UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT
OF 1934
For
the
quarterly period ended June 30, 2008
[
]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT
OF 1934
For
the
transition period from ____________ to ____________
Commission
File Number:
333-103647
Prime
Sun Power Inc.
(Exact
Name of Registrant as Specified in its Charter)
Nevada
|
98-0393197
|
(State
or other jurisdiction of
|
(IRS
Employer
|
incorporation
or organization)
|
Identification
No.)
|
14
Wall Street, 20
th
Floor
New
York, NY 10005
(Address
of principal executive offices)
(212)
618-1306
(Registrant’s
Telephone Number, Including Area Code)
N/A
(Former
Name, Former Address and Former Fiscal Year,
if
Changed Since Last Report)
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements
for
the past 90 days.
Yes
[x]
No [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
Accelerated Filer
|
[
]
|
Accelerated
Filer
|
[
]
|
Non-Accelerated
Filer
|
[
]
|
Smaller
reporting company
|
[X]
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes
[X]
No [ ]
As
of
August 13, 2008, the Issuer had 40,114,900 shares of its Common Stock
outstanding.
TABLE
OF CONTENTS
PART
I: FINANCIAL INFORMATION
|
|
|
|
Item
1: Financial Statements
|
4
|
Item
2: Management’s Discussion and Analysis of Financial Condition and Results
of Operation
|
9
|
Item
3: Quantitative and Qualitative Disclosures about Market
Risk
|
11
|
Item
4T: Controls and Procedures
|
11
|
|
|
PART
II: OTHER INFORMATION
|
|
|
|
Item
1: Legal Proceedings
|
12
|
Item
2: Unregistered Sales of Equity Securities and Use of
Proceeds
|
12
|
Item
3: Defaults Upon Senior Securities
|
12
|
Item
4: Submission of Matters to a Vote of Security Holders
|
12
|
Item
5: Other Information
|
12
|
Item
6: Exhibits
|
13
|
|
|
SIGNATURES
|
14
|
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Report on Form 10-Q (this “Report”) includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, Section
27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of
1934. Forward-looking statements include statements concerning our plans,
objectives, goals, strategies, future events, future revenues or performance,
capital expenditures, financing needs and other information that is not
historical information and, in particular, appear in the sections entitled
“Risk
Factors,” “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and elsewhere in this Report. When used in this Report,
the words “estimates,” “expects,” “anticipates,” “forecasts,” “plans,”
“intends,” “believes,” “seeks,” “may,” “will,” “should” and variations of these
words or similar expressions (or the negative versions of any these words)
are
intended to identify forward-looking statements. All forward-looking statements,
including, without limitation, management’s examination of historical operating
trends, are based upon our current expectations and various assumptions. Our
expectations, beliefs and projections are expressed in good faith and we believe
there is a reasonable basis for them. However, we can give no assurance that
management’s expectations, beliefs and projections will be achieved.
There
are
a number of risks and uncertainties that could cause our actual results to
differ materially from the results referred to in the forward-looking statements
contained in this Report. Important factors outside the scope of our control
could cause our actual results to differ materially from the results referred
to
in the forward-looking statements we make in this Report. Without limiting
the
foregoing, if we are unable to acquire approvals or consents from third parties
or governmental authorities with respect to our new business model, our plans
to
commence our new business may become irrevocably impaired.
All
forward-looking statements included herein are expressly qualified in their
entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by applicable laws and regulations, the Company
undertakes no obligation to update these forward-looking statements to reflect
events or circumstances after the date of this Report or to reflect the
occurrence of unanticipated events.
Unless
otherwise provided in this Report, references to the “Company,” the
“Registrant,” the “Issuer,” “we,” “us,” and “our” refer to Prime Sun Power Inc.
(formally known as ATM Financial Corp.).
PART
I
FINANCIAL
INFORMATION
ITEM
1. FINANCIAL STATEMENTS
Prime
Sun
Power Inc. (formerly known as ATM Financial Corp.)
