Attached files
file | filename |
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8-K/A - Premier Power Renewable Energy, Inc. | v162627_8ka.htm |
EX-23.2 - Premier Power Renewable Energy, Inc. | v162627_ex23-2.htm |
EX-99.1 - Premier Power Renewable Energy, Inc. | v162627_ex99-1.htm |
EX-23.1 - Premier Power Renewable Energy, Inc. | v162627_ex23-1.htm |
EX-99.3 - Premier Power Renewable Energy, Inc. | v162627_ex99-3.htm |
REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the
Stockholders
PREMIER
POWER ITALY S.p.A.
(previously
Arco Energy S.r.l.)
We have
audited the accompanying balance sheet of PREMIER POWER ITALY S.p.A., as of
December 31, 2008, and
the related statements of income and stockholder’s equity for the year then
ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We
conducted our audit in accordance with auditing standards generally accepted in
the United States of America as established by the American Institute of
Certified Public Accountants. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes 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 also 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.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of PREMIER POWER ITALY S.p.A. as of
December 31, 2008, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
September 24, 2009
Ria &
Partners S.p.A.
/s/ Fabio
Gallassi
Fabio
Gallassi
Partner
PREMIER POWER ITALY S.p.A. (formerly ARCO
Energy, SRL)
|
||||||||
BALANCE
SHEETS
|
||||||||
AS
OF DECEMBER 31, 2008 AND JUNE 30, 2009
|
||||||||
December 31, 2008
|
June 30, 2009
|
|||||||
(audited)
|
(unaudited)
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 238,509 | $ | 2,126,479 | ||||
Accounts
receivable, trade
|
281,481 | 637,757 | ||||||
Inventory
|
462,395 | 407,656 | ||||||
Prepaid
expenses and other current assets
|
140,812 | 7,024 | ||||||
Total
current assets
|
1.123.197 | 3.178.916 | ||||||
Property
and equipment, net
|
19,103 | 32,988 | ||||||
Total
assets
|
$ | 1,142,300 | $ | 3,211,904 | ||||
LIABILITIES
AND MEMBERS’
EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 314,042 | $ | 1,108,466 | ||||
Accrued
liablilities
|
23,718 | 169,552 | ||||||
Related
party payable
|
176,781 | 1,755,663 | ||||||
Taxes
payable
|
356,033 | 269,015 | ||||||
Total
current liabilities
|
870.574 | 3.302.696 | ||||||
Members’
Equity:
|
||||||||
Capital
|
14,487 | 14,487 | ||||||
Retained
earnings (accumulated deficit)
|
268,883 | (86,235 | ) | |||||
Accumulated
other comprehensive (loss)
|
(11,644 | ) | (19,044 | ) | ||||
Total
equity
|
271,726 | (90,792 | ) | |||||
Total
liabilities and members’
equity
|
$ | 1,142,300 | $ | 3,211,904 |
2
PREMIER POWER ITALY S.p.A. (formerly ARCO
Energy, SRL)
|
||||||||||||
STATEMENTS
OF OPERATIONS
|
||||||||||||
Year
ended December 31,
|
Six Months ended June 30
|
|||||||||||
2008
|
2009
|
2008
|
||||||||||
(audited)
|
(unaudited)
|
(unaudited)
|
||||||||||
Net
sales
|
$ | 7,685,250 | $ | 2,194,881 | $ | 1,729,571 | ||||||
Cost
of sales
|
(7,027,657 | ) | (1,844,721 | ) | (1,636,405 | ) | ||||||
Gross
profit
|
657,593 | 350,160 | 93,166 | |||||||||
Operating
expenses:
|
||||||||||||
Sales
and marketing
|
38,728 | 161,558 | 15,391 | |||||||||
|
||||||||||||
General
and administrative
|
220,007 | 276,171 | 51,417 | |||||||||
Total
operating expenses
|
258,735 | 437,729 | 66,808 | |||||||||
Operating
income (loss)
|
398,858 | (87,569 | ) | 26,358 | ||||||||
Other
(expense) income:
|
||||||||||||
Interest
expense
|
(432 | ) | (5,030 | ) | - | |||||||
