our business is client-driven,
our revenue requirements will be reviewed and adjusted based on sales. The costs
associated with operating as a public company are included in our budget.
Management will be responsible for the preparation of the required documents to
keep the costs to a minimum. We plan to start the following activities during
the next twelve months
We will design a brochure using material from our web site and have it printed.
We will mail this brochure to a database of contractors in San Diego County. We
will work with the selected patent attorney (Cost estimate - $8,000)
We will follow up contacting contractors who have been sent brochures and have
shown an interest in our product. We will contact pool builders who may be
interested in using our product when they install new pools. We will design a
brochure to be used for direct mail with pool owners. (Cost estimate - $2,000)
Continue our direct mail campaign and work with any contractors and pool
builders who have interested customers. (Cost estimate - $4,000)
If the Company has customers or revenue during this 12 month period, the
business plan may change or be accelerated. There can however, be no assurance
that the Company will have either customers, revenue or sufficient capital to
carry out all of the above plans.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
GOING CONCERN
Our auditor has issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated revenues and no revenues are anticipated until we
begin selling our solar pool heating systems. There is no assurance we will ever
reach that point.
13
ITEM 8. FINANCIAL STATEMENTS
Chang G. Park, CPA, Ph. D.
* 2667 CAMINO DEL RIO SOUTH PLAZA B * SAN DIEGO * CALIFORNIA 92108-3707 *
* TELEPHONE (858)722-5953 * FAX (858) 761-0341 * FAX (858) 433-2979
* E-MAIL changgpark@gmail.com *
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Unseen Solar, Inc.
We have audited the accompanying balance sheets of Unseen Solar, Inc. (A
Development Stage "Company") as of January 31, 2011 and 2010 and the related
statements of operations, changes in shareholders' equity and cash flows for the
years then ended January 31, 2011 and 2010, and for the period from January 8,
2010 (inception) to January 31, 2011. 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 audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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 Unseen Solar, Inc. as of
January 31, 2011, and the result of its operations and its cash flows for the
years then ended and for the period from January 8, 2010 (inception) to January
31, 2011 in conformity with U.S. generally accepted accounting principles.
The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 5 to the financial statements,
the Company's losses from operations raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Chang Park
----------------------------
CHANG G. PARK, CPA
April 21, 2010
San Diego, CA. 92108
Member of the California Society of Certified Public Accountants
Registered with the Public Company Accounting Oversight Board
14
Unseen Solar, Inc.
(A Development Stage Company)
Balance Sheets
--------------------------------------------------------------------------------
As of As of
January 31, January 31,
2011 2010
-------- --------
CURRENT ASSETS
Cash $ 9,979 $ 4,999
-------- --------
TOTAL CURRENT ASSETS 9,979 4,999
-------- --------
TOTAL ASSETS $ 9,979 $ 4,999
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 68 $ 300
Advances from officer -- 299
-------- --------
TOTAL CURRENT LIABILITIES 68 599
-------- --------
LONG-TERM LIABILITIES
Accrued interest payable 123 --
Note payable - related party 2,400 --
-------- --------
TOTAL LONG-TERM LIABILITIES 2,523 --
-------- --------
TOTAL LIABILITIES 2,591 599
-------- --------
STOCKHOLDERS' EQUITY
Preferred Stock ($0.0001 par value, 20,000,000 shares
authorized; zero shares issued and outstanding
as of January 31, 2011 and January 31, 2010 -- --
Common stock, ($0.0001 par value, 100,000,000 shares
authorized; 3,000,000 shares issued and outstanding
and 2,000,000 issued and outstanding as of
January 31, 2011 and 2010 respectively 300 200
Additional paid-in capital 24,700 4,800
Deficit accumulated during development stage (17,612) (600)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 7,388 4,400
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 9,979 $ 4,999
======== ========
The accompanying notes are an integral part of these financial statements
15
Unseen Solar, Inc.
