UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x
|
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31,
2011
¨
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
to
Commission file no.: 001-12885
alpha-En Corporation
(Exact Name of Registrant in its Charter)
Delaware
|
|
95-4622429
|
(State or Other Jurisdiction of
|
|
(I.R.S. Employer Identification No.)
|
Incorporation or Organization)
|
|
|
120 White Plains Road
|
|
|
Tarrytown, New York
|
|
10591
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Registrant’s telephone number, including
area code:
(914) 631-5265
Securities registered pursuant to Section
12(b) of the Act: Common Stock, par value $0.01 per share
Securities registered pursuant to Section
12(g) of the Act: None
Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
¨
No
þ
Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes
¨
No
þ
Indicate by check mark whether the registrant: (1) filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for past 90 days.
þ
Yes
¨
No
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
þ
Yes
¨
No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-BK is not contained herein, and will not be contained, to the best of registrant’s knowledge,
in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
þ
Yes
¨
No
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check one):
Large accelerated filer
¨
|
Accelerated filer
¨
|
|
|
Non-accelerated filer
¨
|
Smaller reporting company
þ
|
(Do not check if a smaller reporting company)
|
|
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). Yes
¨
No
þ
The aggregate market value of the voting and non-voting equity
held by non-affiliates of the registrant, as of June 30, 2011, was approximately $3,926,346.
As of March 31, 2012, 27,821,030 shares of the registrant’s
common stock were issued and outstanding.
Documents Incorporated by Reference:
None
alpha-En Corporation
2011 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
PART I
|
|
|
|
|
|
Item 1.
|
Business
|
1
|
Item 1A.
|
Risk Factors
|
4
|
Item 1B.
|
Unresolved Staff Comments
|
7
|
Item 2.
|
Properties
|
7
|
Item 3.
|
Legal Proceedings
|
8
|
Item 4.
|
Mine Safety Disclosures
|
8
|
|
|
|
PART II
|
|
|
|
|
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
9
|
Item 6.
|
Selected Financial Data
|
9
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
10
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
12
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
12
|
Item 9A.
|
Controls and Procedures
|
12
|
Item 9B.
|
Other Information
|
13
|
|
|
|
PART III
|
|
|
|
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
14
|
Item 11.
|
Executive Compensation
|
16
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
18
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
20
|
Item 14.
|
Principal Accountant Fees and Services
|
21
|
|
|
|
PART IV
|
|
|
|
|
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
22
|
|
|
|
Signatures
|
|
23
|
|
|
|
Financial Statements
|
F-1
|
PART I
This report
contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such
as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates” and similar expressions or variations of such words are intended to identify forward-looking statements,
but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future
matters such as revenue and expense levels and other statements regarding matters that are not historical are forward-looking statements.
Although forward-looking
statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors
currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results
and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements.
Factors that could cause or contribute to such differences in results and outcomes include without limitation those discussed under
the heading “Risk Factors” below, as well as those discussed elsewhere in this report. Readers are urged not to place
undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation
to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date
of this report. Readers are urged to carefully review and consider the various disclosures made in this report, which attempt to
advise interested parties of the risks factors that may affect our business, financial condition, results of operations and prospects.
Overview
For the last three years, we have been focused
exclusively on efforts to develop a business centered around our metallic lithium battery technology.
On February 25, 2009, we entered into a
Technology License Agreement with the Amendola Family Trust, a trust created by Steven Amendola. Pursuant to the License Agreement,
we acquired an exclusive, worldwide, perpetual license to use certain proprietary technology for manufacturing metallic lithium
for use in batteries and other applications. We believe this technology allows for the manufacture of metallic lithium more efficiently
and more inexpensively than current methods.
Commencing in October 2010, working through
a third party, we conducted a series of tests in a production environment to determine if the process covered by the Amendola patent
works. The testing involved feeding lithium carbonate solution into an electrolysis tank containing a liquid metal cathode and
an anode suspended in the lithium carbonate solution. Based on the results of this preliminary testing, we believe that the process
is workable and can be scaled-up to a commercially feasible level.
On February 23, 2011, we entered into an
Option Agreement with MXL Leasing, LP to prepare for the commercial manufacture of lithium metal and, subject to the terms of a
definitive agreement, commence commercial manufacturing of lithium metal.
In 2011, we devoted our resources to developing
our metallic lithium battery technology, from the lab bench to the manufacturing floor, in large part, through the efforts of MXL
Leasing’s scientists and technicians. We believe that we have advanced the state of this technology and are taking preliminary
steps in order to begin manufacturing product by the end of 2012. To achieve this end, however, additional funds will need to be
raised, as to which there can be no assurance.
Metallic Lithium Technology License
On February 25, 2009, we entered into a
Technology License Agreement with the Amendola Family Trust, a trust created by Steven Amendola. Pursuant to the License Agreement,
we acquired an exclusive, worldwide, perpetual license to use certain proprietary technology for manufacturing metallic lithium
for use in batteries and other applications. We believe this technology allows for the manufacture of metallic lithium more efficiently
and more inexpensively than current methods. Lithium batteries are used in cell phones, digital cameras, i-pods and many other
high technology devices and applications.
More broadly, the License Agreement grants
to us the rights to use, further license, sublicense and subcontract the technology to third parties for the purification, manufacture,
purchase of components, quality inspection, assembly, testing, installation, commissioning and operation of the manufacturing process
and sale of metallic lithium in or for batteries and related devices and other fields. A patent application relating to the licensed
technology is pending.
In consideration for the license grant,
we issued 1,000,000 shares of our common stock to the Amendola Family Trust, and have agreed to pay the licensor a royalty of:
(i) $1.00 per kilogram of lithium product manufactured and sold, and (ii) in the event sodium is produced out of the manufacture
of lithium, $0.10 per kilogram of sodium manufactured and sold. The royalty is payable by us quarterly and subject to audit rights
by the licensor.
Additionally, we have agreed to issue to
the Amendola Family Trust a further 2,000,000 shares of our common stock, but which shares are restricted and subject to forfeiture
if there has not been at least $1,000,000 in total commercial sales of licensed products by February 25, 2012 (three years after
the date of the License Agreement).
We have also agreed to issue to the Amendola
Family Trust, an option, exercisable only in the event commercial sales reach $1,000,000 as noted above and for five years after
the date of the License Agreement, to purchase up to such number of shares of our common stock (“option shares”) such
that the option shares, when added to the number of shares of common owned by the Amendola Family Trust or any of its affiliates
prior to exercise of the option, will be equal to 19% of the total number of outstanding shares of our common stock after the exercise
of the option, at an exercise price that is the same price as then current sales by us of our shares during the term of the License
Agreement.
Steven Amendola, the executor of the Amendola
Family Trust, has 25 years of scientific experience focused on metallurgy, chemistry and alternate energy. He holds more than 20
issued patents in these fields with others currently pending. Mr. Amendola developed the basic technology used by Millennium Cell,
Inc. (a hydrogen development company) and is currently founder and Chief Executive Officer of RSI Silicon Products LLC (a silicon
cell manufacturer for solar energy).
Metallic lithium is distinguishable from
other existing forms of battery technology in that it has a higher energy density than zinc or nickel compounds used in conventional
batteries. The market for metallic lithium is now in excess of $1.0 billion according to independent industry sources and, we believe,
steadily increasing. There are a number of much larger and more established firms in the business of manufacturing metallic lithium.
It is our belief that utilizing our new patent pending process we would have a significant advantage in manufacturing costs over
the existing companies in the field, although no assurance can be given.
Preliminary Tests of Technology
Commencing in October 2010, working through
a third party, we conducted a series of tests in a production environment to determine if the process covered by the Amendola patent
works. The testing involved feeding lithium carbonate solution into an electrolysis tank containing a liquid metal cathode and
an anode suspended in the lithium carbonate solution. Based on the results of this preliminary testing, we believe that the process
is workable and can be scaled-up to a commercially feasible level. We intend to bring in a seasoned management team to take the
necessary steps to implement this process.
Commercial Manufacturing Agreement
On February 23, 2011, we entered into an
Option Agreement with MXL Leasing, LP to prepare for the commercial manufacture of lithium metal and, subject to the terms of a
definitive agreement, commence commercial manufacturing of lithium metal. Pursuant to the Option Agreement, we issued to MXL Leasing
an option to purchase 1,000,000 shares of our common stock at an exercise price of $0.11 per share for a period of five years.
Market and Opportunity
Lithium is the lightest
of all metals, has a high energy density and is used in a variety of industrial applications, including consumer electronics, chemical,
pharmaceutical and nuclear. Until recently, research had stalled on the use of lithium metal as a power source, primarily because
of its instability in the presence of air and water. Today, consumers are familiar with lithium in the form of lithium ion batteries,
which for decades have been used as a source of safe, energy dense power for laptops, cell phones, digital cameras and digital
music players, among other items. The safety and stability of lithium ions, however, come at a price when compared to metallic
lithium. Lithium ions have a lower energy density than lithium metal, with the capacity to store just one-tenth of the energy of
equivalent weight lithium metal.
