SOLAR ACQUISITION CORP. - FORM 10-Q

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EX-32.1 - CERTIFICATION - SOLAR ACQUISITION CORP.	ex32_1.htm
EX-31.1 - CERTIFICATION - SOLAR ACQUISITION CORP.	ex31_1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10Q

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ________________ to _______________

000-52225

(Commission file number)

SOLAR ACQUISITION CORP.

(Exact name of small business issuer as specified in its charter)

	Florida		20-5080271
	(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

215 Dino Drive, Ann Arbor, MI 48103

(Address of principal executive offices)

734-320-7628

(Issuer's telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of November 3, 2009 11,500,000–shares of common stock

Transitional Small Business Disclosure Format (check one): Yes o No x

Solar Acquisition Corp.

Index

		Page Number

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Balance Sheet as of September 30, 2009 (unaudited)	1

	Statement of Operations for the Nine months ended September 30, 2009 and 2008 and from inception (June3, 2006) to September 31, 2009(unaudited)	2

	Statements of Cash Flows for the Nine months ended September 30, 2009 and 2008 andfrom Inception(June 3, 2006) to September 30, 2009(unaudited)	3

	Notes to Interim Financial Statements (unaudited)	4

Item 2.	Management's Discussion and Analysis or Plan of Operation

Item 3.	Controls and Procedures	9

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	10

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10

Item 3.	Defaults Upon Senior Securities	10

Item 4.	Submission of Matters to a Vote of Security Holders	10

Item 5.	Other Information	10

Item 6.	Exhibits	10

SIGNATURES		11

SOLAR ACQUISITION CORP.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	September 30,			December 31,
	2009			2008
	(Unaudited)			(Audited)
ASSETS

CURRENT
Cash	$	229,005		$	26
Due from related parties		1,110			-

TOTAL ASSETS	$	230,115		$	26

LIABILITIES AND SHAREHOLDER EQUITY

CURRENT
Accounts payable	$	-		$	6,000
Note payable		7,850			5,850

TOTAL LIABILITIES		7,850			11,850

STOCKHOLDER EQUITY

Common stock, authorized, 100,000,000 shares, par value $.001
- issued and outstanding, 11,533,333(December 31, 2008 - 10,000,000)		11,533			10,000

Preference shares, authorized, 1,000,0000
- issued and outstanding - nil (December 31, 2008 - nil)		-			-

Additional paid in capital		1,431,067			980,100

Deficit accumulated during development stage		(1,220,335	)		(1,001,924	)

Total Stockholder Equity(Deficit)		222,265			(11,824	)

TOTAL LIABILITIES AND STOCKHOLDER EQUITY	$	230,115		$	26

The accompanying notes are an integral part of these financial statements.

SOLAR ACQUISITION CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF OPERATIONS(Unaudited)

													June 3, 2006
	THREE MONTHS ENDED						NINE MONTHS ENDED						(Inception)
	SEPTEMBER 30,						SEPTEMBER 30,						To Sept 30,
	2009			2008			2009			2008			2009
REVENUE	$	-		$	-		$	-		$	-		$	-

OPERATING EXPENSES

Professional fees		500			2,500			2,000			2,500			13,500
Consulting fees		154,000			-			154,000			990,000			1,144,000
General and administrative		60,348			74			62,411			74			62,835

Total Operating Expenses		214,848			2,574			218,411			992,574			1,220,335

NET INCOME(LOSS)	$	(214,848	)	$	(2,574	)	$	(218,411	)	$	(992,574	)	$	(1,220,335	)

WEIGHTED AVERAGE NUMBER OF SHARES		10,441,777			10,000,000			10,441,777			10,000,000

BASIC AND DILUTED LOSS PER SHARE	$	(0.02	)	$	(0.00	)	$	(0.02	)	$	(0.10	)

The accompanying notes are an integral part of these financial statements.

