UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Commission File Number:
000-1523855
SOLAR AMERICA CORP.
(Exact name of registrant as specified in its charter)
Wyoming
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5211
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38-3825959
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(State or other jurisdiction of
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(Primary Standard Industrial
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(I.R.S. Employer Identification
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incorporation or organization)
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Classification Code Number)
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Number)
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1135 Hodges Street
Lake Charles, LA 70601
(337) 214-0097
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
Wyoming Corporate Services, Inc.
2710 Thomes Ave.
Cheyenne, WY 82001
(307) 632-3333
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Lucosky Brookman LLP
Attn: Joseph M. Lucosky, Esq.
33 Wood Avenue South, 6th Floor
Iselin, New Jersey 08830
(732) 395 4400
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.
x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration Statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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CALCULATION OF REGISTRATION FEE
Title of Each Class Of
Securities to be Registered
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Amount to be
Registered
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Proposed
Maximum
Aggregate
Offering Price
per share (1)
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Proposed
Maximum
Aggregate
Offering Price (2)
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Amount of
Registration
fee
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Common Stock, $0.001 par value per share
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6,000,000
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$
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0.02
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$
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120,000
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$
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13.93
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(1)
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There is no public market for our common stock. We cannot give any assurance that the shares being offered will have a market value, or that they can be resold at the offered price if and when an active secondary market might develop, or that a public market for our securities may be sustained even if developed. The absence of a public market for our stock will make it difficult to sell your shares.We intend to apply to the OTCBB through a market maker that is a licensed broker dealer, to allow the trading of our Common Stock upon our becoming a reporting entity under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The offering price of the shares being registered herein is fixed at $0.02.
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(2)
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Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED JUNE 24, 2011
SOLAR AMERICA CORP.
6,000,000SHARES OF COMMON STOCK
This is the initial offering of common stock of Solar America Corp. We are offering for sale a total of 6,000,000 shares of common stock at a fixed price of $0.02 per share. There is no minimum number of shares that must be sold by us for the offering to proceed, and we will retain the proceeds from the sale of any of the offered shares. The offering is being conducted on a self-underwritten, best efforts basis, which means our Chairman and President, Brian Barrilleaux, will attempt to sell the shares. This Prospectus will permit Mr. Barrilleaux to sell the shares directly, with no commission or other remuneration payable to him for any shares he may sell. Mr. Barrilleaux will sell the shares and intends to offer them to friends, family members and business acquaintances. In offering the securities on our behalf, he will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Exchange Act. The shares will be offered at a fixed price of $0.02 per share for a period of one hundred and eighty (180) days from the effective date of this prospectus, unless extended by the Company’sBoard of Directors (the “Board of Directors”) for an additional 90 days.
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Offering Price
to the Public
Per Share
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Commissions
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Net Proceeds
to Company
After Offering
Expenses
(30% of Shares
Sold)
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Net Proceeds
to Company
After Offering
Expenses
(50% of Shares
Sold)
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Net Proceeds
to Company
After Offering
Expenses
(100% of Shares
Sold)
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Common Stock
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$
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0.02
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Not Applicable
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$
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0.00
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$
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24,000
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$
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84,000
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Any investment in the shares offered herein involves a high degree of risk. You should only purchase shares if you can afford a loss of your investment. Our independent registered public accountant has issued an audit opinion for Solar America Corp., which includes a statement expressing substantial doubt as to our ability to continue as a going concern.There currently is no market for our securities and a public market may never develop, or, if any market does develop, it may not be sustained. Our common stock is not traded on any exchange or on the over-the-counter market. There can be no assurance that our common stock will ever be quoted on a stock exchange or a quotation service or that any market for our stock will develop.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE SECTION OF THISPROSPECTUS ENTITLED “RISK FACTORS” BEGINNING ON PAGE 5 BEFORE BUYING ANY SHARES OF SOLAR AMERICA CORP.’S COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is , 2011
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PAGE
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Prospectus Summary
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2
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Summary Financial Information
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4
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Summary of the Offering
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3
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Risk Factors
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5
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Special Note Regarding Forward Looking Statements
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15
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Use of Proceeds
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15
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Determination of Offering Price
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16
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Dilution
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16
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Plan of Distribution
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18
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Description of Securities to be Registered
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19
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Interests of Named Experts and Counsel
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20
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Description of Business
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20
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Description of Property
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24
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Legal Proceedings
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24
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Market for Common Equity and Related Stockholder Matters
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24
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Management Discussion and Analysis of Financial Condition and Results of Operation
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25
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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29
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Directors and Executive Officers
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29
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Executive Compensation
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30
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Security Ownership of Certain Beneficial Owners and Management
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31
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Transactions with Related Persons, Promoters and Certain Control Persons
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32
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Index to Financial Statements
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F-1
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Part II
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II-1
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You should rely only on the information contained in this prospectus in deciding whether to purchase our Common Stock. We have not authorized anyone to provide you with information different from that contained in this prospectus. Under no circumstances should the delivery to you of this prospectus or any sale made pursuant to this prospectus create any implication that the information contained in this prospectus is correct as of any time after the date of this prospectus. To the extent that any facts or events arising after the date of this prospectus, individually or in the aggregate, represent a fundamental change in the information presented in this prospectus, this prospectus will be updated to the extent required by law.
This document may only be used where it is legal to sell these securities. Certain jurisdictions may restrict the distribution of these documents and the offering of these securities. We require persons receiving these documents to inform themselves about and to observe any such restrictions. We have not taken any action that would permit an offering of these securities or the distribution of these documents in any jurisdiction that requires such action.
PROSPECTUS SUMMARY
The following summary highlights material information contained in this prospectus. This summary does not contain all of the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the risk factors section, the financial statements and the notes to the financial statements. You should also review the other available information referred to in the section entitled “Where You Can Find More Information” in this prospectus and any amendment or supplement hereto. Unless otherwise indicated, the terms the “Company,”“SAC,”“we,”“us,” and “our” refer and relate to Solar America Corp.
The Company Overview
Solar America Corp. was incorporated in the state of Wyoming on August 12, 2010, as Glacier Point Corp. On December 6, 2010, an amendment was filed with the State of Wyoming to change the name to Solar America Corp. On December 16, 2010, the Company entered into an Agreement for Sale and Purchase of Business (the “Acquisition”) with the shareholder of Solar N Stuff, Inc. (“SNS”), a Corporation registered in the State of Louisiana, whereby the Company acquired 100% of the issued and outstanding shares of SNS in exchange for consideration in the aggregate of $100,000. As a result of the Acquisition, the business of SNS, which is more fully described below, became our principal business.
SNS, our wholly owned subsidiary, is a Louisiana-based alternative energy solution integrator. Through SNS we are focused on the continued deployment of residential, commercial and governmental alternative energy systems. We offer alternative energy solutions for owners, builders and architecture firms that include designing, building, operating, monitoring and maintaining these systems. Our current market focus is on residential consumers interested in retrofitting existing residences to reduce monthly energy expenditures as well as developers looking to incorporate these advanced technologies into new construction. We provide our customers with a high quality, low cost and flexible alternative energy solution.
We will continue our development as an end-to-end alternative energy solution provider by providing an integrated package, which includes pre and post-sales support, customer technical support, system design and installation. We intend to add additional alternative energy solutions, including wind and geothermal systems, to our product offerings as these technologies mature. We believe the business model for SNS will become the basis for expansion of our offerings into additional geographic areas. Once our product and service offerings are tested in our current market we anticipate an immediate expansion drive, both through organic growth and select acquisitions.
The alternative energy industry is highly competitive and always changing. As the popularity of alternative energy solutions, including solar power, solar lighting and solar thermal systems, continues to grow, there is amazing growth potential; however, there are growing numbers of competitors offering similar products and services to those that we offer. The barriers to entry into the market are not onerous, and a determined competitor could drive down the profit margin sufficiently to make it extremely difficult for us to be profitable.
We are currently a development stage company and to date all of our revenues have been generated by our SNS subsidiary. The acquisition of SNS and our initial operations have been funded through a series of promissory notes (See the Notes to our audited financial statements). Accordingly, our independent registered public accountant has issued a comment regarding our ability to continue as a going concern (See the Notes to our audited financial statements). Until such time that we are able to establish profits from our operations sufficient to sustain our operations, planned growth and marketing strategy, management intends to rely primarily upon debt financing as needed to supplement the cash flows generated by SNS.
Where You Can Find Us
Our principal executive office is located at 1135 Hodges Street, Lake Charles, Louisiana 70601 and our telephone number is (337) 214-0097.
SUMMARY OF THIS OFFERING
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The Issuer
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Solar America Corp.
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Securities being offered
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Up to 6,000,000 shares of common stock, our common stock is described in further detail in the section of this prospectus titled “Description of Securities to Be Registered”
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Per Share Price
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$0.02
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No Public Market
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There is no public market for our common stock. We cannot give any assurance that the shares being offered will have a market value, or that they can be resold at the offered price if and when an active secondary market might develop, or that a public market for our securities may be sustained even if developed. The absence of a public market for our stock will make it difficult to sell your shares.
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We intend to apply to the OTCBB through a market maker that is a licensed broker dealer, to allow the trading of our Common Stock upon our becoming a reporting entity under the Exchange Act.
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Duration of Offering
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The shares are offered for a period not to exceed 180 days, unless extended by our Board of Directors for an additional 90 days.
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Number of Shares Outstanding Before the Offering
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There are 10,000,000 shares of common stock issued and outstanding as of the date of this prospectus, beneficially owned by our Chairman and President, Brian Barrilleaux.
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Registration Costs
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We estimate our total costs relating to the registration herein shall be approximately $36,013.93.
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Net Proceeds to the Company
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The Company is offering 6,000,000 shares of Common Stock, $0.001 par value per share, at an offering price of $0.02 per share, for potential net proceeds to the Company of $120,000. The full subscription price will be payable at the time of subscription and accordingly, funds received from subscribers in this offering will be released to the Company when subscriptions are received and accepted.
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If the maximum amount of funds is raised, we intend to continue expanding our existing business, as well as pursue other energy related opportunities. If we sell 30% or less of our shares under this offering, we will continue our current operations but will require additional capital from alternate sources to execute our business plan. If such funds are not available, our business would likely fail and any investment would be lost. No assurance can be given that the net proceeds from the total number of shares offered hereby or any lesser net amount will be sufficient to accomplish our goals.
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Use of Proceeds
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We will use the proceeds for general working capital and administrative expenses, for the implementation of our business growth strategy.
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Risk Factors
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An investment in our common stock involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors” on page 5 and the other information contained in this prospectus before making an investment decision regarding our common stock.
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SUMMARY FINANCIAL INFORMATION
The following selected financial information is derived from the Company’s Financial Statements appearing elsewhere in this Prospectus and should be read in conjunction with the Company’s Financial Statements, including the notes thereto, appearing elsewhere in this Prospectus.
The following selected financial information is derived from our Financial Statements appearing elsewhere in this prospectus and should be read in conjunction with the Company’s Financial Statements, including the notes thereto, appearing elsewhere in this prospectus.
Summary of Operations
For the Three Months Ended March 31, 2011 and 2010
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Successor
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Predecessor
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Company
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Company
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March 31,
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March 31,
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2011
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2010
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Total Revenue
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$
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27,290
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$
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50,250
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Loss from Operations
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$
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130,058
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$
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39,746
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Other Expenses
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$
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5,565
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$
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—
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Net Loss
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$
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(135,623
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)
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$
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(39,746
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)
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For the Years Ended December 31, 2010 and 2009
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Successor
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Predecessor
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Predecessor
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Company
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Company
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Company
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Period since
inception August
12, 2010 to
December 31, 2010
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For the period
from January 1,
2010 through
December 15,
2010
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For the year ended
December 31, 2009
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Total Revenue
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$
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47,392
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$
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376,214
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$
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294,595
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Loss from Operations
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$
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50,013
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$
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106,044
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$
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51,286
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Other Income (Expense)
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$
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3,113
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$
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(374
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)
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$
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(495
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)
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Net Loss
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$
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(46,900
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)
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$
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(106,418
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)
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$
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(51,781
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)
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Statement of Financial Position
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March 31,
2011
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December 31,
2010
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Cash and Cash Equivalents
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$
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24,369
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$
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55,852
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Total Assets
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$
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144,067
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$
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190,920
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Total Liabilities
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$
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316,590
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$
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227,820
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Stockholders’Deficit
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$
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(172,523
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)
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$
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(36,900
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)
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. Currently, shares of our common stock are not publicly traded. In the event that shares of our common stock become publicly traded, the trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. In the event our common stock fails to become publicly traded you may lose all or part of your investment.
Risks Related to the Offering
AS THERE IS NO MINIMUM FLOOR FOR OUR OFFERING, IF ONLY A FEW PERSONS PURCHASE SHARES THEY WILL LOSE THEIR MONEY WITHOUT US BEING ABLE TO INITIALIZE OUR BUSINESS PLAN.
Since there is no minimum with respect to the number of shares to be sold directly by the Company in its offering, if a limited number of shares are sold, we may not have enough capital to fully implement our business plan. If we are only able to sell 30% of the offered shares, the potential proceeds of $36,000 may not be sufficient to cover our anticipated offering expenses. As such, we may not be able to meet the objectives we state in this prospectus, other corporate milestones that we may set, or avoid a “going concern” modification in future auditor reports as to uncertainty with respect to our ability to continue as a going concern. In such an event, it is highly likely that any investment would be lost, since we would not be able to generate sufficient profits from our operating revenues to cover operating expenses. If we fail to raise sufficient capital, we would expect to have to significantly decrease operating expenses, which will curtail the growth of our business.
INVESTING IN THE COMPANY IS A HIGHLY SPECULATIVE INVESTMENT AND COULD RESULT IN THE LOSS OF YOUR ENTIRE INVESTMENT.
A purchase of the offered shares is significantly speculative and involves significant risks. Any person who cannot afford the loss of his/her entire investment should not purchase the offered shares. The business objectives of the Company are also speculative, and we may be unable to satisfy those objectives. The stockholders of the Company may be unable to realize a substantial return on their purchase of the offered shares, or any return whatsoever, and may lose their entire investment in the Company. For this reason, each prospective purchaser of the offered shares should read this prospectus and all of its exhibits carefully and consult with their attorney, business advisor and/or investment advisor.
WE WILL REQUIRE FINANCING TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND OUR INABILITY TO OBTAIN SUCH FINANCING COULD PROHIBIT US FROM EXECUTING OUR BUSINESS PLAN AND CAUSE US TO SLOW DOWN OUR EXPANSION OF OPERATIONS.
We will need to raise funds through public or private debt or sale of equity to achieve our business strategy. Our current revenues provide us enough cash to maintain our current operations, yet additional funds will be required to implement our planned business growth strategy. Such financing may not be available when needed. Even if such financing is available, it may be on terms that are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. Our capital requirements to implement our business strategy will be significant. Moreover, in addition to monies needed to continue operations over the next twelve months, we anticipate requiring additional funds in order to significantly expand our operations as set forth in our plan of operations.
While we believe that our current funding sources will continue to advance funds to us as needed, there can be no assurances that such funding will be available to us on terms that would be acceptable and at this time we have no specific details regarding the timing or terms under which such funding would be available. Accordingly, there can be no assurance that we will be able to obtain financing if and when it is needed on terms we deem acceptable. If we are unable to obtain financing on reasonable terms, we could be forced to delay or scale back our plans for expansion. In addition, such inability to obtain financing on reasonable terms could have a material adverse effect on our business, operating results, or financial condition.
PURCHASERS IN THIS OFFERING WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION IN THE BOOK VALUE OF THEIR INVESTMENT.
The offering price of our common stock is substantially higher than the net tangible book value per share of our outstanding common stock immediately after this offering. Therefore, if you purchase our common stock in this offering and assuming we are able to sell 100% of the shares being offered hereunder, you will incur immediate dilution of 20% in net tangible book value per share from the price you paid.
WE MAY NEED ADDITIONAL CAPITAL IN THE FUTURE, AND THE SALE OF ADDITIONAL SHARES OR OTHER EQUITY SECURITIES COULD RESULT IN ADDITIONAL DILUTION TO OUR STOCKHOLDERS.
We believe that our current cash and cash equivalents, anticipated cash flow from operations and the net proceeds from this offering will be sufficient to meet our anticipated cash needs for the foreseeable future. We may, however, require additional cash resources due to changed business conditions or other future developments. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in additional dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
BECAUSE OUR CHAIRMAN AND PRESIDENT, MR. BRIAN BARRILLEAUX, BENEFICIALLY OWNS 100% OF OUR OUTSTANDING COMMON STOCK, INVESTORS MAY FIND THAT CORPORATE DECISIONS INFLUENCED BY MR. BARRILLEAUX ARE INCONSISTENT WITH THE BEST INTERESTS OF OTHER STOCKHOLDERS.
Mr. Barrilleaux, our Chief Executive Officer, President and Chairman of the Board of Directors, beneficially owns 100% of the current outstanding shares of our common stock, and, upon completion of this offering, will beneficially own 62.5% of our outstanding common stock if the maximum number of shares are sold. Accordingly, he will have a significant influence in determining the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. While we have no current plans with regard to any merger, consolidation or sale of substantially all of our assets, the interests of Mr. Barrilleaux may still differ from the interests of the other stockholders.
THERE IS A SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
The Company has incurred a net operating loss for each period since the Company’s inception. For the period from August 12, 2010 (Inception) to December 31, 2010, the Company had a net loss of $46,900, had a working capital deficit of $88,635 and an accumulated deficit of $46,900. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our ability to continue generating revenues will depend on a number of factors, many of which are beyond our control. These factors include general economic conditions, interest rates, market acceptance of our products and services, and competitive efforts. Due to these factors, we cannot anticipate with any degree of certainty what our revenues will be in future periods.
As such, our independent registered public accountants have expressed substantial doubt about our ability to continue as a going concern. This opinion could materially limit our ability to raise additional funds by issuing new debt or equity securities or otherwise. If we fail to raise sufficient capital when needed, we will not be able to complete our proposed business plan. As a result, we may have to liquidate our business and you may lose your investment.
Risks Related to Our Business
BECAUSE WE HAVE A LIMITED OPERATING HISTORY TO EVALUATE OUR COMPANY, THE LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES, COMPLICATIONS AND DELAY FREQUENTLY ENCOUNTERED BY A DEVELOPMENT-STAGE COMPANY.
Since we have a limited operating history, it will be difficult for investors and securities analysts to evaluate our business and future prospects. You must consider our prospects in light of the risks, expenses and difficulties we face as a development-stage company with a limited operating history. Investors should evaluate an investment in the Company in light of the uncertainties encountered by early-stage companies in an intensely competitive industry. There can be no assurance that our efforts will be successful or that we will be able to maintain profitability.
We have only recently developed our strategy of expanding our installation business beyond the Southeastern Louisiana market and proposing photovoltaic solar power projects. Potential investors should therefore be aware that we face the substantial risk of failure associated with any new business strategy as a result of problems encountered in connection with their commencement of new operations. These include, but are not limited to, the entry of new competition, unknown or unexpected additional costs and expenses that may exceed estimates.
THE MARKET FOR ALTERNATIVE ENERGY SOLUTIONS IS HIGHLY COMPETITIVE AND WE MAY BE UNABLE TO COMPETE SUCCESSFULLY.
The market for alternative energy solutions is intensely competitive. Our current solar products and services is only a small component of the overall U.S. residential power and lighting market and thus we must compete with established, larger and better-known national and local service providers. We compete for customers directly with larger and more established firms, such as local power companies, which have significant advantages over us, including access to greater capital resources, established sales and support mechanisms and large existing customer bases.
We also compete directly with other solar power and lighting installation companies. We expect these competitors to devote significant financial and operating resources to maintain their respective positions in the residential power and lighting segment. We also expect existing competitors and new entrants to the market to constantly revise and improve their products and services in light of challenges from us and other competition. If we cannot respond effectively to advances by our competitors, our business may be adversely affected.
IF THE PRICES OF TRADITIONAL SOURCES OF ENERGY DECLINE SIGNIFICANTLY, OUR SALES COULD DECLINE AND THE FINANCIAL RESULTS OF OUR BUSINESS OPERATIONS WOULD BE HARMED.
Prices of energy (including traditional sources of energy such as oil, gas, or electricity) or alternative energy may decline. The alternative energy industry as a whole can also be significantly affected by fluctuations in energy prices and supply and demand of alternative energy fuels, energy conservation, the success of exploration projects and tax and other government regulations and policies. If sufficient demand for alternative energy products does not develop or takes long periods of time to develop, the revenues of alternative energy companies may not experience growth to permit the ongoing expansion of such businesses. In the event that prices of energy from traditional sources undergo a significant and sustained decline, our sales and results of operations will be harmed.
BECAUSE DEMAND FOR ALTERNATIVE ENERGY SOLUTIONS IS DRIVEN IN PART BY GOVERNMENTAL INCENTIVES, A SIGNIFICANT REDUCTION IN GOVERNMENT SUBSIDIES AND ECONOMIC INCENTIVES FOR SOLAR POWER COULD CAUSE OUR SALES TO DECLINE.
Currently, demand for alternative energy solutions is driven in part by significant government subsidies and economic incentives. If subsidies and other incentives for alternative energy solutions are reduced or eliminated, the demand for alternative energy may decline and cause corresponding declines in the revenues and profits of alternative energy companies. In addition, existing regulations and policies, and changes to such regulations and policies, may present technical, regulatory and economic barriers to the purchase and use of alternative energy solutions, thus reducing demand for such solutions.
IF WE ARE UNABLE TO RESPOND TO CHANGING TECHNOLOGIES AND ISSUES PRESENTED BY NEW TECHNOLOGIES, OUR BUSINESS WILL BE HARMED.
The alternative energy industry is subject to technological change. If we rely on products and technologies that are not attractive to customers, or if we are unable to respond appropriately to changing technologies and changes in product function and quality, we may not be successful in capturing or retaining a significant market share. In addition, any new technologies utilized in our alternative energy systems may not perform as expected or as desired, in which event the adoption of such products or technologies could harm our business.
BECAUSE WE ARE CURRENTLY DEPENDENT ON THE SOUTHEASTERN LOUISIANA MARKET, WE MUST EXPAND TO OTHER MARKETS IN ORDER TO INCREASE OUR SALES AND DIVERSIFY OUR REVENUE BASE.
We derive substantially all of the revenue from our alternative energy solutions from sales in single state, making us dependent on the economics and market conditions of one region. We currently derive substantially all of the revenue from our alternative energy solutions from projects in Southeastern Louisiana. The growth of our business will require us to expand our operations in Louisiana and to commence operations in other states. Our success will likely depend on our ability to raise additional capital and successfully extend our installation business to other states.
IF WE ARE UNABLE TO MANAGE OUR PLANNED GROWTH, OUR OPERATIONS COULD BE ADVERSELY IMPACTED.
Our wholly-owned subsidiary, SNS, with its residential solar sales and installation business has formed the basis for a business model that we are confident can be replicated in locations across the United States. The management of such growth will require, among other things, continued development of our financial and management controls and management systems, stringent control of costs on both products and labor expenses, diligent management of our subsidiaries, increased spending associated with marketing activities, the addition of new locations, either through organic growth or acquisition, the ability to attract and retain qualified management personnel and the training of new personnel.
In addition, growth will eventually require the expansion of our accounting, customer support and business development operations, which will require additional capital expenditures and may divert the time and attention of management personnel who oversee any such expansion. Failure to successfully manage our expected growth and development, to enhance our processes and management systems or to timely and adequately resolve any such difficulties could have a material adverse effect on our business, financial condition and results of operations.
KEY MANAGEMENT PERSONNEL MAY LEAVE THE COMPANY, WHICH COULD ADVERSELY AFFECT THE ABILITY OF THE COMPANY TO CONTINUE OPERATIONS.