With the advent of
more advanced electronic products, most notably the recent introduction of battery- powered automobiles, the development of lithium
battery-driven propulsion in the form of a lithium metal battery is generating an increasing level of interest among scientists
and corporations. The lithium metal batteries reported to be under development would be lightweight, powerful (capable of producing
as much as 10 times the energy of lithium ion batteries), and rechargeable. By way of example, it is reported that automobiles
powered by lithium ion batteries can travel up to 40 miles on a charge; a lithium metal battery could potentially extend that range
to over 400 miles using a lighter, less expensive power package.
Assuming that lithium
metal battery technology is perfected, the question for manufacturers, including automobile companies, remains: “Can metallic
lithium be produced cost-effectively and in sufficient quantities to support the introduction of products – like automobiles
- powered by this technology?”
alpha-En’s Proposed Process
Based on results to
date, including what we believe to be the validation of the proof of process, we believe that our licensed, proprietary technology
offers a number of advantages over lithium extraction techniques currently in use. Traditionally, industrial production of lithium
metal involved the electrolysis of molten salts at temperatures of 400-600 Celsius (752-1112 Fahrenheit). Maintaining these salts
at high heat levels adds meaningful production costs to the process.
A well-known process
exists which allows for lithium production at much lower temperatures, however that process requires large amounts of mercury which
creates an unacceptable environmental risk profile. Other proposed low temperature processes also require the use of halide salts
of lithium which release hazardous by-products, such as chlorine gas, during lithium separation. Containment and handling of these
hazardous by-products adds to the manufacturing costs and increases the environmental risk profile.
Our licensed technology
allows for separation temperatures of below 100 degrees Celsius, without the use of mercury, and allows for the use of lithium
carbonate as a primary feed stock. The advantages are:
|
·
|
Lower process temperatures mean lower
manufacturing costs.
|
|
·
|
Environmental risk is reduced by the absence
of toxic mercury.
|
|
·
|
Lithium carbonate can be used as the feed
stock, reducing raw material and overall manufacturing costs, and eliminating the hazardous by-products typically produced when
processing halide salts of lithium.
|
|
·
|
The metal alloy which holds the separated
lithium metal can be circulated for immediate extraction, or solidified to protect and stabilize the lithium metal for later extraction.
This provides a previously unattainable degree of manufacturing flexibility.
|
In 2011, we devoted our resources to developing
our metallic lithium battery technology, from the lab bench to the manufacturing floor, in large part, through the efforts of MXL
Leasing’s scientists and technicians. We believe that we have advanced the state of this technology and are taking preliminary
steps in order to begin manufacturing product by the end of 2012. To achieve this end, however, additional funds will need to be
raised, as to which there can be no assurance.
Corporate Information and Background
alpha-En Corporation is a Delaware corporation.
From 1969 to September 1996, operating as Wombat Productions, our primary focus was the production of one-hour profiles of Hollywood
stars. In September 1996, we sold this business to former management and changed our name to Avenue Entertainment Group, Inc. From
September 1996 to September 2005, we were an independent entertainment company that produced feature films, television films and
made-for-television/cable movies.
Our
company cut back daily operations in late 2005 and essentially ceased daily operations in May 2006.
From
May 2006 through the date we entered into a Technology License Agreement in February 2009 (as described above), we were substantially
inactive. All monies disbursed by us from 2006 through January 2009 were used to pay previously-incurred accounting fees and for
the payment of directors and officers’ insurance premiums. During that period, we had no employees and our board of directors
did not meet.
On April 30, 2008, our board of directors
and stockholders owning a majority of our outstanding shares of common stock voted to approve an amendment to our certificate of
incorporation to (a) change our corporate name to alpha-En Corporation, and (b) increase the aggregate number of our authorized
shares of common stock from 15,000,000 shares to 35,000,000 shares. On June 9, 2008, we filed the certificate of amendment to our
certificate of incorporation, effecting these changes. Pursuant to the corporate name change, effective July 22, 2008, our company’s
trading symbol was changed to “ALPE.”
An investment in our company is highly
speculative in nature and involves an extremely high degree of risk.
You should carefully consider the following
material risks, together with the other information contained in this report, before you decide to buy our common stock. If any
of the following risks actually occur, our business, results of operations and financial condition would likely suffer. In these
circumstances, the market price of our common stock could decline, and you may lose all or part of your investment.
We have no relevant operating history; we have accumulated
and working capital deficits; we are only in an initial commercialization stage with technology that is unproven on a large-scale
commercial basis; and there is going concern disclosure in our independent auditors' report.
Our company cut back daily
operations in late 2005 and essentially ceased daily operations in May 2006. Through January 2009, we were substantially inactive.
In February 2009, we entered into a Technology License Agreement and expect our future operations will be centered around this
licensed metallic lithium battery technology. Accordingly, we have no relevant operating history upon which an evaluation of our
performance and prospects can be made. We are subject to all of the business risks associated with a new enterprise, including,
but not limited to, risks of unforeseen capital requirements, failure of market acceptance, failure to establish business relationships
and competitive disadvantages as against larger and more established companies. The report of our independent auditors with respect
to our financial statements included in this report includes a "going concern" qualification, indicating that our significant
operating losses and deficits in working capital and stockholders' equity raise substantial doubt about our ability to continue
as a going concern.
We have generated no revenues
over the past three years from our lithium license, and will not generate any meaningful revenues until after we successfully commercialize
our technology to manufacture metallic lithium, of which no assurance can be given. As of December 31, 2011, we had a working capital
deficit of $(267,805) and an accumulated deficit of $(8,014,735). Since December 31, 2011, we have continued to incur significant
losses and anticipate that we may continue to incur significant losses in 2012 and beyond. There can be no assurance as to whether
or when we will generate meaningful revenues or achieve profitable operations.
The metallic lithium battery
technology that we have licensed has never been utilized on a large-scale basis, and there can be no assurance that this technology
will perform successfully on a large-scale commercial basis or that it will be profitable for us. All of the tests conducted to
date by us with respect to our new process and technology have been proven in the laboratory only, and there can be no assurance
that the same or similar results could be obtained on a large-scale commercial basis. Additionally, our ability to operate our
business successfully will depend on a variety of factors, many of which are outside our control, including competition, cost and
availability of strategic components, changes in governmental initiatives and requirements, changes in regulatory requirements,
and the costs associated with commencing pilot manufacturing at a third-party site.
There remains uncertainty of any market acceptance of our
technology to manufacture metallic lithium.
Many prospective users
of metallic lithium have already committed substantial resources to other existing forms of battery technology. Our growth and
future financial performance will depend on our ability to demonstrate to prospective users the technical and economic advantages
of our technology to manufacture metallic lithium over alternative technologies. There can be no assurance that we will be successful
in this effort. Furthermore, it is possible that competing technologies may be perceived to have, or may actually have, certain
advantages over our technology or metallic lithium in general for certain industries or applications.
Our technology is licensed and its patent is pending; therefore,
protection of our technology is unpredictable at this time.
We license our technology
from the Amendola Family Trust, which has filed a patent application on the technology in its name. We own no patents ourselves.
Our success depends, in part, on our ability to maintain trade secrecy protection, and operate without infringing on the proprietary
rights of third parties. There can be no assurance that the Amendola Family Trust’s pending patent application will be approved,
that the Technology License Agreement between us and the Amendola Family Trust will provide us with competitive advantages or will
not be challenged by third parties or that the patents of others will not have an adverse effect on our ability to conduct our
business. Furthermore, there can be no assurance that others will not independently develop similar or superior technologies, or
duplicate elements of our technology. It is possible that we may need to acquire licenses to, or to contest the validity of, issued
or pending patents of third parties relating to metallic lithium. There can be no assurance that any license acquired under such
patents would be made available to us on acceptable terms, if at all, or that we would prevail in any such contest. In addition,
we could incur substantial costs in defending ourselves in suits brought against us or in bringing patent suits against other parties.
In addition to patent
protection, we also rely on trade secrets, proprietary know-how and technology which we seek to protect, in part, by confidentiality
agreements with our prospective working partners and collaborators, employees and consultants. There can be no assurance that these
agreements will not be breached, that we would have adequate remedies for any breach, or that our trade secrets and proprietary
know-how will not otherwise become known or be independently discovered by others.
We have a royalty payment obligation based on sales, regardless
of whether we are profitable.
Pursuant to our February
2009 Technology License Agreement, we agreed to pay the licensor a royalty of (i) $1.00 per kilogram of lithium product manufactured
and sold, and (ii) in the event sodium is produced out of the manufacture of lithium, $0.10 per kilogram of sodium manufactured
and sold. Payment of such royalty to the Amendola Family Trust is based on our sales revenue and is not related to or contingent
upon our attaining profitability or positive cash flow. As a result, such payment will adversely affect operating results and divert
cash resources from use in our business, and possibly at times when our liquidity and access to funding may be limited.
We have a need for additional financing
in the foreseeable future.
During the past three
years, financing for all of our activities has been provided in the form of direct equity investments and advances from our officers
and directors. Our future capital requirements could vary significantly and will depend on certain factors, many of which are not
within our control. These include the ongoing development and testing of our technology to manufacture metallic lithium, the nature
and timing of prospective commercial projects and permits required and the availability of financing. In the battery market, we
may not be able to enter into favorable business collaborations and might thus be required to seek project contracts for our own
account. If such efforts were successful, we would be required to make significant expenditures on personnel and capital equipment
which would require significant financing. In addition, our lack of operational experience and limited capital resources could
make it difficult, if not highly unlikely, to successfully secure major projects. In such event, our business development could
be limited to smaller commercial projects with significantly lower potential for profit.