(A Development Stage Company)
Statements of Operations
--------------------------------------------------------------------------------
January 8, 2010
(inception)
Year Ended Year Ended through
January 31, January 31, January 31,
2011 2010 2011
---------- ---------- ----------
REVENUES
Revenues $ -- $ -- $ --
---------- ---------- ----------
TOTAL REVENUES -- -- --
GENERAL & Administrative Expenses
Administrative expenses 7,089 600 7,689
Professional fees 9,800 -- 9,800
---------- ---------- ----------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES 16,889 600 17,489
---------- ---------- ----------
LOSS FROM OPERATION (16,889) (600) (17,489)
---------- ---------- ----------
OTHER EXPENSE `
Interest expense 123 -- 123
---------- ---------- ----------
NET INCOME (LOSS) $ (17,012) $ (600) $ (17,612)
========== ========== ==========
BASIC EARNINGS PER SHARE $ (0.01) $ (0.00)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING $2,180,822 $2,000,000
========== ==========
The accompanying notes are an integral part of these financial statements
16
Unseen Solar, Inc.
(A Development Stage Company)
Statement of changes in Shareholders' Equity (Deficit)
From January 8, 2010 (Inception) through January 31, 2011
--------------------------------------------------------------------------------
Deficit
Accumulated
Common Stock Additional During
-------------------- Paid-in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Balance, January 8, 2010 ( Inception) -- $ -- $ -- $ -- $ --
Common stock issued, January 12, 2010
at $0.0025 per share 2,000,000 200 4,800 -- 5,000
Loss for the period beginning January 8, 2010
(inception) to January 31, 2010 (600) (600)
---------- ---------- ---------- ---------- ----------
BALANCE, JANUARY 31, 2010 2,000,000 $ 200 $ 4,800 $ (600) $ 4,400
---------- ---------- ---------- ---------- ----------
Common stock issued, November 26, 2010
at $0.02 per share 1,000,000 100 19,900 20,000
Net Loss, year ended January 31, 2011 (17,012) (17,012)
---------- ---------- ---------- ---------- ----------
BALANCE, JANUARY 31, 2011 3,000,000 $ 300 $ 24,700 $ (17,612) $ 7,388
========== ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements
17
Unseen Solar, Inc.
(A Development Stage Company)
Statements of Cash Flows
--------------------------------------------------------------------------------
January 8, 2010
(inception)
Year Ended Year Ended through
January 31, January 31, January 31,
2011 2010 2011
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(17,012) $ (600) $(17,612)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Increase (Decrease) in accounts payable and accrued liabilities (232) 300 68
Increase in accrued interest 123 -- 123
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (17,121) (300) (17,421)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in advance from officer (299) 299 --
Increase in note payable - related party 2,400 -- 2,400
Issuance of common stock 20,000 5,000 25,000
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 22,101 5,299 27,400
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 4,980 4,999 9,979
CASH AT BEGINNING OF YEAR 4,999 -- --
-------- -------- --------
CASH AT END OF YEAR $ 9,979 $ 4,999 $ 9,979
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these financial statements
18
Unseen Solar, Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2011
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Unseen Solar, Inc. (the "Company") was incorporated on January 8, 2010 under the
laws of the State of Delaware to enter into the solar energy industry. The
Company's activities to date have been limited to organization and capital. The
Company has been in the development stage since its formation and has not yet
realized any revenues from its planned operations. The Company's fiscal year end
is January 31.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING BASIS
The statements were prepared following generally accepted accounting principles
of the United States of America consistently applied.
USE OF ESTIMATES
Management uses estimates and assumptions in preparing these financial
statements in accordance with U.S. generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses.
CASH AND CASH EQUIVALENTS
Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition.
INCOME TAXES
The Company accounts for its income taxes in accordance with FASB Accounting
Standards Codification ("ASC") No. 740, "Income Taxes". Under this method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances. Deferred tax assets and liabilities are measured using enacted or
substantially enacted tax rates expected to apply to the taxable income in the
years in which those differences are expected to be recovered or settled.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the date of enactment or substantive enactment.