The Company is entirely dependent on the efforts of its Chief Executive Officer and President. The loss of him, or of other key personnel in the future, could have a material adverse effect on our business, financial condition and results of operations. Our success will depend on the performance of our Chief Executive Officer and President and our ability to attract and motivate other key personnel. In the event that we are unable to retain our Chief Executive Officer and President or other personnel, we cannot provide assurance that we would be able to locate and hire qualified replacements.The Company does not maintain “key person” life insurance on its executive officers.
In addition, the expansion of our business could place a significant strain on our managerial, financial and personnel resources. To reach our goals, we must successfully recruit, train, motivate and retain additional employees, including management and technical personnel. Also, we must be to integrate new employees into our overall operations and enhance our financial and accounting systems, controls and reporting systems.
FUTURE ACQUISITIONS COULD HAVE ADVERSE CONSEQUENCES ON OUR EXISTING BUSINESS OR ASSETS.
We may acquire additional operating businesses and other assets that we believe will aid us in our business model and growth strategy. Our acquisition strategy involves numerous risks, including:
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Possible failures of our acquisitions to be profitable or to generate anticipated cash flows;
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Lack of consumer interest in new product and service offerings;
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Entry into markets and geographic areas where we have limited or no experience;
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Potential difficulties in integrating our operations with those of acquired companies;
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Diversion of our management team’s attention away from other business concerns; and
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Loss of key employees of acquired companies or the inability to recruit additional senior management to supplement or replace senior management of acquired companies.
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THE LACK OF AVAILABILITY OF POTENTIAL ACQUISITIONS AT REASONABLE PRICES COULD HARM OUR GROWTH STRATEGY.
We face stiff competition from others for acquisition opportunities.If the prices sought by sellers of these companies were to rise, we may find fewer acceptable acquisition opportunities. In addition, the purchase price of possible acquisitions could require debt or equity financing on our part. Since the terms and availability of this financing depend to a large degree upon general economic conditions and third parties over which we have no control, we can give no assurance that we will obtain the needed financing or that we will obtain such financing on attractive terms. In addition, our ability to obtain financing depends on a number of other factors, many of which are also beyond our control, such as interest rates and national and local business conditions. If the cost of obtaining needed financing is too high or the terms of such financing are otherwise unacceptable in relation to the acquisition opportunity we are presented with, we may decide to forgo that opportunity. Additional indebtedness could increase our leverage and make us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures. Additional equity financing could result in dilution to our stockholders.
IT MAY BE DIFFICULT TO PREDICT OUR FINANCIAL PERFORMANCE BECAUSE OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE.
Our revenues and operating results may vary significantly from quarter to quarter due to a variety of factors, many of which are beyond our control. You should not rely on period-to-period comparisons of our results of operations as an indication of our future performance. Our results of operations may fall below the expectations of market analysts and our own forecasts. If this happens, the market price of our common stock may fall significantly. The factors that may affect our quarterly operating results include the following:
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Fluctuations in demand for our products and services;
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Backordered or oversold inventories of products required to complete booked installations;
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The timing and amount of sales and marketing expenses incurred to attract new customers;
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Fluctuations in sales of different types (i.e., daylighting systems vs. solar attic fans);
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Seasonal patterns in consumer spending;
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Worsening economic conditions which cause consumers to resist purchasing of our products and services;
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Changes in the regulatory environment, particularly the potential future elimination of State and Federal Tax Rebates for the purchase and installation of our products;
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The timing and amount of expenses associated with litigation, regulatory investigations or restructuring activities, including settlement costs and regulatory penalties assessed related to government enforcement actions;
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The adoption of new accounting pronouncements, or new interpretations of existing accounting pronouncements, that impact the manner in which we account for, measure or disclose our results of operations, financial position or other financial measures; and
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Costs related to opening additional locations or acquiring other operating businesses.
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Purchases by consumers also tend to be cyclical; reflecting overall economic conditions as well as budgeting and buying patterns. Any decline in the economy generally may alter consumers’ current or prospective spending priorities, or may increase the time it takes us to close sales, and could materially and adversely affect our business, results of operations and financial condition.
BECAUSE WE ARE DEPENDENT ON A LIMITED NUMBER OF SUPPLIERS, OUR BUSINESS, FINANCIAL CONDITION, AND OPERATING RESULTS WILL BE HARMED IF OUR SUPPLY ORDERS ARE DELAYED.
We depend upon a limited number of suppliers for the components used in our solar energy systems. The failure of our suppliers to supply us with components in a timely manner or on commercially reasonable terms could result in lost orders, delay our project schedules and harm our operating results and business expansion efforts. Our orders with certain of our suppliers may represent a very small portion of their total business. As a result, these suppliers may not give priority to our business, leading to potential delays in or cancellation of our orders. If any of our suppliers were to fail to supply our needs on a timely basis or to cease providing us key components we use, we would be required to secure alternative sources of supply. We may have difficulty securing alternative sources of supply in a timely manner and on commercially reasonable terms. If this were to occur, our business would be harmed.
OUR BUSINESS COULD BE ADVERSELY AFFECTED BY GENERAL ECONOMIC CONDITIONS; IF WE EXPERIENCE A DECLINE IN SALES OUR ABILITY TO BECOME PROFITABLE WILL DECREASE.
Our business could be adversely affected in a number of ways by general economic conditions, including higher interest rates, consumer credit conditions, unemployment and other economic factors. During economic downturns, we may have greater difficulty in gaining new customers for our products and services. Our strategies to acquire new customers may not be successful, which, in turn, could have a material adverse effect on our business, financial condition and results of operations.
IF OUR PRODUCTS CONTAIN DEFECTS, OUR REPUTATION COULD BE HARMED AND OUR RESULTS OF OPERATIONS ADVERSELY AFFECTED.
Some of our products are complex and may contain undetected defects. The occurrence of defects or malfunctions could result in financial losses for our customers and in turn, termination of services, cancellation of orders, product returns and diversion of our resources. Any of these occurrences could also result in the loss of or delay in market acceptance of our products and services, cause a loss of sales, and result in harm to our business reputation and the value of our brand.
IF WE ARE SUBJECT TO SIGNIFICANT UNEXPECTED WARRANTY EXPENSES OR SERVICE CLAIMS, OUR ABILITY TO GENERATE NET PROFITS WILL BE HARMED.
We may be subject to unexpected warranty expenses or service claims that could reduce our profits. As a result of the length of the warranty periods we provide, we bear the risk of warranty claims long after we have completed the installation of an alternative energy system. Our current standard warranty for our installation services includes a 10-year warranty period for defects in material and workmanship in Louisiana. Our failure to accurately predict future warranty claims could result in unexpected volatility in our financial condition.
BECAUSE OUR EMPLOYEES AND TECHNICIANS WORK IN THE HOMES AND BUSINESS OF OUR CUSTOMERS, WE MAY BE SUBJECT TO LIABILITY CLAIMS BASED ON THEIR ACTIONS.
As part of our alternative energy solution installation and integration business, our technicians and other employees must perform work in our customers’ homes and businesses. If the actions of these employees give rise to claims of property damages or other claims, we could experience increased costs, including potentially significant monetary damages.
WE ARE OPERATING IN A HIGHLY COMPETITIVE MARKET AND WE ARE UNSURE AS TO WHETHER OR NOT THERE WILL BE ANY CONSUMER DEMAND FOR OUR PRODUCTS.
Some of our competitors are much larger and better capitalized than we are. It may be that our competitors will better address the same market opportunities that we are addressing. These competitors, either alone or with collaborative partners, may succeed in developing business models that are more effective or have greater market success than our own. The Company is especially susceptible to larger companies that invest more money in marketing. Moreover, the market for our products is potentially large but highly competitive. There is little or no hard data that substantiates the demand for our services or how this demand will be segmented over time. We will be subject to delays and or order cancellation due to factors outside of the company’s control.
THE LACK OF PUBLIC COMPANY EXPERIENCE OF OUR MANAGEMENT TEAM COULD ADVERSELY IMPACT OUR ABILITY TO COMPLY WITH THE REPORTING REQUIREMENTS OF U.S. SECURITIES LAWS.
Our management team lacks public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002. Our senior management has never had responsibility for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including the establishing and maintaining internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of 1934, which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company.
WE NEED TO ESTABLISH AND MAINTAIN REQUIRED DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING AND TO MEET THE PUBLIC REPORTING AND THE FINANCIAL REQUIREMENTS FOR OUR BUSINESS, WHICH WILL BE TIME CONSUMING FOR OUR MANAGEMENT.
Our management has a legal and fiduciary duty to establish and maintain disclosure controls and control procedures in compliance with the securities laws, including the requirements mandated by the Sarbanes-Oxley Act of 2002. The standards that must be met for management to assess the internal control over financial reporting as effective are new and complex, and require significant documentation, testing and possible remediation to meet the detailed standards. Because we have limited resources, we may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting, and other disclosure controls and procedures. In addition, the attestation process by our independent registered public accounting firm is new and we may encounter problems or delays in completing the implementation of any requested improvements and receiving an attestation of our assessment by our independent registered public accounting firm. If we cannot assess our internal control over financial reporting as effective or provide adequate disclosure controls or implement sufficient control procedures, or our independent registered public accounting firm is unable to provide an unqualified attestation report on such assessment, investor confidence and share value may be negatively impacted.
WHILE NO CURRENT LAWSUITS ARE FILED AGAINST THE COMPANY, THE POSSIBILITY EXISTS THAT A CLAIM OF SOME KIND MAY BE MADE IN THE FUTURE.
While no current lawsuits are filed against us, the possibility exists that a claim of some kind may be made in the future. While we will work to insure high product quality and accuracy in all marketing and labeling, no assurance can be given that some claims for damages will not arise. We currently have no plan to purchase liability insurance and we currently lack the resources to purchase such insurance.
Risks Related to Our Common Stock
THE COMPANY’S STOCK PRICE MAY BE VOLATILE.
The market price of the Company’s Common Stock is likely to be highly volatile and could fluctuate widely in price in response to various potential factors, many of which will be beyond the Company’s control, including the following:
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Products and services by the Company or its competitors;
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Additions or departures of key personnel;
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The Company’s ability to execute its business plan;
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Operating results that fall below expectations;
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Loss of any strategic relationship;
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Economic and other external factors; and
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Period-to-period fluctuations in the Company’s financial results.
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In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the Company’s common stock.
WE MAY INCUR SIGNIFICANT COSTS TO BE A PUBLIC COMPANY TO ENSURE COMPLIANCE WITH U.S. CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS AND WE MAY NOT BE ABLE TO ABSORB SUCH COSTS.
Upon declared effectiveness of this registration statement by the SEC, we will become subject to the information and reporting requirements of the U.S. securities laws. The U.S. securities laws require, among other things, review, audit, and public reporting of our financial results, business activities, and other matters. Recent SEC regulation, including regulation enacted as a result of the Sarbanes-Oxley Act of 2002, has also substantially increased the accounting, legal, and other costs related to becoming and remaining an SEC reporting company. If we do not have current information about our company available to market makers, they will not be able to trade our stock. The public company costs of preparing and filing annual and quarterly reports, and other information with the SEC and furnishing audited reports to stockholders, will cause our expenses to be higher than they would be if we were privately-held. In addition, we are incurring substantial expenses in connection with the preparation of this registration statement. These increased costs may be material and may include the hiring of additional employees and/or the retention of additional advisors and professionals. Our failure to comply with the federal securities laws could result in private or governmental legal action against us and/or our officers and directors, which could have a detrimental effect on our business and finances, the value of our stock, and the ability of stockholders to resell their stock.
OUR COMMON STOCK IS SUBJECT TO THE “PENNY STOCK” RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.
The SEC has adopted Rule 15g-9, which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person’s account for transactions in penny stocks; and (ii) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (i) obtain financial information and investment experience objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (i) sets forth the basis on which the broker or dealer made the suitability determination; and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
THE MARKET FOR PENNY STOCKS HAS EXPERIENCED NUMEROUS FRAUDS AND ABUSES WHICH COULD ADVERSELY IMPACT INVESTORS IN OUR STOCK.
We believe that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:
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Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
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Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
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“Boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;
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Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
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The wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.
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FINRA SALES PRACTICE REQUIREMENTS MAY LIMIT A STOCKHOLDER’S ABILITY TO BUY AND SELL OUR STOCK.
The Financial Industry Regulatory Authority (“FINRA”) has adopted rules that relate to the application of the SEC’s penny stock rules in trading our securities and require that a broker/dealer have reasonable grounds for believing that the investment is suitable for that customer, prior to recommending the investment. Prior to recommending speculative, low priced securities to their non-institutional customers, broker/dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative, low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker/dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our common stock, reducing a shareholder’s ability to resell shares of our common stock.
THERE IS NO ASSURANCE OF A PUBLIC OF A PUBLIC MARKET OR THAT OUR COMMON STOCK WILL EVER TRADE ON A RECOGNIZED EXCHANGE. THEREFORE, YOU MAY BE UNABLE TO LIQUIDATE YOUR INVESTMENT IN OUR STOCK.
There is no established public trading market for our common stock. Our shares have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTCBB, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate their investment.
WE DO NOT EXPECT TO PAY DIVIDENDS FOR SOME TIME, WHICH COULD RESULT IN NO RETURN ON YOUR INVESTMENT.
We have never declared or paid cash dividends on our common stock. We currently intend to retain our earnings, if any, to provide funds for the operation and expansion of our business and, therefore, do not anticipate declaring or paying cash dividends in the foreseeable future. Any payment of future dividends will be at the discretion of the Company’s board of directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions with respect to the payment of dividends and other relevant factors of our operations.
THE ELIMINATION OF MONETARY LIABILITY AGAINST THE COMPANY’S EXISTING AND FUTURE DIRECTORS, OFFICERS AND EMPLOYEES UNDER WYOMING LAW AND THE EXISTENCE OF INDEMNIFICATION RIGHTS TO THE COMPANY’S EXISTING AND FUTURE DIRECTORS, OFFICERS AND EMPLOYEES MAY RESULT IN SUBSTANTIAL EXPENDITURES BY THE COMPANY AND MAY DISCOURAGE LAWSUITS AGAINST THE COMPANY’S DIRECTORS, OFFICERS AND EMPLOYEES.
The Company’s Articles of Incorporation contain specific provisions that eliminate the liability of directors for monetary damages to the Company and the Company’s stockholders; further, the Company is prepared to give such indemnification to its existing and future directors and officers to the extent provided by Wyoming law. The Company may also have contractual indemnification obligations under future employment agreements with its officers or employees. The foregoing indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which the Company may be unable to recoup. These provisions and resultant costs may also discourage the Company from bringing a lawsuit against existing and futuredirectors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by the Company’s stockholders against the Company’s existing and futuredirectors and officers even though such actions, if successful, might otherwise benefit the Company and its stockholders.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information included or incorporated by reference in this Prospectus may contain forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,”“should,”“expect,”“anticipate,”“estimate,”“believe,”“intend” or “project” or the negative of these words or other variations on these words or comparable terminology.
The forward-looking statements contained in this report are based on current expectations and beliefs concerning future developments and the potential effects on the parties and the transaction. There can be no assurance that future developments actually affecting us will be those anticipated. These that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including the following forward-looking statements involve a number of risks, uncertainties (some of which are beyond the parties’ control) or other assumptions.
USE OF PROCEEDS
Our offering is being made as a direct public offering, without the involvement of underwriters or broker-dealers. We will receive up to $120,000 if all of the shares of Common Stock offered by us at $0.02 per share are purchased. We cannot guarantee that we will sell any or all of the shares being offered by us. This is a best efforts offering with no minimum-offering amount. The table below estimates our use of proceeds, given the varying levels of success of the offering. We expect that the proceeds will be used primarily towards business development and working capital in an effort to expand our business.
Offered
Shares Sold
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Offering
Proceeds
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Approximate
Offering
Expenses (1) (2)
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Total Net
Offering
Proceeds
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Principal Uses of Net Proceeds
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1,800,000 shares (30%)
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Research & Development
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$
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-
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$
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36,000
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|
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$
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36,000
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$
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0
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|
Marketing
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$
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-
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|
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|
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Working Capital
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$
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-
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3,000,000 shares (50%)
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Research & Development
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$
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-
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$
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60,000
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|
$
|
36,000
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|
|
$
|
24,000
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|
Marketing
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|
$
|
10,000
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|
|
|
|
|
|
|
|
|
|
|
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|
Working Capital
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|
$
|
14,000
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|
|
|
|
|
|
|
|
|
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|
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4,500,000 shares (75%)
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Research & Development
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$
|
10,000
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|
$
|
90,000
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|
|
$
|
36,000
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|
$
|
54,000
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|
Marketing
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|
$
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital
|
|
$
|
24,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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6,000,000 shares (maximum)
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|
|
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|
|
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|
|
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Research & Development
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$
|
30,000
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|
|
$
|
120,000
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|
|
$
|
36,000
|
|
|
$
|
84,000
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|
Marketing
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|
$
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital
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|
$
|
24,000
|
|
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(1)
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Offering expenses have been rounded to $36,000.
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(2)
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Any remainder of offering expenses will be paid out of cash on hand.
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If 100% of the offered shares were sold we would receive the maximum proceeds of $84,000, after deducting offering expenses. If the maximum amount of funds is raised, we intend to continue to implement our business plan in our current markets as well as investigate additional markets across the United States. We believe that research and development will play a key role in growing our business in new geographic locations. If the maximum number of shares is sold we estimate that we would spend up to $64,000 on such research and development, including, new website design and marketing.
In the event that 75% of the offered shares are sold we would receive $54,000 after deducting offering expenses. In this instance, we would allocate up to $34,000 to continue expanding business development, research and marketing of our products and services.
In the event that 50% of the offered shares were sold we would receive $24,000 after expenses. In this instance, we would only be able to allocate $14,000 of our offering proceeds towards business development.
In the event that 30% or less of our shares are sold under the offering, we will not have sufficient proceeds to cover our offering expenses and we will have to pay the remainder of such expenses out of current cash, additional financing and/or our existing revenues. In this instance, we will continue our current operations and likely have to seek out additional capital from alternate sources to execute our business plan. To the extent our offering proceeds do not cover any professional fees incurred by the Company, we anticipate paying for any such expenses out of any additional funding or revenues we receive. If such funds are not available our business would likely fail and any investment would be lost.
Working capital will be used to pay general administrative expenses, legal expenses and accounting expenses for the next ten to twelve months. Those expenses may increase if we are able to grow our operations and marketing activities. Marketing expenses primarily include costs associated with travel to meet potential customers and joint ventures for our products and services. Marketing expenses also includes development, preparation and printing of marketing materials, such as brochures and catalogs to promote our products and services.
The funds from this offering will not be used to pay Mr. Brian Barrilleuax, our Chairman and President, for any services related to activities undertaken to further the success of this offering, whether provided prior to, during, or subsequent to the offering. There can be no assurance that the Company will raise any funds through this offering and in the event that a limited amount of funds are raised, the Company will use such funds according to their best judgment in an effort to maximize shareholder value.
DETERMINATION OF OFFERING PRICE
In determining the initial public offering price of the shares we considered several factors including the following:
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·
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Prevailing market conditions, including the history and prospects for the industry in which we compete;
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·
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Our future prospects; and
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Therefore, the public offering price of the shares does not necessarily bear any relationship to established valuation criteria and may not be indicative of prices that may prevail at any time or from time to time in the public market for the common stock. You cannot be sure that a public market for any of our securities will develop and continue or that the securities will ever trade at a price at or higher than the offering price in this offering.
DILUTION
We intend to sell 6,000,000 shares of our common stock at a price of $0.02 per share. The following table sets forth the number of shares of common stock purchased from us, the total consideration paid and the price per share. The table assumes all 6,000,000 shares of common stock will be sold.
|
|
Shares Issued
(1)
|
|
|
Total Consideration
|
|
|
|
|
|
|
Number of Shares
|
|
|
Percent
|
|
|
Amount
|
|
|
Percent
|
|
|
Price Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Existing Shareholder (2)
|
|
|
10,000,000
|
|
|
|
62.5
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%
|
|
$
|
10,000
|
|
|
|
7.7
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%
|
|
$
|
0.001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchasers of Shares
|
|
|
6,000,000
|
|
|
|
37.5
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%
|
|
$
|
120,000
|
|
|
|
92.3
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%
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
16,000,000
|
|
|
|
100
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%
|
|
$
|
130,000
|
|
|
|
100
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%
|
|
|
|
|
|
(1)
|
Adjusted to reflect the Company’s 10-for-1 forward split, effectuated on April 26, 2011.
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|
(2)
|
In connection with the Company’s formation on August 8, 2010, the Company authorized the issuance of 10,000,000 shares of its common stock, par value $0.001 per share, to Salty Pepper Corp., a company owned by our Chairman and President, Brian Barrilleaux, in payment for services rendered.
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The following table sets forth the difference between the offering price of the shares of our common stock being offered by us, the net tangible book value per share, and the net tangible book value per share after giving effect to the offering by us, assuming that 100%, 75%, and 50% of the offered shares are sold. Net tangible book value per share represents the amount of total tangible assets less total liabilities divided by the number of shares outstanding as of December 31, 2010. Totals may vary due to rounding.
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|
100% of offered
shares are sold
|
|
75% of offered
shares are sold
|
|
50% of offered
shares are sold
|
|
|
|
|
|
|
|
Offering Price
|
|
$0.020
|
|
$0.020
|
|
$0.020
|
|
|
per share
|
|
per share
|
|
per share
|
|
|
|
|
|
|
|
Net tangible book value at 12/31/10
|
|
$0.013
|
|
$0.013
|
|
$0.013
|
|
|
per share
|
|
per share
|
|
per share
|
|
|
|
|
|
|
|
Net tangible book value after giving effect to the offering
|
|
$0.016
|
|
$0.016
|
|
$0.016
|
|
|
per share
|
|
per share
|
|
per share
|
|
|
|
|
|
|
|
Increase in net tangible book value per share attributable to cash payments made by new investors
|
|
$0.003
|
|
$0.003
|
|
$0.003
|
|
per share
|
|
per share
|
|
per share
|
|
|
|
|
|
|
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Per Share Dilution to New Investors
|
|
$0.004
|
|
$0.004
|
|
$0.004
|
|
|
per share
|
|
per share
|
|
per share
|
|
|
|
|
|
|
|
Percent Dilution to New Investors
|
|
20%
|
|
20%
|
|
20%
|
PLAN OF DISTRIBUTION
As of June 24, 2011, Solar America Corp. has 10,000,000 shares of common stock issued and outstanding. The Company is registering an additional of 6,000,000 shares of its common stock for sale at the price of $0.02 per share.
In connection with the Company’s selling efforts in the offering, Mr. Brian Barrilleaux will not register as a broker-dealer pursuant to Section 15 of the Exchange Act, but rather, will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Exchange Act. Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer’s securities. Mr. Barrilleaux is not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Mr. Barrilleaux will not be compensated in connection with his participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Mr. Barrilleaux is not, nor has he been within the past 12 months, a broker or dealer, and he is not, nor has he been within the past 12 months, an associated person of a broker or dealer. At the end of the offering, Mr. Barrilleaux will continue to primarily perform substantial duties for the Company or on its behalf otherwise than in connection with transactions in securities. Mr. Barrilleaux will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).
In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for sale, an exemption from such registration ora qualification requirement is available and with which the Company has complied. In addition, and without limiting the foregoing, the Company will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during the period of time when this registration statement is declared effective.
Penny Stock Regulation
The shares of our common stock are not quoted on any stock exchange or quotation system. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, that:
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·
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Contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
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|
·
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Contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties;
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|
·
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Contains a brief, clear, narrative description of a dealer market, including “bid” and “ask” prices for penny stocks and the significance of the spread between the bid and ask price;
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|
·
|
Contains a toll-free telephone number for inquiries on disciplinary actions;
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|
·
|
Defines significant terms in the disclosure document or in the conduct of trading penny stocks; and
|
|
·
|
Contains such other information and is in such form (including language, type, size, and format) as the SEC shall require by rule or regulation.