In addition, the expansion
of our business will require the commitment of significant capital resources toward the hiring of technical and operational support
personnel and the development of a manufacturing and testing facility. In the event we are presented with one or more significant
projects, individually or in conjunction with collaborative working partners, we may require additional capital to take advantage
of such opportunities. There can be no assurance that such financing will be available or, if available, that it will be on favorable
terms. If adequate financing is not available, we may be required to delay, scale back or eliminate certain of our research and
development programs, to relinquish rights to certain of our technologies, or to license third parties to commercialize technologies
that we would otherwise seek to develop ourselves. To the extent we raise additional capital by issuing equity securities, stockholders
will be diluted.
We face competition and technical alternatives in the overall
battery market.
We anticipate that our
primary market will be for metallic lithium batteries. We have had limited experience in manufacturing and marketing our technology
and have not previously had any employees or personnel whose primary responsibilities consisted of these functions. Other participants
include several large domestic and international companies and numerous small companies, many of whom have substantially greater
financial and other resources and more manufacturing, marketing and sales experience than we do. In addition, as metallic lithium
technology evolves, there exists the possibility that our technology may be rendered obsolete by one or more competing technologies.
Any one or more of our competitors, or one or more other enterprises not presently known to us, may develop technologies which
are superior to our technology. To the extent that our competitors are able to offer more cost-effective alternatives, our ability
to compete could be materially and adversely affected.
There can be no assurance that we will enter into collaborative
agreements or projects utilizing our technology in the future.
We propose to pursue opportunities
in the battery market through collaborative joint working arrangements with companies that have a significant presence in well-established
industries or markets, and that can introduce our technology to industry participants. However, neither we nor any of our prospective
collaborative joint working partners have secured any project contracts. There can be no assurance that we will enter into any
definitive joint project arrangements with our prospective working partners or others, or that any such definitive arrangements
will be on terms and conditions that will enable us to generate profits. Furthermore, even if we are successful in obtaining one
or more project awards, such projects may be curtailed or eliminated, or other problems may arise, which could materially adversely
affect our business, financial condition and results of operations.
We depend on senior management and other personnel to run
our business.
We are dependent on the
efforts of our senior management, particularly Jerome I. Feldman, our Chairman, Chief Executive Officer and Chief Financial Officer,
and Steven M. Payne, our President. We do not have employment agreements with them or have key-man life insurance policies on the
lives of such individuals to compensate us for the loss of any of such individuals. The loss of the services of any one or more
of such persons may have a material adverse effect on our company.
Our future success will
depend in large part upon our ability to attract and retain skilled scientific, management, operational and marketing personnel.
Other than Messrs. Feldman and Payne, we do not currently have any employees or personnel whose responsibilities are focused primarily
in these fields. We face competition for hiring such personnel from other companies. There can be no assurance that we will be
successful in attracting and retaining such personnel.
We will need to comply with government regulations, which
can be costly and time-consuming.
We and our customers may
be required to comply with a number of federal, state and local laws and regulations in the areas of safety, health and environmental
controls, including without limitation, the Resource Conservation and Recovery Act (RCRA), as amended, and the Occupational Safety
and Health Act of 1970 (OSHA), which may require us, our prospective working partners or our customers to obtain permits or approvals
to manufacture and utilize metallic lithium. There is no assurance that such required permits and approvals will be obtained or
maintained. Furthermore, particularly in the battery market, we may be required to conduct performance and operating studies to
assure government agencies that our technology does not pose environmental risks. There is no assurance that such studies, if successful,
will not be more costly or time-consuming than anticipated. Further, if new environmental legislation or regulations are enacted
or existing legislation or regulations are amended, or are interpreted or enforced differently, we, our prospective working partners
and/or our customers may be required to meet stricter standards of operation and/or obtain additional operating permits or approvals.
There can be no assurance that we will meet all of the applicable regulatory requirements. Failure to obtain such permits, or otherwise
to comply with such regulatory requirements, could have a material adverse effect on our business, financial condition and results
of operations.
We are controlled by a small number of “insider”
stockholders.
Our directors and executive
officers currently beneficially own approximately 49.7% of our outstanding common stock. Accordingly, through their collective
ownership of our outstanding common stock, if they act together, they will be able to control the voting of our shares at all meetings
of stockholders and, because the common stock does not have cumulative voting rights, will be able to determine the outcome of
the election of all of our directors and determine corporate and stockholder action on other matters.
We have no plans to pay dividends.
We have never paid any
dividends on our common stock, and have no plans to pay dividends on our common stock in the foreseeable future.
It is likely that our common stock price will be volatile.
The stock market has from
time to time experienced significant price and volume fluctuations that may be unrelated to the operating performances of specific
companies. Announcements of new technologies and changing policies and regulations of the federal government and state governments
and other external factors, as well as potential fluctuations in our financial results, may have a significant impact on the price
of our stock.
Our charter contains some anti-takeover provisions that may
inhibit a takeover.
The provisions in our certificate of incorporation
relating to a classified board of directors and delegation to the board of directors of rights to determine the terms of preferred
stock may have the effect not only of discouraging attempts by others to buy us, but also of making it more difficult or impossible
for existing stockholders to make management changes. A classified board, which is made up of directors elected for staggered terms,
while promoting stability in board membership and management, also moderates the pace of any change in control of our board of
directors by extending the time required to elect a majority, effectively requiring action in at least two annual meetings. The
ability of our board of directors to determine the terms of preferred stock, while providing flexibility in connection with possible
business purchases and other corporate purposes, could make it more difficult for a third party to secure a majority of our outstanding
common stock. Additionally, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law,
which prohibits us from engaging in a "business combination" with an "interested stockholder" for a period
of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination
is approved in a prescribed manner. Section 203 could have the effect of delaying or preventing a change of control.
|
ITEM 1B.
|
Unresolved Staff Comments
|
None
We maintain an executive office in Tarrytown,
New York, at the offices of Jerome I. Feldman, our Chairman, Chief Executive Officer and Chief Financial Officer. We are not currently
required to make any payments to Mr. Feldman for use of this office.
|
ITEM 3.
|
Legal Proceedings
|
There are no pending legal proceedings to
which we are a party or of which any of our property is the subject.
|
ITEM 4.
|
Mine Safety Disclosures
|
Not applicable
PART II
|
ITEM 5.
|
Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities
|
Market Information
Our common stock was quoted on the OTC Bulletin
Board from April 2001 to April 2007, and then on the Pink Sheets, under the symbol “PIXG.” Following our name change
in June 2008, our trading symbol was changed to “ALPE” effective July 22, 2008. The following table sets forth the
high and low closing prices for our common stock on the Pink Sheets for the years ended December 31, 2011 and 2010.
|
|
Year ended December 31,
|
|
Quarter
|
|
2010
|
|
|
2011
|
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
First
|
|
$
|
.33
|
|
|
$
|
.16
|
|
|
$
|
.41
|
|
|
$
|
.11
|
|
Second
|
|
|
.21
|
|
|
|
.12
|
|
|
|
.50
|
|
|
|
.26
|
|
Third
|
|
|
.20
|
|
|
|
.13
|
|
|
|
.36
|
|
|
|
.25
|
|
Fourth
|
|
|
.42
|
|
|
|
.11
|
|
|
|
.25
|
|
|
|
.14
|
|
For the period from January 1, 2012 to March
31, 2012, the high and low closing prices for our common stock were $.19 and $.10 per share, respectively.
Holders
The number of record holders of our common
stock as of March 31, 2012, was approximately 155. This number does not include an indeterminate number of stockholders whose shares
are held by brokers in street name.
Dividends
We have not to date and do not expect to
pay a dividend on our common stock in the foreseeable future. The payment of dividends on our common stock is within the
discretion of our board of directors, subject to our certificate of incorporation. We intend to retain any earnings for use in
our operations and any expansion of our business. Payment of dividends in the future will depend on our future earnings, future
capital needs and our operating and financial condition, among other factors.
Recent Sales of Unregistered Securities
There were no sales of unregistered securities
other than as reported in prior reports on Forms 10-K, 10-Q or 8-K.
Purchases of Equity Securities by the Registrant and Affiliated
Purchasers
We did not repurchase any shares of our
common stock during the fourth quarter of 2011.
|
ITEM 6.
|
Selected Financial Data
|
Not applicable
|
ITEM 7.
|
Management’s Discussion and Analysis of Financial
Condition and Results of Operations
|
The following discussion of our financial
condition and results of operations should be read in conjunction with our financial statements and related notes included in this
report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of many factors,
our actual results may differ materially from those anticipated in these forward-looking statements.
Overview
For the last two years, we have been focused
exclusively on efforts to develop a business centered around our metallic lithium battery technology.
On February 25, 2009, we entered into a
Technology License Agreement with the Amendola Family Trust, a trust created by Steven Amendola. Pursuant to the License Agreement,
we acquired an exclusive, worldwide, perpetual license to use certain proprietary technology for manufacturing metallic lithium
for use in batteries and other applications. We believe this technology allows for the manufacture of metallic lithium more efficiently
and more inexpensively than current methods.