Other
income
|
20 | 2,237 | 7 | |||||||||
Interest
income
|
163 | 127 | 43 | |||||||||
Total
other (expense) income, net
|
(249 | ) | (2,666 | ) | 50 | |||||||
Income
before income taxes
|
398,609 | (90,235 | ) | 26,408 | ||||||||
Income
tax expense
|
(129,726 | ) | (49 | ) | - | |||||||
Net
income (loss)
|
$ | 268,883 | $ | (90,284 | ) | $ | 26,408 |
3
PREMIER POWER ITALY S.p.A. (formerly ARCO
Energy, SRL)
|
||||||||||||
STATEMENTS
OF CASH FLOWS
|
||||||||||||
Year
ended December 31
|
Six Months ended June 30
|
|||||||||||
2008
|
2009
|
2008
|
||||||||||
(audited)
|
(unaudited)
|
(unaudited)
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income (loss)
|
$ | 268,883 | $ | (90,284 | ) | $ | 26,408 | |||||
Adjustments
to reconcile net income (loss) provided by
|
||||||||||||
(used
in) operating activities:
|
||||||||||||
Depreciation
and amortization
|
3,563 | 3,858 | 1,129 | |||||||||
Accounts
receivable
|
(293,777 | ) | (339,554 | ) | (17,379 | ) | ||||||
Inventory
|
(482,593 | ) | 50,485 | (1,885,005 | ) | |||||||
Prepaid
expenses and other assets
|
(146,963 | ) | 126,688 | (38,605 | ) | |||||||
Accounts
payable
|
327,759 | 756,094 | 1,426,566 | |||||||||
Accrued
liablities
|
24,754 | 138,685 | 247,810 | |||||||||
Related
party payable
|
184,504 | 1,488,180 | 145,509 | |||||||||
Taxes
payable
|
371,585 | (81,519 | ) | 114,689 | ||||||||
Net
cash provided by operating activities
|
257,715 | 2,052,633 | 21,122 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Acquisition
of property and equipment
|
(23,500 | ) | (17,118 | ) | (20,880 | ) | ||||||
Distributions
|
- | (240,331 | ) | - | ||||||||
Net
cash used in investing activities
|
(23,500 | ) | (257,449 | ) | (20,880 | ) | ||||||
Cash
flows from financing activities:
|
||||||||||||
Proceeds
from members’
units
|
14,487 | - | 14,487 | |||||||||
Net
cash provided by financing activities
|
14,487 | - | 14,487 | |||||||||
Effect
of foreign currency
|
(10,193 | ) | 92,786 | 1,312 | ||||||||
Increase
in cash and cash equivalents
|
238,509 | 1,887,970 | 16,041 | |||||||||
Cash
and cash equivalents at begining of period
|
- | 238,509 | - | |||||||||
Cash
and cash equivalents at end of period
|
$ | 238,509 | $ | 2,126,479 | $ | 16,041 | ||||||
Supplemental
cash flow information:
|
||||||||||||
Interest
paid
|
$ | (432 | ) | $ | (5,030 | ) | $ | - | ||||
Taxes
paid
|
$ | 0 | $ | (49 | ) | $ | - |
4
PREMIER
POWER ITALY S.p.A (formerly ARCO Energy, SRL)
|
||||||||||
STATEMENTS
OF EQUITY
|
||||||||||
FOR
THE YEAR ENDED DECEMBER 31, 2008 AND THE SIX MONTHS ENDED JUNE 30,
2009
|
Capital
|
Retained
Earnings
(Accumulated
|
Accumulated
Other
Comprehensive
|
Unaudited
|
|||||||||||||
Amount
|
Deficit)
|
Loss
|
Total
|
|||||||||||||
Balance January
23, 2008 (unaudited)
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Net
income
|
268,883 | 268,883 | ||||||||||||||
Foreign
currency translation adjustment
|
(11,644 | ) | (11,644 | ) | ||||||||||||
Comprehensive
income
|
257,239 | |||||||||||||||
Contribution
|
14,487 | 14,487 | ||||||||||||||
Balance,
December 31, 2008
|
14,487 | 268,883 | (11,644 | ) | 271,726 | |||||||||||
Net
income
|
(90,284 | ) | (90,284 | ) | ||||||||||||
Foreign
currency translation adjustment
|
(7,400 | ) | (7,400 | ) | ||||||||||||
Comprehensive
loss
|
(97,684 | ) | ||||||||||||||
Distribution
|
(264,834 | ) | (264,834 | ) | ||||||||||||
Balance
June 30, 2009 (unaudited)
|
$ | 14,487 | $ | (86,235 | ) | $ | (19,044 | ) | $ | (90,792 | ) |
5
PREMIER
POWER ITALY, S.P.A.