(A
development stage company)
Balance
Sheet
|
|
June30
|
|
December
31,
|
|
|
|
2008
|
|
2007
|
|
ASSETS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash
|
|
|
28,684
|
|
|
71,241
|
|
Prepaid
expense
|
|
|
600
|
|
|
600
|
|
|
|
|
|
|
|
|
|
Total
Current Assets and Total Assets
|
|
|
29,284
|
|
|
71,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Accounts
payable and Accrued liabilities
|
|
|
63,140
|
|
|
|
|
Due
to related parties
|
|
|
145,051
|
|
|
48,880
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities and Total Liabilities
|
|
|
208,191
|
|
|
48,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity (Deficiency)
|
|
|
(178,907
|
)
|
|
22,961
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity (Deficiency)
|
|
|
29,284
|
|
|
71,841
|
|
Prime
Sun
Power Inc. (formerly known as ATM Financial Corp.)
(A
development stage company)
(Unaudited)
Statement of Operations
|
|
|
|
|
|
|
|
|
|
Accumulated
from
|
|
|
|
For
the Three Months
ended
|
|
For
the Six Months e
nded
|
|
December
18, 2002
|
|
|
|
June
30
|
|
June
30
|
|
(Date
of Inception)
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
to
June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
-
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
(INCOME)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank
and financing charges
|
|
|
24
|
|
|
28
|
|
|
24
|
|
|
150
|
|
|
2,518
|
|
Consulting
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
26,826
|
|
Director
fees
|
|
|
4,000
|
|
|
-
|
|
|
4,000
|
|
|
-
|
|
|
4,000
|
|
Gain
on currency exchange
|
|
|
-
|
|
|
-
|
|
|
341
|
|
|
-
|
|
|
732
|
|
License
payment
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
1,000
|
|
Listing
and filing fees
|
|
|
3,082
|
|
|
100
|
|
|
4,927
|
|
|
100
|
|
|
26,258
|
|
Office
and sundry
|
|
|
6,438
|
|
|
2,527
|
|
|
6,837
|
|
|
2,801
|
|
|
30,127
|
|
Professional
fees
|
|
|
57,155
|
|
|
1,354
|
|
|
117,879
|
|
|
6,179
|
|
|
176,973
|
|
Personnel
|
|
|
50,839
|
|
|
-
|
|
|
63,835
|
|
|
-
|
|
|
63,835
|
|
Regulatory
fees
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Rent
|
|
|
1,079
|
|
|
-
|
|
|
1,079
|
|
|
|
|
|
26,729
|
|
Transfer
agent
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
50
|
|
|
2,675
|
|
Travel
|
|
|
1,388
|
|
|
|
|
|
1,388
|
|
|
|
|
|
1,388
|
|
Loss
on sale of property and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
909
|
|
Interest
expense
|
|
|
1,558
|
|
|
|
|
|
1,558
|
|
|
|
|
|
2,584
|
|
Gain
on debt settlement
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
(14,176
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses (Income)
|
|
|
125,563
|
|
|
4,009
|
|
|
201,868
|
|
|
9,280
|
|
|
352,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
(125,563
|
)
|
|
(4,009
|
)
|
|
(201,868
|
)
|
|
(9,280
|
)
|
|
(352,378
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted Loss Per Share
|
|
|
($0.00
|
)
|
|
($0.00
|
)
|
|
($0.01
|
)
|
|
($0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding
|
|
|
40,114,900
|
|
|
40,114,900
|
|
|
40,114,900
|
|
|
40,114,900
|
|
|
|
|
Share
data has been adjusted to reflect the stock dividend effective February 4,
2008
Prime
Sun
Power Inc. (formerly known as ATM Financial Corp.)