19
Unseen Solar, Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2011
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FINANCIAL INSTRUMENTS
Fair value measurements are determined based on the assumptions that market
participants would use in pricing an asset or liability. ASC 820-10 establishes
a hierarchy for inputs used in measuring fair value that maximizes the use of
observable inputs and minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available. FASB ASC 820 establishes a
fair value hierarchy that prioritizes the use of inputs used in valuation
methodologies into the following three levels:
* Level 1: Quoted prices (unadjusted) for identical assets or
liabilities in active markets. A quoted price in an active market
provides the most reliable evidence of fair value and must be used to
measure fair value whenever available.
* Level 2: Significant other observable inputs other than Level 1 prices
such as quoted prices for similar assets or liabilities; quoted prices
in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data.
* Level 3: Significant unobservable inputs that reflect a reporting
entity's own assumptions about the assumptions that market
participants would use in pricing an asset or liability. For example,
level 3 inputs would relate to forecasts of future earnings and cash
flows used in a discounted future cash flows method.
The recorded amounts of financial instruments, including cash equivalents
accounts payable and accrued expenses, and long-term debt approximate their
market values as of December 31, 2010 and December 31, 2009.
NET LOSS PER SHARE
Basic loss per share includes no dilution and is computed by dividing loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Dilutive loss per share reflects the potential
dilution of securities that could share in the losses of the Company. Because
the Company does not have any potentially dilutive securities, the accompanying
presentation is only of basic loss per share.
20
Unseen Solar, Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2011
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements that the Company has adopted or that will be
required to adopt in the future are summarized below.
In October 2009, the FASB issued Accounting Standards Update No. 2009-13 ("ASU
2009-13") "Revenue Recognition (ASC 605), Multiple-Deliverable Revenue
Arrangements a consensus of the FASB Emerging Issues Task Force ("EITF"). This
ASU provides amendments to the criteria in FASB ASC 605-25 for separating
consideration in multiple-deliverable arrangements. ASU 2009-13 changes existing
rules regarding recognition of revenue in multiple deliverable arrangements and
expands ongoing disclosures about the significant judgments used in applying its
guidance. It will be effective for revenue arrangements entered into or
materially modified in the fiscal year beginning on or after June 15, 2010.
Early adoption is permitted on a prospective or retrospective basis. The
adoption of FASB ASU 2009-13 did not have a material impact on our financial
statements.
In June 2009, the FASB issued FASB ASC 820-10, "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." This ASC provides
additional guidance for estimating fair value in accordance with FASB ASC
820-10, when the volume and level of activity for the asset or liability have
significantly decreased. This ASC also includes guidance on identifying
circumstances that indicate a transaction is not orderly. This ASC is effective
for interim and annual reporting periods that ended after June 15, 2009. The ASC
does not require disclosures for earlier periods presented for comparative
purposes at initial adoption. In periods after initial adoption, this ASC
requires comparative disclosures only for periods ending after initial adoption.
The adoption of FASB ASC 820-10 did not have a material impact on our financial
statements.
On July 1, 2009, the Company adopted updates issued by the Financial Accounting
Standards Board (FASB) to the authoritative hierarchy of GAAP. These changes
establish the FASB Accounting Standards CodificationTM (ASC) as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with GAAP. Rules and interpretive releases of the Securities and
Exchange Commission ("SEC") under authority of federal securities laws are also
sources of authoritative GAAP for SEC registrants. The FASB will no longer issue
new standards in the form of Statements, FASB Staff Positions, or Emerging
Issues Task Force Abstracts; instead the FASB will issue Accounting Standards
Updates. Accounting Standards Updates will not be authoritative in their own
right as they will only serve to update the Codification. These changes and the
Codification itself do not change GAAP. Other than the manner in which new
accounting guidance is referenced, the adoption of these changes had no impact
on the Financial Statements.