Commencing in October 2010, working through
a third party, we conducted a series of tests in a production environment to determine if the process covered by the Amendola patent
works. The testing involved feeding lithium carbonate solution into an electrolysis tank containing a liquid metal cathode and
an anode suspended in the lithium carbonate solution. Based on the results of this preliminary testing, we believe that the process
is workable and can be scaled-up to a commercially feasible level.
On February 23, 2011, we entered into an
Option Agreement with MXL Leasing, LP to prepare for the commercial manufacture of lithium metal and, subject to the terms of a
definitive agreement, commence commercial manufacturing of lithium metal.
Results of Operations
Year ended December 31, 2011 Compared
to Year Ended December 31, 2010
Operations for the year ended December 31,
2011 consisted principally of developing our technology. In 2010, our operations consisted principally of maintaining our public
company status.
Net loss for the year ended December 31,
2011 was $(182,419), compared to a net loss of $(105,427) for the year ended December 31, 2010. We had limited operations during
2011 and expenses consisted primarily of general and administrative expenses (legal and accounting fees), and research and development
expenses.
Liquidity and Capital Resources
As of December 31, 2011, we had negative
working capital of $(267,805), compared to negative working capital of $(155,386) at December 31, 2010.
We do not have sufficient funds to continue
our operating activities. Future operating activities are expected to be funded by loans from officers, directors and major shareholders,
until we begin to raise capital from non-officers or non-directors or generate cash flows from operations.
Off-Balance Sheet Arrangements
As of the date of this report, we have not
entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests,
derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or
any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market
risk or credit risk support.
Impact of Inflation
We believe that inflation has not had a
material impact on our results of operations for the years ended December 31, 2011 and 2010. We cannot assure you that future inflation
will not have an adverse impact on our operating results and financial condition.
Application of Critical Accounting Policies and Estimates
The
significant accounting policies that we believe are the most critical to aid in fully understanding and evaluating our reported
financial results are as follows:
Consolidated
Financial Statements
. Our consolidated financial statements include the accounts of our company and our wholly-owned subsidiaries.
All material intercompany accounts and transactions have been eliminated.
Fair
Value of Financial Instruments
. Our carrying values of cash, accounts payable and accrued expenses, loan payable, note payable
and due to related party approximate their fair values because of the short-term maturity of these instruments.
Revenue
Recognition
. Participation rights related to both sales of assets are recognized as earned and reported by the purchasers of
both assets.
Use
of Estimates
. The preparation of financial statements in conformity with generally accepted accounting principles requires
us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Intangible
Assets
. Intangible assets, consisting of a license for an exclusive, worldwide, transferable, perpetual license to use certain
proprietary technology for the processing of lithium for use in batteries and other fields, have been recorded at fair value and,
as they have an indefinite life, will not be amortized. The carrying value of the intangible assets will be evaluated by us for
impairment at least annually or upon the occurrence of an event which may indicated that the carrying amount may be greater than
its fair value. If impaired, the we will write down such impairment. In addition, the useful life of the intangible assets will
be evaluated by us at least annually or upon the occurrence of an event which may indicate that the useful life may be definitive
and we will commence amortization over such useful life.
We
have evaluated the fair value of our intangible assets and determined that it exceeds the carrying value based on our knowledge
of the potential use of the lithium that we plan to produce in the existing market. Although are at an early stage of bringing
the lithium process to produce revenues and cannot accurately forecast revenues, we believe that the net cash flow to be derived
from the lithium will exceed the carrying value.
Income
(Loss) per Common Share
. Basic net income (loss) per share was computed by dividing the net income (loss) for the period by
the basic weighted average number of shares outstanding during the period. Diluted net income (loss) per share was computed by
dividing the net income (loss) for the period by the weighted average number and any potentially dilutive securities outstanding
during the period.
Share-Based
Compensation
. We recognize compensation expense for all share-based payment awards made to employees, directors and others
based on the estimated fair values on the date of the grant. Options are valued using the Black-Scholes Option-Pricing Model using
the market price of our common stock on the date of valuation, an expected dividend yield of zero, the remaining period or maturity
date of the warrants and the expected volatility of our common stock.
Deferred
Income Taxes
. Deferred income taxes are provided for temporary differences between financial statement and income tax reporting
under the liability method, using expected tax rates and laws that are expected to be in effect when the differences are expected
to reverse. A valuation allowance is provided when it is more likely than not, that the deferred tax asses will not be realized.
New
Accounting Pronouncements
. We do not believe that any recently issued, but not yet effective accounting pronouncements, if
adopted, would have a material effect on the accompanying consolidated financial statements. For more information, please see Note
2., “Summary of Significant Accounting Policies - New Accounting Pronouncements” in the Notes to Consolidated Financial
Statements.
|
ITEM 7A.
|
Quantitative and Qualitative Disclosures About Market
Risk
|
Not applicable
|
ITEM 8.
|
Financial Statements and Supplementary Data
|
Our audited financial
statements for the years ended December 31, 2011 and 2010 are included as a separate section of this report beginning on page F-1.
|
ITEM 9.
|
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
|
On March 21 , 2011, we were informed
by our then independent registered public accounting firm, Most & Company, LLP, that it has combined its practice
with Schulman, Wolfson & Abruzzo, LLP, effective as of January 10, 2011. As a result, Most & Company resigned as our
independent registered public accounting firm and Schulman, Wolfson, as successor to Most & Company, became our current independent
registered public accounting firm. The engagement of Schulman Wolfson was approved by our board of directors acting as our
audit committee. For additional information with respect to our change in certifying accountant, please see our Current
Report on Form 8-K dated March 22, 2011, filed with the SEC on March 23, 2011.
|
ITEM 9A.
|
Controls and Procedures
|
Our management, including our President
and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based upon that
evaluation, our President and Chief Financial Officer have concluded that the disclosure controls and procedures as of December
31, 2011 were not effective,
due to the material weaknesses discussed below,
to ensure that information
required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is
accumulated and communicated to our management, including our President and Chief Financial Officer, to allow timely decisions
regarding disclosure.
Management’s Report on Internal Control Over Financial
Reporting
Our management is responsible for establishing
and maintaining an adequate system of internal control over financial reporting. Our internal control over financial reporting
includes those policies and procedures that:
|
·
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of our assets;
|
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements
in accordance with generally accepted accounting principles in the United States, and that our receipts and expenditures are being
made only in accordance with authorizations of our management and directors; and
|
|
·
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our
assets that could have a material effect on the financial statements.
|
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations.
Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement
preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements
may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations
are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce,
though not eliminate, this risk.
Our management assessed the effectiveness
of our system of internal control over financial reporting as of December 31, 2011. In making this assessment, our management
used the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission COSO). Based on our assessment and the criteria set forth by COSO, our management believes that we did not
maintain effective internal control over financial reporting as of December 31, 2011
due to the
material weaknesses discussed below
.
The aforementioned
evaluation identified
material weaknesses that relate to the fact that that our overall financial reporting structure, internal
accounting information systems and current staffing levels are not sufficient to support our financial reporting requirements.
To address the weaknesses, we performed additional analyses and other post-closing procedures to ensure
that our consolidated financial statements are prepared in accordance with generally accepted accounting principles. Accordingly,
our management believes that the financial statements included in this report fairly present in all material respects our financial
condition, results of operations and cash flows for the periods presented.
As noted above, the issues that resulted
from these weaknesses were properly addressed before the completion of our consolidated financial statements. In addition, our
management is working to identify and implement corrective actions where required to improve our internal controls, including the
enhancement of our systems and procedures to assure that the weaknesses noted above are corrected. We are working to remedy our
deficiency.
This annual report does not include an attestation
report of our registered public accounting firm regarding internal control over financial reporting. Our management’s report
was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only our management’s report in this annual report.
|
ITEM 9B.
|
Other Information
|
None
PART III
|
ITEM 10.
|
Directors, Executive Officers and Corporate Governance
|
The following table shows the positions
held by our board of directors and executive officers, and their ages, as of March 31, 2012:
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Jerome I. Feldman
|
|
83
|
|
Chairman of the Board, Chief Executive Officer, Chief Financial Officer and Treasurer
|
|
|
|
|
|
George McKeegan
|
|
63
|
|
Executive Vice President, Secretary and Director
|
|
|
|
|
|
Steven M. Payne
|
|
57
|
|
President and Director
|
|
|
|
|
|
Ogden Reid
|
|
86
|
|
Director
|
The principal occupations
for the past five years (and, in some instances, for prior years) of each of our directors and executive officers are as follows:
Jerome I. Feldman
became our Chairman
of the Board in December 2008 (he previously was the Vice Chairman) and our Chief Executive Officer in March 2011, and has been
a member of our board of directors and our Chief Financial Officer and Treasurer since September 2006. Mr. Feldman founded GP Strategies
Corp., which provides training, engineering and consulting services to the automotive, steel, energy and government industries,
in 1959 and served as its Chief Executive Officer from 1959 until April 2005, Chairman of the Board from 1999 until April 2005,
and President from 1959 until 2001. He has been Chairman of the Board of Five Star Products, Inc., a paint and hardware distributor,
from 1994 until June 2007, a director of GSE Systems, Inc., a leading global provider of real-time simulation and training solution
to the power, process, manufacturing and government sectors, since 1994, Chairman of the Board of GSE Systems since 1997, and Chairman
of the Board and Chief Executive Officer of National Patent Development Corp., which was devoted to searching out new inventions
and assisting major corporations in licensing their technologies, from 2004 until June 2007. He was a director of Valera Pharmaceuticals,
a specialty pharmaceutical company, from January 2005 until April 2007. Mr. Feldman is also Chairman of the New England Colleges
Fund and a Trustee of Northern Westchester Hospital Foundation. Mr. Feldman is a minority owner of MXL Industries, Inc. and MXL
Leasing, LP. He has a B.A. degree from Indiana University and an LL.B degree from New York University. Mr. Feldman is a Class III
Director.