(A
development stage company)
(Unaudited)
Statement of Stockholder's Equity
For
the
Period from December 18, 2002 (Date of Inception) to June 30,
2008
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
During
the
|
|
|
|
|
|
Common
Stock
|
|
Paid-in
|
|
Development
|
|
|
|
|
|
Shares
|
|
Par
|
|
Capital
|
|
Stage
|
|
Total
|
|
Balance
- December 18, 2002
|
|
#
|
|
Value
($)
|
|
($)
|
|
($)
|
|
($)
|
|
(Date
of Inception)
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for cash at
|
|
|
|
|
|
|
|
|
|
|
|
$0.0001
per share
|
|
|
4,000,000
|
|
|
400
|
|
|
-
|
|
|
-
|
|
|
400
|
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
(21,990
|
)
|
|
(21,990
|
)
|
Balance
- December 31, 2002
|
|
|
4,000,000
|
|
|
400
|
|
|
-
|
|
|
(21,990
|
)
|
|
(21,590
|
)
|
Net
loss for the Year
|
|
|
|
|
|
|
|
|
|
|
|
(24,216
|
)
|
|
(24,216
|
)
|
Balance
- December 31, 2003
|
|
|
4,000,000
|
|
|
400
|
|
|
-
|
|
|
(46,206
|
)
|
|
(45,806
|
)
|
Net
loss for the Year
|
|
|
|
|
|
|
|
|
|
|
|
(13,398
|
)
|
|
(13,398
|
)
|
Balance
- December 31, 2004
|
|
|
4,000,000
|
|
|
400
|
|
|
-
|
|
|
(59,604
|
)
|
|
(59,204
|
)
|
February
14, 2005 - shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
issued
for cash at $0.10 per share
|
|
|
1,730,700
|
|
|
173
|
|
|
172,897
|
|
|
-
|
|
|
173,070
|
|
Net
loss for the Year
|
|
|
|
|
|
|
|
|
|
|
|
(18,609
|
)
|
|
(18,609
|
)
|
Balance
- December 31, 2005
|
|
|
5,730,700
|
|
|
573
|
|
|
172,897
|
|
|
(78,213
|
)
|
|
95,257
|
|
Net
loss for the Year
|
|
|
|
|
|
|
|
|
|
|
|
(16,167
|
)
|
|
(16,167
|
)
|
Balance
- December 31, 2006
|
|
|
5,730,700
|
|
|
573
|
|
|
172,897
|
|
|
(94,380
|
)
|
|
79,090
|
|
Net
loss for the Year
|
|
|
|
|
|
|
|
|
|
|
|
(56,129
|
)
|
|
(56,129
|
)
|
Balance
- December 31, 2007
|
|
|
5,730,700
|
|
|
573
|
|
|
172,897
|
|
|
(150,509
|
)
|
|
22,961
|
|
6
for 1 Stock Dividend - February 8, 2008
|
|
|
34,384,200
|
|
|
3,438
|
|
|
|
|
|
(3,438
|
)
|
|
-
|
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
(76,305
|
)
|
|
(76,305
|
)
|
Balance
- March 31, 2008
|
|
|
40,114,900
|
|
|
4,011
|
|
|
172,897
|
|
|
(230,252
|
)
|
|
(53,344
|
)
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
(125,563
|
)
|
|
(125,563
|
)
|
Balance
- June 30, 2008
|
|
|
40,114,900
|
|
|
4,011
|
|
|
172,897
|
|
|
(355,815
|
)
|
|
(178,907
|
)
|
Prime
Sun
Power Inc. (formerly known as ATM Financial Corp.)
(A
development stage company)
(Unaudited)
Statement of Cash Flow
|
|
|
|
|
|
Accumulated
from
|
|
|
|
For
the Six Months ended
|
|
December
18, 2002
|
|
|
|
June
30
|
|
(Date
of Inception)
|
|
|
|
2008
|
|
2007
|
|
to
June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
(201,868
|
)
|
|
(9,280
|
)
|
|
(352,378
|
)
|
Adjustments
to reconcile net loss to net cash
|
|
|
|
|
|
|
|
|
|
|
used
in operations:
|
|
|
|
|
|
|
|
|
|
|
Gain
in debt settlement
|
|
|
-
|
|
|
-
|
|
|
14,176
|
|
Loss
on sale of equipment
|
|
|
-
|
|
|
-
|
|
|
909
|
|
Change
in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
Prepaid
expense
|
|
|
-
|
|
|
5
|
|
|
(600
|
)
|
Accounts
payable and accrued liabilities
|
|
|
14,260
|
|
|
(6
|
)
|
|
48,965
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used in Operating Activities
|
|
|
(187,608
|
)
|
|
(9,281
|
)
|
|
(288,928
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Provided By Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Proceeds
of loans from related parties
|
|
|
145,051
|
|
|
-
|
|
|
145,051
|
|
Common
stock issued
|
|
|
-
|
|
|
-
|
|
|
173,470
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Financing Activities
|
|
|
145,051
|
|
|
-
|
|
|
318,521
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Provided By (Used In) Investing Activities
|
|
|
|
|
|
|
|
|
|
|
Purchase
of equipment
|
|
|
-
|
|
|
-
|
|
|
(3,416
|
)
|
Proceeds
from sale of equipment
|
|
|
-
|
|
|
-
|
|
|
2,507
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used In Investing Activities
|
|
|
-
|
|
|
|
|
|
(909
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease) in Cash
|
|
|
(42,557
|
)
|
|
(9,281
|
)
|
|
28,684
|
|
Cash
- Beginning of Period
|
|
|
71,241
|
|
|
101,877
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
- End of Period
|
|
|
28,684
|
|
|
92,596
|
|
|
28,684
|
|
PRIME
SUN POWER INC.