21
Unseen Solar, Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2011
--------------------------------------------------------------------------------
In January 2010, the Financial Accounting Standards Board ("FASB") issued
guidance to amend the disclosure requirements related to recurring and
nonrecurring fair value measurements. The guidance requires new disclosures on
the transfers of assets and liabilities between Level 1 (quoted prices in active
market for identical assets or liabilities) and Level 2 (significant other
observable inputs) of the fair value measurement hierarchy, including the
reasons and the timing of the transfers. Additionally, the guidance requires a
roll forward of activities on purchases, sales, issuance, and settlements of the
assets and liabilities measured using significant unobservable inputs (Level 3
fair value measurements). The guidance became effective for us with the
reporting period beginning January 1, 2010, except for the disclosure on the
roll forward activities for Level 3 fair value measurements, which will become
effective for us with the reporting period beginning July 1, 2011. Other than
requiring additional disclosures, adoption of this new guidance did not have a
material impact on our financial statements.
In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities
that declare dividends to shareholders that may be paid in cash or shares at the
election of the shareholders are considered to be a share issuance that is
reflected prospectively in EPS, and is not accounted for as a stock dividend.
This standard is effective for interim and annual periods ending on or after
December 15, 2009 and is to be applied on a retrospective basis. The adoption of
this standard is not expected to have a significant impact on the Company's
financial statements.
On February 24, 2010, the FASB issued guidance in the "Subsequent Events" topic
of the FASC to provide updates including: (1) requiring the company to evaluate
subsequent events through the date in which the financial statements are issued;
(2) amending the glossary of the "Subsequent Events" topic to include the
definition of "SEC filer" and exclude the definition of "Public entity"; and (3)
eliminating the requirement to disclose the date through which subsequent events
have been evaluated. This guidance was prospectively effective upon issuance.
The adoption of this guidance did not impact the Company's results of operations
of financial condition.
The Company has implemented all new accounting pronouncements that are in effect
and that may impact its financial statements and does not believe that there are
any other new accounting pronouncements that have been issued that might have a
material impact on its financial position or results of operations.
22
Unseen Solar, Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2011
--------------------------------------------------------------------------------
NOTE 3 - PROVISION FOR INCOME TAXES
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and
carry-forwards are expected to be available to reduce taxable income. As the
achievement of required future taxable income is uncertain, the Company recorded
a valuation allowance. As of January 31, 2011 the Company had a net operating
loss carry-forward of approximately $17,612. Net operating loss carry-forward,
expires twenty years from the date the loss was incurred.
The Company is subject to United States federal and state income taxes at an
approximate rate of 34%. The reconciliation of the provision for income taxes at
the United States federal statutory rate compared to the Company's income tax
expense as reported is as follows:
January 31 January 31
2011 2010
-------- --------
Net loss before income taxes per
financial statements $ 17,612 $ 600
Income tax rate 34% 34%
Income tax recovery (5,988) (204)
Permanent differences -- --
Temporary differences -- --
Valuation allowance change 5,988 204
Provision for income taxes -- --
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Deferred income taxes
arise from temporary differences in the recognition of income and expenses for
financials reporting and tax purposes. The significant components of deferred
income tax assets and liabilities at January 31, 2011 are as follows:
23
Unseen Solar, Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2011
--------------------------------------------------------------------------------
NOTE 3 - PROVISION FOR INCOME TAXES- CONTINUED
January 31 January 31
2011 2010
-------- --------
Net operating loss carryforward $ 5,988 $ 204
Valuation allowance (5,988) (204)
Net deferred income tax asset -- --
The Company has recognized a valuation allowance for the deferred income tax
asset since the Company cannot be assured that it is more likely than not that
such benefit will be utilized in future years. The valuation allowance is
reviewed annually. When circumstances change and which cause a change in
management's judgment about the realizability of deferred income tax assets, the
impact of the change on the valuation allowance is generally reflected in
current income.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
LITIGATION
The Company is not presently involved in any litigation.