As the Chairman, Chief Executive Officer
and Chief Financial Officer, Mr. Feldman leads the board and guides our company. Mr. Feldman brings extensive industry knowledge
to our company and a deep background in technology growth companies.
George McKeegan
has been our Vice
President or Executive Vice President, Secretary and a member of our board of directors since May 2006. Since 1986, Mr. McKeegan
has led McKeegan & Shearer, P.C., a law firm engaged in the general practice of civil law, and specializing in litigation and
corporate counseling. Prior to that, he served as Vice President at Citibank, N.A. and as an Assistant District Attorney with the
New York County District Attorney’s Office. He received a B.A. degree from Fordham College and a J.D. degree from the University
of Michigan, Ann Arbor. Mr. McKeegan is a Class III Director. Mr. McKeegan serves as a director due to his substantial knowledge
and working experience in corporate controls and governance, and general legal matters.
Steven M. Payne
has been our President
and a member of our board of directors since May 2006. Since 1976, Mr. Payne has served as President and Chief Executive Officer
of Quatro Foods Inc., a food service enterprise. He is a director and past Board President of Carbondale Main Street, Inc., a local
downtown redevelopment corporation, and a director of the Southern Illinois Entrepreneurship and Business Development Center at
Southern Illinois University in Carbondale, Illinois. Mr. Payne is also President of 13 West LLC, a developer and operator of Mini
Storage facilities. He attended Southern Illinois University. Mr. Payne is a Class I Director. Mr. Payne’s experience in
running businesses and advising entrepreneurial ventures makes him well qualified to be a member of our board.
Ogden Reid
became a member of our
board of directors in December 2008. He previously served as a director and Chairman of the Audit Committee of GP Strategies Corp.,
a New York Stock Exchange-listed company, from 2002 to 2006. His professional life included service as a six-term Congressman from
Westchester, New York, as Ambassador to Israel and as Commissioner of the New York State Department of Conservation. Mr. Reid is
a graduate of Yale University. Mr. Reid is a Class II Director. Mr. Reid’s prior experience as a director of a major public
company, as well as his knowledge of the technology business environment, make him well qualified as a member of the board.
Our directors are divided into three classes.
At each annual meeting of stockholders, directors are elected to succeed those directors whose terms expire and are elected for
a term of office to expire at the third succeeding annual meeting of stockholders after their election. Under our bylaws, the number
of directors constituting the entire board of directors shall be fixed, from time to time, by the directors then in office, who
may decrease or increase the number of directors by majority action without soliciting stockholder approval. We do not currently
pay compensation to directors for service in that capacity.
Committees of the Board
We have not established an audit committee,
compensation committee or nominations and governance committee, and we are not required to do so since our shares are not listed
on a national securities exchange.
Indebtedness of Directors and Executive Officers
None of our directors or executive officers
or their respective associates or affiliates is indebted to us.
Family Relationships
There are no family relationships among
our current directors and executive officers.
Legal Proceedings
No officer, director, persons nominated
for such positions, promoter or significant employee has been involved in the last ten years in any of the following:
|
·
|
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;
|
|
·
|
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and
other minor offenses);
|
|
·
|
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring suspending or otherwise limiting his involvement in any type of business,
securities or banking activities;
|
|
·
|
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated;
|
|
·
|
Being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or state securities or commodities
law or regulation, (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited
to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist
order, or removal or prohibition order or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with
any business entity; and
|
|
·
|
Being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority
over its members or persons associated with a member.
|
Code of Ethics
In December
2007, we adopted a Code of Ethics and Business Conduct that applies to all of our executive officers, directors and employees.
The Code of Ethics and Business Conduct codifies the business and ethical principles that govern all aspects of our business. Our
Code of Ethics and Business Conduct is available without charge to any stockholder who makes a written request for a copy.
Section 16(a) Beneficial Ownership Reporting Compliance
Rules adopted by
the SEC under Section 16(a) of the Exchange Act, require our officers and directors, and persons who own more than 10% of
the issued and outstanding shares of our
equity securities, to file reports of their ownership, and
changes in ownership, of such securities with the SEC on Forms 3, 4 or 5, as appropriate. Such persons are required by
the regulations of the SEC to furnish us with copies of all forms they file pursuant to Section 16(a).
We believe that
all of the officers, directors, and owners of more than ten percent of the outstanding shares of our common stock complied with
Section 16(a) of the Exchange Act for the year ended December 31, 2011.
|
ITEM 11.
|
Executive Compensation
|
Summary Compensation Table
The following table sets forth, for the
most recent fiscal year and prior fiscal year, all cash compensation paid, distributed or accrued, including salary and bonus amounts,
for services rendered to us by our Chief Executive Officer, Chief Financial Officer and two other executive officers in such year
who received or are entitled to receive remuneration in excess of $100,000 during the stated period and any individuals for whom
disclosure would have been made in this table but for the fact that the individual was not serving as an executive officer as at
December 31, 2011:
Name and Principal
Position
|
|
|
Year
|
|
|
|
Salary
($)
|
|
|
|
Bonus
($)
|
|
|
|
Stock
Awards
($)
|
|
|
|
Option
Awards
($)
|
|
|
|
Non-Equity
Incentive
Plan
Compen-
sation
(4)
|
|
|
|
Nonqualified
Deferred
Compen-
sation
Earnings
($)
|
|
|
|
All Other
Compen-
sation ($)
|
|
|
|
Total ($)
|
|
(a)
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
|
(g)
|
|
|
|
(h)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
Jerome I. Feldman
|
|
|
2011
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Chairman, Chief Executive Officer, Chief Financial
Officer and Treasurer
|
|
|
2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Payne
|
|
|
2011
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
President
|
|
|
2010
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Outstanding Equity Awards at Fiscal Year-End
The following table
summarizes equity awards outstanding at December 31, 2011, for each of the executive officers named in the Summary Compensation
Table above:
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
Name
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
|
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
|
Option
Exercise
Price
($)
|
|
|
|
Option
Expiration
Date
|
|
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
|
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
|
|
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)
|
|
(a)
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
|
(g)
|
|
|
|
(h)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
Jerome I. Feldman
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Chairman, Chief Executive Officer, Chief Financial
Officer and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Payne
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Employment Agreements
As of December 31, 2011, and through the
date of this report, we have no employment agreements in place with any person.
Director Compensation
Directors currently
receive no compensation for serving on our board of directors, other than reimbursement of all reasonable expenses for attendance
at board meetings.
Director Compensation
Name
|
|
|
Fees
Earned or
Paid in
Cash ($)
|
|
|
|
Stock
Awards
($)
|
|
|
|
Option
Awards
($)
|
|
|
|
Non-Equity
Incentive
Plan
Compen-
sation
($)
|
|
|
|
Nonqualified
Deferred
Compen-
sation
Earnings
($)
|
|
|
|
All Other
Compen-
sation ($)
|
|
|
|
Total ($)
|
|
(a)
|
|
|
(b)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
|
(g)
|
|
|
|
(h)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
Jerome I. Feldman
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George McKeegan
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Payne
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ogden Reid
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
ITEM 12. Security Ownership
of Certain Beneficial Owners and Management and Related Stockholder Matters
The table below
sets forth the beneficial ownership of our common stock, as of March 31, 2012, by:
|
·
|
all of our directors and executive officers, individually,
|
|
·
|
all of our directors and executive officers, as a group, and
|
|
·
|
all persons who beneficially owned more than 5% of our outstanding common stock.
|
The beneficial
ownership of each person was calculated based on
27,821,030
shares of our common stock outstanding
as of March 31, 2012, according to the record ownership listings as of that date and the verifications we solicited and received
from each director and executive officer. The SEC has defined “beneficial ownership” to mean more than ownership in
the usual sense. For example, a person has beneficial ownership of a share not only if he owns it in the usual sense, but also
if he has the power to vote, sell or otherwise dispose of the share. Beneficial ownership also includes the number of shares that
a person has the right to acquire within 60 days of March 31, 2012, pursuant to the exercise of options or warrants or the
conversion of notes, debentures or other indebtedness, but excludes stock appreciation rights. Two or more persons might count
as beneficial owners of the same share. Unless otherwise noted, the address of the following persons listed below is c/o alpha-En
Corporation,
120 White Plains Road, Tarrytown, New York 10591
.
Unless otherwise indicated, we believe that
all persons named in the table below have sole voting and investment power with respect to all shares of common stock beneficially
owned by them.