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The broker-dealer also must provide the customer with the following, prior to proceeding with any transaction in a penny stock:
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·
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Bid and offer quotations for the penny stock;
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|
·
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Details of the compensation of the broker-dealer and its salesperson in the transaction;
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|
·
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The number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
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|
·
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Monthly account statements showing the market value of each penny stock held in the customer’s account.
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In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling those securities.
DESCRIPTION OF SECURITIES TO BE REGISTERED
General
We are authorized to issue an aggregate number of 210,000,000 shares of capital stock, of which (i)200,000,000 shares are common stock, $0.001 par value per share and (ii) 10,000,000 shares are blank check preferred stock.
Common Stock
Our authorized capital stock consists of 200,000,000 shares of common stock, $0.001 par value per share. There are no provisions in our charter or bylaws that would delay, defer or prevent a change in our control, however, there exists such provisions in our charter that may make a change of control more difficult. Such provisions include the ability of theBoard of Directors to issue a series of preferred stock and the limited ability of stockholders to call a special meeting. Special meetings of the shareholders may be called at any time by the Chairman of theBoard of Directors, the President, or the Secretary, by resolution of the Board of Directors, or at the request in writing of one or more stockholders owning shares in the aggregate entitled to cast at least a majority of the votes at the meeting, such written request to state the purpose or purposes of the meeting and to be delivered to the Chairman of the Board, the President, or the Secretary. In case of failure to call such meeting within 60 days after such request, such shareholder or shareholders may call the same. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
The holders of our common stock have equal ratable rights to dividends from funds legally available if and when declared by the Board of Directors and are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs. Our common stock does not provide the right to a preemptive, subscription or conversion rights and there is no redemption or sinking fund provisions or rights. Our common stock holders are entitled to one non-cumulative vote per share on all matters on which shareholders may vote. Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.
Preferred Stock
The Company’s Articles of Incorporation authorize the issuance of 10,000,000 shares of “black check” Preferred Stock with designations, rights and preferences determined from time to time by our Board of Directors. As of the date hereof there have been no shares of Preferred Stock designated.
Our Board of Directors is authorized to determine or alter any or all of the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of preferred stock and, within the limitations or restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares comprising any such series subsequent to the issue of shares of that series, to set the designation of any series, and to provide for rights and terms of redemption, conversion, dividends, voting rights, and liquidation preferences of the shares of any such series.
Warrants and Options
There are no outstanding warrants or options to purchase our securities.
Transfer Agent and Registrar
Our transfer agent is Fidelity Stock Transfer, 8915 South 700 East, Suite 102, Sandy, UT 84070 and its phone number is (801) 562-1300. The transfer agent is responsible for all record-keeping and administrative functions in connection with the common shares.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
McConnell &Jones LLP, our independent registered public accountant, has audited our financial statements included in this prospectus and Registration Statement to the extent and for the periods set forth in their audit report. McConnell &Jones LLP has presented its report with respect to our audited financial statements.
The validity of the shares of our common stock offered by the Selling Stockholders has been passed upon by the law firm of Lucosky Brookman LLP.
DESCRIPTION OF BUSINESS
Overview
Solar America Corp. was incorporated in the State of Wyoming on August 12, 2010, as Glacier Point Corp. On December 6, 2010, an amendment was filed with the State of Wyoming to change the name to Solar America Corp. On December 16, 2010, the Company entered into an Agreement for Sale and Purchase of Business (the “Acquisition”) with the shareholders of Solar N Stuff, Inc. (“SNS”), a Louisiana corporation, whereby the Company acquired 100% of the issued and outstanding shares of SNS in exchange for consideration in the aggregate amount of $100,000. As a result of the Acquisition, the business of SNS, which is more fully described below, became our principal business.
SNS, our wholly owned subsidiary, is a Louisiana-based alternative energy solution integrator. Through SNS, we are focused on the continued deployment of residential, commercial and governmental alternative energy systems. We offer alternative energy solutions for owners, builders and architecture firms that include designing, building, operating, monitoring and maintaining these systems. Our current market focus is on residential consumers interested in retrofitting existing residences to reduce monthly energy expenditures as well as developers looking to incorporate these advanced technologies into new construction. We provide our customers with a high quality, low cost and flexible alternative energy solution.
We will continue our development as an end-to-end alternative energy solution provider by providing an integrated package, which includes pre and post-sales support, customer technical support, system design and installation. We intend to add additional alternative energy solutions, including wind and geothermal systems, to our product offerings as these technologies mature. We believe the business model for SNS will become the basis for expansion of our offerings into additional geographic areas. Once our product and service offerings are tested in our current market we anticipate an immediate expansion drive, both through organic growth and select acquisitions.
The alternative energy industry is highly competitive and always changing. As the popularity of alternative energy solutions, including solar power, solar lighting and solar thermal systems, continues to grow, there is amazing growth potential; however, there are growing numbers of competitors offering similar products and services to those that we offer. The barriers to entry into the market are generally low, and a determined competitor would be able to drive down the profit margin sufficiently to make it extremely difficult for us to be profitable.
To date all of our revenues have been generated by ourwholly-owned subsidiary, SNS. The acquisition of SNS and our initial operations have been funded by a series of promissory notes (as described in the footnotes to the financial statements filed as a part of this prospectus). Accordingly, our independent registered public accountant has issued a comment regarding our ability to continue as a going concern. Until such time that we are able to establish profits from our operations sufficient to sustain our operations, planned growth and marketing strategy, management intends to rely primarily upon debt financing as needed to supplement the cash flows generated by SNS.
Principal Products and Services
Our philosophy is to provide advanced, eco-friendly alternative energy solutions to commercial and residential customers. Since inception, we have concentrated on serving the needs of residential and commercial customers tied to the electric power grid. Our business plan is focused in four specific areas:
|
(1)
|
Solar Daylight and Attic Fan System Sales and Installation;
|
|
(2)
|
Solar Hot Water System Sales and Installation;
|
|
(3)
|
Solar Power System Sales and Installation; and
|
|
(4)
|
Rooftop Solar Power Plant Systems
|
Solar Daylight and Attic Fan Systems Sales and Installation
The scope of our solar daylight and attic fan systems sales and installation business includes:
|
·
|
Pre-sales service for commercial, residential and governmental customers;
|
|
·
|
Installation of solar daylight and attic fan systems and related constructional systems;
|
|
·
|
Technical support and service to end-users; and
|
|
·
|
Providing government permits and tax incentives application services to end-users.
|
Since inception, we have focused on solar daylight and attic fan system sales and installation. Installation is our core business, and it also provides the Company with a platform for additional after installation sales and other lines of business. Our gross revenues to date have come mostly from our solar daylight and attic fan installation business. Our installation business is focused primarily in Southeastern Louisiana. Our installers are highly skilled independent contractors, each with years of experience installing a wide range of alternative energy systems. When necessary, we hire licensed sub-contractors to handle situation in which our installers are not fully trained.
Solar Hot Water System Sales and Installation
The scope of our solar hot water system sales and installation business includes:
|
·
|
Pre-sales service for commercial, residential, governmental and non-profit customers;
|
|
·
|
Installation of solar hot water systems and related infrastructure;
|
|
·
|
Technical support and service to end-users; and
|
|
·
|
Providing government permits and tax incentives application services to end-users.
|
Over the past 12 months we have expanded our product offerings to include solar hot water systems. These systems use sunlight to heat water utilizing state of the art solar concentrating systems. Solar hot water systems can be customized to provide water for general in-home use, or residential requirements such as pool heating. Systems can also be installed for specialized commercial or industrial applications. Most solar hot water systems aren’t designed to replace traditional hot water systems. The systems are designed to pre-heat water before it runs through a more traditional water heater. This preheating can reduce the energy required to maintain the hot water supply by 75% or more. Residential customers in Louisiana can receive tax rebates of up to 80% of the installed cost of solar hot water systems.
Solar Power System Sales and Installation
The scope of our solar power system sales and installation business includes:
|
·
|
Pre-sales service for commercial, residential, governmental and non-profit customers;
|
|
·
|
Installation of PV systems and related infrastructure;
|
|
·
|
Technical support and service to end-users; and
|
|
·
|
Providing government permits and tax incentives application services to end-users.
|
We have recently expanded our product offerings to include solar power systems. These photovoltaic (PV) systems convert sunlight directly into electricity that can be used, stored, or sold back into the power grid. As the cost of PV systems continues to decline, while reliability and efficiency continue to increase, more commercial and residential customers are seeing the benefits of installing PV systems. While PV systems are a very small part of our business today, we anticipate that PV systems will be a major part of our growth, due in large part to generous tax rebates available, as well as the increasing acceptance of “green” energy alternatives. Residential customers in Louisiana can receive tax rebates of up to 80% of the installed cost of PV solar systems.
Rooftop Solar Power Plant (“RPP”) Systems
We are currently developing a new business segment focused on the design and installation of rooftop solar power plants. Conventional thinking has led to the creation of massive stand-alone solar plants, which, due to size, are generally located tens or hundreds of miles from the anticipated end-users. The distance between power generation and use requires the installation of power transmission lines to connect to the electrical distribution network, which can substantially increase the required investment in larger solar projects.
Some of the most troublesome issues relating to the construction of large scale solar plants are the lengthy environmental impact assessment studies (which take three years or longer and are required by federal environmental protection laws), sophisticated application processing for land use permits, and different safety and security requirements for open public space, not to mention the current opposition to solar projects from activists concerned about the habitat loss. All of these difficulties add up to tremendous investment, effort and long delays; often resulting in cancelled projects.
By comparison, the much smaller footprint of our planned grid-tied RPP systems would be a substantial departure from current large-scale solar power plants. Our RPP systems won’t use public land; instead, we will partner with large commercial property owners to utilize free, and currently unutilized, roof space on commercial buildings. By installing our RPP systems on existing private buildings, we believe we can avoid most environmental and regulatory issues. We will also greatly reduce the need for expensive electrical transmission infrastructure, as the “host” building will already be connected to the local electric distribution grid. We believe that property owners will be receptive to partnering with us to develop these systems.
We are currently planning a demonstration installation to act as a proof of concept. Power generated by the demonstration installation will be sold to the local electric company for resale to end-users. While the demonstration installation is designed as a much smaller installation, we believe commercialized systems will range from 0.5 to 2 megawatts (“MW”). Where practical, multiple RPP systems can be tied together to deliver even larger quantities of electricity.
Our planned RPP systems are reliant on recent advances in solar technologies that have drastically increased efficiency as well as the reduced cost of PV panels due, in large part, to the proliferation of solar panel manufacturers. Additionally, federal and state laws requiring electric providers to “purchase” power from grid-tied alternative energy systems provide standards for the sale of power generated by these systems. We believe our Rooftop Solar Power Plants could avoid many of the roadblocks faced by traditional large-scale solar power plants.
As an established alternative energy system integrator we have the requisite technical background, experience, and other capabilities necessary to design and install RPP systems.
Competition and Market Overview
According to SolarBuzz, a research and consulting firm, the global alternative energy market has sustained annual growth of more than 30% over the past five years. However, alternative energy still accounts for only a small percentage of electricity generation worldwide and less than 8% in the United States. The United States currently lags behind Germany, Japan, Korea and China in alternative energy installation and manufacturing.
The United States possesses some of the best solar resources in the world and yet Germany has installed seven times as many solar energy systems as the United States. As an emerging player in the solar power industry, China has grown from having a virtually non-existent alternative energy industry prior to 2005, to their current position as the world’s largest supplier of PV solar panels.
According to SolarBuzz, the global solar power market, as defined by solar power system installations, had an estimated $82 billion in total revenue in 2010. The U.S. solar power installation market, comprised approximately 8% of the total global market installations, reaching approximately 950MW installed during 2010. According to SolarBuzz, the residential and small commercial market segments represent approximately 65% of the solar market in the U.S. market and are expected to continue to do so through 2012.
The solar power industry is at an early stage of its growth and is highly fragmented with many smaller companies. The prospect for long-term worldwide demand for solar power has attracted many new solar panel manufacturers, as well as a multitude of design/integration companies in our market segment, with no single competitor gaining market dominance. We expect the manufacturing segment of the industry to consolidate as solar panel manufacturing capacity increases. We also expect there to be consolidation in the design/integration segment of the industry based mostly on branding, development of new technology and business process improvements. We believe our growth model will allow us the opportunity to be a leader in the consolidation of integration and installation companies.
Principal Suppliers
We currently purchase our inventory primarily from two manufacturers. For the year ended December 31, 2010, these vendors accounted for approximately 90% of our total inventory purchases. We are the preferred re-seller for Solatube, Inc. (“Solatube”), a worldwide leader in solar daylighting and solar attic fans, in Southeastern Louisiana. We plan to expand our relationship with Solatube to include additional geographic areas as we continue to grow.
Chinese alternative energy companies have invested billions of dollars in research and development and manufacturing facilities over the past few years. However, the market for alternative energy in China is not yet mature. As a result, Chinese manufacturers are looking for business opportunities in the United States. As an established alternative energy integration company we have a unique opportunity to act as the bridge between Chinese manufacturers and their North American end customers, while providing superior value-added services to these customers. We intend to establish strategic partnerships with Chinese alternative energy manufacturers that will allow us to offer the latest cutting edge technologies to our customers.
Government Regulation
The market for alternative 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, there currently exist metering caps in certain jurisdictions, which limit the aggregate amount of power that may be sold by alternative 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 alternative energy systems and investment in the research and development of alternative energy technologies. For example, without a mandated regulatory exception for alternative 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 alternative 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 alternative energy systems. In addition, electricity generated by alternative 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 alternative energy systems to achieve lower prices in order to compete with the price of electricity.
The importation of a part of the products we sell is subject to tariffs, duties and quotas imposed by the United States. In addition, other restrictions on the importation of our products are periodically considered by the United States Congress, and may again be considered. No assurances can be given that tariffs or duties on such goods may not be raised, resulting in higher costs to us, or that import quotas with respect to such goods will not be lowered. Deliveries of products from our foreign suppliers could be restricted or delayed by the imposition of lower quotas or increased tariffs. We may be unable to obtain similar quality products at equally favorable prices from domestic suppliers or from other foreign suppliers whose quotas have not been exceeded by the supply of goods to existing customers.
Employees/Contractors
As of the date of this filing we have one full-time employee, our Chief Executive Officer and President, Mr. Brian Barrilleuax. We also have one part-time employee, our Corporate Secretary, Mrs. Kellie Moss. SNS, our wholly-owned subsidiary, has two full time employees and three part time independent contractors. We intend to add staff as the Company initiates its growth strategy. Any such additions will be made at the judgment of Management to meet the Company’s then current needs.None of our employees, nor those of our SNS subsidiary, are covered by employment agreements or contracts. We have no collective bargaining agreements with our employees.
DESCRIPTION OF PROPERTY
We currently lease office space as our corporate headquarters. This space is located at 1135 Hodges Street in Lake Charles, Louisiana 70601. We pay $1,500 per month for use of this office space under a month-to-month lease. Additionally, our Solar N Stuff subsidiary leases a storefront in Covington, Louisiana, to utilize as both a warehouse and showroom. As of the date hereof, we have not sought to move or change either of our locations. Additional space may be required as we expand our operations. We do not foresee any significant difficulties in obtaining any required additional space. We currently do not own any real property.
LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Market Information
There is presently no public market for our shares of common stock. We anticipate engaging a market maker to apply for quotation of our common stock on the OTCBB upon the effectiveness of the registration statement of which this prospectus forms apart. However, we can provide no assurance that our shares of common stock will be quoted on the OTCBB or, if quoted, that a public market will materialize.
(b) Holders
As of the date of this registration statement, there is one (1) holder of our common stock.
(c) Dividends
We have not declared or paid any dividends on our common stock and intend to retain any future earnings to fund the development and growth of our business. Therefore, we do not anticipate paying dividends on our common stock for the foreseeable future. There are no restrictions on our present ability to pay dividends to stockholders of our common stock, other than those prescribed by Wyoming law.
(d) Securities authorized for issuance under equity compensation plans
Not applicable.
Rule 144 Shares
As of the date of this registration statement, we do not have any shares of our common stock that are currently available for sale to the public in accordance with the volume and trading limitations of Rule 144.
Stock Option Grants
We do not have any stock option plans.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our financial statements and the notes thereto contained elsewhere in this filing. With the exception of historical matters, the matters discussed herein are forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning anticipated trends in revenues and net income, projections concerning operations and available cash flow. Our actual results could differ materially from the results discussed in such forward-looking statements. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto appearing elsewhere herein.
Description of Business and Plan of Operation
SNS, our wholly owned subsidiary, is a Louisiana-based alternative energy solution integrator. Through SNS, we are focused on the continued deployment of residential, commercial and governmental alternative energy systems. We offer alternative energy solutions for owners, builders and architecture firms that include designing, building, operating, monitoring and maintaining these systems. Our current market focus is on residential consumers interested in retrofitting existing residences to reduce monthly energy expenditures as well as developers looking to incorporate these advanced technologies into new construction. We provide our customers with a high quality, low cost and flexible alternative energy solution.
We will continue our development as an end-to-end alternative energy solution provider by providing an integrated package, which includes pre and post-sales support, customer technical support, system design and installation. We intend to add additional alternative energy solutions, including wind and geothermal systems, to our product offerings as these technologies mature. We believe the business model for SNS will become the basis for expansion of our offerings into additional geographic areas. Once our product and service offerings are tested in our current market, we anticipate an immediate expansion drive, both through organic growth and select acquisitions.
The alternative energy industry is highly competitive and always changing. As the popularity of alternative energy solutions, including solar power, solar lighting and solar thermal systems continues to grow, there is amazing growth potential; however, there are growing numbers of competitors offering similar products and services to those that we offer. The barriers to entry into the market are generally low, and a determined competitor would be able to drive down the profit margin sufficiently to make it extremely difficult for us to be profitable.
We are currently a development stage company and to date all of our revenues have been generated by our wholly-owned subsidiary, SNS. The acquisition of SNS and our initial operations have been funded by a series of promissory notes (as described in the footnotes to the financial statements filed as a part of this prospectus). Accordingly, our independent registered public accountant has issued a comment regarding our ability to continue as a going concern. Until such time that we are able to establish profits from our operations sufficient to sustain our operations, planned growth and marketing strategy, management intends to rely primarily upon debt financing as needed to supplement the cash flows generated by SNS.
Within three months of the conclusion of our direct public offering we expect to achieve several important milestones; including:
|
·
|
Execution of our first contract for a large-scale commercial installation of solar daylighting systems; and
|
|
·
|
Execution of a contract with a major regional home builder to install solar daylighting in new construction; and
|
|
·
|
Expansion of our products and services to additional markets through the opening of satellite locations.
|
Between three months and six months after the conclusion of our direct public offering we expect to achieve several important milestones; including:
|
·
|
Execution of a distribution agreement with a major manufacturer of photovoltaic panels in order to become a preferred distributor of solar power systems; and
|
|
·
|
Installation of a proof of concept demonstration of our first rooftop power plant concept.
|
Within six months and twelve months after the conclusion of our direct public offering we expect to achieve several important milestones; including:
|
·
|
Begin offering leased solar systems to residential and business customers in our core markets; and
|
|
·
|
Develop in-house solar engineering and solar electrical design teams in order to provide a sole source solution for large commercial and governmental solar power projects.
|
Results of Operations
Prior to the acquisition of SNS we had minimal operations. Accordingly, the results of operations included in our financial statements attached hereto for the year ended December 31, 2009, and for the period from January 1, 2010 to December 15, 2010 represent theoperations of SNS, the predecessor entity. The consolidated results of operations for the period from December 16, 2010 to December 31, 2010, and for the period from January 1, 2011 to March 31, 2011, represent our results of operations subsequent to the SNS acquisition, as successor.
Management does not believe the results of operations of the predecessor are directly comparable to the successor; therefore successor and predecessor results of operations are presented separately, without comparison.
For the Three Months ended March 31, 2011 - Successor
For the three months ended March 31, 2011, we realized gross revenue of $27,920 and gross profit of $10,048. Our operating expenses were $157,978, consisting primarily of selling, general and administrative expenses of $136,949, of which $44,020 was for legal and accounting fees and $24,688 for payroll expenses. We incurred interest expense of $5,565 and had a net loss of $135,623.
For the Three Months ended March 31, 2010 - Predecessor
For the three months ended March 31, 2010, thepredecessor entity realized gross revenue of $50,250 and gross profit of $6,199. Predecessor entity operating expenses were $45,945, consisting primarily of selling, general and administrative expenses of $42,715. The predecessor entity had a net loss of $39,746.
For the period from August 12, 2010 (date of inception) to December 31, 2010 - Successor
For the period from August 12, 2010 (date of inception) to December 31, 2010, we realized gross revenue of $47,392 and gross profit of $10,895. Our operating expenses were $105,400, consisting primarily of selling, general and administrative expenses of $67,851. We realized a gain on debt settlement of $11,008 and had a net loss of $46,900.
For the period from January 1, 2010 to December 15, 2010 - Predecessor
For the period from January 1, 2010 to December 15, 2010, the predecessor entity realized gross revenue of $376,214 and gross profit of $112,865. Predecessor entity operating expenses were $218,909, consisting primarily of selling, general and administrative expenses of $207,366, of which $85,664 was for compensation to the former owner and $29,688 for payroll expense. The predecessor entity had interest expense of $374 and had a net loss of $106,418.
For the year ended December 31, 2009 - Predecessor
For the year ended December 31, 2009,the predecessor entity realized gross revenue of $294,595 and gross profit of $135,150. Predecessor entity operating expenses were $186,436 consisting primarily of selling, general and administrative expenses of $179,989. The predecessor entity had interest expense of $495 and had a net loss of $51,781.
As of March 31, 2011 and December 31, 2010, the Company had a loss per share of $0.01 and $0.03, respectively.
Liquidity and Capital Resources
As of March 31, 2011
As of March 31, 2011, the Company had current assets of $58,589, comprised of cash of $24,369, inventory valued at $22,643 and other assets of $11,577and current liabilities of $316,590, comprised of outstanding notes payable of $280,000, and accounts payable and accrued liabilities of $36,590. The outstanding notes payable of $280,000 are unsecured and due interest at 10% per annum (a more complete description of the Company’s debt obligations can be found in Note 4of the financial statements filed herewith).
As of December 31, 2010
As of December 31, 2010, the Company had current assets of $102,285, comprised of cash of $55,852, inventory valued at $13,842 and other assets of $32,591 and current liabilities of $227,820, comprised of an outstanding note payable of $200,000, and accounts payable and accrued liabilities of $27,820. The outstanding Note Payablewas unsecured and due interest at 10% per annum (a more complete description of the Company’s debt obligations can be found in Note 4 of the financial statements filed herewith).
On August 8, 2010, in connection with the formation of the Company, we authorized the issuance of 10,000,000 (adjusted to reflect the Company’s 10-for-1 forward split, effectuated on April 26, 2011) shares of its common stock, par value $0.001 per share, to Salty Pepper Corp, a company owned by our Chairman and President, Brian Barrilleaux, as payment for services rendered.
Cash flows from Operating Activities
During the three months ended March 31, 2011, the Company used cash flow of $111,483 for operating activities as compared to$89,393during the period from August 12, 2010 (date of inception) to December 31, 2010. The use of cash for operating activities is attributed to the fact that the Company incurred operating expenditures relating to the SEC registration process and amounts have been comparable to prior periods.
Cash flows from Financing Activities
During the three months ended March 31, 2011, the Company received $80,000 of cash flows from the issuance of notes payable and advances from non-related parties as compared to the period from August12, 2010 (date of inception) to December31, 2010, where the Company received $200,000 of cash flows from the issuance of notes payable.