NOTE 5 - GOING CONCERN
Future issuances of the Company's equity or debt securities will be required in
order for the Company to continue to finance its operations and continue as a
going concern. The Company's present revenues are insufficient to meet operating
expenses. The financial statement of the Company have been prepared assuming
that the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has incurred cumulative net losses of
$17,612 since its inception and requires capital for its contemplated
operational and marketing activities to take place. The Company's ability to
raise additional capital through the future issuances of common stock is
unknown. The obtainment of additional financing, the successful development of
the Company's contemplated plan of operations, and its transition, ultimately,
to the attainment of profitable operations are necessary for the Company to
continue operations. The ability to successfully resolve these factors raise
substantial doubt about the Company's ability to continue as a going concern.
24
Unseen Solar, Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2011
--------------------------------------------------------------------------------
The financial statements of the Company do not include any adjustments that may
result from the outcome of these aforementioned uncertainties.
NOTE 6 - RELATED PARTY TRANSACTIONS
Dr. Edward F. Myers, the sole officer and director of the Company, may in the
future, become involved in other business opportunities as they become
available, thus he may face a conflict in selecting between the Company and his
other business opportunities. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 7 - NOTE PAYABLE - RELATED PARTY
During the fiscal year the Company received cash totaling $9,400 from EFM
Venture Group, Inc. in the form of two promissory notes and made one payment of
$7,000 in cash. EFM Venture Group, Inc. is 100% owned by the company director.
As of January 31, 2011 the amount due to EFM Venture Group was $2,400.
Through July 31, 2010, the Company received $7,000 loan. This loan is at 4%
interest with principle and interest all due on July 31, 2012 (Note 1). As of
January 31, 2011, accrued interest is $99.
On October 6, 2010, the Company received $2,400 loan. This loans is at 4%
interest with principle and interest all due on October 6, 2012 (Note 2). As of
January 31, 2011, accrued interest is $24.
On November 27, 2010, the Company made a payment of $7,000 to EFM Venture Group.
(Paid Note 1)
Accrued interest payable on both notes was $123 as of January 31, 2011.
NOTE 8 - STOCK TRANSACTIONS
On January 12, 2010, the Company issued a total of 2,000,000 shares of common
stock to one director for cash in the amount of $0.0025 per share for a total of
$5,000
On November 26, 2010, the Company issued a total of 1,000,000 shares of common
stock to 26 individuals for cash in the amount of $0.02 per share for a total of
$20,000
As of January 31, 2011 the Company had 3,000,000 shares of common stock issued
and outstanding.
25
Unseen Solar, Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2011
--------------------------------------------------------------------------------
NOTE 9 - STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes
of capital stock as of January 31, 2011 and January 31, 2010:
Common stock, $ 0.0001 par value: 100,000,000 shares authorized; 3000,000 shares
issued and outstanding and 2,000,000 shares issued and outstanding respectively.
Preferred stock, $ 0.0001 par value: 20,000,000 shares authorized; no shares
issued and outstanding.
26
ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer (our
president), we have conducted an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the
end of the period covered by this report. Based on this evaluation, our
principal executive officer and principal financial officer concluded as of the
evaluation date that our disclosure controls and procedures were effective such
that the material information required to be included in our Securities and
Exchange Commission reports is accumulated and communicated to our management,
including our principal executive and financial officer, recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms relating to our company, particularly during
the period when this report was being prepared.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act, for the Company.
Internal control over financial reporting includes those policies and procedures
that: (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our assets;
(2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of its management and directors; and (3)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness
of any system of internal control, and accordingly, even effective internal
control can provide only reasonable assurance with respect to financial
statement preparation and may not prevent or detect material misstatements. In
addition, effective internal control at a point in time may become ineffective
in future periods because of changes in conditions or due to deterioration in
the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant
deficiencies, that results in there being a more than remote likelihood that a
material misstatement of the annual or interim financial statements will not be
prevented or detected.