Name
|
|
Position
|
|
Shares of
Common Stock
Beneficially
Owned
|
|
|
Percent of
Common Stock
Beneficially
Owned
|
|
|
|
|
|
|
|
|
|
|
5% Stockholder:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael D. Feldman
|
|
Former Chairman and Chief Executive Officer
|
|
|
3,765,000
|
|
|
|
13.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Directors and Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerome I. Feldman
|
|
Chairman of the Board, Chief Executive Officer, Chief Financial Officer and Treasurer
|
|
|
7,320,000
|
|
|
|
26.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
George McKeegan
|
|
Executive Vice President, Secretary and Director
|
|
|
750,000
|
|
|
|
2.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Payne
|
|
President and Director
|
|
|
4,667,900
|
|
|
|
16.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Ogden Reid
|
|
Director
|
|
|
100,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (4 persons)
|
|
|
|
|
12,837,900
|
|
|
|
46.1
|
%
|
* Less than 1% of outstanding shares.
Change in Control
There are no arrangements
currently in effect which may result in our “change in control,” as that term is defined by the provisions of Item
403(c) of Regulation S-K.
Equity Compensation Plan Information
Under our Stock Option and Long Term Incentive
Compensation Plan (the Plan), as amended, there are 2,750,000 shares reserved for issuance under the Plan to key employees, directors
and consultants. Grants may be stock options, SAR’s, restricted stock or stock bonuses. Only employees may receive incentive
awards. Exercise prices of incentive stock option grants shall not be less than the fair market value of our common stock on the
date of the grant. Stock options may be exercised subject to continued employment and certain other conditions. We can determine
all other terms of an award under the Plan, including vesting and term, provided, however, that the terms of a stock option grant
under the Plan may not be for more than ten years from the date of grant. As of March 31, 2012, all 2,750,000 stock options are available
for issuance under the Plan and, as of that date, there were no outstanding grants under the Plan.
The following table provides information
as of December 31, 2011, with respect to the shares of common stock that may have been issued under our existing equity compensation
plan.
Equity Compensation Plan Information
Plan category
|
|
Number of shares of
common stock to be issued
upon exercise of
outstanding options,
warrants and rights
(a)
|
|
|
Weighted-average exercise
price of outstanding
options, warrants and rights
(b)
|
|
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
|
Equity compensation plans approved by security holders
|
|
|
—
|
|
|
|
—
|
|
|
|
2,750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans not approved by security holders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
—
|
|
|
|
—
|
|
|
|
2,750,000
|
|
ITEM 13. Certain Relationships and Related Transactions,
and Director Independence
Related Party Transactions
As of December 31, 2011, our loan payable-stockholder/officer
was $134,384, payable on demand with interest at 5% per annum. For the year ended December 31, 2011 and 2010, interest expense
on the loan payable-stockholder/officer was $5,288 and $3,704, respectively. From January through April 9, 2012, we borrowed
an additional $6,920, from the stockholder/officer.
Our Chief Executive
Officer provides us administrative space without rent.
Director Independence
Ogden Reid is an “independent”
director, as that term is defined in Rule 10A-3(b)(1) under the Exchange Act. Our other three directors are not “independent”
as they are or recently were executive officers of our company.
PART IV
ITEM 14. Principal Accountant Fees and Services
Effective as of January 10, 2011, our independent
registered public accounting firm, Most & Company, LLP, combined its practice with Schulman, Wolfson & Abruzzo, LLP. As
a result, Most & Company resigned as our independent registered public accounting firm and Schulman Wolfson, as successor to
Most & Company, became our independent registered public accounting firm. The engagement of Schulman Wolfson was approved by
our board of directors acting as our audit committee.
Schulman Wolfson, as successor to Most &
Company, served as our independent auditors for the years ended December 31, 2010 and 2011.
Audit Fees
Audit fees are those fees billed for professional
services rendered for the audit of the annual financial statements and reviews of the financial statements included in Forms 10-Q.
For the year ended December 31, 2011, $25,875 in audit fees were billed by Schulman Wolfson and, for the year ended December 31,
2010, $49,388 in audit fees were billed by Schulman Wolfson, as successor to Most & Company, related to the audit and reviews
of our financial statements.
Audit-related Fees
Audit-related fees are fees billed for professional
services other than the audit of our financial statements. For the year ended December 31, 2011, no audit-related fees were billed
by Schulman Wolfson and, for the year ended December 31, 2010, $438 in audit-related fees were billed by Schulman Wolfson, as successor
to Most & Company.
Tax Fees
Tax fees are those fees billed for professional
services rendered for tax compliance, including preparation of corporate federal and state income tax returns, tax advice and tax
planning. For the year ended December 31, 2011, no tax fees were billed by Schulman Wolfson and, for the year ended December 31,
2010, $4,214 in tax fees were billed by Schulman Wolfson, as successor to Most & Company.
All Other Fees
No other fees were billed by our independent
auditors in 2011 and 2010.
Audit Committee
We have not established an audit committee.
Our board of directors approved the services rendered and fees charged by our independent auditors. Our board of directors has
reviewed and discussed our audited financial statements for the year ended December 31, 2011, with our management. In addition,
our board of directors has discussed with Schulman Wolfson, our independent registered public accountants, the matters required
to be discussed by Statement of Auditing Standards No. 61 (Communications with Audit Committee). Our board of directors also has
received the written disclosures and the letter from as required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and our board of directors has discussed the independence of Schulman Wolfson with that firm.
Based on our board of directors’ review
of the matters noted above and its discussions with our independent auditors and our management, our board of directors approved
that the audited financial statements be included in our annual report on Form 10-K for the year ended December 31, 2011.
Policy for Pre-Approval of Audit and Non-Audit Services
Our board of directors’ policy is
to pre-approve all audit services and all non-audit services that our independent auditor is permitted to perform for us under
applicable federal securities regulations. As permitted by the applicable regulations, our board of directors’ policy utilizes
a combination of specific pre-approval on a case-by-case basis of individual engagements of the independent auditor and general
pre-approval of certain categories of engagements up to predetermined dollar thresholds that are reviewed annually by our board
of directors. Specific pre-approval is mandatory for the annual financial statement audit engagement, among others.
The pre-approval policy was implemented
effective in fiscal 2001. All engagements of the independent auditor to perform any audit services and non-audit services since
that date have been pre-approved by our board of directors in accordance with the pre-approval policy. The policy has not been
waived in any instance. All engagements of the independent auditor to perform any audit services and non-audit services prior to
the date the pre-approval policy was implemented were approved by our board of directors in accordance its normal functions.
ITEM 15. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit No.
|
|
Description
|
|
|
|
10.1
|
|
Option Agreement, dated as of February 23, 2011, between alpha-En Corporation and MXL Leasing, LP. Incorporated by reference to exhibit 10.1 to Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on March 2, 2011.
|
|
|
|
21.1*
|
|
Subsidiaries of alpha-En Corporation.
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13(a)-14(a).
|
|
|
|
32.1*
|
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
* Filed herewith.
SIGNATURES
Pursuant to the
requirements of Section 13 or 15(d) of the
Securities
Exchange Act of 1934, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: April 13, 2012
|
ALPHA-EN CORPORATION
|
|
|
|
|
|
|
By:
|
/s/ Jerome I. Feldman
|
|
|
|
Jerome I. Feldman
|
|
|
|
Chairman, Chief Executive Officer, Chief Financial Officer and Treasurer
|
|
|
|
(principal executive, financial and accounting officer)
|
|
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated:
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Jerome I. Feldman
|
|
Chairman, Chief Executive Officer, Chief Financial Officer and Treasurer
|
|
April 13, 2012
|
Jerome I. Feldman
|
|
(principal executive, financial and accounting officer)
|
|
|
|
|
|
|
|
/s/ George McKeegan
|
|
Executive Vice President, Secretary and Director
|
|
April 13, 2012
|
George McKeegan
|
|
|
|
|
|
|
|
|
|
/s/ Steven M. Payne
|
|
President and Director
|
|
April 13, 2012
|
Steven M. Payne
|
|
|
|
|
|
|
|
|
|
/s/ Ogden Reid
|
|
Director
|
|
April 13, 2012
|
Ogden Reid
|
|
|
|
|
alpha-En Corporation and Subsidiaries
Index to Consolidated Financial Statements
|
Page
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
|
Consolidated Balance Sheet as of December 31, 2011 and 2010
|
F-3
|
|
|
Consolidated Statement of Operations for the years ended December 31, 2011 and 2010
|
F-4
|
|
|
Consolidated Statement of Stockholders’ Equity (Deficit) for the years ended December 31, 2011 and 2010
|
F-5
|
|
|
Consolidated Statement of Cash Flows for the years ended December 31, 2011 and 2010
|
F-6
|
|
|
Notes to Consolidated Financial Statements
|
F-7
|
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board
of Directors and Stockholders
alpha-En Corporation
We have
audited the accompanying consolidated balance sheet of alpha-En Corporation (Company) as of December 31, 2011 and 2010 and the
related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the two years then ended. These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audit.
We conducted
our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
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 control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
The accompanying
financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company has operating losses, negative working capital, no operating cash flow and future losses are anticipated.
The Company’s plan of operations, even if successful, may not result in cash flow sufficient to finance and expand its business
which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters
are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
In our opinion,
the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position
of the alpha-En Corporation as of December 31, 2011 and 2010 and the consolidated results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally accepted in the United States.