As of March 31, 2011 and December 31, 2010, respectively, the Company’s auditors issued a going concern opinion as the Company has not earned sufficient revenues from itsoperations to break even, has a working capital deficit, and an accumulated deficit of$182,523since inception.
The Company will require additional financing to continue operations, either from existing shareholders or new shareholders through equity financing. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
If 100% of the offered shares are sold we would receive the maximum proceeds of $84,000, after deducting the projected offering expenses. If the maximum amount of funds is raised, we intend to continue to implement our solar energy business plan in our current markets as well as investigate additional markets across the United States. We believe that research and development will play a key role in growing our business to new areas. We estimate that we would spend up to $64,000 on this aspect of our business development (new website design, research and development and marketing), provided the maximum number of shares is sold. If 75% of the offered shares were sold we would receive $54,000 after deducting offering expenses. We would still focus on continuing to expand our business development, research and development efforts, and marketing of our products and services; however we estimate that we would allocate up to $34,000 on this aspect of our business plan in this instance. If 50% of the offered shares were sold we would receive $24,000 after expenses. In this instance, we would only be able to allocate $14,000 of our offering proceeds towards business development. If we sell 30% or less of our shares under the offering, we will not have sufficient proceeds to cover our offering expenses and we will have to pay the remainder of such expenses out of current cash, additional financing and/or our existing revenues. In this instance, we will continue our current operations and likely have to seek out additional capital from alternate sources to execute our business plan. To the extent our offering proceeds do not cover any professional fees incurred by the Company, we anticipate paying for any such expenses out of any additional funding or revenues we receive. If such funds are not available, our business would likely fail and any investment would be lost.
At March 31, 2011, we had cash on hand of $24,369. We anticipate that our maximum expenses over the next 12 months following the effectiveness of this offering will be approximately $700,000, accounting for the full implementation of our business plan, including our anticipated general expenses and salaries, reporting company expenses, and expansion both products and geographic markets. We believe our existing funding sourceswill continue to provide sufficient capital to fully execute ourbusiness plan. At a minimum we will require approximately $81,000 of additional funding to execute our plan of operation for the 12 months following the effectiveness of this offering. The minimum amount anticipated takes into account our current cash, our estimated costs related to this offering, and costs associated with being a publicly reporting company
Our estimated costs take into account total offering expenses (incurred and non-incurred) of $36,000 for audit fees, legal fees and other expenses to be repaid to the Company from the proceeds raised under this offering. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources. If we are unable to raise sufficient capital, we will not be able to execute our entire growth strategy, thus we will restructure our business development to account for lower funding levels.
Description
|
|
Time period
|
|
Estimated maximum expenses
|
|
General Expenses & Salaries
|
|
12 months
|
|
$
|
200,000
|
|
Reporting Company Expenses
|
|
12 months
|
|
$
|
50,000
|
|
Expansion – New Product Offerings
|
|
12 months
|
|
$
|
150,000
|
|
Expansion – New Geographic Markets
|
|
12 months
|
|
$
|
300,000
|
|
Total
|
|
|
|
$
|
700,000
|
|
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in Note 1 of our audited financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Recently Issued Accounting Pronouncements
In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), “Consolidation (Topic 810): Amendments for Certain Investment Funds.” The amendments in this update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009, and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU 2010-10 did not have a material effect on the financial position, results of operations or cash flows.
In February 2010, the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic 855) “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company’s financial position and results of operations.
In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard is effective for interim and annual reporting periods beginning after December 15, 2009, with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of this standard is not expected to have a significant impact on the Company’s consolidated financial statements.
In October 2009, FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. The adoption of this standard is not expected to have a significant impact on the Company’s consolidated financial statements.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company 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.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants on accounting or financial disclosure matters.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the name and age of our current officers and directors. Our Board of Directors appoints our executive officers. Our directors will serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors.
Name
|
|
Age
|
|
Positions
|
|
|
|
|
|
Brian D Barrilleaux
|
|
32
|
|
Chief Executive Officer, President, Chairman
|
|
|
|
|
|
Kellie A Moss
|
|
36
|
|
Secretary, Director
|
Brian D Barrilleaux, age 32, Chief Executive Officer, President, Chairman
Mr. Brian Barrilleaux is currently the Company’s Chief Executive Officer, President and Chairman of the Board of Directors. He has held thesepositionssince December 6, 2010. Prior to joining the Company, from January 2005 to December 2010, Mr. Barrilleaux worked for Dunham Price LLC in Lake Charles, Louisiana, a provider of various concrete products, including ready mixed concrete, concrete piling, concrete pipe, and aggregate, where he held numerous positions, including Quality Control Manager, Dispatch Manager, and Assistant Sales Manager. In 2004,Mr. Barrilleaux received a bachelor degree in Business Administration and Marketing from McNeese State University in Lake Charles, Louisiana.
Kellie A Moss, age 36, Secretary, Director
Ms. Moss is currently the Company’s Corporate Secretary and serves as a member of the Board of Directors. She has held such positions since December 6, 2010. In January 2006, Ms. Moss formed Moss Consulting Services (“Moss Consulting”), a sole proprietorship based in Lake Charles, Louisiana focused on business process consulting. Mrs. Moss remains the owner of Moss Consulting and dedicates approximately 20 hours per week to its operation. Prior to forming Moss Consulting, Ms. Moss served as the office manager for the Austin Law Firm, based in Lake Charles, Louisiana, where here responsibilities includedbookkeeping, client correspondence, and managing interaction with courthouse staff and opposing counsel. She held such position from 1992 to 2006.
Board Committees
The Company does not currently have a designated audit, nominating or compensation committee. The Company currently has no plans to form these separately designated board committees.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board of directors.
There are no agreements or understandings for any director or officer to resign at the request of another person and none of the directors or officers is acting on behalf of or will act at the direction of any other person. The activities of each director and officer are material to the operation of the Company. No other person’s activities are material to the operation of the Company.
EXECUTIVE COMPENSATION
The table set forth below summarizes the annual and long-term compensation for services in all capacities to us payable to our officers and sole director for the fiscal year ended December 31, 2010. Our Board of Directors may adopt an incentive stock option plan for our executive officers that would result in additional compensation.
Name and
Principal
Position
|
|
Title
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
All other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian Barrilleaux
|
|
Chief Executive Officer, President, Chairman
|
|
2010
|
|
|
—
|
|
|
|
—
|
|
|
$
|
10,000
|
(1)
|
|
|
—
|
|
|
|
—
|
|
|
$
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kellie A Moss
(2)
|
|
Secretary, Director
|
|
2010
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(1)
|
In connection with the Company’s formation, on August 8, 2010, the Company authorized the issuance of 10,000,000 (adjusted to reflect the Company’s 10-for-1 forward split, effectuated on April 26, 2011) shares of its common stock, par value $0.001 per share, to Salty Pepper Corp., a company beneficially owned by our Chairman and President, Brian Barrilleaux, in payment for services rendered.
|
|
(2)
|
Under the terms of our verbal arrangement with Mrs. Moss, her compensation of $1,000 per month for her services became effective January 1, 2011. Her date of appointment was December 6, 2010.
|
There are no annuity, pension or retirement benefits proposed to be paid to officers, directors or employees.
Outstanding Equity Awards since Inception:
We have no Outstanding Equity Awards.
Long-Term Incentive Plans
We have no Long-Term Incentive Plans.
Director Compensation
None.
Code of Ethics
The Company has adopted a Code of Ethics applicable to its directors and officers (including its principal executive officer and principal financial officer). The Company’s Code of Ethics is filed as an exhibit to this registration statement on Form S-1.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information at June 24, 2011, with respect to the beneficial ownership of shares of Common Stock by (i) each person known to us who owns beneficially more than 5% of the outstanding shares of Common Stock (based upon reports which have been filed and other information known to us), (ii) each of our Directors, (iii) each of our Executive Officers and (iv) all of our Executive Officers and Directors as a group. Unless otherwise indicated, each stockholder has sole voting and investment power with respect to the shares shown. As of June 24, 2011, we had 10,000,000 shares of common stock issued and outstanding.
Title
|
|
Name and Address of
Beneficial Owner
|
|
Amount and Nature of
Beneficial Ownership
|
|
|
Percentage
of
Common
Stock (1)
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer,
President, Chairman
|
|
Brian D Barrilleuax
1135 Hodges Street
Lake Charles, LA 70601
|
|
|
10,000,000
|
(2)
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Director Secretary
|
|
Kellie A Moss
1135 Hodges Street
Lake Charles, LA 70601
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Officers and Directors as a Group (2 persons)
|
|
|
10,000,000
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
10,000,000
|
|
|
|
100
|
%
|
|
(1)
|
Under Rule 13d-3 promulgated under the Exchange Act, 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 is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.
|
|
(2)
|
These shares are held in the name of Salty Pepper Corp., a Louisiana corporation. Brian Barrilleaux, the Company’s Chairman and President,is the sole beneficial owner.
|
We are not aware of any arrangements that could result in a change of control.
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
None of the following persons has any direct or indirect material interest in any transaction to which we were or are a party since the beginning of our last fiscal year, or in any proposed transaction to which we propose to be a party:
|
(A)
|
Any of our director(s) or executive officer(s);
|
|
(B)
|
Any nominee for election as one of our directors;
|
|
(C)
|
Any person who is known by us to beneficially own, directly or indirectly, shares carrying more than 5% of the voting rights attached to our Common Stock; or
|
|
(D)
|
Any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons named in paragraph (A), (B) or (C) above.
|
Involvement in Certain Legal Proceedings
During the past ten years, none of the following occurred with respect to the directors and officers of the Company: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the commodities futures trading commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation provides that we shall indemnify our directors and officers to the fullest extent permitted by Wyoming law and that none of our directors will be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability:
|
·
|
For any breach of the director’s duty of loyalty to the Company or its stockholders;
|
|
·
|
For acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of the law;
|
|
·
|
Under the Wyoming Business Corporation Act for the unlawful payment of dividends; or
|
|
·
|
For any transaction from which the director derives an improper personal benefit.
|
These provisions require us to indemnify our directors and officers unless restricted by Wyoming law and eliminate our rights and those of our stockholders to recover monetary damages from a director for breach of his fiduciary duty of care as a director except in the situations described above. The limitations summarized above, however, do not affect our ability or that of our stockholders to seek non-monetary remedies, such as an injunction or rescission, against a director for breach of his fiduciary duty.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, we have been advised that in the opinion of the SEC indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.
SOLAR AMERICA CORP
AUDITED FINANCIAL STATEMENTS
|
|
Page
|
|
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
|
F-1
|
|
|
|
CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
Consolidated Balance Sheets as of December 31, 2010 (Successor); and
as of December 31, 2009 (Predecessor)
|
|
F-2
|
|
|
|
Consolidated Statements of Operations
for the period from August 12, 2010 (Inception) to December 31, 2010 (Successor); and
for the period from January 1, 2010 to December 15, 2010 (Predecessor); and
for the year ended December 31, 2009 (Predecessor)
|
|
F-3
|
|
|
|
Consolidated Statements of Changes in Stockholders’ Deficit
for the year ended December 31, 2008 (Predecessor) ; and
for the year ended December 31, 2009 (Predecessor) ; and
for the period from January 1, 2010 to December 15, 2010 (Predecessor); and
for the period from August 12, 2010 (Inception) to December 31, 2010 (Successor)
|
|
F-4
|
|
|
|
Consolidated Statements of Cash Flows
for the period from August 12, 2010 (Inception) to December 31, 2010 (Successor); and
for the period from January 1, 2010 to December 15, 2010 (Predecessor); and
for the year ended December 31, 2009 (Predecessor)
|
|
F-5
|
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
F-6
|
Report of Independent Registered Public Accounting Firm
To the Board of Directors of
Solar America Corporation.
We have audited the accompanying consolidated balance sheet of Solar America Corporation and its subsidiary (Successor Company) as of December 31, 2010, and the related consolidated statement of operations, stockholders' equity (deficit), and cash flows for the period from August 12, 2010 to December 31, 2010 (Successor Period). We have also audited the balance sheet of Solar N Stuff, Inc. (Predecessor) as of December 31, 2009 and the related statements of operations, stockholders ‘equity (deficit) and cash flows for the period from January 1, 2010 to December 15, 2010 and as of December 31, 2009 (Predecessor Periods). These financial statements are the responsibility of the management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal controls 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 controls 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 aforementioned Successor Company consolidated financial statements present fairly, in all material respects, the financial position of Solar America Corporation and its subsidiary as of December 31, 2010 and the results of their operations and their cash flows for the Successor Period, in conformity with accounting principles generally accepted in the United States of America. Further, in our opinion, the aforementioned Predecessor financial statements present fairly, in all material respects, the financial position of Solar N Stuff, Inc. as of December 31,2009 and the result of operations and cash flows of Solar N Stuff, Inc. for the Predecessor periods, in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that Solar America Corporation will continue as a going concern. As described in Note 2 of the financial statements, Solar America Corporation had incurred a substantial loss and negative cash flows from operations as of December 31, 2010. These matters raise substantial doubt about Solar America Corporation’s ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 2 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ McConnell & Jones, LLP
Houston, Texas
June 22,2011
3040 Post Oak Blvd., Suite
1600
Houston, TX 77056
Phone: 713.968.1600
Fax: 713.968.1601
|
|
SOLAR AMERICA CORP.
CONSOLIDATED BALANCE SHEETS
|
|
Successor
Company
December
31, 2010
|
|
|
Predecessor
Company
December
31,
2009
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
55,852
|
|
|
$
|
3,342
|
|
Accounts receivable
|
|
|
23,376
|
|
|
|
3,112
|
|
Inventory
|
|
|
13,842
|
|
|
|
22,123
|
|
Prepaid expenses
|
|
|
9,215
|
|
|
|
-
|
|
Total current assets
|
|
|
102,285
|
|
|
|
28,577
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
62,193
|
|
|
|
-
|
|
Fixed assets, net of accumulated depreciation of $19,524 and $6,929, respectively
|
|
|
26,442
|
|
|
|
36,707
|
|
Refundable deposits
|
|
|
-
|
|
|
|
1,500
|
|
Total assets
|
|
$
|
190,920
|
|
|
$
|
66,784
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
27,820
|
|
|
$
|
33,482
|
|
Notes payable
|
|
|
200,000
|
|
|
|
-
|
|
Total current liabilities
|
|
|
227,820
|
|
|
|
33,482
|
|
Total liabilities
|
|
|
227,820
|
|
|
|
33,482
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMITMENTS AND CONTINGENCIES (See Note 8)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, ($0.001 par value), 10,000,000 shares authorized and -0-issued and outstanding (successor); -0- shares authorized (predecessor)
|
|
|
-
|
|
|
|
-
|
|
Common stock, ($0.001 par value), 200,000,000 shares authorized and 10,000,000 shares issued and outstanding (successor); 100 shares authorized and outstanding (predecessor)
|
|
|
10,000
|
|
|
|
100
|
|
Additional paid-in capital
|
|
|
-
|
|
|
|
103,354
|
|
Accumulated deficit
|
|
|
(46,900
|
)
|
|
|
(70,152
|
)
|
Total stockholders' equity (deficit)
|
|
|
(36,900
|
)
|
|
|
33,302
|
|
Total liabilities and stockholders' equity (deficit)
|
|
$
|
190,920
|
|
|
$
|
66,784
|
|
The accompanying notes are an integral part of these consolidated financial statements
SOLAR AMERICA CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Successor
|
|
|
Predecessor
|
|
|
Predecessor
|
|
|
|
Company
|
|
|
Company
|
|
|
Company
|
|
|
|
Period since
inception ,August
12, 2010 to
December 31,
2010
|
|
|
For the period
from January 1,
2010 to
December 15,
2010
|
|
|
For the year
Ended
December
31, 2009
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Product revenue
|
|
$
|
45,417
|
|
|
$
|
319,901
|
|
|
$
|
241,961
|
|
Service revenue
|
|
|
1,975
|
|
|
|
56,313
|
|
|
|
52,634
|
|
Total revenues
|
|
|
47,392
|
|
|
|
376,214
|
|
|
|
294,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
28,502
|
|
|
|
263,349
|
|
|
|
159,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
18,890
|
|
|
|
112,865
|
|
|
|
135,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
67,851
|
|
|
|
207,366
|
|
|
|
179,989
|
|
Depreciation
|
|
|
1,052
|
|
|
|
11,543
|
|
|
|
6,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
68,903
|
|
|
|
218,909
|
|
|
|
186,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(50,013
|
)
|
|
|
(106,044
|
)
|
|
|
(51,286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
3,013
|
|
|
|
-
|
|
|
|
-
|
|
Interest income
|
|
|
100
|
|
|
|
-
|
|
|
|
-
|
|
Interest expense
|
|
|
-
|
|
|
|
(374
|
)
|
|
|
(495
|
) )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
3,113
|
|
|
|
(374
|
)
|
|
|
(495
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
$
|
(46,900
|
)
|
|
$
|
(106,418
|
)
|
|
$
|
(51,781
|
)
|
Income tax provision
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net loss
|
|
$
|
(46,900
|
)
|
|
$
|
(106,418
|
)
|
|
$
|
(51,781
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
|
$
|
(0.03
|
)
|
|
$
|
(1,064.18
|
)
|
|
$
|
(517.81
|
)
|
Weighted average common shares outstanding
|
|
|
1,798,561
|
|
|
|
100
|
|
|
|
100
|
|
The accompanying notes are an integral part of these consolidated financial statements
SOLAR AMERICA CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
Preferred
Shares
|
|
|
Common
Shares
|
|
|
Par
Amount
($0.001)
(b)
|
|
|
Additional
Paid-In
Capital
|
|
|
Accumulated
Deficit
|
|
|
Total
|
|
Balance at December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Predecessor)
|
|
|
-
|
|
|
|
100
|
|
|
$
|
-
|
|
|
$
|
37.398
|
|
|
$
|
(18,371
|
)
|
|
$
|
19,027
|
|
Contribution to capital
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
66,056
|
|
|
|
|
|
|
|
66,056
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
(51,781
|
)
|
|
|
(51,781
|
)
|
Balance at December 31, 2009
(Predecessor)
|
|
|
|
|
|
|
100
|
|
|
|
-
|
|
|
|
103,454
|
|
|
|
(70,152
|
)
|
|
|
33,302
|
|
Contribution to capital
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
66,103
|
|
|
|
-
|
|
|
|
66,103
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(106,418
|
)
|
|
|
(103,508
|
)
|
Balance at December 15, 2010
(Predecessor)
|
|
|
-
|
|
|
|
100
|
|
|
$
|
-
|
|
|
$
|
169,557
|
|
|
$
|
(176,570
|
)
|
|
$
|
(7,013
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at August 12, 2010 (Inception) (
Successor)
|
|
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Shares issued for service
|
|
|
-
|
|
|
|
10,000,000
|
|
|
|
10,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,000
|
|
Net loss
(a)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(46,900
|
)
|
|
|
(46,900
|
)
|
Balance at December 31, 2010 (
Successor)
|
|
|
-
|
|
|
|
10,000,000
|
|
|
$
|
10,000
|
|
|
$
|
-
|
|
|
$
|
(46,900
|
)
|
|
$
|
(36,900
|
)
|
|
(a)
|
Contains the operating results of Solar N Stuff, Inc. (Predecessor), since the acquisition date on December 16, 2010 to December 31, 2010, plus the operating results of Solar America (Successor), from August 12, 2010, its inception date, to December 31, 2010.
|
|
(b)
|
On April 12, 2011, Solar America (Successor) amended its articles of incorporation to reflect a change in authorized capital. The aggregate number of shares of all classes of stock which the Company has the authority to issue is 210,000,000 shares consisting of 10,000,000 shares of Preferred stock at $0.001 par value and 200,000,000 shares of common stock at $0.001 par value. On April 4, 2011, Solar America (Successor) approved a forward 10:1 stock split. This capital structure has been retroactively recast to present the current capital structure of the Company.
|
The accompanying notes are an integral part of these consolidated financial statements
SOLAR AMERICA CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Successor
|
|
|
Predecessor
|
|
|
Predecessor
|
|
|
|
Company
|
|
|
Company
|
|
|
Company
|
|
|
|
Period since
inception,
August 12,
2010 to
December 31,
2010
|
|
|
For the period
from January 1,
2010 to
December 15,
2010
|
|
|
For the
year ended
December
31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(46,900
|
)
|
|
$
|
(106,418
|
)
|
|
$
|
(51,781
|
)
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for services
|
|
|
10,000
|
|
|
|
-
|
|
|
|
-
|
|
Depreciation
|
|
|
1,052
|
|
|
|
11,543
|
|
|
|
6,447
|
|
Other non-cash income
|
|
|
3,013
|
|
|
|
-
|
|
|
|
-
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(20,200
|
)
|
|
|
(64
|
)
|
|
|
(1,694
|
)
|
Prepaid expenses
|
|
|
(9,215
|
)
|
|
|
1500
|
|
|
|
(1,500
|
)
|
Inventory
|
|
|
8,526
|
|
|
|
7,750
|
|
|
|
(7,787
|
)
|
Accounts payable and accrued liabilities
|
|
|
(35,669
|
)
|
|
|
18,999
|
|
|
|
26,456
|
|
Net cash used in operating activities
|
|
$
|
(89,393
|
)
|
|
$
|
(66,690
|
)
|
|
$
|
(29,859
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of a business, net of cash acquired
|
|
|
(54,755
|
)
|
|
|
-
|
|
|
|
-
|
|
Purchases of equipment
|
|
|
-
|
|
|
|
(2,330
|
)
|
|
|
(33,112
|
)
|
Net cash used in investing activities
|
|
$
|
(54,755
|
)
|
|
$
|
(2,330
|
)
|
|
$
|
(33,112
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds from borrowings on notes payable
|
|
|
200,000
|
|
|
|
-
|
|
|
|
-
|
|
Cash proceeds from third party advances
|
|
|
11,000
|
|
|
|
-
|
|
|
|
-
|
|
Repayments of third party advances
|
|
|
(11,000
|
)
|
|
|
-
|
|
|
|
-
|
|
Owner contributions of capital
|
|
|
|
|
|
|
66,103
|
|
|
|
66,056
|
|
Net cash provided by financing activities
|
|
$
|
200,000
|
|
|
$
|
66,103
|
|
|
$
|
66,056
|
|
Change in cash and equivalents
|
|
|
55,852
|
|
|
|
(2,917
|
)
|
|
|
3,085
|
|
Cash and cash equivalents, beginning of period
|
|
|
-
|
|
|
|
3,342
|
|
|
|
257
|
|
Cash and cash equivalents, end of period
|
|
|
55,852
|
|
|
$
|
425
|
|
|
|
3,342
|
|
The accompanying notes are an integral part of these consolidated financial statements.
SOLAR AMERICA CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Nature of Business and Summary of Significant Accounting Policies
Nature of Business and Basis of Presentation
On August 12, 2010, Solar America Corp., a Wyoming corporation (“Solar America” or the “Company”) was formed with the intent to acquire businesses operating in the alternative energy industry sector. On December 16, 2010, Solar America acquired 100% of the outstanding common stock of Solar N Stuff, Inc. a Louisiana corporation founded in 2008 (“Solar n Stuff”), in exchange for $100,000, resulting in Solar n Stuff becoming a wholly owned subsidiary of Solar America. Solar n Stuff’s results of operations are consolidated with Solar America and presented from December 16, 2010 through December 31, 2010. Solar n Stuff provides homeowners and businesses with clean and efficient solar energy products, such as Solar Hot Water Heating, Photovoltaic Solar Electric Systems, SolatubeDaylighting, Solar Swimming Pool Heating and DC Pool pumps, and Solar Attic Ventilation through its distribution arrangement with Solatube International, Inc. (“Solatube”).