Under the supervision and with the participation of our president, management
conducted an evaluation of the effectiveness of our internal control over
financial reporting, as of January 31, 2011, based on the framework set forth in
Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on our evaluation under
this framework, management concluded that our internal control over financial
reporting was not effective as of the evaluation date due to the factors stated
below.
27
Management assessed the effectiveness of the Company's internal control over
financial reporting as of evaluation date and identified the following material
weaknesses:
INSUFFICIENT RESOURCES: We have an inadequate number of personnel with requisite
expertise in the key functional areas of finance and accounting.
INADEQUATE SEGREGATION OF DUTIES: We have an inadequate number of personnel to
properly implement control procedures.
LACK OF AUDIT COMMITTEE & OUTSIDE DIRECTORS ON THE COMPANY'S BOARD OF DIRECTORS:
We do not have a functioning audit committee or outside directors on our board
of directors, resulting in ineffective oversight in the establishment and
monitoring of required internal controls and procedures.
Management is committed to improving its internal controls and will (1) continue
to use third party specialists to address shortfalls in staffing and to assist
the Company with accounting and finance responsibilities, (2) increase the
frequency of independent reconciliations of significant accounts which will
mitigate the lack of segregation of duties until there are sufficient personnel
and (3) may consider appointing outside directors and audit committee members in
the future.
Management, including our president, has discussed the material weakness noted
above with our independent registered public accounting firm. Due to the nature
of this material weakness, there is a more than remote likelihood that
misstatements which could be material to the annual or interim financial
statements could occur that would not be prevented or detected.
This annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the 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.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting that
occurred during the last fiscal quarter for our fiscal year ended January 31,
2011 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
28
PART III
ITEM 10. DIRECTOR AND EXECUTIVE OFFICER
The name, age and title of our executive officer/director is as follows:
Name and Address of Executive
Officer and/or Director Age Position
----------------------- --- --------
Edward F. Myers II 78 President, Secretary, Treasurer
505 Camino Elevado and Director
Bonita, CA 91902
Edward F. Myers II, PhD is the promoter of UNSEEN SOLAR, INC., as that term is
defined in the rules and regulations promulgated under the Securities and
Exchange Act of 1933. Dr. Myers has been Sole Director, President, Chief
Financial officer and Secretary of Unseen Solar, Inc. from its inception
(January 8, 2010) until present. For the past five years Dr. Myers has been a
Director and Secretary of EFM Venture Group, Inc. a private family company. EFM
Venture Group, Inc. is active in real estate and financial and business
consulting. Dr. Myers received his PhD in Psychology from International College
in Los Angeles, CA in 1982 and his M.S. in Nuclear Physics from the State
University of Iowa in 1958. Dr. Myers is the principle inventor of a
Bioartifical liver machine US Patent # 6,858,146.
TERM OF OFFICE
Our director is appointed to hold office until the next annual meeting of our
stockholders or until his successor is elected and qualified, or until he
resigns or is removed in accordance with the provisions of the Delaware Revised
Statutes. Our officer is appointed by our Board of Directors and holds office
until removed by the Board. The Board of Directors has no nominating, auditing
or compensation committees.
SIGNIFICANT EMPLOYEES
We have no significant employees other than our officer and director, Edward F.
Myers II. Dr. Myers currently devotes approximately 2 hours per week to company
matters. After receiving funding per our business plan Dr. Myers intends to
devote as much time as the Board of Directors deem necessary to mange the
affairs of the company.
Dr. Myers has not been the subject of any order, judgment, or decree of any
court of competent jurisdiction, or any regulatory agency permanently or
temporarily enjoining, barring, suspending or otherwise limiting him from acting
as an investment advisor, underwriter, broker or dealer in the securities
industry, or as an affiliated person, director or employee of an investment
company, bank, savings and loan association, or insurance company or from
engaging in or continuing any conduct or practice in connection with any such
activity or in connection with the purchase or sale of any securities. Dr. Myers
has not been convicted in any criminal proceeding (excluding traffic violations)
nor is he subject of any currently pending criminal proceeding.