Notes
to Financial Statements
1.
|
ORGANIZATION
AND NATURE OF BUSINESS
|
Premier Power Italy S.p.A, an Italian
limited organization (the “Company”), is a distributor and developer of solar
products and projects in Italy. The
Company was operating under the statutory and civil code of the Italian
government and the Company earnings after taxes were distributed 5% legal
reserve and 95% as from the shareholder assembly.
2.
|
SIGNIFICANT
ACCOUNTING POLICIES
|
Basis of Presentation — The
accompanying financial statements as of and for the six months ended June 30,
2009 and 2008 are unaudited and have been prepared in accordance with generally
accepted accounting principles for interim financial
information. Certain information and note disclosures normally
included in the annual financial statements have been condensed or omitted,
although the Company’s management believes the disclosures made are adequate to
make the information presented not misleading. In the opinion of
management, all adjustments, consisting of normal recurring accruals, necessary
for fair presentation of the results of operation for the interim periods
presented have been reflected herein. The results of operations for
the interim periods are not necessarily indicative of the results to be expected
for the entire year.
Cash and cash
equivalents —
The Company considers all highly liquid investments with a maturity of three
months or less at the time of purchase to be cash equivalents.
Property and Equipment -
Property and equipment are recorded at cost and depreciated using
the straight-line method over estimated useful lives, or in the case of
leasehold improvements, the lease term, if shorter. Maintenance and repairs are
expensed as they occur.
Revenue Recognition - Revenue
on photovoltaic and distribution orders is recognized when persuasive evidence
of an arrangement exists, delivery has occurred, the fee is fixed and
determinable and collectability is reasonably assured. The Company
had no revenues from solar project development for the six months ended June 30,
2009 and the year ended December 31, 2008.
Advertising – The Company
expenses advertising costs as they are incurred. Advertising costs
were $150,142 and $15,391 for the six months ended June 30, 2009 and 2008,
respectively, and $34,049 for the year ended December 31, 2008.
Foreign Currency – The
Company’s functional currency is the Euro. Its assets and liabilities are
translated at year-end exchange rates, except for certain non-monetary balances,
which are translated at historical rates. All income and expense amounts of the
Company are translated at average exchange rates for the respective period.
Translation gains and losses are not included in determining net income but are
accumulated in a separate component of equity. Foreign currency transaction
gains and losses are included in the determination of net income (loss) in the
period in which they occur. For the six months ended June 30, 2009 and the year
ended December 31, 2008, the foreign currency transaction loss was
zero.
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 amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.
Income Taxes — The
Company follows the liability method of accounting for income
taxes. Under this method, deferred income tax assets and liabilities
are determined based on differences between the financial statement and the
income tax bases of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse. The
Company expects to maintain a full valuation allowance on the net deferred tax
assets until an appropriate level of profitability that generates taxable income
is sustained or until we are able to develop tax strategies that would enable us
to conclude that it is more likely than not that a portion of the deferred tax
assets will be realizable. Any reversal of valuation allowance will
favorably impact our results of operations in the period of the
reversal. For the period from inception (January 23, 2008) through
December 31, 2008, and for the six months ended June 30, 2009 and 2008 tax
expense, was $129,726, $49 and $0, respectively. At December 31, 2008 and June
30, 2009 and 2008 there were no significant current or deferred taxes or
valuation allowance.
6
Recently
Issued Accounting Pronouncements
In
December 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“FAS”) No. 157,
"Fair Value
Measurement" ("FAS 157"), which defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP) and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value
measurements. This statement is effective for fiscal years beginning
after November 15, 2007, except for non-financial assets and liabilities
measured at fair value on a non-recurring basis for which the
effective date will be for fiscal years beginning after November 15,
2008. The adoption of FAS 157 for financial assets and liabilities
did not have a material impact on the Company's financial
statements. The adoption of FAS 157 for non-financial assets is not
expected to have a material impact on the Company’s financial
statements.
In
February 2007, the FASB issued FAS No. 159, “The Fair Value Option for
Financial Assets and Financial
Liabilities — Including an amendment of FASB Statement No. 115” (“FAS
159”), which permits entities to choose to measure many financial instruments
and certain other items at fair value at specified election dates. A business
entity is required to report unrealized gains and losses on items for which the
fair value option has been elected in earnings at each subsequent reporting
date. This statement is expected to expand the use of fair value measurement.
FAS 159 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years, and is
applicable beginning in the first quarter of 2008. The adoption of FAS 159 did
not have a material effect on our results of operations, cash flows or financial
position.