Solar America (Successor) has presented its financial statements with operating results of Solar America since its inception on August 12, 2010, plus the operating results of Solar n Stuff from December 16, 2010 (acquisition date by Solar America). The predecessor company’s financial statements are presented and contain the operating results of Solar n Stuff from January 1, 2010 to December 15, 2010. The term “Predecessor” is defined as a person with the major portion of the business and assets of which another person acquired in a single succession, or in a series of related successions in each of which the acquiring person acquired the major portion of the business and assets of the acquired person.
Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements at December 31, 2010 include the accounts of Solar n Stuff, a wholly-owned subsidiary for the period from the acquisition date of December 16, 2010 to December 31, 2010 and Solar America’s results from August 12, 2010, its inception, to December 31, 2010.
All significant inter-company transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 periods. Actual results could differ materially from those estimates.
Cash and Equivalents
Solar America considers all highly liquid investments with maturities from date of purchase of three months or less to be cash equivalents. Cash and equivalents consist of cash on deposit with domestic banks and, at year-end all the funds were within the federally insured limits.
Accounts Receivable
Solar America provides an allowance for doubtful accounts on trade receivables based on historical collection experience and a specific review of each customer’s trade receivable balance. When specific accounts are determined to be uncollectable, they are expensed to bad debt expense in that period. At December 31, 2010 and 2009, Solar America and the predecessor Solar n Stuff, estimated its allowance for doubtful accounts to be $0 and $0, respectively.
Inventory
Inventory is stated at lower of cost (first-in, first out) or net realizable value. Inventory consists of Solatube products that are being marketed to customers. Amounts at December 31, 2010 (Successor) and 2009 (Predecessor) were $13,842 and $22,123, respectively.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the shorter of the assets' useful lives or lease terms.
Asset Description
|
|
Useful Lives
|
|
|
|
Equipment
|
|
3-7 years
|
|
|
|
Computers and electronic
|
|
3 years
|
|
|
|
Furniture and fixtures
|
|
3-7 years
|
Goodwill
Goodwill represents the excess of cost over the net tangible assets and identifiable intangible assets of acquired businesses. The Company’s goodwill results from the
acquisition of Solar n Stuff. In order to determine the fair value of goodwill on the Solar n Stuff acquisition, the Company allocated the purchase price to the fair value of all Solar n Stuff’s assets and liabilities. The Company estimated the fair value of the assets and liabilities to approximate book value. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the fair value of goodwill. As a result, the Company recorded goodwill in the amount of $62,193 at December 16, 2010, as a non-current asset.
In accordance with guidance of the FASB ASC Topic no. 350-10,
Goodwill and Other
, the Company tests goodwill for impairment at least annually, or at any time when impairment indicators exist, by comparing the fair value of the reporting unit, generally based on discounted future cash flows, with its carrying amount including goodwill. Examples of such indicators, which would cause the Company to test goodwill for impairment between annual tests, include a significant change in the business climate, significant unexpected competition, significant deterioration in market share, and/or a loss of key personnel. If goodwill is determined to be impaired, the loss is measured by the excess of the carrying amount of the reporting unit over its fair value.
Revenue Recognition
Revenue is derived primarily from providing services under short-term negotiated fixed and variable fee arrangements. Revenue is recognized when it is earned, typically when our services have been rendered and equipment has been installed. In those cases, where services have not been provided and amounts to be paid as a deposit under such agreement is received, the deposit is recorded as deferred revenue on the balance sheet and is reclassified as revenue on the statement of operations after services have been provided and such revenue earned.
Income Taxes
Solar America accounts for income taxes under the provisions of FASB ASC Topic No. 740 (formerly SFAS No. 109,
Accounting for Income Taxes),
which provides for an asset and liability approach in accounting for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted tax laws, attributable to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts calculated for income tax purposes.
In recording deferred income tax assets, Solar America considers whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those deferred income tax assets would be realizable. The Company considers the scheduled reversal of deferred income tax liabilities and projected future taxable income for this determination. The Company established a full valuation allowance and reduced its net deferred tax asset, principally related to the Company’s net operating loss carryovers, to zero as of December 31, 2010 (Successor) and 2009 (Predecessor). The Company will continue to assess the valuation allowance against deferred income tax assets considering all available information obtained in future reporting periods. If the Company achieves profitable operations in the future, it may reverse a portion of the valuation allowance in an amount at least sufficient to eliminate any tax provision in that period. As a result of the acquisition of Solar n Stuff, the use of the NOL is limited under Section 382 of the IRS Rules and Regulations.
Fair value of financial instruments
The carrying value of cash and cash equivalents, accounts payable and accrued expenses and other liabilities approximates fair value due to the short-term maturity of these instruments. The carrying value of the notes payable are believed to approximate their fair value as of December 31, 2010, based upon the relatively short period these instruments have been outstanding.
Recent Accounting Pronouncements
In December 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-28—
Intangibles-Goodwill and Other
(Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. This Accounting Standards Update affects all entities that have recognized goodwill and have one or more reporting units whose carrying amount for purposes of performing Step 1 of the goodwill impairment test is zero or negative. The adoption of ASU No. 2010-28 will not have material impact on our consolidated financial statements.
In December 2010, the FASB issued Accounting Standards Update No. 2010-29—
Business Combinations
(Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. This ASU addresses the diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations. The amendments in this update affect any public entity that enters into business combinations that are material on an individual or aggregate basis. The adoption of ASU No. 2010-29 will not have a material impact on our consolidated financial statements.
In January 2011, the FASB issued Accounting Standards Update No. 2011-01—
Receivables
(Topic 310): Deferral of the Effective Date of Disclosures about Troubled Debt Restructuring in Update No. 2010-20. The amendments in this update apple to all public entity creditors that modify financing receivables within the scope of the disclosure requirements about troubled debt restructurings in Update 2010-20. The adoption of ASU No. 2011-01 will not have a material impact on our financial statements.
Note 2: Going Concern
At December 31, 2010, the Company had net losses of $46,900 and working capital deficit of $125,535. The Company believes that its existing capital resources may not be adequate to enable it to execute its business plan. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The Company estimates that it will require additional cash resources during 2011 based on its current operating plan and condition.
The Company expects cash flows from operating activities to improve, primarily as a result of an increase in revenue and reduction of costs, although there can be no assurance thereof. The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If we fail to generate positive cash flow or obtain additional financing, when required, we may have to modify, delay, or abandon some or all of our business and expansion plans.
Note 3: Business Combinations
Acquisition of Solar n Stuff.by Solar America Corp. on December 16, 2010
On December 16, 2010, Solar America acquired Solar n Stuff, a Louisiana corporation founded in October 2008. The acquisition of Solar n Stuff was accounted for in accordance with the provision of FASB Accounting Standard Codification 805 (“ASC805”),
Business Combinations
, as Solar America acquired 100% of the outstanding common stock along with substantially all of the assets, debts, business name, goodwill, and other tangible assets of Solar n Stuff. Solar n Stuff’s results of operations and cash flows are included in the accompanying consolidated financial statements from the date of acquisition through December 31, 2010.
On December 16, 2010, Solar America paid the seller $55,179 in cash and invested $44,821 into Solar n Stuff for payment of liabilities resulting in a total purchase price of $100,000. The purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values with the excess being recorded in goodwill.
In addition, on December 16, 2010, Solar America entered into a consulting agreement with Michael Hopman, former General Manager of Solar n Stuff, to provide transition consulting services for 60 days from the purchase date for a monthly fee of $10,000 per month. Also, as part of the agreement, Mr. Hopman agreed not to utilize information acquired as a result of the consulting services to directly or indirectly compete or engage in any competitive business in the Greater New Orleans region or solicit customers or consultants of the Company for a period of 24 months subsequent to the end of the consulting term. The fees paid in connection with this consulting agreement was expensed as consulting fees and were not considered to be part of the purchase price.
The following table summarizes the estimated preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition:
|
|
Amount
|
|
Cash
|
|
$
|
45,246
|
|
Accounts receivable
|
|
|
3,176
|
|
Property, plant and equipment
|
|
|
27,494
|
|
Inventory
|
|
|
14,373
|
|
Goodwill
|
|
|
62,193
|
|
Total assets acquired
|
|
|
152,482
|
|
|
|
|
|
|
Accounts payable assumed
|
|
|
52,482
|
|
Net assets acquired
|
|
$
|
100,000
|
|
The allocation of the purchase price was based on preliminary estimates and is provisional. Estimates and assumptions are subject to change upon the receipt of management’s review of the final amounts and final tax returns. This final evaluation of net assets acquired is expected to be completed as soon as a final accounting is performed but no later than one year from the acquisition date. Any future changes in the value of the net assets acquired will be offset by a corresponding change in goodwill.
The following unaudited pro-forma combined condensed financial statements are based on the unaudited historical financial statements of Solar n Stuff and Solar America after giving effect to the acquisition of Solar n Stuff. The unaudited pro-forma condensed combined statements of operations for the period ended December 31, 2010 and 2009 are presented as if the acquisition had taken place on the first day of each period, by combining the unaudited historical results of Solar America since its inception on August 12, 2010 and Solar n Stuff for the periods indicated.
The unaudited condensed combined pro-forma results were as follows:
Solar America Corp.
Unaudited Condensed Combined Pro-forma Statements of Operations
|
|
For the Period Ended December 31, 2010
|
|
|
|
Historical
Solar
America
Since
Inception
(August 12,
2010 to
December 31,
2010)
|
|
|
Historical
Solar n Stuff,
Inc. for the
period from
January 1,
2010 to
December 15,
2010
|
|
|
Pro-forma
Adjustments
|
|
|
Pro-forma
Condensed
Combined
|
|
Revenues
|
|
$
|
47,392
|
|
|
$
|
376,214
|
|
|
$
|
-
|
|
|
$
|
423,606
|
|
Cost of sales
|
|
|
37,419
|
|
|
|
272,880
|
|
|
|
-
|
|
|
|
310,299
|
|
Gross profit (loss)
|
|
|
9,973
|
|
|
|
103,334
|
|
|
|
-
|
|
|
|
113,307
|
|
Operating expenses
|
|
|
(68,903
|
)
|
|
|
(218,909
|
)
|
|
|
-
|
|
|
|
(287,812
|
)
|
Other income
|
|
|
12,030
|
|
|
|
9,157
|
|
|
|
-
|
|
|
|
21,187
|
|
Net loss
|
|
$
|
(46,900
|
)
|
|
$
|
(106,418
|
)
|
|
$
|
-
|
|
|
$
|
(153,318
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic and diluted
|
|
$
|
( 0.03
|
)
|
|
|
|
|
|
|
|
|
|
$
|
(0.85
|
)
|
Weighted average shares outstanding -basic and diluted
|
|
|
1,798,561
|
|
|
|
|
|
|
|
|
|
|
|
1,798,561
|
|
A unaudited condensed combined pro-forma statement of operations for December 31, 2009 is not presented as Solar America (Successor) was not incorporated at December 31, 2009.
Note 4: Notes Payable
On December 31, 2010, Solar America entered into an unsecured one year note payable agreement with Infinite Funding Inc. for $200,000 with stated interest of 10%. The notes payable balance together with accrued interest is due and payable on December 31, 2011.
Note 5: Common Stock
On December 6, 2010, Solar America issued 10,000,000 shares of common stock (post 10:1 forward stock split) to Salty Pepper Corp., a company wholly-owned by our Chairman and President, Mr. Brian Barrilleaux. The shares were issued as compensation for consulting services with a fair market value of $10,000 which equaled par value. Solar America recognized $10,000 of compensation expense related to the issuance.
Note 6: Related Party Transactions
Prior to the acquisition by Solar America and during the year ended December 31, 2009 and the period from January 1, 2010 through December 15, 2010, Solar n Stuff’s previous owners contributed $66,056 and $66,103, respectively, in the form of assets or cash to the Company. These amounts appear as additional paid in capital as of these balance sheet dates. Also, during the same periods the sole owner and general manager of the predecessor entity incurred expenses which could not be substantiated as Company expenses and as such, owner and officer compensation was recorded in the amount of $100,831 and $85,664, respectively.
Note 7: Gain on Vendor Settlements
Subsequent to the acquisition, Solar America negotiated a settlement with a Solar n Stuff vendor in order to reduce the obligations of the companies. As such, at December 31, 2010, the Company recognized $3,013 of other income that was comprised of the difference between the cash paid to the certain vendors as compared to the amounts originally owed.
Note 8: Commitments and Contingencies
Premier Dealer Agreement
On January 1, 2011, the Company entered into a three-year non-exclusive dealer agreement with Solatube to distribute certain products for the following territories: The Parishes of Ascension, Assumption, East Baton Rouge, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St John the Baptist, St. Tammany, Tangipahoa, Terrebonne, and West Baton Rouge, within the State of Louisiana. Under the terms of the dealer agreement, there are minimum purchase requirements of the following:
|
·
|
$216,675 from January 1, 2011 to December 31, 2011
|
|
·
|
$270,843 from January 1, 2012 to December 31, 2012
|
|
·
|
$338,555 from January 1, 2013 to December 31, 2013.
|
Note 9: Income Taxes
Deferred income taxes are recorded at the effective tax rate of 35%. SFAS No. 109, ASC 740 “
Accounting for Income Taxes”
, the provision for income taxes is computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
|
December 31,
|
|
|
December 31
|
|
|
|
2010
|
|
|
2009
|
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
Net operating losses
|
|
$
|
64,269
|
|
|
$
|
24,449
|
|
|
|
|
|
|
|
|
|
|
Less: valuation allowance
|
|
|
(64,269
|
)
|
|
|
(24,449
|
)
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
-
|
|
|
|
-
|
|
As of December 31, 2010 and 2009, the deferred tax assets are net of a valuation allowance of $64,269 and $24,449 respectively, based on the amount that management believes will ultimately be realized. 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. At December 31, 2010, Solar America had net loss carry-forwards primarily from the assumption of the net operating loss carry forward amounts of its predecessor entity, Solar n Stuff, of approximately $186,409 for tax purposes which will begin to expire in 2028. As of a result of the acquisition of Solar n Stuff, the predecessor entity’s NOL’s are limited to carryforward under Section 382 of the IRS Rules and Regulations. All years presented are open for IRS examination.
The Company applies the authoritative guidance in accounting for uncertainty in income taxes recognized in the financial statements. This guidance prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. There are no uncertain tax positions taken by the Company on its tax returns.
Note 10: Subsequent Events
On January 26, 2011, the Company entered into an unsecured debt agreement with Infinite Funding Inc. for $30,000. The note’s original terms include 10% stated simple interest payable upon maturity on January 25, 2012.
On April 4, 2011, Solar America approved a 10:1 forward stock split. The equity structure has been retroactively recast to show the effect of the forward stock split.
On April 12, 2011, Solar America amended its articles of incorporation to reflect a change in authorized capital. The aggregate number of shares of all classes of stock which the company has the authority to issue is 210,000,000 shares consisting of 10,000,000 shares of Preferred stock at $0.001 par value and 200,000,000 shares of common stock at $0.001 par value. The equity structure has been retroactively recast to present this change in capital structure at December 31, 2010.
On April 22, 2011, the Company entered into an unsecured debt agreement with Infinite Funding Inc. for $100,000. The note’s original terms include 10% stated simple interest payable upon maturity on April 21, 2012.
In the period from May 1, 2011 to June 24, 2011, the Company has received additional advances in the aggregate of $100,000 from Infinite Funding Inc. These advances bear no interest and are due on demand.
In the period from January 1, 2011 to June 24, 2011, the Company also received interest free short-term bridge loans from a third party in the aggregate amount of $45,000. These bridge loans were each repaid with the proceeds of the above-described debt agreements. No interest was accrued or paid on the bridge loans. As of June 24, 2011, there are no outstanding bridge loans.
SOLAR AMERICA CORP
UNAUDITED FINANCIAL STATEMENTS
|
|
Page
|
|
|
|
CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010
|
|
F-1
|
|
|
|
Consolidated Statements of Operations
for the three months ended March 31, 2011 (Successor); and
for the three months ended March 31, 2010 (Predecessor)
|
|
F-2
|
|
|
|
Consolidated Statements of Cash Flows
for the three months ended March 31, 2011 (Successor); and
for the three months ended March 31, 2010 (Predecessor)
|
|
F-3
|
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
F-4
|
SOLAR AMERICA CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
March 31,
2011
|
|
|
December 31,
2010
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
24,369
|
|
|
$
|
55,852
|
|
Accounts receivable
|
|
|
1,482
|
|
|
|
23,376
|
|
Inventory
|
|
|
22,643
|
|
|
|
13,842
|
|
Prepaid expenses
|
|
|
10,095
|
|
|
|
9,215
|
|
Total current assets
|
|
|
58,589
|
|
|
|
102,285
|
|
Goodwill
|
|
|
62,193
|
|
|
|
62,193
|
|
Fixed assets, net of accumulated depreciation of $22,681 and $19,524 respectively
|
|
|
23,285
|
|
|
|
26,442
|
|
Total assets
|
|
$
|
144,067
|
|
|
$
|
190,920
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
31,025
|
|
|
$
|
27,820
|
|
Accrued interest
|
|
|
5,565
|
|
|
|
-
|
|
Notes payable
|
|
|
280,000
|
|
|
|
200,000
|
|
Total current liabilities
|
|
|
316,590
|
|
|
|
227,820
|
|
Total liabilities
|
|
|
316,590
|
|
|
|
227,820
|
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMITMENTS AND CONTINGENCIES (See Note 6)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, ($0.001 par value), 10,000,000 shares authorized and -0- issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Common stock, ($0.001 par value), 200,000,000 shares authorized and 10,000,000 shares issued and outstanding
|
|
|
10,000
|
|
|
|
10,000
|
|
Additional paid-in capital
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Accumulated deficit
|
|
|
(182,523
|
)
|
|
|
(46,900
|
)
|
Total stockholders' deficit
|
|
|
(172,523
|
)
|
|
|
(36,900
|
)
|
Total liabilities and stockholders' deficit
|
|
$
|
144,067
|
|
|
$
|
190,920
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements
SOLAR AMERICA CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
Predecessor
Company
|
|
|
|
Three months
ended March 31,
2011
|
|
|
Three months
ended March 31,
2010
|
|
Revenues:
|
|
|
|
|
|
|
Product revenue
|
|
$
|
23,890
|
|
|
$
|
42,083
|
|
Service revenue
|
|
|
4,030
|
|
|
|
8,167
|
|
Total revenues
|
|
|
27,920
|
|
|
|
50,250
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
17,872
|
|
|
|
44,051
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
10,048
|
|
|
|
6,199
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
136,949
|
|
|
|
42,715
|
|
Depreciation
|
|
|
3,157
|
|
|
|
3,230
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
140,106
|
|
|
|
45,945
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(130,058
|
)
|
|
|
(39,746
|
)
|
|
|
|
|
|
|
|
|
|
Other expense:
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(5,565
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total other expense
|
|
|
(5,565
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
$
|
(135,623
|
)
|
|
$
|
(39,746
|
)
|
Income tax provision
|
|
|
-
|
|
|
|
-
|
|
Net loss
|
|
$
|
(135,623
|
)
|
|
$
|
(39,746
|
)
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
|
$
|
(0.01
|
)
|
|
$
|
(397.46
|
)
|
Weighted average common shares outstanding
|
|
|
10,000,000
|
|
|
|
100
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements
SOLAR AMERICA CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Successor
|
|
|
Predecessor
|
|
|
|
Company
|
|
|
Company
|
|
|
|
March 31,
2011
|
|
|
March 31,
2010
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(135,623
|
)
|
|
$
|
(39,746
|
)
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
3,157
|
|
|
|
3,230
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
21,894
|
|
|
|
(6,767
|
)
|
Prepaid expenses
|
|
|
(880
|
)
|
|
|
-
|
|
Inventory
|
|
|
(8,801
|
)
|
|
|
5,517
|
|
Accounts payable and accrued liabilities
|
|
|
8,770
|
|
|
|
6,817
|
|
Net cash used in operating activities
|
|
$
|
(111,483
|
)
|
|
$
|
(30,949
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Cash proceeds from borrowings on notes payable
|
|
|
80,000
|
|
|
|
-
|
|
Cash proceeds from third party advances
|
|
|
-
|
|
|
|
-
|
|
Owner contributions of capital
|
|
|
-
|
|
|
|
31,300
|
|
Net cash provided by financing activities
|
|
$
|
80,000
|
|
|
$
|
31,300
|
|
Change in cash and equivalents
|
|
|
(31,483
|
)
|
|
|
351
|
|
Cash and cash equivalents, beginning of period
|
|
|
55,852
|
|
|
|
3,342
|
|
Cash and cash equivalents, end of period
|
|
|
24,369
|
|
|
$
|
3,693
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements
SOLAR AMERICA CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Nature of Business and Summary of Significant Accounting Policies
Nature of Business and Basis of Presentation
On August 12, 2010, Solar America Corp., a Wyoming corporation (“Solar America” or the “Company”) was formed with the intent to acquire businesses operating in the alternative energy industry sector. On December 16, 2010, Solar America acquired 100% of the outstanding common stock of Solar n Stuff Inc. a Louisiana corporation founded in 2008 (“Solar n Stuff”), in exchange for $100,000, resulting in Solar n Stuff becoming a wholly owned subsidiary of Solar America. Solar n Stuff’s results of operations are consolidated with Solar America and presented for the period ending March 31, 2011. Solar n Stuff provides homeowners and businesses with clean and efficient solar energy products, such as Solar Hot Water Heating, Photovoltaic Solar Electric Systems, SolatubeDaylighting, Solar Swimming Pool Heating and DC Pool pumps, and Solar Attic Ventilation through its distribution arrangement with Solatube International, Inc. (“Solatube”).
Solar America, “the Successor Company” has presented its financial statements with operating results of Solar America since its inception on August 12, 2010, plus the operating results of Solar n Stuff since the acquisition date on December 16, 2010, and for the three months ended March 31, 2011. The predecessor company’s financial statements are presented for the three months ended March 31, 2010.
Solar America prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the Company’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month periods ended March 31, 2011 (successor) and March 31, 2010 (predecessor) are not necessarily indicative of the results for the full fiscal years. While the Company’s management believes that the disclosures presented herein and adequate and not misleading, these interim financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the periods ended December 31, 2010 (successor) and 2009 (predecessor), respectively, included elsewhere in this Registration Statement on Form S-1.
Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements at March 31, 2011, include the accounts of Solar n Stuff, a wholly-owned subsidiary. The consolidated statements at December 31, 2010 present amounts for Solar n Stuff for the period from the acquisition date of December 16, 2010 to December 31, 2010, and Solar America’s results from August 12, 2010 (inception) to December 31, 2010.
All significant inter-company transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 periods. Actual results could materially differ from those estimates.
Goodwill
Goodwill represents the excess of cost over the net tangible assets and identifiable intangible assets of acquired businesses. The Company’s goodwill results from the acquisition of Solar n Stuff. In order to determine the fair value of goodwill on the Solar n Stuff acquisition, the Company allocated the purchase price to the fair value of all Solar n Stuff’s assets and liabilities. The Company estimated the fair value of the assets and liabilities to approximate book value. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the fair value of goodwill. As a result, the Company recorded goodwill in the amount of $62,193 at December 16, 2010, as a non-current asset.
In accordance with guidance of the FASB ASC Topic no. 350-10,
Goodwill and Other
, the Company tests goodwill for impairment at least annually, or at any time when impairment indicators exist, by comparing the fair value of the reporting unit, generally based on discounted future cash flows, with its carrying amount including goodwill. Examples of such indicators, which would cause the Company to test goodwill for impairment between annual tests, include a significant change in the business climate, significant unexpected competition, significant deterioration in market share, and/or a loss of key personnel. If goodwill is determined to be impaired, the loss is measured by the excess of the carrying amount of the reporting unit over its fair value.