Dr. Myers is qualified to be a director of the Company for the following
reasons: 1). Dr. Myers is knowledgeable in the science of this product in that
he holds a Master of Science degree in Physics. 2). He is the inventor of the
product. 3). He has used the product for over 30 years. 4). Dr. Myers has been a
29
principle of EFM Venture Group, Inc. for over 20 years and has been involved in
both business and financial consulting.
CODE OF ETHICS
We do not currently have a code of ethics, because we have only limited business
operations and only one officer and director, we believe a code of ethics would
have limited utility. We intend to adopt such a code of ethics as our business
operations expand and we have more directors, officers and employees.
ITEM 11. EXECUTIVE COMPENSATION
MANAGEMENT COMPENSATION
Currently, Edward F. Myers, our officer and director receives no compensation
for his services during the development stage of our business operations. He is
reimbursed for any out-of-pocket expenses that he incurs on our behalf. In the
future, we may approve payment of salaries for officers and directors, but
currently, no such plans have been approved. We do not have any employment
agreements in place with our sole officer and director. We also do not currently
have any benefits, such as health or life insurance, available to our employees.
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred All
Name and Plan Compen- Other
Principal Stock Option Compen- sation Compen-
Position Year Salary Bonus Awards Awards sation Earnings sation Totals
------------ ---- ------ ----- ------ ------ ------ -------- ------ ------
Edward
Myers II, 2011 0 0 0 0 0 0 0 0
President, 2010 0 0 0 0 0 0 0 0
CEO, CFO
and Director
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards Stock Awards
----------------------------------------------------------------- ----------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options (#) Options (#) Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable Unexercisable Options (#) Price Date Vested(#) Vested Vested Vested
---- ----------- ------------- ----------- ----- ---- --------- ------ ------ ------
Edward 0 0 0 0 0 0 0 0 0
Myers II
30
DIRECTOR COMPENSATION
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash Awards Awards Compensation Earnings Compensation Total
---- ---- ------ ------ ------------ -------- ------------ -----
Edward Myers II 0 0 0 0 0 0 0
There are no current employment agreements between the company and its officer
and director.
On January 12, 2010, a total of 2,000,000 shares of common stock were issued to
Dr. Myers in exchange for cash in the amount of $5,000 or $0.0025 per share.
Dr. Myers currently devotes approximately2 hours per week to manage the affairs
of the company. He has agreed to work with no remuneration until such time as
the company receives sufficient revenues necessary to provide management
salaries. At this time, we cannot accurately estimate when sufficient revenues
will occur to implement this compensation, or what the amount of the
compensation will be.
There are no annuity, pension or retirement benefits proposed to be paid to the
officer or director or employees in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the
company or any of its subsidiaries, if any.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as of the date of this prospectus
by: (i) each person (including any group) known to us to own more than five
percent (5%) of any class of our voting securities, (ii) our director, and or
(iii) our officer. Unless otherwise indicated, the stockholder listed possesses
sole voting and investment power with respect to the shares shown.
Amount and Nature Percentage
Name and Address of of Beneficial of Common
Title of Class Beneficial Owner Ownership Stock(1)
-------------- ---------------- --------- --------
Common Stock Edward F. Myers II, Director 2,000,000 66.6%
505 Camino Elevado Direct
Bonita, CA 91902
Common Stock Officer and/or director as a Group 2,000,000 66.6%
HOLDERS OF MORE THAN 5% OF OUR COMMON STOCK
31
----------
(1) A beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship,
or otherwise has or shares: (i) voting power, which includes the power to
vote, or to direct the voting of shares; and (ii) investment power, which
includes the power to dispose or direct the disposition of shares. Certain
shares may be deemed to be beneficially owned by more than one person (if,
for example, persons share the power to vote or the power to dispose of the
shares). In addition, shares are deemed to be beneficially owned by a
person if the person has the right to acquire the shares (for example, upon
exercise of an option) within 60 days of the date as of which the
information is provided. In computing the percentage ownership of any
person, the amount of shares outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason
of these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in this table does not necessarily reflect
the person's actual ownership or voting power with respect to the number of
shares of common stock actually outstanding as of the date of this
prospectus. As of the date of this report, there were 2,000,000 shares of
our common stock issued and outstanding.