/s/ Schulman, Wolfson & Abruzzo, LLP
|
|
|
|
Schulman Wolfson & Abruzzo, LLP
|
|
|
|
New York, New York
|
|
April 6, 2012
|
|
ALPHA-EN CORPORATION
CONSOLIDATED BALANCE SHEET
|
|
December 31, 2011
|
|
|
December 31, 2010
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
376
|
|
|
$
|
804
|
|
Prepaid expenses
|
|
|
3,078
|
|
|
|
3,127
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
3,454
|
|
|
|
3,931
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
253,454
|
|
|
$
|
253,931
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
134,499
|
|
|
$
|
100,818
|
|
Loan payable - stockholder/officer
|
|
|
134,384
|
|
|
|
56,506
|
|
Note payable
|
|
|
1,385
|
|
|
|
-
|
|
Due to related party
|
|
|
991
|
|
|
|
1,993
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
271,259
|
|
|
|
159,317
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT):
|
|
|
|
|
|
|
|
|
Preferred stock, $.01 par value, 2,000,000 shares authorized; none issued
|
|
|
-
|
|
|
|
-
|
|
Class B common stock, no par value, 1,000,000 shares authorized; none issued
|
|
|
-
|
|
|
|
-
|
|
Common stock, $.01 par value, 35,000,000 shares authorized; 27,821,030 and 27,821,030 shares issued and outstanding as of December 31, 2011and 2010, respectively
|
|
|
278,210
|
|
|
|
278,210
|
|
Additional paid-in capital
|
|
|
7,788,103
|
|
|
|
7,718,103
|
|
Accumulated deficit
|
|
|
(8,014,735
|
)
|
|
|
(7,832,316
|
)
|
Treasury stock, at cost (798,918 shares of common stock)
|
|
|
(69,383
|
)
|
|
|
(69,383
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
(17,805
|
)
|
|
|
94,614
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
$
|
253,454
|
|
|
$
|
253,931
|
|
See notes to consolidated financial statements
ALPHA-EN CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
|
|
Years Ended December 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,002
|
|
|
$
|
2,720
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
(172,479
|
)
|
|
|
(108,147
|
)
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
(70,000
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cancellation of consulting agreement
|
|
|
31,500
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Forgiveness of accounts payable
|
|
|
27,558
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(182,419
|
)
|
|
$
|
(105,427
|
)
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic and diluted
|
|
|
*
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted
|
|
|
27,821,030
|
|
|
|
27,026,509
|
|
|
|
|
|
|
|
|
|
|
* Less than $.01 per share
|
|
|
|
|
|
|
|
|
See notes to consolidated financial statements
AVENUE ENTERTAINMENT GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
Common
Stock
|
|
|
Additional
|
|
|
|
|
|
Treasury
Stock
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Paid-in
|
|
|
Accumulated
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Shares
|
|
|
Amount
|
|
|
Total
|
|
Balance at December 31, 2009
|
|
|
25,821,030
|
|
|
$
|
258,210
|
|
|
$
|
7,578,103
|
|
|
$
|
(7,726,889
|
)
|
|
|
798,918
|
|
|
$
|
(69,383
|
)
|
|
$
|
40,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of loan - stockholder/officer
in exchange for common stock
|
|
|
2,000,000
|
|
|
|
20,000
|
|
|
|
140,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(105,427
|
)
|
|
|
|
|
|
|
|
|
|
|
(105,427
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2010
|
|
|
27,821,030
|
|
|
$
|
278,210
|
|
|
$
|
7,718,103
|
|
|
$
|
(7,832,316
|
)
|
|
|
798,918
|
|
|
$
|
(69,383
|
)
|
|
$
|
94,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for investor
relations consulting agreement
|
|
|
300,000
|
|
|
|
3,000
|
|
|
|
123,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
126,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option granted for research
and development
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation of investor
relations consulting agreement
|
|
|
(300,000
|
)
|
|
|
(3,000
|
)
|
|
|
(123,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(126,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(182,419
|
)
|
|
|
|
|
|
|
|
|
|
|
(182,419
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2011
|
|
|
27,821,030
|
|
|
$
|
278,210
|
|
|
$
|
7,788,103
|
|
|
$
|
(8,014,735
|
)
|
|
|
798,918
|
|
|
$
|
(69,383
|
)
|
|
$
|
(17,805
|
)
|
See notes to consolidated financial statements
ALPHA-EN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
Years Ended December 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
Cash Flows From Operations
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(182,419
|
)
|
|
|
(105,427
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Option granted for research and development
|
|
|
70,000
|
|
|
|
-
|
|
Amortization
|
|
|
18,515
|
|
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
(18,466
|
)
|
|
|
(58
|
)
|
Accounts payable and accrued expenses
|
|
|
33,681
|
|
|
|
29,336
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(78,689
|
)
|
|
|
(76,149
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities
|
|
|
|
|
|
|
|
|
Increase in loan payable-stockholder/officer
|
|
|
77,878
|
|
|
|
79,105
|
|
Increase in note payable
|
|
|
10,557
|
|
|
|
14,532
|
|
Payments of note payable
|
|
|
(9,172
|
)
|
|
|
(16,139
|
)
|
Decrease in due to related party
|
|
|
(1,002
|
)
|
|
|
(2,720
|
)
|
Net cash provided by financing activities
|
|
|
78,261
|
|
|
|
74,778
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash
|
|
|
(428
|
)
|
|
|
(1,371
|
)
|
|
|
|
|
|
|
|
|
|
Cash - Beginning of period
|
|
|
804
|
|
|
|
2,175
|
|
|
|
|
|
|
|
|
|
|
Cash - End of period
|
|
$
|
376
|
|
|
$
|
804
|
|
|
|
|
|
|
|
|
|
|
Noncash Transaction:
|
|
|
|
|
|
|
|
|
Payment of loan payable - stockholder/officer for issuance of common stock
|
|
|
|
|
|
|
160,000
|
|
See notes to consolidated financial statements.
ALPHA-EN
CORPORATION
Notes To
Consolidated Financial Statements
|
1.
|
Organization and Operations
|
Alpha-En
Corporation (Company) was incorporated in Delaware on March 7, 1997 and had operated through its wholly-owned subsidiaries, Avenue
Pictures, Inc. and its subsidiaries and Wombat Productions, Inc. through May 2, 2006.
From May
2, 2006 through February 24, 2009, the Company had been inactive.
On February
25, 2009, the Company was granted a license for an exclusive, worldwide, transferable, perpetual license to use certain proprietary
technology for the processing of lithium for use in batteries and other fields.
Commencing
in October 2010, working through a third party, the Company conducted a series of tests to determine if the process works and,
based on the results, believes that the process is workable and commercially feasible (Note 7).
|
2.
|
Summary of Significant Accounting Policies
|
Consolidated
Financial Statements
The Company's
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany
accounts and transactions have been eliminated.
Fair Value
of Financial Instruments
The Company's
carrying values of cash, accounts payable and accrued expenses, loan payable-stockholder/officer, note payable and due to related
party approximate their fair values because of the short-term maturity of these instruments.
Revenue
Recognition
Participation
rights related to assets previously sold are recognized as earned and reported.
Use of Estimates
The preparation
of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Intangible
Assets
Intangible
assets are recorded at fair value and, as they have an indefinite life, will not be amortized. The carrying value of the intangible
assets will be evaluated by management for impairment at least annually or upon the occurrence of an event which may indicate that
the carrying amount may be greater than its fair value. If impaired, the Company will write down such impairment. In addition,
the useful life of the intangible assets will be evaluated by management at least annually or upon the occurrence of an event which
may indicate that the useful life may be definitive and the Company will commence amortization over such useful life.
Loss per
Common Share
Basic loss
per share is calculated using the weighted-average number of shares outstanding during each period. Diluted loss per share includes
potentially diluted securities such as outstanding options and warrants, using various methods such as the treasury stock or modified
treasury stock method in the determination of dilutive shares outstanding during each period.
For the
years ended December 31, 2011 and 2010, there were no significant potentially dilutive securities.
Share-Based
Compensation
The Company
recognizes compensation expense for all share-based payment awards made to employees, directors and others based on the estimated
fair values on the date of the grant. Common stock equivalents are valued using the Black-Scholes Option-Pricing Model using the
market price of our common stock on the date of valuation, an expected dividend yield of zero, the remaining period or maturity
date of the common stock equivalent and the expected volatility of our common stock.
Research
and Development Expense
Research
and development costs are expensed as incurred. Research and developments expenses consist of stock-based compensation paid to
consultants and outside service providers for development costs relating to the design, development and testing of the processing
of lithium for use in batteries and other fields.
Income Taxes
The Company
utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are
determined based on the differences between financial reporting basis and tax basis of the assets and liabilities and are measured
using enacted tax rates that will be in effect when the differences are expected to reverse. A valuation allowance is provided
when it is more likely than not, that such tax benefits will not be realized.
The Company’s
policy is to classify assessments, if any, for tax related interest as interest expense and tax related penalties as general and
administrative expenses.