Revenue Recognition
Revenue is derived primarily from providing services under short-term negotiated fixed and variable fee arrangements. Revenue is recognized when it is earned, typically when our services have been rendered and equipment has been installed. In those cases, where services have not been provided and amounts to be paid as a deposit under such agreement is received, the deposit is recorded as deferred revenue on the balance sheet and is reclassified as revenue on the statement of operations after services have been provided and such revenue earned. Any amount that has been earned, but not yet billed, is recorded as work in process at the balance sheet date. Our product revenue is recognized upon delivery to the customer.
Note 2: Going Concern
At March 31, 2011, Solar America had cash and cash equivalents of $24,369, accumulated net losses of $182,523 and working capital deficit of $258,001. The Company believes that its existing capital resources may not be adequate to enable it to execute its business plan. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The Company estimates that it will require additional cash resources during 2011 based on its current operating plan and condition.
The Company expects cash flows from operating activities to improve, primarily as a result of an increase in revenue and reduction of costs, although there can be no assurance thereof. The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If we fail to generate positive cash flow or obtain additional financing, when required, we may have to modify, delay, or abandon some or all of our business and expansion plans.
Note 3: Business Combinations
Acquisition of Solar n Stuff.by Solar America Corp. on December 16, 2010
On December 16, 2010, Solar America acquired Solar n Stuff, a Louisiana corporation founded in October 2008. The acquisition of Solar n Stuff was accounted for in accordance with the provision of FASB Accounting Standard Codification 805 (“ASC805”),
Business Combinations
, as Solar America acquired 100% of the outstanding common stock along with substantially all of the assets, debts, business name, goodwill, and other tangible assets of Solar n Stuff. Solar n Stuff’s results of operations and cash flows are included in the accompanying consolidated financial statements from the date of acquisition through December 31, 2010.
On December 16, 2010, Solar America paid the seller $55,179 in cash and invested $44,821 into Solar n Stuff for payment of then-existing liabilities resulting in a total purchase price of $100,000. The purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values with the excess being recorded in goodwill.
In addition, on December 16, 2010, Solar America entered into a consulting agreement with Michael Hopman, former General Manager of Solar n Stuff, to provide transition consulting services for 60 days from the purchase date for a monthly fee of $10,000 per month. Also, as part of the agreement, Mr. Hopman agreed not to utilize information acquired as a result of the consulting services to directly or indirectly compete or engage in any competitive business in the Greater New Orleans region or solicit customers or consultants of the Company for a period of 24 months subsequent to the end of the consulting term. The fees paid in connection with this consulting agreement was expensed as consulting fees and were not considered to be part of the purchase price.
The following table summarizes the estimated preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition:
|
|
Amount
|
|
Cash
|
|
$
|
45,246
|
|
Accounts receivable
|
|
|
3,176
|
|
Property, plant and equipment
|
|
|
27,494
|
|
Inventory
|
|
|
14,373
|
|
Goodwill
|
|
|
62,193
|
|
Total assets acquired
|
|
|
152,482
|
|
|
|
|
|
|
Accounts payable assumed
|
|
|
52,482
|
|
Net assets acquired
|
|
$
|
100,000
|
|
The allocation of the purchase price was based on preliminary estimates and is provisional. Estimates and assumptions are subject to change upon the receipt of management’s review of the final amounts and final tax returns. This final evaluation of net assets acquired is expected to be completed as soon as a final accounting is performed but no later than one year from the acquisition date. Any future changes in the value of the net assets acquired will be offset by a corresponding change in goodwill.
Condensed combined pro-forma statement of operations is not presented as Solar America (Successor) was not incorporated as of March 31, 2010.
Note 4: Notes Payable
On December 31, 2010, Solar America entered into an unsecured one-year note payable agreement with Infinite Funding Inc. for $200,000 with stated interest of 10%. The notes payable balance together with accrued interest is due and payable on December 31, 2011.
Additionally, during the three months ended March 31, 2011, Solar America received advances of $80,000 from Infinite Funding Inc. See Subsequent Events (Note 7).
Note 5: Related Party Transactions (Predecessor)
Prior to the acquisition by Solar America and during the period ended March 31, 2010, Solar n Stuff’s previous owners contributed $31,300, respectively, in the form of assets or cash to the company. These amounts appear as additional paid-in capital as of these balance sheet dates. Also, during the same periods, the sole owner and general manager of the predecessor entity incurred expenses which could not be substantiated as company expenses and as such, owner and officer compensation was recorded in the amount of $22,762, respectively.
Note 6: Commitments and Contingencies
Premier Dealer Agreement
On January 1, 2011, the Company entered into a three-year non-exclusive dealer agreement with Solatube to distribute certain products for the following territories: The Parishes of Ascension, Assumption, East Baton Rouge, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St John the Baptist, St. Tammany, Tangipahoa, Terrebonne, West Baton Rouge, within the State of Louisiana. Under the terms of the dealer agreement, there are minimum purchase requirements of the following:
|
·
|
$216,675 from January 1, 2011 to December 31, 2011
|
|
·
|
$270,843 from January 1, 2012 to December 31, 2012
|
|
·
|
$338,555 from January 1, 2013 to December 31, 2013.
|
As of March 31, 2011, the Company has made $9,277 purchases under this agreement.
Note 7: Subsequent Events
On April 4, 2011, Solar America approved a 10:1 forward stock split. The forward split was effectuated on April 26, 2011.
On April 12, 2011, Solar America amended its articles of incorporation to reflect a change in authorized capital. The aggregate number of shares of all classes of stock which the Company has the authority to issue is 210,000,000 shares, consisting of 10,000,000 shares of preferred stock at $0.001 par value and 200,000,000 shares of common stock at $0.001 par value. The equity structure has been retroactively recast to present this change in capital structure at December 31, 2010.
On April 22, 2011, the Company entered into an unsecured debt agreement with Infinite Funding Inc. for $100,000. The note’s original terms include 10% stated simple interest payable upon maturity on April 21, 2012, and incorporates the $80,000 advances made during the three months ended March 31, 2011.
In the period from May 1, 2011 to June 24, 2011, the Company has received additional advances in the aggregate of $100,000 from Infinite Funding Inc. These advances bear no interest and are due on demand.
In the period from April 1, 2011 to June 24, 2011, the Company also received interest free short-term bridge loans from a third party in the aggregate amount of $35,000. These bridge loans were each repaid with the proceeds of the above-described debt agreements. No interest was accrued or paid on the bridge loans. As of June 24, 2011, there are no outstanding bridge loans.
PRELIMINARY PROSPECTUS
SOLAR AMERICA CORP.
6,000,000SHARES OF COMMON STOCK
_____________, 2011
PART II – INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth estimated expenses expected to be incurred in connection with the issuance and distribution of the securities being registered.
Securities and Exchange Commission Registration Fee
|
|
$
|
13.93
|
|
Audit Fees and Expenses
|
|
$
|
15,000.00
|
|
Legal Fees and Expenses
|
|
$
|
20,000.00
|
|
Transfer Agent and Registrar Fees and Expenses
|
|
$
|
500.00
|
|
Miscellaneous Expenses
|
|
$
|
500.00
|
|
Total
|
|
$
|
36,013.93
|
|
All amounts are estimates other than the Commission’s registration fee. We are paying all expenses of the offering listed above.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The officers and sole director of the Company are indemnified as provided by the Wyoming Business Corporation Act and the Bylaws of the Company. Unless specifically limited by a corporation’s articles of incorporation, Wyoming law provides directors with immunity from monetary liabilities. The Company’s Articles of Incorporation do not contain any such limiting language. Excepted from that immunity are:
|
·
|
Willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director has a material conflict of interest;
|
|
·
|
A violation of criminal law unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful;
|
|
·
|
A transaction from which the director derived an improper personal profit; and
|
The Articles of Incorporation provide that the Company will indemnify its officers, directors, legal representatives, and persons serving at the request of the Company as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise to the fullest extent legally permissible under the laws of the State of Wyoming against all expenses, liability and loss (including attorney’s fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by that person as a result of that connection to the Company. This right of indemnification under the Articles is a contract right that may be enforced in any manner by such person and extends for such persons benefit to all actions undertaken on behalf of the Company.
The Bylaws of the Company provide that the Company will indemnify its directors and officers to the fullest extent not prohibited by Wyoming law; provided, however, that the Company may modify the extent of such indemnification by individual contracts with its directors and officers; and, provided, further, that the Company shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Company, (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under Wyoming law or (iv) such indemnification is required to be made pursuant to the Bylaws.
The Bylaws of the Company provide that the Company will advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer, of the Company, or is or was serving at the request of the Company as a director or executive officer of another Company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefore, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said amounts if it should be determined ultimately that such person is not entitled to be indemnified under the Bylaws of the Company or otherwise.
The Bylaws of the Company provide that no advance shall be made by the Company to an officer of the Company (except by reason of the fact that such officer is or was a director of the Company in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Company.
RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of securities without registration since inception.
On August 8, 2010, in connection with the Company’s formation, we issued 10,000,000 shares (adjusted to reflect the Company’s 10-for-1 forward split, effectuated on April 26, 2011) shares of its common stock, par value $0.001 per share, to Salty Pepper Corp, a Louisiana corporation, an entity owned and controlled by our Chief Executive Officer, President and Chairman of the Board of Directors, Brian Barrilleaux, as payment for services rendered. The shares were issued pursuant Section 4(2) of the Securities Act. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act since the issuance of shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Mr. Barrilleaux had the necessary investment intent as required by Section 4(2) since he agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.
The Company did not use any underwriters with respect to the foregoing sales of its common stock. We did not, nor did any person acting on our behalf, offer or sell the securities by any form of general solicitation or general advertising.
All securities sold contained a restrictive legend on the share certificate stating that the securities have not been registered under the Securities Act and setting forth, or referring to the restrictions on transferability and sale of the securities.
EXHIBITS
(a) Exhibits
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
|
Articles of Incorporation of Glacier Point Corp., dated August 12, 2010
|
|
|
|
3.2
|
|
Amendment to the Articles of Incorporation of Glacier Point Corp., to effectuate name change to Solar America Corp., dated December 6, 2010
|
|
|
|
3.3
|
|
Amended and Restated Articles of Incorporation of Solar America Corp., dated April 26, 2011
|
|
|
|
3.4
|
|
Bylaws of Glacier Point Corp., dated August 12, 2010
|
|
|
|
3.5
|
|
Amended and Restated Bylaws of Solar America Corp., dated April 4, 2011
|
|
|
|
4.1
|
|
Specimen Stock Certificate
|
|
|
|
4.2
|
|
Promissory Note, dated December 31, 2010, issued in favor of Infinite Funding, Inc.
|
|
|
|
4.3
|
|
Promissory Note, dated January 26, 2011, issued in favor of Infinite Funding, Inc.
|
|
|
|
4.4
|
|
Promissory Note, dated April 22, 2011, issued in favor of Infinite Funding, Inc.
|
|
|
|
5.1
|
|
Legal Opinion of Lucosky Brookman LLP*
|
|
|
|
10.1
|
|
Acquisition Agreement, dated December 16, 2010, by and between Solar America Corp. andTina Thomas, the selling shareholder of Solar N Stuff, Inc.
|
|
|
|
14.1
|
|
Code of Ethics
|
|
|
|
21.1
|
|
List of Subsidiaries
|
|
|
|
23.1
|
|
Consent of McConnell &Jones LLP
|
|
|
|
* To be filed by amendment
UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1.
|
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to:
|
|
(a)
|
Include any prospectus required by Section 10(a)(3) of the Securities Act;
|
|
(b)
|
Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
|
|
(c)
|
Include any additional or changed material information on the plan of distribution.
|
2.
|
To, for the purpose of determining any liability under the Securities Act, treat each post-effective amendment as a new Registration Statement relating to the securities offered herein, and to treat the offering of such securities at that time to be the initial bona fide offering thereof.
|
3.
|
To remove from registration, by means of a post-effective amendment, any of the securities being registered hereby that remain unsold at the termination of the offering.
|
4.
|
For determining liability of the undersigned Registrant under the Securities Act to any purchaser in the initial distribution of the securities, that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
|
(a)
|
Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
|
|
(b)
|
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;
|
|
(c)
|
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and
|
|
(d)
|
Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
|
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to our director, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our director, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our director, officers, or controlling person sin connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.
For the purposes of determining liability under the Securities Act for any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a Registration Statement relating to an offering, other than Registration Statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a Registration Statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such date of first use.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City on the Lake Charles, State of Louisiana, on June 24, 2011.
|
SOLAR AMERICA CORP.
|
|
|
|
By:
|
/s/ Brian Barrilleaux
|
|
|
Name: Brian Barrilleaux
|
|
|
Title: President, Chief Executive Officer and
Chief Financial Officer, and Principal
Accounting Officer
|
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Brian Barrilleaux, as his true and lawful attorney-in-fact and agent with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement on Form S-1 of Solar America Corp., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, grant unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the foregoing, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this Registration Statement on Form S-1 was signed by the following persons in the capacities and on the dates so indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Brian Barrilleaux
|
|
President, Chief Executive Officer and Chief
|
|
June 24, 2011
|
Brian Barrilleaux
|
|
Financial Officer, and Principal Accounting Officer
|
|
|
|
|
|
|
|
/s/ Kellie A Moss
|
|
Corporate Secretary
|
|
June 24, 2011
|
Kellie A Moss
|
|
|
|
|
BYLAWS
OF
GLACIER POINT CORP.
A Wyoming Corporation.
ARTICLE I. OFFICES AND AGENT
The principal office of the corporation in the State of Wyoming shall be located in the City of Cheyenne, Wyoming. The corporation may have such other offices, either within or without the State of Wyoming, as the Board of Directors may designate or as the business of the corporation may require from time to time.
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2)
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Registered office. [Section 17-16- 501-502.]
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The registered office of the corporation required to be maintained in the State of Wyoming may be, but need not be, identical with the principal office or place of business in the State of Wyoming, and the address of the registered office may be changed from time to time by the Board of Directors in accord with the law of Wyoming.
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3)
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Registered Agent. [Sections 17-16-501-509.]
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The Registered Agent of the corporation required by law shall be the Secretary of State and the post office address to which he shall send process shall be as initially designated in the Certificate of Incorporation and may resign or change address or be changed by the Board of Directors from time to time in accord with the law of Wyoming.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. [Section 17-16-701.]
The annual meeting of the Shareholders shall be held on the first Monday in the month of March in each year, beginning with the year after incorporation, at the hour of 11 o'clock A.M., for the purpose of electing Directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the State of Wyoming such meeting shall be held on the next succeeding business day. If the election of Directors shall not be held on the day designated herein for any annual meeting of the Shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the Shareholders as soon thereafter as conveniently may be. A Shareholder may demand a regular meeting be held pursuant to Wyoming law.
Section 2. Special Meetings. [Section 17-16-702.]
Special meetings of the Shareholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Chairman of the Board of Directors, of the President or by the Board of Directors, and shall be called by the President at the request of any person owning the number of outstanding shares of the corporation entitled to vote at the meeting as set forth in Wyoming law.
Section 3. Place of Meeting. [Sections 17-16-702-703.]
The Board of Directors may designate any place, either within or without the State of Wyoming, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. A waiver of notice signed by all Shareholders entitle to vote at a meeting may designate any place, either within or without the State of Wyoming, as the place for the holding of such meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the registered office of the corporation in the State of Wyoming.
Section 4. Notice of Meeting. [Sections 17-16-705-706.]
Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, and other contents required by law, shall be delivered not less than ten nor more than 60 days before the date of the meeting, either personally or by mail, but or at the direction of the Chairman, President, or the Secretary, or the officer of persons called the meeting, to each Shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the Shareholder at his address as it appears on the records of the corporation, with postage thereon prepaid. Written waiver of attendance at such meeting without protest by the Shareholder shall be equivalent to the giving of such notice and cure any deficiency therein.
Section 5. Fixing of Record Date. [Sections 17-16-703, -704, -707.]
Subject to applicable law, for the purpose of determining Shareholders entitled to notice of or to vote at any meeting of Shareholders or any adjournment thereof, or Shareholders entitled to receive payment of any dividend, or in order to make a determination of Shareholders for any other proper purpose, the Board of Directors or an authorized officer may fix in advance a date as the record date for any such determination of Shareholders, such date in any case to be not more than 60 days and, in case of a meeting of Shareholders, not less than ten days prior to the date on which the particular action, requiring such determination of Shareholders, is to be taken. If no record date is fixed for the determination of Shareholders entitled to notice of or to vote at a meeting of Shareholders, or Shareholders entitled to receive payment of a dividend, the date on which the resolution of the Board of Directors declaring such meeting or dividend is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of Shareholders entitled to vote at any meeting of Shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof.
Section 6. Electronic Communications.
A meeting of the Shareholders in the form of a conference among Shareholders may be held by electronic communication as permitted by Wyoming law.
Section 7. Voting Lists. [Section 17-16-720.]
The officer or agent having charge of the stock transfer books for shares of the corporation shall make a complete list of the Shareholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of an the number of share held by each, which list shall be kept on file at the registered office of the corporation and shall be subject to inspection by any Shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any Shareholder during the whole time of the meeting. The original stock transfer book shall be prima facie evidence as to who are the Shareholders entitled to examine such list of transfer books or to vote at any meeting of Shareholders.
Section 8. Quorum. [Sections 17-16-725, -1021.]
A majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of Shareholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The Shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough Shareholders to leave less than a quorum unless such presence was only for the sole purpose of objection to notice given.
Section 9. Proxies. [Section 17-16-722.]
At all meetings of Shareholders, a Shareholder may vote by proxy executed in writing or by electronic transmission by the Shareholder or by his duly authorized attorney in fact. Such proxy shall be filed with the secretary of the corporation before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.
Section 10. Voting of Shares.
10.1. Cumulative Voting. [Section 17-16-721.]
Each Shareholder entitled to vote for directors has the right to cumulate votes in the election of directors according to Wyoming law, unless the articles provide that there shall be no cumulative voting.
10.2. Vote. [Sections 17-16-726, -728, -0121.]
Subject to the provisions of Section 11 of this Article II and provision of the articles, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of Shareholders. Corporate action, other than as set forth in Section 11, shall be authorized by a majority of qualified votes cast at a Shareholder's meeting. A Shareholder is deemed to have voted all of the shares in the same way, absent direction voting shares differently.
10.3. Voting by Beneficial Owners. [Section 17-16-723, -724.]
Upon compliance with Wyoming law, beneficial owners, rather than the actual Shareholder, may vote the shares.
10.4. Voting by Non-Shareholders.
If the articles have provided for voting by creditor, security holder, or other person, such person shall have the right to vote as set forth in the articles.
Section 11. Informal Action by Shareholders. [Section 17-16-704.]
Any action required to be taken at any meeting of the Shareholders, or any other action which may be taken at a meeting of the Shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Shareholders entitled to vote with respect to the subject matter thereof. Such action is effective when signed by all the Shareholders, unless a different time is provided in such written action.
ARTICLE III. BOARD OF DIRECTORS
Section 1. General Powers. [Section 17-16-801.]
The business and affairs of the corporation shall be managed under the direction of its Board of Directors under the authority granted by the law of Wyoming.
Section 2. Number, Tenure, Election, Removal, Resignation, Vacancies and Qualification. [Sections 17-16-802 to -810.]
Directors shall be natural persons. The first Board of Directors may be named in the articles or elected by Incorporators or Shareholders. The number of directors of the corporation shall be determined by resolution of the Board of Directors or Shareholders or as set forth in the articles, but shall in the absence of such designation be the number of Shareholders of the corporation entitled to elect directors or three (3), whichever is less, and may be increased or decreased in accordance with Wyoming law. Directors may be elected to fill vacancies and newly created directorships by the Board of Directors. Each director shall hold office until the next annual meeting of Shareholders and until his successor shall have been elected and qualified; or elected for a term not to exceed five (5) years. A Director may resign by filing his resignation with the Secretary, to take effect as set forth in such resignation, which shall have the effect of creating a vacancy. The articles or these bylaws shall determine Directors' qualifications, but a Director need not be a resident of the State of Wyoming or Shareholder of the corporation.
Section 3. Regular Meetings. [Section 17-16-820.]
A regular meeting of the Board of Directors shall be held without other notice than this Bylaw immediately after, and at the same place as, the annual meeting of Shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Wyoming, for the holding of additional regular meetings without other notice than such resolution.
Section 4. Special Meetings. [Section 17-16-820.]
Special meetings of the Board of Directors may be called by or at the request of the Chairman, President or any Director. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Wyoming, as the place for holding any special meeting of the Board of Directors called by them.
Section 5. Notice. [Sections 17-16-820, -823.]
Notice of any special meeting of the Board of Directors shall be given at least three (3) days previously thereto by written notice delivered personally or mailed to each Director at his business address, or by telegram. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Any Director may waive notice of any meeting in a writing to be filed with the minutes of such meeting. The attendance of a Director at a meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
Section 6. Quorum. [Sections 17-16-824, -1021.]
A majority of the Directors currently holding office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than all Directors are present at a meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice. A Director may give advance written consent or opposition to a proposal to be acted on at a Board of Directors meeting in accordance with Wyoming law.
Section 7. Manner of Acting. [Sections 17-16-824, -1021.]
The act of a majority of the Directors present at a meeting shall be the act of the Board of Directors. All members may consent in writing to an action without a meeting.
Section 8. Electronic Meetings. [Section 17-16-821.]
Any one or more of the Directors may participate in a meeting of the Board of Directors or any Committee thereof by means of a conference telephone or similar communications equipment allowing all persons to hear each other at the same time. Such participation shall constitute presence in person at such meetings
Section 9. Vacancies. [Section 17-16-810.]
Any vacancy occurring in the Board of Directors may be filled by the vote of the remaining Directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office.
Section 10. Compensation. [Section 17-16-811.]
The Board of Directors may fix the compensation of directors serving in any capacity.
Section 11. Presumption of Assent. [Section 17-16-824.]
A Director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting within three (3) days after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.
Section 12. Removal. [Section 17-16-808, -809.]
The Shareholders or Directors of the corporation may remove a Director pursuant to Wyoming law.
Section 13. Board Committees. [Section 17-16-825.]
The Board of Directors may establish committees having the authority of the board pursuant to Wyoming law.
Section 14. Shareholder Management. [Section 17-16-732.]
The Shareholders may take any action that the Board of Directors has the power to make pursuant to Wyoming law.
ARTICLE IV. OFFICERS
Section 1. Number. [Section 17-16-840.]
The officers of the corporation shall be a Chairman of the Board of Directors, President, Chief Executive Officer, one or more vice-presidents (the number thereof to be determined by the Board of Directors), a Secretary, and a Treasurer or Chief Financial Officer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Any two or more offices may be held by the same person.
Section 2. Election and Term of Office; Resignation. [Sections 17-16-840, -843.]
The officers of the corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the Shareholders, or as soon thereafter as is convenient. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. In the absence of an election or appointment, the person exercising such powers are deemed to have been elected to such offices under Wyoming law.
Section 3. Removal. [Section 17-16-843.]
Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.
Section 4. Vacancies. [Section 17-16-843.]
A vacancy in any office because of death, resignation, removal, disqualification or otherwise may be filled by the Board of Directors for the unexpired portion of the term and until the successor shall have been chosen and qualified.
Section 5. Officers. [Sections 17-16-840, -841.]
The Board of Directors may appoint the following officers:
5.1. Chairman of the Board of Directors. The Board of Directors shall elect the Chairman of the Board of Directors from its membership. He shall preside at the meetings of the Board and Shareholders and perform such other duties as may be assigned to him by the Board of Directors from time to time.