FUTURE SALES BY EXISTING STOCKHOLDERS
A total of 2,000,000 shares have been issued to the existing stockholder, all of
which are held by our sole officer/director and are restricted securities, as
that term is defined in Rule 144 of the Rules and Regulations of the SEC
promulgated under the Act. Under Rule 144, such shares can be publicly sold,
subject to volume restrictions and certain restrictions on the manner of sale,
commencing six months after their acquisition.
Rule 144(i)(1) states that the Rule 144 safe harbor is not available for the
resale of securities "initially issued" by a shell company (other than a
business combination related shell company) or an issuer that has "at any time
previously" been a shell company (other than a business combination related
shell company). Consequently, the Rule 144 safe harbor is not available for the
resale of such securities unless and until all of the conditions in Rule
144(i)(2) are satisfied at the time of the proposed sale.
Any sale of shares held by the existing stockholder (after applicable
restrictions expire) and/or the sale of shares purchased in this offering (which
would be immediately resalable after the offering), may have a depressive effect
on the price of our common stock in any market that may develop, of which there
can be no assurance. Our principal shareholder does not have any plans to sell
his shares at any time after this offering is complete.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Edward F. Myers II is our sole officer and director. We are currently operating
out of the premises of Dr. Myers on a rent-free basis for administrative
purposes. There is no written agreement or other material terms or arrangements
relating to said arrangement.
On January 12, 2010, the Company issued a total of 2,000,000 shares of common
stock to Dr. Myers for cash at $0.0025 per share for a total of $5,000.
On January 12, 2010 the Company's President and major shareholder, for the
amount of $1.00 assigned all his rights in a Provisional patent EFS ID 5425605
titled "Unseen Solar" to Unseen Solar, Inc. This Provisional patent is valid
until May 29, 2010. Dr. Myers has subsequently assigned all his rights in an
additional provisional patent EFS ID 61347235 to Unseen Solar, Inc. It is the
Company's intention to use a portion of the proceeds of this offering to file
for a conventional patent on this invention.
We do not currently have any conflicts of interest by or among our current
officer, director, key employee or advisors. We have not yet formulated a policy
for handling conflicts of interest; however, we intend to do so upon completion
of this offering and, in any event, prior to hiring any additional employees.
32
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The total fees charged to the Company for audit services, including quarterly
reviews, were $6,800 for audit-related services were $Nil, for tax services were
$Nil and for other services were $Nil during the year ended January 31, 2011.
The total fees charged to the Company for audit services, including quarterly
reviews, were $Nil for audit-related services were $Nil, for tax services were
$Nil and for other services were $Nil during the year ended January 31, 2010.
33
PART IV
ITEM 15. EXHIBITS
The following exhibits are included with this filing:
Exhibit
Number Description
------ -----------
3(i) Articles of Incorporation*
3(ii) Bylaws*
31.1 Sec. 302 Certification of CEO
31.2 Sec. 302 Certification of CFO
32.1 Sec. 906 Certification of CEO
32.2 Sec. 906 Certification of CFO
----------
* Included in our S-1 filing under Commission File Number 333-165381.
SIGNATURES
Pursuant to the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
April 21, 2011 Unseen Solar, Inc., Registrant
By: /s/ Edward F. Myers II
-----------------------------------
Edward F. Myers II, President,
Chief Executive Officer, Principal
Accounting Officer, and Chief
Financial Officer
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.
April 21, 2011 Unseen Solar, Inc., Registrant
By: /s/ Edward F. Myers II
-----------------------------------
Edward F. Myers II, President,
Chief Executive Officer, Principal
Accounting Officer and Chief
Financial Officer
3