New Accounting
Pronouncements
In September
2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-08: “Intangibles-Goodwill
and Other (Topic 350) Testing Goodwill for Impairment”. The amendments in this update are intended to reduce complexity and
costs by allowing the reporting entity the option to make a qualitative evaluation about the likelihood of goodwill impairment
to determine whether it should calculate the fair value of a reporting unit. The update includes examples of events and circumstances
that an entity should consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less
than its carrying amount. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years
beginning after December 15, 2011. Early adoption is permitted for annual and interim goodwill impairment tests performed as of
a date prior to September 15, 2011 if the entity’s financial statements for the most recent annual or interim period have
not yet been issued.
In June
2011, the FASB issued Accounting Standards Update (ASU) 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive
Income. ASU 2011-05: (1) eliminates the option to present components of other comprehensive income (“OCI”) as part
of the statement of changes in stockholders’ equity, (2) requires presentation of each component of net income and each component
of OCI (and their respective totals) either in a single continuous statement or in two separate (but consecutive) statements, and
(3) requires presentation of reclassification adjustments on the face of the statement. The amendment is effective for fiscal years
and interim periods within those years, beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-05
to have a significant impact on the Company’s consolidated financial statements.
In May 2011,
The FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): “Amendments to Achieve Common Fair Value Measurement and
Disclosure Requirements in U.S. GAAP and IFRSs”. The new guidance results in a consistent definition of fair value and common
requirements for measurement of and disclosure about fair value between U.S. Generally Accepted Accounting Principles (GAAP) and
International Financial Reporting Standards. While many of the amendments to U.S. GAAP are not expected to have a significant effect
on practice, the new guidance changes some fair value measurement and disclosure requirements. Adoption of ASU 2011-04 is effective
for annual periods beginning after December 15, 2011 and is not expected to have a significant impact on the Company’s consolidated
financial statements.
Management
does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material
effect on the accompanying consolidated financial statements.
|
3.
|
Going Concern and Management’s Plans
|
The accompanying consolidated financial
statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The Company had incurred operating losses, negative
working capital, and no operating cash flow and future losses are anticipated.
The Company's plan is to raise equity financing,
which even if successful, may not result in cash flow sufficient to finance and expand its business and generate sales from the
License (Note 4). These factors raise substantial doubt about the Company's ability to continue as a going concern. Realization
of assets is dependent upon future operations of the Company, which in turn is dependent upon management's plans to meet its financing
requirements and the success of its future operations. These financial statements do not include any adjustments related to the
recoverability and classification of asset amounts or the amounts and classification of liabilities that might be necessary should
the Company be unable to continue in existence.
On February
25, 2009, the Company was granted an exclusive, worldwide, transferable, perpetual license (License) to use certain proprietary
technology for the processing of lithium for use in batteries and other fields. A patent application relating to the licensed technology
is pending.
In exchange for the
License, the Company:
(1) issued 1,000,000 shares of common stock
of the Company;
(2) issued an additional 2,000,000 shares
of common stock of the Company which are restricted and subject to forfeiture if there has not been at least $1,000,000 in total
commercial sales of licenses products within three years (Threshold);
(3) will pay royalties of $1.00 per kilogram,
of lithium products manufactured and sold, payable quarterly;
(4) will pay a royalty of $.01 per kilogram,
of excess products manufactured and sold, payable quarterly;
(5) will grant options to purchase up to
a total of 19% (inclusive of previously issued shares) of the issued and outstanding shares of the Company upon the issuance of
any additional shares after the date of the License. These options are exercisable at the same prices as the shares sold or values
received for five years from each grant date. These grants are only issuable if the Threshold is met.
Upon a transfer of the entire License,
the Company shall pay the licensor a fee equal to 19% of all compensation received on the transfer.
The License has been recorded at its fair
value of $250,000 based on management’s projected net cash flows to be realized from sales of products under the License.
Pursuant to the terms of the License Agreement,
the additional 2,000,000 shares of the Company’s common stock, which were issued, are subject to forfeiture if there has
not been at least $1,000,000 in total commercial sales of licenses products by February 25, 2012.
As of February 25, 2012, commercial sales
of the licensed products have not commenced.
As of December 31, 2011, the Company has
evaluated the fair value of the Technology License intangible asset and has determined that it is in excess of the carrying value based
on our estimated net discounted cash flows anticipated from the sale of the process under the licensing agreement. The Company
has also continued to test the process and believes that it is workable and commercially feasible.
On May 11, in connection with the purchase
of directors and officers liability insurance, the Company borrowed $12,171, payable in monthly installments, including interest
of 11.04% through January 2012.
|
6.
|
Related Party Transactions
|
As of December 31, 2011, loan payable-stockholder/officer
was $134,384 payable on demand, with interest at 5%, per annum. For the year ended December 31, 2011 and 2010, interest expense
on the loan payable-stockholder/officer was $5,288 and $3,704, respectively.
In January through April 9, 2012, the Company
borrowed an additional $6,920, from the stockholder/officer.
An officer of the Company provides administrative
space without rent.
On February
23, 2011, the Company entered into an Option Agreement (“Option”) with a company owned 25% by a stockholder/officer,
which had been conducting research and development in connection with the commercial manufacture of lithium metal for use in batteries
and other applications under the Company’s proprietary license.
In exchange
for the rights to the research and development of and to further develop the lithium process, the Company granted an option to
purchase 1,000,000 shares of its common stock exercisable at $0.11 per share, for five years from the date of the grant. The option
was valued at $70,000 using the Black-Scholes Option-Pricing Model using the market price of the Company’s common stock on
the date of valuation of $0.11, an expected dividend yield of zero, a term of five years, and an annual risk-free interest rate
of 2.21% and an expected volatility of 80.75%
The option
is immediately exercisable and is subject to adjustment by the Company in the event there are any changes in the stock of the Company
by reason of stock dividends, stock splits, reorganizations, mergers, consolidations, combinations, exchanges of share or if the
number and price of shares available under the Option should be equitably adjusted by the Company.
On May 25,
2010, the Company issued 2,000,000 shares of its common stock in payment of $160,000 of the loan payable – stockholder/officer.
On February
25, 2011, the Company entered into a one year agreement for investor relation consulting services in exchange for 300,000 shares
of common stock valued at $126,000, or $.42 per share, the fair value of the shares on the date of issuance.
During the
quarter ended June 30, 2011 the consulting agreement was mutually cancelled and 300,000 shares of common stock were cancelled,
resulting in a gain of $31,500, net of the unamortized prepaid consulting expense.
As of December
31, 2011the Company has reserved the following shares of common stock for future issue:
Stock Option Plan
|
|
|
2,750,000
|
|
|
|
|
|
|
Non-qualified options
|
|
|
1,056,500
|
|
|
|
|
|
|
|
|
|
3,806,500
|
|
The Alpha-En
Corporation Stock Option and Long Term Incentive Compensation Plan (“Plan”), as amended, provides for the grants up
to 2,750,000 shares of shares of common stock to key employees, directors and consultants. Grants may be options, SAR’s,
restricted stock or stock bonuses. Only employees may receive incentive awards. Exercise prices of incentive grants shall not be
less than the fair market value of the stock on the date of the grant. Options may be exercised subject to continued employment
and certain other conditions. The Company may determine all other terms of an award, including vesting, term, etc. but not more
than ten years from the date of grant. Awards that expired or were cancelled are available for future awards.
As of December
31, 2011, there were no options outstanding to purchase common stock under the Plan.
As of December
31, 2011, options not under the Plan to purchase 1,056,500 shares of the Company’s common stock were outstanding at a weighted
average exercise price of $0.13, per share, and a weighted average remaining life of 4.3 years.
The Company
was granted the right to receive future participation rights on certain revenues from certain film properties sold in prior years.
The Company
filed consolidated tax returns through December 31, 2004 and anticipates filing consolidated returns for 2005 through 2011. The
Company anticipates no significant income tax expense as a result of these filings.
Management
has evaluated and concluded that there are no significant uncertain tax positions requiring recognition in the Company’s
consolidated financial statements as of December 31, 2011.
As of December
31, 2011, the Company has net operating loss carryforward of approximately $3,850,000 to reduce future Federal and state taxable
income through 2030.
As of December
31, 2011, realization of the Company’s deferred tax assets of $1,574,000 was not considered more likely than not and, accordingly,
a valuation allowance of $1,574,000 has been provided. The valuation allowance increased by $73,000 from December 31, 2010 to December
31, 2011.
As of December
31, 2011 and 2010, components of deferred tax assets were as follows:
|
|
2010
|
|
|
2010
|
|
|
|
|
|
|
|
|
Net operating loss
|
|
|
1,574,000
|
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(1,574,000
|
)
|
|
|
(1,500,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
NONE
|
|
|
|
NONE
|
|
For the
years ended December 31, 2011 and 2010, deferred income tax expense consisted of the following:
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
Net operating loss
|
|
$
|
74,000
|
|
|
$
|
43,000
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(74,000
|
)
|
|
|
(43,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
NONE
|
|
|
|
NONE
|
|
A
reconciliation of income taxes and the statutory rate was as follows:
Federal statutory rate
|
|
|
34
|
%
|
|
|
|
|
|
Effect of state income taxes
|
|
|
4
|
%
|
|
|
|
|
|
Valuation allowance
|
|
|
(38
|
)%
|
|
|
|
|
|
|
|
|
None
|
|
Alpha En (CE) (USOTC:ALPE)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Alpha En (CE) (USOTC:ALPE)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024