In
December 2007, the FASB issued FAS No. 141(R), “Business Combinations” (“FAS
141(R)”), which requires the acquiring entity in a business combination to
recognize all (and only) the assets acquired and liabilities assumed in the
transaction; establishes the acquisition-date fair value as the measurement
objective for all assets acquired and liabilities assumed; and requires the
acquirer to disclose to investors and other users all of the information they
need to evaluate and understand the nature and financial effect of the business
combination. FAS 141(R) is prospectively effective to business combinations for
which the acquisition is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. The impact of FAS 141(R) on the
Company's financial statements will be determined in part by the nature and
timing of any future acquisition completed.
In
December 2007, the FASB issued FAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements (as amended)” (“FAS 160”), which
improves the relevance, comparability, and transparency of financial information
provided to investors by requiring all entities to report noncontrolling
(minority) interests in subsidiaries in the same way as equity consolidated
financial statements. Moreover, FAS 160 eliminates the diversity that currently
exists in accounting from transactions between an entity and noncontrolling
interests by requiring they be treated as equity transactions. FAS 160 is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008; earlier adoption is
prohibited.
7
PREMIER
POWER ITALY, S.P.A.
Notes
to Financial Statements
3.
|
PROPERTY
AND EQUIPMENT
|
Property
and equipment consisted of the following:
December
31,
2008
|
June
30,
2009
|
|||||||
Vehicles
|
$ | 18,186 | $ | 31,702 | ||||
Computers and
Equipment
|
4,330 | 8,747 | ||||||
22,516 | 40,449 | |||||||
Less: accumulated
depreciation
|
(3,413) | (7,460 | ) | |||||
Total fixed
assets
|
$ | 19,103 | $ | 32,989 |
Depreciation
expense was $3,858 and $1,129 for the six months ended June 30, 2009 and 2008,
respectively, and $3,563 for the year ended December 31, 2008.
4.
|
ACCRUED
LIABILITIES
|
Accrued
liabilities consisted of the following:
December
31,
2008
|
June
30,
2009
|
|||||||
Suppliers
|
$ | 20,866 | $ | 103,278 | ||||
Payroll
|
1,782 | 41,304 | ||||||
Customer
advances
|
17,593 | |||||||
Other
|
1,070 | 7,377 | ||||||
$ | 23,718 | $ | 169,552 |
On July
31, 2009, the Company and its parent, Rupinvest Sarl, were acquired by Premier
Power Renewable Energy, Inc. (“Premier Power”), in exchange for $18,292 and up
to 3,000,000 shares of Premier Power common stock based upon the Company’s sales
and gross margin levels through 2011. In conjunction with the
acquisition, the Company’s supply agreements were amended without penalty to
eliminate any minimum purchase penalty provisions.
5.
|
INCOME
TAXES
|
The
provision for income taxes for the year ended December 31, 2008, and six months
ended June 30, 2009 and 2008 consists of the following:
December
31,
2008
|
June
30,
2009
|
June
30,
2008
|
||||||||
Current
|
||||||||||
Regional
|
$ | 19,861 | — | $ |
—
|
|||||
National
|
109,865 | 49 |
—
|
|||||||
|
||||||||||
Total provision
for income taxes
|
$ | 129,726 | $ | 49 | $ |
—
|
As of
December 31, 2008, June 30, 2009 and 2008, the Company had a tax liability of
$129,726, $129,726, and $0, respectively. As of December 31, 2008 and June 30,
2009 and 2008, the company had no material deferred taxes to
report.
6.
|
COMMITMENTS
AND CONINGENCIES
|
Premier
Power Italy is party to a non-cancelable renewable lease for operating
facilities in Ripalimosani, Italy, which expires in 2015. The lease requires the
following payments as of June 30, 2009, subject to annual adjustment, if
any:
2009
|
$
|
12,292
|
||
2010
|
29,502
|
|||
2011
|
29,502
|
|||
2012
|
29,502
|
|||
2013
and beyond
|
76,212
|
|||
Total
|
$
|
177,010
|
7.
|
SUBSEQUENT
EVENTS
|
On May
15, 2009, the members of the Company reorganized their ownership interests in
the Company and Rupinvest Sarl (Rupinvest), a company controlled by the members
of the Company, such that the Company became a subsidiary of Rupinvest. As the
Company and Rupinvest were under common control, the transaction has been
treated as a reorganization with the assets and liabilities of the Company and
Rupinvest continuing to be recorded at their historical
costs.