5.2. President/CEO. The President shall be the Chief Executive Officer of the corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the corporation. He shall, when the Chairman of the Board of Directors is absent, preside at all meetings of the Shareholders and of the Board of Directors. He may sign, with the Secretary or any other proper officer of the corporation thereunto authorized by the Board of Directors, certificates for shares of the corporation, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these bylaws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time.
5.3. The Vice-Presidents. In the absence of the President or in the event of his death, inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any vice-president may sign, with the Secretary or an Assistant Secretary, certificates for shares of the corporation; and shall perform such other duties as from time to time may be assigned to him by the President or by the Board of Directors.
5.4. The Secretary. The Secretary shall: (a) keep the minutes of the Shareholders' and of the Board of Directors' meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is affixed to all documents the execution of which on behalf of the corporation under its seal is duly authorized; (d) keep a register of the post office address of each Shareholder which shall be furnished to the Secretary by such Shareholder; (e) sign with the President, or vice-president, certificates for shares of the corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the corporation; and (g) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President or by the Board of Directors.
5.5. The Treasurer/CFO. The Treasurer shall be the Chief Financial Officer of the corporation and shall have charge and custody of and be responsible for all funds and securities of the corporation and shall keep regular books of all receipts and disbursements of the corporation, and in general shall perform such other duties as may be assigned to him by the Board of Directors or the President. The Treasurer shall disburse out of the funds of the corporation payment of such just demands against the corporation as may from time to time be authorized by the Board of Directors. The Treasurer shall sign or countersign all checks, notes and such other instruments or obligations as require his signature, and shall perform all duties incident to his office, or that are properly required of him by the Board of Directors, provided, however, that by resolution of the Board of Directors' authority and responsibility for the signing of checks, notes and other obligations may be assigned to either the President or Treasurer or such other officer or officers as the Board of Directors may designate from time to time.
Section 6. Transfer of Authority.
In case of the absence of any officer of the corporation or for any other reason the Board of Directors deems sufficient, the Board of Directors may transfer the powers or duties of that officer to any other officer, Director or employee of the corporation and any officer may delegate their duties to persons functioning in subordinate offices.
Section 11. Compensation.
The salaries of the principal officers shall be fixed from time to time by the Board of Directors. No officer shall be prevented from receiving his salary by reason of the fact that he is also a Director of the corporation.
ARTICLE V. CONTRACT
Section 1. Contracts.
The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.
ARTICLE VI. CERTIFICATES FOR SHARES
AND THEIR TRANSFER
Section 1. Determination of Shares. [Section 17-16-625, -626.]
The Board of Directors shall determine if some or all of any or all classes and series of its shares shall be uncertificated or certificated shares.
Section 2. Certificates for Shares. [Section 17-16-625.]
If the Board of Directors determines to issue Certificates representing fully paid and non-assessable shares of the common stock of the corporation, such certificates shall be in such form as shall be similar to that annexed to the minutes of the first meeting of the Board of Directors or otherwise as determined by the Board of Directors. Such certificates shall be signed by the President or a vice-president and by the Secretary or an Assistant Secretary and the Corporation Seal shall be affixed thereto. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the corporation as the Board of Directors may prescribe.
Section 3. Transfer of Shares. [Section 17-16-627.]
Transfer of shares of the corporation shall be made only on the stock transfer books of the corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes. The Board of Directors or Shareholders may impose a restriction on the transfer of shares in accordance with Wyoming law.
Section 4. Lost or Destroyed Certificates. [Uniform Commercial Code, Article 8]
The holder of any certificate representing shares of the corporation shall immediately notify the corporation of any loss or destruction of the certificate(s) representing same. The corporation may issue a new certificate in the place of any certificate theretofore issued by it alleged to have been lost or destroyed. On production of such evidence of loss or destruction as the Board of Directors in its discretion may require, the Board of Directors may, in its discretion, require the owner of the lost or destroyed certificate, or such person's legal representatives, to give the corporation a bond in such sum as the Board may direct, and with such surety or sureties as may be satisfactory to the Board of Directors to indemnify the corporation against any claims, loss, liability, or damage it may suffer on account of the issuance of the new certificate. A new certificate may be issued without requiring any such evidence, bond, or indemnity subject to the discretion of the Board of Directors.
ARTICLE VII. FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of January (and end on the thirty-first day of December) in each year. The Board of Directors shall have the power to change the fiscal year by resolution duly adopted.
ARTICLE VIII. NAME. [Section 17-16-401.]
The exclusive name of this corporation that has been reserved as required by law shall be as above written.
ARTICLE IX. SEAL.
The Board of Directors shall provide a corporate seal which shall have inscribed thereon the (1) word "Seal" or "Corporate Seal", and may contain (2) the name of the corporation, (2) the state of incorporation, and may contain (3) abbreviations or combinations of such terms and be affixed, engraved, printed, placed, stamped or in any other manner be reproduced on any document.
ARTICLE X. WAIVER OF NOTICE
Whenever any notice is required to be given to any Shareholder or Director of the corporation under the provisions of these Bylaws or under the provisions of the articles of incorporation or under the provisions of the Wyoming law, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.
ARTICLE XI. AMENDMENTS. [Section 17-16-206.]
These bylaws may be altered, amended or repealed and new bylaws may be adopted by Shareholders or the Board of Directors at any regular or special meeting of the Board of Directors or Shareholders by a vote of such Shareholders or Directors entitled to vote in accordance with the laws of Wyoming.
ARTICLE XII. FURTHER AUTHORITIES
The Board of Directors may grant, delegate or assign to any officer of the corporation any of the duties and authorities herein above designated to be performed by any officer or may enlarge or restrict the duty and authority of any officer, either temporarily or permanently, as long as such powers and authorities shall not be inconsistent with these bylaws.
ARTICLE XIII. SEVERABILITY
Any provision of these bylaws, or any amendment or alteration thereof, which has been constructed to be in violation of Wyoming law, as amended, and any amendment or replacement thereto, shall not in any way render the remaining provisions invalid.
ARTICLE XIV. DIRECTOR AND OFFICER INDEMNIFICATION [Sections 17-16-850 to -853, -855 to -858.]
The corporation shall indemnify any person acting on its behalf in accord with the law of Wyoming. The indemnification provided hereby shall not be deemed exclusive of any other right to which anyone seeking indemnification thereunder may be entitled under any bylaw, agreement, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The corporation may purchase and maintain insurance on the behalf of any Director, officer, agent, employee or former Director or officer or other person, against any liability asserted against them and incurred by him.
SOLAR AMERICA CORP.
CONVERTIBLE PROMISSORY NOTE
December31, 2010
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$200,000.00
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FOR VALUE RECEIVED, Solar America Corp., a Wyoming corporation (the “
Company
”), promises to pay to the order of Infinite Funding, Inc., or its permitted assigns, transferees and successors as provided herein (the “
Holder
”), or as the Holder may direct, at such location as the Holder may designate, Two HundredThousandDollars and Zero Cents ($200,000.00) plus simple interest on such principal amount from the date of this Promissory Note (the “
Note
”) at an annual interest rate equal to ten percent (10%).
Interest will be computed on the basis of a year of 365 days for the actual number of days elapsed from the date of this Note. The number of days used to compute the interest will include the first day but exclude the last day during which any principal is outstanding.
ARTICLE I.
THE NOTE
This Note is issued by the CompanyonDecember31, 2010 (the “
Issuance Date
”). Between December 6, 2010 and December 31, 2010 Holderhereof made advances to the Company in the aggregate amount of $200,000.00.
ARTICLE II.
PRINCIPAL AND INTEREST PAYMENTS.
Section 2.01 The entire principal amount of this Note together with accrued and unpaid interest thereon will be due and payable on December30, 2011 (the “
Repayment Date
.
Section 2.02 The principal and interest on this Note will be payable in the lawful currency of the United States of America by wire transfer of immediately available funds and without set-off or counterclaim, free and clear of and without deduction for any present or future taxes, restrictions or conditions of any nature.
Section 2.03 All payments under this Note prior to demand or acceleration will be applied first, to any and all costs, expenses or charges then owed by the Company to the Holder, second, to accrued and unpaid interest, and third, to the unpaid principal balance. All payments so received after demand or acceleration will be applied in such manner as the Holder may determine in its sole and absolute discretion.
Section 2.04 Whenever any payment on this Note is stated to be due on a day which is not a business day, the payment will be made on the next succeeding business day and the extension of time will be included in the computation of the payment of interest of this Note.
Section 2.05 Overdue principal and interest will bear interest at a rate equal to the greater of (i) twenty-five percent (25%) or (ii) the highest rate permitted by applicable law. Overdue principal and interest will be payable on demand.
Section 2.06 This Note may be prepaid at any time.
ARTICLE III.
DEFAULT; ACCELERATION
The occurrence of any one or more of the following events with respect to the Company constitutes an event of default hereunder (“
Event of Default
”):
Section 3.01 The Company fails to pay: (a) the principal of this Note or the accrued interest thereon when due; or (b) the principal or the accrued interest on any other obligation of the Company to the Holder when due.
Section 3.02 The Company breaches, in any materially respect, any covenant, representation or warranty in this Note or the term of any other existing instrument or agreement between the Company and the Holder.
Section 3.03 The Company (a) voluntarily becomes subject to any proceeding under the Bankruptcy Code or any similar remedy under state statutory or common law, or (b) admits in writing its inability to pay debts generally as they become due.
Section 3.04 Within 60 days after the commencement of proceedings against the Company seeking any bankruptcy, insolvency, liquidation, dissolution or similar relief under any present or future statute, law or regulation (a) such action has not been dismissed or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or (b) the stay of any such order or proceedings has been set aside, or, within 60 days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company, the appointment has not been vacated.
Section 3.05 Any litigation is commenced against the Company by a person other than Holder, any of its affiliates, or any person acting in concert with them, if: (a) the damages sought are in excess of $250,000.
Section 3.06 The Company defaults under any instrument or agreement between the Company and any third party evidencing indebtedness of the Company in excess of $250,000.
Upon the occurrence of an Event of Default under this Note, the entire unpaid principal balance of this Note, together with all accrued interest thereon, shall become immediately due and payable regardless of any prior forbearance and without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Company. The Holder may exercise any and all rights and remedies available to the Holder under applicable law, including, without limitation, the right to collect from the Company all amounts due under this Note.
ARTICLE IV.
MISCELLANEOUS
Section 4.01 The Company waives diligence, presentment, protest, demand and notice of protest, demand, dishonor and nonpayment of this Note, and expressly agrees that this Note, and any payment under it, may be extended by the Holder from time to time without in any way affecting the liability of the Company.
Section 4.02 Any term of this Note may be amended or waived only with the written consent of the Company and the Holder;
provided
,
however
, that, in no event shall the principal amount of this Note be amended without the written consent of the Holder of this Note. By acceptance hereof, the Holder acknowledges that in the event consent is obtained pursuant to the foregoing sentence, any term of this Note (other than the principal amount thereof) may be amended or waived with or without the consent of the Holder. Any amendment or waiver effected in accordance with this Section 4.02 shall be binding upon the Company, the Holder and each transferee of this Note.
Section 4.03 All rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs and administrators of the parties. As used in this Note, the Company includes any corporation, partnership, Limited Liability Company or other entity that succeeds to or assumes the obligations of the Company under this Note. “Holder” means any person who is at the time the registered holder of this Note.
Section 4.04 The Company agrees to reimburse the Holder for all attorneys’ fees and expenses incurred by the Holder in connection with the collection and enforcement of this Note.
Section 4.05 The rights and remedies of the Holder under this Note and as may otherwise be available at law or in equity are cumulative and concurrent and at the sole discretion of the Holder may be pursued singly, successively or together and exercised as often as the Holder desires.
Section 4.06 This Note will be governed in accordance with the laws of the State of Texas.
Section 4.07 Any notice required or permitted hereunder shall be given in writing and shall be conclusively deemed effectively given upon personal delivery or delivery by courier, or five days after deposit in the United States mail, by registered or certified mail, postage prepaid.
Section 4.08 Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of mutilation, upon surrender and cancellation of this Note, the Company, at its expense, will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
Section 4.09 If one or more provisions of this Note are held unenforceable under applicable law, the unenforceable provision will be excluded from this Note and the balance of this Note will be interpreted as if such provision were so excluded and will be enforceable in accordance with its terms. The parties to this Note agree to replace any void or unenforceable provision of this Note with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provision.
IN WITNESS WHEREOF, the Company has executed this Note by its duly authorized officer as of the date and year first written above.
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Solar America Corp.
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/s/ Brian Barrilleaux
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By:
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Brian Barrilleaux
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Chairman and President
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SOLAR AMERICA CORP.
CONVERTIBLE PROMISSORY NOTE
January 26, 2011
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$30,000.00
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FOR VALUE RECEIVED, Solar America Corp., a Wyoming corporation (the “
Company
”), promises to pay to the order of Infinite Funding, Inc., or its permitted assigns, transferees and successors as provided herein (the “
Holder
”), or as the Holder may direct, at such location as the Holder may designate, ThirtyThousandDollars and Zero Cents ($30,000.00) plus simple interest on such principal amount from the date of this Promissory Note (the “
Note
”) at an annual interest rate equal to ten percent (10%).
Interest will be computed on the basis of a year of 365 days for the actual number of days elapsed from the date of this Note. The number of days used to compute the interest will include the first day but exclude the last day during which any principal is outstanding.
ARTICLE I.
THE NOTE
This Note is issued by the CompanyonJanuary 26, 2011 (the “
Issuance Date
”). On January 26, 2011 Holderhereof made advances to the Company in the aggregate amount of $30,000.00.
ARTICLE II.
PRINCIPAL AND INTEREST PAYMENTS.
Section 2.01 The entire principal amount of this Note together with accrued and unpaid interest thereon will be due and payable on January 25, 2012 (the “
Repayment Date
.
Section 2.02 The principal and interest on this Note will be payable in the lawful currency of the United States of America by wire transfer of immediately available funds and without set-off or counterclaim, free and clear of and without deduction for any present or future taxes, restrictions or conditions of any nature.
Section 2.03 All payments under this Note prior to demand or acceleration will be applied first, to any and all costs, expenses or charges then owed by the Company to the Holder, second, to accrued and unpaid interest, and third, to the unpaid principal balance. All payments so received after demand or acceleration will be applied in such manner as the Holder may determine in its sole and absolute discretion.
Section 2.04 Whenever any payment on this Note is stated to be due on a day which is not a business day, the payment will be made on the next succeeding business day and the extension of time will be included in the computation of the payment of interest of this Note.
Section 2.05 Overdue principal and interest will bear interest at a rate equal to the greater of (i) twenty-five percent (25%) or (ii) the highest rate permitted by applicable law. Overdue principal and interest will be payable on demand.
Section 2.06 This Note may be prepaid at any time.
ARTICLE III.
DEFAULT; ACCELERATION
The occurrence of any one or more of the following events with respect to the Company constitutes an event of default hereunder (“
Event of Default
”):
Section 3.01 The Company fails to pay: (a) the principal of this Note or the accrued interest thereon when due; or (b) the principal or the accrued interest on any other obligation of the Company to the Holder when due.
Section 3.02 The Company breaches, in any materially respect, any covenant, representation or warranty in this Note or the term of any other existing instrument or agreement between the Company and the Holder.
Section 3.03 The Company (a) voluntarily becomes subject to any proceeding under the Bankruptcy Code or any similar remedy under state statutory or common law, or (b) admits in writing its inability to pay debts generally as they become due.
Section 3.04 Within 60 days after the commencement of proceedings against the Company seeking any bankruptcy, insolvency, liquidation, dissolution or similar relief under any present or future statute, law or regulation (a) such action has not been dismissed or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or (b) the stay of any such order or proceedings has been set aside, or, within 60 days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company, the appointment has not been vacated.
Section 3.05 Any litigation is commenced against the Company by a person other than Holder, any of its affiliates, or any person acting in concert with them, if: (a) the damages sought are in excess of $250,000.
Section 3.06 The Company defaults under any instrument or agreement between the Company and any third party evidencing indebtedness of the Company in excess of $250,000.
Upon the occurrence of an Event of Default under this Note, the entire unpaid principal balance of this Note, together with all accrued interest thereon, shall become immediately due and payable regardless of any prior forbearance and without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Company. The Holder may exercise any and all rights and remedies available to the Holder under applicable law, including, without limitation, the right to collect from the Company all amounts due under this Note.
ARTICLE IV.
MISCELLANEOUS
Section 4.01 The Company waives diligence, presentment, protest, demand and notice of protest, demand, dishonor and nonpayment of this Note, and expressly agrees that this Note, and any payment under it, may be extended by the Holder from time to time without in any way affecting the liability of the Company.
Section 4.02 Any term of this Note may be amended or waived only with the written consent of the Company and the Holder;
provided
,
however
, that, in no event shall the principal amount of this Note be amended without the written consent of the Holder of this Note. By acceptance hereof, the Holder acknowledges that in the event consent is obtained pursuant to the foregoing sentence, any term of this Note (other than the principal amount thereof) may be amended or waived with or without the consent of the Holder. Any amendment or waiver effected in accordance with this Section 4.02 shall be binding upon the Company, the Holder and each transferee of this Note.
Section 4.03 All rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs and administrators of the parties. As used in this Note, the Company includes any corporation, partnership, Limited Liability Company or other entity that succeeds to or assumes the obligations of the Company under this Note. “Holder” means any person who is at the time the registered holder of this Note.
Section 4.04 The Company agrees to reimburse the Holder for all attorneys’ fees and expenses incurred by the Holder in connection with the collection and enforcement of this Note.
Section 4.05 The rights and remedies of the Holder under this Note and as may otherwise be available at law or in equity are cumulative and concurrent and at the sole discretion of the Holder may be pursued singly, successively or together and exercised as often as the Holder desires.
Section 4.06 This Note will be governed in accordance with the laws of the State of Texas.
Section 4.07 Any notice required or permitted hereunder shall be given in writing and shall be conclusively deemed effectively given upon personal delivery or delivery by courier, or five days after deposit in the United States mail, by registered or certified mail, postage prepaid.
Section 4.08 Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of mutilation, upon surrender and cancellation of this Note, the Company, at its expense, will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
Section 4.09 If one or more provisions of this Note are held unenforceable under applicable law, the unenforceable provision will be excluded from this Note and the balance of this Note will be interpreted as if such provision were so excluded and will be enforceable in accordance with its terms. The parties to this Note agree to replace any void or unenforceable provision of this Note with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provision.
IN WITNESS WHEREOF, the Company has executed this Note by its duly authorized officer as of the date and year first written above.
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Solar America Corp.
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/s/ Brian Barrilleaux
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By:
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Brian Barrilleaux
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Chairman and President
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SOLAR AMERICA CORP.
CONVERTIBLE PROMISSORY NOTE
April 22, 2011
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$100,000.00
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FOR VALUE RECEIVED, Solar America Corp., a Wyoming corporation (the “
Company
”), promises to pay to the order of Infinite Funding, Inc., or its permitted assigns, transferees and successors as provided herein (the “
Holder
”), or as the Holder may direct, at such location as the Holder may designate, One Hundred ThousandDollars and Zero Cents ($100,000.00) plus simple interest on such principal amount from the date of this Promissory Note (the “
Note
”) at an annual interest rate equal to ten percent (10%).
Interest will be computed on the basis of a year of 365 days for the actual number of days elapsed from the date of this Note. The number of days used to compute the interest will include the first day but exclude the last day during which any principal is outstanding.
ARTICLE I.
THE NOTE
This Note is issued by the CompanyonApril22, 2011 (the “
Issuance Date
”). Between February 1, 2011 and April 22, 2011, Holderhereof made advances to the Company in the aggregate amount of $100,000.00.
ARTICLE II.
PRINCIPAL AND INTEREST PAYMENTS.
Section 2.01 The entire principal amount of this Note together with accrued and unpaid interest thereon will be due and payable on April 21, 2012 (the “
Repayment Date
.
Section 2.02 The principal and interest on this Note will be payable in the lawful currency of the United States of America by wire transfer of immediately available funds and without set-off or counterclaim, free and clear of and without deduction for any present or future taxes, restrictions or conditions of any nature.
Section 2.03 All payments under this Note prior to demand or acceleration will be applied first, to any and all costs, expenses or charges then owed by the Company to the Holder, second, to accrued and unpaid interest, and third, to the unpaid principal balance. All payments so received after demand or acceleration will be applied in such manner as the Holder may determine in its sole and absolute discretion.
Section 2.04 Whenever any payment on this Note is stated to be due on a day which is not a business day, the payment will be made on the next succeeding business day and the extension of time will be included in the computation of the payment of interest of this Note.
Section 2.05 Overdue principal and interest will bear interest at a rate equal to the greater of (i) twenty-five percent (25%) or (ii) the highest rate permitted by applicable law. Overdue principal and interest will be payable on demand.
Section 2.06 This Note may be prepaid at any time.
ARTICLE III.
DEFAULT; ACCELERATION
The occurrence of any one or more of the following events with respect to the Company constitutes an event of default hereunder (“
Event of Default
”):
Section 3.01 The Company fails to pay: (a) the principal of this Note or the accrued interest thereon when due; or (b) the principal or the accrued interest on any other obligation of the Company to the Holder when due.
Section 3.02 The Company breaches, in any materially respect, any covenant, representation or warranty in this Note or the term of any other existing instrument or agreement between the Company and the Holder.
Section 3.03 The Company (a) voluntarily becomes subject to any proceeding under the Bankruptcy Code or any similar remedy under state statutory or common law, or (b) admits in writing its inability to pay debts generally as they become due.
Section 3.04 Within 60 days after the commencement of proceedings against the Company seeking any bankruptcy, insolvency, liquidation, dissolution or similar relief under any present or future statute, law or regulation (a) such action has not been dismissed or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or (b) the stay of any such order or proceedings has been set aside, or, within 60 days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company, the appointment has not been vacated.
Section 3.05 Any litigation is commenced against the Company by a person other than Holder, any of its affiliates, or any person acting in concert with them, if: (a) the damages sought are in excess of $250,000.
Section 3.06 The Company defaults under any instrument or agreement between the Company and any third party evidencing indebtedness of the Company in excess of $250,000.
Upon the occurrence of an Event of Default under this Note, the entire unpaid principal balance of this Note, together with all accrued interest thereon, shall become immediately due and payable regardless of any prior forbearance and without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Company. The Holder may exercise any and all rights and remedies available to the Holder under applicable law, including, without limitation, the right to collect from the Company all amounts due under this Note.
ARTICLE IV.
MISCELLANEOUS
Section 4.01 The Company waives diligence, presentment, protest, demand and notice of protest, demand, dishonor and nonpayment of this Note, and expressly agrees that this Note, and any payment under it, may be extended by the Holder from time to time without in any way affecting the liability of the Company.
Section 4.02 Any term of this Note may be amended or waived only with the written consent of the Company and the Holder;
provided
,
however
, that, in no event shall the principal amount of this Note be amended without the written consent of the Holder of this Note. By acceptance hereof, the Holder acknowledges that in the event consent is obtained pursuant to the foregoing sentence, any term of this Note (other than the principal amount thereof) may be amended or waived with or without the consent of the Holder. Any amendment or waiver effected in accordance with this Section 4.02 shall be binding upon the Company, the Holder and each transferee of this Note.
Section 4.03 All rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs and administrators of the parties. As used in this Note, the Company includes any corporation, partnership, Limited Liability Company or other entity that succeeds to or assumes the obligations of the Company under this Note. “Holder” means any person who is at the time the registered holder of this Note.
Section 4.04 The Company agrees to reimburse the Holder for all attorneys’ fees and expenses incurred by the Holder in connection with the collection and enforcement of this Note.
Section 4.05 The rights and remedies of the Holder under this Note and as may otherwise be available at law or in equity are cumulative and concurrent and at the sole discretion of the Holder may be pursued singly, successively or together and exercised as often as the Holder desires.