Notes
to
Financial Statements
(Unaudited)
NOTE
A - BASIS OF PRESENTATION
The
accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted for interim financial information
and with the instructions to Form 10-Q and Article 8 of Regulation S-X relating
to smaller reporting companies. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles (“GAAP”) for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included. Operating results for the three and six-month periods ended
June 30, 2008 are not necessarily indicative of the results that may be expected
for the year ended December 31, 2008.
The
balance sheet at December 31, 2007 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by GAAP for complete financial statements.
For
further information, refer to the consolidated financial statements and
footnotes thereto included in our Annual Report on Form 10-KSB for the year
ended December 31, 2007 filed on March 31, 2008.
NOTE
B - GOING CONCERN
The
Company has been in the development stage since its inception and has not yet
realized any revenues from its planned operations. As of June 30, 2008, the
Company has an accumulated deficit of $355,815. The ability of the Company
to
continue as a going concern and to emerge from the development stage is
dependent upon its successful execution of its plan of operations and ability
to
raise additional financing. There is no guarantee that the Company will be
able
to raise additional capital or sell any of its products and services at a
profit. These factors, among others, raise substantial doubt regarding the
Company’s ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from the outcome
of
this uncertainty.
NOTE
C - STOCKHOLDERS’ EQUITY
On
January 22, 2008, the Board of Directors declared the payment of a stock
dividend to the stockholders of record of the Company as of February 4, 2008.
The stock dividend was paid on February 4, 2008. Each stockholder received
six
additional shares of the Company’s common stock for each one share of the
Company’s common stock which they held on the record date. Following the payment
of the stock dividend, the issued and outstanding share ownership of the Company
increased from 5,730,700 shares of Company common stock to 40,114,900 shares
of
common stock.
NOTE
D - RELATED PARTY TRANSACTION
Included
in accounts payable and accrued liabilities at June 30, 2008 and December 31,
2007 is $25,685 owed to a former director of the Company for rent and other
expenses.
NOTE
E - NEW ACCOUNTING PRONOUNCEMENTS
In
December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and SFAS
No. 160, Non-controlling Interests in Consolidated Financial Statements. SFAS
No. 141 (R) requires an acquirer to measure the identifiable assets acquired,
the liabilities assumed, and any non-controlling interest in the acquiree at
their fair values on the acquisition date, with goodwill being the excess value
over the net identifiable assets acquired. SFAS No. 160 clarifies that a
non-controlling interest in a subsidiary should be reported as equity in the
consolidated financial statement. The calculation of earnings per share will
continue to be based on income amounts attributable to the parent. SFAS No.
141
(R) and SFAS No. 160 are effective for financial statements issued for fiscal
years beginning after December 15, 2008. Early adoption is prohibited. We have
not yet determined the effect on our financial statements, if any, upon adoption
of SFAS No. 141 (R) or SFAS No. 160.
ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS
OF OPERATIONS
The
Company's Operations
The
following discussion of the financial condition and results of operations of
Prime Sun Power Inc. should be read in conjunction with the financial statements
and the related notes thereto included elsewhere in this Report. This Report
contains certain forward-looking statements and the Company's future operating
results could differ materially from those discussed herein. Certain statements
contained in this Report, including, without limitation, statements containing
the words “believes”, “anticipates,” “expects” and the like, constitute
“forward-looking statements” within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934,
as amended (the “Exchange Act”). However, as the Company intends to issue “penny
stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange
Act, the Company is ineligible to rely on these safe harbor provisions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of
the Company to be materially different from any future results, performance
or
achievements expressed or implied by such forward-looking statements. Given
these uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. The Company disclaims any obligation to update
any
such factors or to announce publicly the results of any revisions of the
forward-looking statements contained or incorporated by reference herein to
reflect future events or developments, except as required by the Exchange Act.
We
were
incorporated in the State of Nevada on December 18, 2002, as ATM Financial
Corp., for the purpose of providing access to the Canadian Interac shared cash
dispensing network for those operators of automated teller machines, also known
as ATMs, who are not affiliated with any financial institution. On November
10,
2006, our President and Chief Executive officer resigned to pursue other
interests. We suspended all prior business plans as of that date. During the
first quarter 2008, we began considering a new business model involving solar
power and other alternative energies.
On
April
1, 2008, we changed our name from “ATM Financial Corp.” to “Prime Sun Power
Inc.”
On
April
14, 2008, the Company changed its address to: 14 Wall Street, 20th Floor, New
York, NY 10005. The Company’s new telephone number is (212)
618-1306.
On
April
15, 2008, the Company changed its stock symbol from “AFIC” to “PSPW.” The
Company’s common stock is traded on the National Association of Securities
Dealers Inc.’s over-the-counter bulletin board.
Effective
May 10, 2008, the Board of Directors (the “Board”) appointed Dr. Augustine Fou
to fill one of the vacancies on the Board. Ms. Vynnyk resigned as an officer
and
director of the Company as of May 10, 2008. On May 10, 2008, Gerald Sullivan
was
appointed as the Chief Financial Officer and interim President and Chief
Executive Officer of the Company. On May 10, 2008, Barbara Salz was appointed
as
Corporate Secretary.
Our
Plan of Operation
Our
new
business purpose focuses on solar power and other alternative energies. We
have
not yet formulated how we shall finance the new business. We are currently
working on the plans to commence and operate the new business. Although we
have
a new business purpose, we have not formulated definitive plans and we have
not
commenced any operations under the new business model. We expect to announce
details of the new model during the third or fourth quarter of
2008.
Research
and Development
The
Company has not yet determined its anticipated spending on research and
development activities for the year ending December 31, 2008.
Plant
and Equipment
The
Company has not yet determined its anticipated spending on plant and equipment
for the year ending December 31, 2008.
Employees
As
of
June 30, 2008, the Company had only two part time employees. The Company has
not
yet determined its anticipated employee and staff needs for the year ending
December 31, 2008.
Liquidity
and capital resources
During
the quarter ended June 30, 2008 and to date, the primary source of capital
has
been loans from existing shareholders and equity sales. Our operations to date
have consumed substantial amounts of cash. Our negative cash flow
from operations is expected to continue and to accelerate in the foreseeable
future as the Company invests in capital expenditures including production
facilities.
As
of the
date of this Report, we have not yet generated any revenues from our business
operations. Since inception, the Company has incured total expenses of $352,378,
including total expenses of $201,868during the six months ended June 30,
2008.
We
will
need to raise additional capital to implement our new business plan and continue
operations. We are seeking alternative sources of financing, through private
placement of securities and loans from our shareholders in order for us to
maintain our operations. We cannot guarantee that we will be successful in
raising additional cash resources for our operations or that we will stay in
business after our new business plan has commenced.
Our
consolidated cash balance at June 30, 2008 was $28,684. As of June 30, 2008,
our
total current assets consisted of $600 in prepaid expenses and our total
liabilities were $266,414.
For
the
period ending June 30, 2008, the Company has received 3 loans in aggregate
of
$174,189 from Rudana (the “Shareholder Loan”). The Company will use the proceeds
from the Shareholder Loan for general corporate purposes. The Shareholder Loans
have an interest rate of seven and a half percent (7.5%) per annum, which
together with the principal amount shall be repayable thirty (30) days after
demand by Rudana. In connection with the Shareholder Loan, the Company executed
a notes setting forth the terms thereof. The Shareholder Loans were approved
by
the Company’s Board.
On
May
10, 2008, the Company issued a warrant to Arimathea Limited in consideration
for
international corporate development services rendered on behalf of the Company.