Section 4.06 This Note will be governed in accordance with the laws of the State of Texas.
Section 4.07 Any notice required or permitted hereunder shall be given in writing and shall be conclusively deemed effectively given upon personal delivery or delivery by courier, or five days after deposit in the United States mail, by registered or certified mail, postage prepaid.
Section 4.08 Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of mutilation, upon surrender and cancellation of this Note, the Company, at its expense, will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
Section 4.09 If one or more provisions of this Note are held unenforceable under applicable law, the unenforceable provision will be excluded from this Note and the balance of this Note will be interpreted as if such provision were so excluded and will be enforceable in accordance with its terms. The parties to this Note agree to replace any void or unenforceable provision of this Note with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provision.
IN WITNESS WHEREOF, the Company has executed this Note by its duly authorized officer as of the date and year first written above.
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Solar America Corp.
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/s/ Brian Barrilleaux
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By:
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Brian Barrilleaux
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Chairman and President
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AGREEMENT FOR PURCHASE AND SALE OF BUSINESS
STATE OF LOUISIANA
PARISH OF CALCASEIU
This agreement is made on
December 16, 2010
, by
Solar America Corporation
, a Corporation registered in the State of Wyoming, with its principal office located in Lake Charles, Louisiana (“Buyer”), and
Tina Thomas
of Covington, Louisiana (“Seller”).
ARTICLE I.
PURCHASE AND SALE
1.01. In consideration of the mutual promises and conditions contained in this agreement, Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, on the terms, conditions, warranties and representations set forth in this Agreement:
(a) One Hundred Percent of the issued and outstanding shares of Solar N Stuff Inc., a Corporation registered in the State of Louisiana, business owned and operated by Seller, being conducted under the name Solar N Stuff located at 1102 N Hwy 190, Suite D, Covington, LA 70433 (the “Business”);
(b) all of the stock in trade, inventory, and merchandise of the Business as described in Exhibit “A” attached to this agreement;
(c) all of the fixtures, equipment, and other tangible assets of the Business as shown on attached Exhibit “B”;
(d) any leasehold interest owned by Seller under the lease for the premises where the Business is located; and
(e) all the trade, business name, goodwill, and other tangible or intangible assets of the Business.
ARTICLE II.
AMOUNT OF PURCHASE PRICE
2.01. The total purchase price to be paid by Buyer to Seller for all the properties, assets and rights of the Business described in this Agreement (“Purchase Price”) shall be $100,000.00.
2.02. In addition to the Purchase Price, Buyer agrees that Seller shall retain ownership of all accounts receivable outstanding as of the date of this Agreement, unless otherwise noted in this Agreement and/or Exhibits hereto. A detailed list of the accounts receivable as of the date of this Agreement is attached as Exhibit “C”;
ARTICLE III.
PAYMENT OF PURCHASE PRICE
3.01. The total Purchase Price shall be paid as follows:
(a) The Buyer shall make arrangements to pay in full all outstanding accounts payable of the Seller as of the date of this Agreement. A detailed list of the accounts payable as of the date of this Agreement is attached as Exhibit “D”;
(b) The remaining balance of the Purchase Price, after deducting the accounts payable, as described in this Article, shall be paid to seller in certified funds when this Agreement is signed.
ARTICLE IV.
CLOSING
4.01. The closing of the sale and purchase of the Business (the “Closing”) shall take place at Solar N Stufflocated at 1102 N Hwy 190, Suite D, Covington, LA 70433, on or before
December 16, 2010
or at such other place and date as the parties may agree to in writing.
4.02. At the closing the Seller shall:
(a) deliver clear title and ownership to Buyer of all assets subject to this Agreement; and
(b) execute any other documents necessary to finalize this Agreement.
4.03. At the Closing the Buyer shall:
(a) pay all remaining moneys owed to Seller; and
(b) execute any other documents necessary to finalize this Agreement.
ARTICLE V.
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS BY SELLER
5.01. Seller agrees and warrants and represents to Buyer that:
(a) the financial records for the Business, previously inspected by Buyer, contain a full and complete record and account of the financial affairs of this Business and truthfully set forth all liabilities, assets and other matters pertaining to the fiscal or financial condition of this Business through the date of inspection and furthermore, that there have been no material changes in the financial condition of this Business since that time except for transactions normal to this Business;
(b) Seller is the lawful owner of this Business and has good right and due authorization to sell it. At the time of signing this Agreement, Seller neither knows nor has reason to know of the existence of any outstanding claim or title, or interest, or lien in, to, or on this Business except as shown on the financial records of this Business inspected by Buyer;
(c) all fixtures and equipment sold pursuant to this Agreement are free and clear of any lien (including UCC financing statements) and/or debt unless otherwise set forth in a written statement from Seller to Buyer;
(d) Seller owes no obligations and has contracted no liabilities affecting this Business or which might affect the consummation of the purchase and sale described in this Agreement that are not shown on the financial records inspected by Buyer and that have not been expressly disclosed to Buyer;
(e) there are no taxes due and owing on account of Seller's operation of the Business for unemployment compensation, withholding tax, social security tax, sales tax, personal property tax, franchise tax, income tax, and other taxes of any nature;
(f) except as described in Article 3 herein, any accounts payable due and owing as of the Closing shall remain the responsibility of Seller and shall be paid promptly as they become due and payable;
(g) no litigation, actions or proceedings, legal, equitable, administrative, through arbitration or otherwise, including but not limited to lawsuits, claims or disputes with employees, customers and vendors, etc., are pending or threatened that might affect this Business, the assets being purchased, or the consummation of the purchase and sale described in this Agreement;
(h) Seller agrees to indemnify and hold Buyer harmless from any and all claims, causes of actions, damages, or debts, including legal fees, resulting from any actions, occurrences or events occurring prior to the Closing;
(i) all mechanical equipment sold pursuant to this Agreement is in good working condition.
ARTICLE VI.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY BUYER
6.01. Buyer agrees and warrants and represents to Seller that Buyer will duly notify all authorities, suppliers, creditors, and/or other entities that Buyer is to be responsible for all liabilities associated with the operation of the Business, including without limitation withholding taxes, social security taxes, unemployment contributions, salaries, and purchases incurred after the Closing, and Buyer specifically agrees to assume such liabilities as of the Closing.
ARTICLE VII.
COMPLIANCE WITH BULK SALES LAW
7.01. At the Closing, Seller will deliver to Buyer a sworn list of all existing creditors of the Business.
7.02. By reason of this list Seller and Buyer agree that notice to creditors under the Bulk Sales law of Louisiana will not be required and need not be given except in respect to any creditors named on this list.
7.03. Any such debt, unless otherwise provided for in this Agreement, is to be paid solely by Seller, and Seller does indemnify and hold Buyer harmless from any and all loss, expense, damage or liability, including counsel fees, that Buyer may incur or become subject to by reason of noncompliance with the Bulk Sales law.
ARTICLE VIII.
TRADE NAME, TELEPHONE NUMBER, BANK ACCOUNTS AND POST OFFICE BOX
8.01. Seller assigns to Buyer the exclusive right to use the trade or business name and Seller agrees not to use, or authorize others to use, this name or a similar name.
8.02. Seller agrees to allow Buyer to assume the Business telephone number, bank and merchant accounts, current advertising arrangements, including Internet and/or “Yellow Pages Advertising,” and the Post Office Box, if any, currently used by the Business for a mailing address.
ARTICLE IX.
DELIVERY OF BOOKS AND RECORDS
9.01. All books, records, files, documents and papers, including customer lists and all records of the accounts of customers used in the operation of or relating to the Business shall be transferred and delivered to Buyer at the Closing.
9.02. All of these books, records, files, documents and papers shall be available to Seller at any reasonable time for any proper purpose, and Seller has the right to freely examine and to copy all such materials prior to closing.
ARTICLE X.
NONASSUMPTION OF LIABILITIES
10.01. Unless otherwise expressly provided for in this agreement, the liabilities and obligations incurred by Seller prior to the Closing are not assumed by Buyer but continue as liabilities and obligations of Seller and shall be solely paid by Seller.
10.02. In the event Buyer is required to pay after the Closing any valid lien, debt, or expense incurred by Seller prior to the Closing Date, Buyer shall have the right to collect from the Seller any such lien, debt, or expense actually paid by Buyer, which is the valid and legal obligation of the Seller.
ARTICLE XI.
INDEMNIFICATION OF SELLER
11.01. Buyer will indemnify and hold Seller and the property of Seller free and harmless from any and all claims, losses, damages, injuries and liabilities arising from or in connection with the operation of the Business after the Closing.
ARTICLE XII.
PRORATIONS
12.01. There shall be prorated between Seller and Buyer on the basis of 30 days per month as of 12:01 a.m. Central Standard Time on the date of the Closing all property taxes, rent, insurance premiums, and utility bills, etc.
ARTICLE XIII.
DEFAULT
13.01. After execution of this Agreement by the parties, default shall consist in the failure of either party to perform its respective obligations and duties and/or a breach of a warranty or covenant in this agreement.
13.02. In the event of default of either party, Seller or Buyer shall have the right to sue for specific performance and/or sue for damages in addition to any other relief provided in this Agreement or attached Exhibits. In a suit for default, reasonable attorney fees shall be recoverable by the prevailing party.
ARTICLE XIV.
RESTRICTIVE COVENANTS
15.01. The Seller expressly agrees that for a period of 2 years following the execution of this Agreement, she will not, directly or indirectly, as an employee, agent, proprietor, partner, stockholder, officer, director, or otherwise, render any services to, or on her own behalf engage in or own a part or all of any business which is the same as, similar to, or competitive with the Business, which is being sold to Buyer, anywhere within a 250 mile radius from the current location of the Business that is being sold without the prior written consent of the Buyer.
15.02. The Seller shall not for a period of 2 years immediately following the execution of this Agreement, regardless of any reasons or cause, either directly or indirectly:
(a) make known to any person, firm or corporation the names and addresses of any of the customers of the Seller or Buyer or any other information pertaining to them; or
(b) call on, solicit, or take away, or attempt to call on, solicit, or take away any of the customers of the Seller on whom the Seller called or with whom she became acquainted during ownership of this Business either for Seller or for any other person, firm or corporation.
15.03. Should Seller violate any paragraph of this Article, the parties agree that stipulated damages shall be $100,000 per occurrence.
ARTICLE XV.
GENERAL AND ADMINISTRATIVE PROVISIONS
16.01. Parties Bound. This Agreement shall be binding upon and inure to the benefit of the Parties to this Agreement and their respective heirs, executors, administrators, legal representatives, successors and assigns.
16.03. Corporate Authority. If any party to this Agreement is a legal entity (partnership, corporation and/or trust), such party represents to the other that this Agreement, the transaction contemplated in this Agreement, and the execution and delivery hereof, have been duly authorized by all necessary partnership, corporate or trust proceedings and actions, including without limitation the action on the part of the directors, if the party is a corporation. Certified copies of such corporate or other resolutions authorizing this transaction shall upon request be delivered at the Closing.
16.04. Use of Pronouns. The use of the neuter singular pronoun to refer to the Parties described in this Agreement shall be deemed a proper reference even though the Parties may be an individual, a partnership, a corporation, or group of two or more individuals, partnerships or corporations. The necessary grammatical changes required to make the provisions of this Agreement apply in the plural sense where there is more than one party to this Agreement, and to either corporations, partnerships or individuals, males or females, shall in all instances be assumed as though in each case fully expressed.
16.05. Louisiana Law. This Agreement shall be subject to and governed by the laws of the State of Louisiana.
16.06. Severability. If any provision of this Agreement should, for any reason, be held violative of any applicable law, and so much of this Agreement be held unenforceable, then the invalidity of such a specific provision in this Agreement shall not be held to invalidate any other provisions in this Agreement, which other provisions shall remain in full force and effect unless removal of the invalid provisions destroys the legitimate purposes of this Agreement, in which event this Agreement shall be canceled.
16.07. Entire Agreement. This Agreement represents the entire understanding of the Parties hereto. There are no oral agreements, understandings, or representations made by any party to this Agreement that are outside of this Agreement and are not expressly stated in it.
16.08. Notices. All notices or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as properly given if mailed from within the United States by first class mail, postage prepaid, and addressed as follows:
75368 Moonshadow Lane
Abita Springs, LA 70420
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to Buyer:
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Solar America Corp.
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1135Hodges Street
Lake Charles, LA 70601
A party may change the address for notice by giving of such change to the other party in writing.
SIGNED, ACCEPTED, AND AGREED TO on
December 16, 2010
by the undersigned parties, who acknowledge that they have read and understand this Agreement and the Attachments and Schedules to it and they execute this legal document voluntarily and of their own free will.
"Seller"
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"Buyer"
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Tina Thomas
, an individual
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Solar America Corporation
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/s/ Tina Thomas
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/s/ Brian Barrilleaux
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By: Brian Barrilleaux
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SOLAR AMERICA CORP.
CODE OF BUSINESS CONDUCT AND ETHICS
FOR DIRECTORS, OFFICERS AND EMPLOYEES
Effective as of December 6, 2010
I. Introduction.
Solar America Corp. (the “Company”) has adopted this Code of Business Conduct and Ethics (the “Code”) to set forth the Company’s standards and practices relating to the business ethics of its directors, officers and employees. The Code is in addition to, and not in replacement of, other policies the Company may have including, without limitation, its insider trading policy.
The Code covers a wide range of business practices and procedures. It does not cover every issue that may arise, nor is it a complete list of every legal or ethical question that directors, officers and employees may face in the course of the Company’s business. The Code is intended to serve only as a guide, and it must be applied using common sense and good judgment.
The Company requires its directors, officers and employees to observe the highest standards of business and personal ethics in the discharge of their assigned responsibilities. They must behave honestly and with integrity at all times, including in dealings with co-workers, the public, the business community, stockholders, customers, suppliers and governmental and regulatory authorities. They must comply with all applicable legal requirements, avoid any questionable relationships with persons or firms with whom the Company transacts or is likely to transact business, avoid disclosure to others of confidential information obtained in the course of their employment by the Company, and avoid situations which may place them in a conflict of interest situation to the possible detriment of themselves and/or the Company.
The following sections of the Code describe these standards in greater detail.
II. Administration of the Code.
The Audit Committee is responsible for monitoring compliance with the Code and for serving as a resource to directors, officers and employees by providing information and guidance regarding issues of compliance and ethical conduct. The Chairman of the Audit Committee is the Code Administrator and is the appropriate person for the reporting of violations of the Code of Business Conduct and Ethics.
Directors, officers and employees should feel free to discuss questions and issues arising under the Code or otherwise raising ethical or legal compliance concerns with the Audit Committee.
If an Audit Committee has not been established as of the date an issue arises, the Chairman of the Company’s Board of Directors shall serve as the Code Administrator.
III. Conflicts of Interest
.
Directors, officers and employees must conduct the Company’s business on an arm’s length basis. They are required to avoid any business, financial activity or other activity that may cause their personal interests to conflict with those of the Company unless, after disclosure to the Code Administrator, it is determined that the activity is not harmful to the Company or otherwise improper. They are obligated to disclose to the Company all the facts in any situation where a conflict of interest may arise. Further, they may not engage in any outside activity that would prevent them from performing their duties to the Company.
Directors, officers and employees must avoid any activity which even appears to present a conflict unless, after disclosure to the Code Administrator, it is determined that the activity is not harmful to the Company or otherwise improper.
A conflict or the appearance of a conflict may arise in many ways. For example, depending upon the circumstances, the following may constitute a conflict of interest:
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Ownership of an interest, or other financial interests, in a supplier, contractor, subcontractor, customer, licensee, collaborator or other entity with which the Company does business or competes (excluding ownership of securities that represent less than a 2 percent (2%) interest in publicly traded companies);
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Acting in any capacity (including as a director, officer, partner, consultant, employee or agent) for a supplier, contractor, subcontractor, customer, licensee, collaborator or other entity with which the Company does business or competes;
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Accepting payments, services or loans from a supplier, contractor, subcontractor, customer, licensee, collaborator or other entity with which the Company does business or competes (except for obtaining bank loans, purchasing insurance and retaining services of lawyers, accountants, financial advisers and brokers, who also provide services to the Company, where such loans, insurance and services are received or purchased at rates customary for similarly situated customers);
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Accepting discounts or other preferential treatment that has been offered to an individual personally (and not all Company personnel) because of his or her position with the Company;
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Using or disclosing information to which an individual has access by reason of his or her position with the Company for personal benefit or in a manner detrimental to the Company (e.g., use of technology or data developed by the Company for personal benefit);
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Owning property the value of which has been or is likely to be materially affected by an action of the Company (other than equity or debt securities of the Company or options to acquire stock of the Company);
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Receiving loans or guarantees of obligations from the Company;
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Appropriating a business opportunity in which it is known or could reasonably be anticipated that the Company would be interested (e.g., the opportunity to purchase or lease land); and
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Selling property to or purchasing property from the Company.
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It is not possible to list every situation that may involve a conflict of interest, and the determination as to whether an activity constitutes a conflict of interest is not always clear-cut. An individual who has a question should consult with the Code Administrator.
A director, officer or employee who becomes aware of a conflict or potential conflict of interest should bring it to the attention of the Code Administrator immediately. Discussions with the Code Administrator may well result in the approval of certain relationships or transactions that, despite appearances, are not harmful to the Company.
IV. Accuracy of Records and Public Disclosures.
The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions and to meet its obligations to make full, fair, timely, accurate and understandable disclosure in the reports that it files with the U.S. Securities and Exchange Commission (the “SEC”) and in other public communications.
This means, without limitation, that:
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All financial books, records and accounts clearly and accurately reflect transactions and events;
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No false or artificial entries are made in the Company’s books and records (e.g., only the true and actual number of hours worked should be reported, and the use of business expense accounts must be documented and recorded accurately);
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No undisclosed or unrecorded funds or assets of the Company are established for any purpose unless permitted by applicable law or regulation;
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No payment on behalf of the Company is approved without adequate supporting documentation and when a payment is made it is used only for the purpose specified in the supporting documentation;
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There is full compliance with the Company’s accounting rules and procedures and internal controls;
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No payroll related expenditures, bonuses, awards or non-cash gifts are given to or by directors, officers or employees without the proper approval and adequate documentation;
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No payments are made in cash or checks drawn to cash, except petty cash;
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No invoices are made higher or lower than normal prices at a customer’s request;
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All Company funds, assets and liabilities are recorded in accordance with appropriate Company accounting procedures;
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Records are retained and destroyed according to the Company’s record retention policies; and
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No individual shall take any direct or indirect action fraudulently to influence, coerce, manipulate or mislead any internal accountant or auditor or the Company’s independent public accountants in the performance of an internal or independent audit of the Company’s financial statements or accounting books and records.
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It is the Company’s policy that the reports it files with the SEC and all other public communications will be full, fair, accurate, timely and understandable. The Company expects all personnel to take this responsibility very seriously, to provide prompt and accurate answers to inquiries related to the Company’s public disclosure requirements, and to bring to the attention of their supervisors (a) any material information of which they become aware that affects the disclosures made by the Company and (b) any information they may have concerning significant deficiencies in the design or operation of the Company’s internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data.
Depending upon their positions with the Company, certain individuals may be called upon to assure that the Company’s filings are complete, fair and understandable. To this end, such individuals shall:
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Comply, and, to the extent applicable, cause those under their supervision to comply, fully at all times with the Company’s disclosure controls and procedures; and
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Ensure that all reports and disclosures they prepare or review, in whole or in part, are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading.
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V. Compliance with Law.
Obeying the law, both in letter and in spirit, is paramount to the conduct of the Company’s business. Directors, officers and employees must comply, and, to the extent applicable, ensure that employees under their supervision comply, with the laws, rules and regulations of each city, state and country in which the Company does business.
While the Company does not expect that all personnel will know the details of all of these laws, it requires that they have a general understanding of the laws applicable to their specific job responsibilities so as to enable them to determine when to seek advice from supervisors, managers or other appropriate individuals.
To ensure that the Company’s operations are conducted in compliance with all applicable governmental regulations, directors, officers and employees must avoid activities that could involve or lead to involvement of the Company or its personnel in any unlawful practice.
For example, among other things, they must not, and, to the extent applicable, must not permit the employees under their supervision to:
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Take any unlawful or improper actions on the Company’s behalf (e.g., engage in conduct that is intended to mislead, manipulate or take unfair advantage of a collaborator or agree with representatives of competing companies to engage in price fixing or other illegal activities);
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Use the assets of the Company for any unlawful or improper purpose; or
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Directly or indirectly promise, offer or make payment in money or anything of value to anyone, including a government official, agent or employee of a government, political party, labor organization or business entity or a candidate of a political party, with the intent to induce favorable business treatment or to improperly affect business or government decisions.
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VI. Confidential and Proprietary Information.
Directors, officers and employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, licensees, collaborators or other parties with whom it does business unless disclosure is authorized and approved by the Chief Executive Officer, or the Chief Operating Officer.
Confidential information includes all non-public information that might be useful to competitors or harmful to the Company or its customers if disclosed. It also includes information that third parties such as suppliers, customers, licensees and collaborators have provided to the Company. The obligation to preserve confidentiality continues even after employment by the Company ends.
Directors, officers and employees must also protect the Company’s proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks and copyrights, as well as confidential business and scientific information. In addition, directors, officers and employees must respect the trade secrets and proprietary information of others, including the Company’s licensees and collaborators. While information obtained from the public domain is a legitimate source of competitive information, a trade secret or other proprietary information obtained through improper means is not, and no individual should obtain such information improperly or use any such information that was obtained improperly.
VII. Waivers of the Code.
Any waivers of this Code for directors or executive officers may be granted only by the Company’s Board of Directors or a committee thereof and will be promptly disclosed as required by law or stock exchange or market regulation.
The Code Administrator may grant waivers for other officers or employees.
VIII. Violations of the Code.
Compliance with the Code is a condition of employment. No one has the authority to make another person violate the Code, and any attempt to direct or otherwise influence someone else to commit a violation is unacceptable. Failure to comply with the Code may result in a range of disciplinary actions, including dismissal. Any illegal activity will be dealt with swiftly and the violators will be reported to the appropriate authorities.
Directors, officers and employees are required to report promptly any violations of the Code by others to the Code Administrator, regardless of whether such persons are their superiors, peers or subordinates. The Code Administrator, working with such advisers, including counsel to the Company, as he or she deems necessary or appropriate, will direct the investigation of any suspected violations. Failure to report, or to disclose relevant information concerning, a violation of the Code or the laws and regulations applicable to the Company and its business to the Code Administrator may be grounds for disciplinary action. Similarly, if an individual deliberately provides false information concerning a violation of the Code or the laws and regulations applicable to the Company and its business, he or she may be subject to disciplinary action.
No individual should discuss instances of actual or suspected violations of the Code or criminal activity with anyone other than the Code Administrator and those persons authorized by the Code Administrator to investigate such conduct. Directors, officers and employees must not promise to refrain from reporting conduct to the Code Administrator or law enforcement authorities and must not attempt to dissuade others from reporting actual or suspected Code violations or criminal activity. An individual who is contacted by any law enforcement or other governmental agency about actual or suspected illegal activity of any kind must immediately report such contact to the Code Administrator. Directors, officers and employees are expected to cooperate in any investigation of an alleged Code violation or criminal conduct.
The Company will maintain confidentiality regarding those who make compliance reports and those potentially involved to the extent possible during a compliance investigation.
The Company does not permit or tolerate retribution, retaliation or adverse personnel action against any individual for lawfully (i) reporting a possible violation of the Code, law or regulation; (ii) assisting in an investigation of such violation; or (iii) filing or participating in a proceeding to address such a violation. Potential code violations and related information may be reported anonymously by submission in writing to the Code Administrator.