On May 22, 2008, the Company amended the First Warrant and issued a second
warrant to Arimathea Limited (the “Second Warrant”). Subsequent to the period
covered by this Report, the Company agreed to amalgamate and amend the First
Warrant and the Second Warrant (collectively, the “Amended Warrant”). The
Amended Warrant will have an exercise term of 3 years and will become
exercisable only for the purchase of a number of shares equal to (i) 5% of
the
amount of capital raised by the Company from introductions made by Arimathea,
divided by (ii) the original exercise price of $1.62 per share. All other terms
and conditions of the First Warrant and Second Warrant as amalgamated into
the
Amended Warrant shall remain the same.
Off
Balance Sheet Arrangements
The
Company does not have any off balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company's financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.
Subsequent
Events
On
August
11, 2008 and on August 13, 2008, Prime Sun Power Inc., Inc. (the “Company”)
received shareholder loans in the aggregate amount of $80,000.00 (the
“Shareholder Loans”), from Rudana Investment Group AG (“Rudana”), the Company’s
majority shareholder. The Shareholder Loans have an interest rate of seven
and a half percent (7.5%) per annum, which together with the principal amount
shall be repayable thirty (30) days after demand by Rudana. In connection with
the Shareholder Loan, the Company executed two notes on August 11, 2008 and,
respectively, August 13, 2008, setting forth the terms thereof.
ITEM
3.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not
Applicable.
ITEM
4T.
CONTROLS
AND PROCEDURES
As
of the
end of the period covered by this report, the Company carried out, under the
supervision and with the participation of the Company’s management, including
its Chief Executive Officer and Chief Financial Officer, an evaluation of the
effectiveness of the design and operation of the Company’s disclosure controls
and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934) in ensuring that information required to be disclosed
by
the Company in its reports is recorded, processed, summarized and reported
within the required time periods. In carrying out that evaluation, management
identified a material weakness (as defined in Public Company Accounting
Oversight Board Standard No. 2) in our internal control over financial
reporting.
The
material weakness identified by Management consisted of inadequate staffing
and
supervision within the bookkeeping and accounting operations of the Company.
The
relatively small number of employees who have bookkeeping and accounting
functions prevents us from segregating duties within the Company’s internal
control system. The inadequate segregation of duties is a weakness because
it
could lead to the untimely identification and resolution of accounting and
disclosure matters or could lead to a failure to perform timely and effective
reviews. Accordingly, based on their evaluation of the Company’s disclosure
controls and procedures as of June 30, 2008, the Company’s Chief Executive
Officer and its Chief Financial Officer have concluded that, as of that date,
the Company’s controls and procedures were not effective for the purposes
described above. The Company intends to take steps to remediate such procedures
as soon as reasonably possible.
There
was
no change in the Company’s internal control over financial reporting (as defined
in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934)
during the quarter ended June 30, 2008 that has materially affected or is
reasonably likely to materially affect the Company’s internal control over
financial reporting.
PART
II.
OTHER
INFORMATION
ITEM
1.
LEGAL
PROCEEDINGS
The
Company is not, and has not been during the period covered by this Quarterly
Report, a party to any legal proceedings.
ITEM
2:
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM
3:
DEFAULTS
UPON SENIOR SECURITIES
Not
Applicable.
ITEM
4:
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
No
matters were submitted to the vote of the Company’s security holders during the
period covered by this Quarterly Report.
ITEM
5:
OTHER
INFORMATION
Not
Applicable.
ITEM
6.
EXHIBITS
Exhibit
Description
10.5
Form
of
Promissory Note issued by the Company to Rudana Investment Group
AG.
31.1
Certification
of Principal Executive Officer and Principal Financial Officer pursuant to
Section 302 of
the
Sarbanes-Oxley Act of 2002.
32.1
Certification
of the Principal Executive Officer and Principal Financial Officer pursuant
to
18 U.S.C.
Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
|
|
|
PRIME
SUN POWER INC.
|
|
|
|
|
|
|
|
By:
|
/s/
Gerald
Sullivan
|
|
Name:
|
Gerald
Sullivan
|
|
Title:
|
Chief
Financial Officer and Interim
President
and Chief Executive Officer
|
Date:
August 19, 2008
3Power Energy (CE) (USOTC:PSPW)
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