SOLAR ACQUISITION CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS(Unaudited)

							June 3, 2006
	NINE MONTHS ENDED						(Inception)
	SEPTEMBER 30,						To Sept 30,
	2009			2008			2009

CASH FLOWS FROM OPERATING ACTIVITIES
Net income(loss)	$	(218,411	)	$	(992,574	)	$	(1,220,335	)
Changes in assets and liabilities
Stock issued for services		-			990,000			990,000
Increase(decrease) in accounts payable		(6,000	)		(500	)		-

Cash Used In Operating Activities		(224,411	)		(3,074	)		(230,335	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock		452,500			-			452,600
Advances to related party		(1,110	)		-			(1,110	)
Increase in note payable		2,000			3,000			7,850

Cash Provided By Financing Activities		453,390			3,000			459,340

NET CHANGE IN CASH		228,979			(74	)		229,005

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		26			100			-

CASH AND CASH EQUIVALENTS - END OF PERIOD	$	229,005		$	26		$	229,005

SUPPLEMENTARY INFORMATION
Interest paid	$	108		$	-		$	108
Income taxes paid	$	-		$	-		$	-

The accompanying notes are an integral part of these financial statements.

SOLAR ACQUISITION CORP.

A Development Stage Company

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a)	Organization and Business:

SOLAR ACQUISITION CORP. (the “Company”) was incorporated in the State of Florida on June 3, 2006 for the purpose of raising capital that is intended to be used in connection with its business plans which may include a possible merger, acquisition or other business combination with an operating business.

The Company is currently in the development stage. All activities of the Company to date relate to its organization, initial funding and share issuances.

(b)	Basis of Presentation

The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has adopted a year end of December 31.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

The Company has had no significant operations, assets or liabilities since inception and, accordingly, is fully dependent either future sales of securities or upon its current management and/or advances or loans from significant stockholders or corporate officers to provide sufficient working capital to preserve the integrity of the corporate entity. Because of these factors, our auditors have issued an audit opinion for the Company which includes a statement describing our going concern status. This means, in our auditor’s opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion.

The Company’s continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.

The Company anticipates offering future sales of equity securities. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.

(c)	Use of Estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(d)	Cash and Cash Equivalents:

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

(e)	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 the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.

Any deferred tax asset is considered immaterial and has been fully offset by a valuation allowance because at this time the Company believes that it is more likely than not that the future tax benefit will not be realized as the Company has no current operations.

(f)	Loss per Common Share:

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive 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 reporting period. The Company does not have any potentially dilutive instruments.

(g)	Fair Value of Financial Instruments:

The carrying value of cash and cash equivalents, advances to a related party and accrued expenses approximates fair value due to the short period of time to maturity. The note payable approximates fair value based on market rates available to the Company for financing with similar terms.

NOTE 2 - ADVANCES TO A RELATED PARTY

Advances to a related party are unsecured, non-interest bearing and have no fixed terms of repayment.

NOTE 3 - NOTE PAYABLE:

Notes payable from a related party is unsecured, non-interest bearing and has no fixed terms of repayment.

NOTE 4 - CAPITAL STOCK:

The total number of shares of capital stock which the Company shall have authority to issue is seventy-five million (50,000,000) common shares with a par value of $.001. On June 9, 2006, the company issued 100,000 shares at par value of $.001 for $100.

Holders of shares of Common stock shall be entitled to cast one vote for each share held at all stockholders' meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights.

No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.

On May 15, 2008, the Company increased its authorized share capital to 100,000,000 shares of common stock and 1,000,000 shares of preferred stock having voting rights of 100 shares of common stock for each share of preferred stock.

On June 1, 2008, the Company issued an additional 9,900,000 shares of common stock for consulting services rendered having a value of $990,000.

During the quarter ended June 30, 2009, the Company raised a total of $335,200 through the sale of 1,117,333 of common shares at a price of $0.30 per share.

During the quarter ended September 30, 2009. the Company raised a total $117,300 through the sale of 416,000 common shares at a price of $0.30 per share.

NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS:

In April 2009, the Financial Accounting Standards Board (FASB) issued guidance for accounting for assets acquired and liabilities assumed in a business combination that arise from contingencies. This guidance modified earlier guidance to provide that contingent assets acquired or liabilities assumed in a business combination be recorded at fair value if the acquisition-date fair value can be determined during the measurement period. If not, such items would be recognized at the acquisition date if they meet the recognition requirements under GAAP for accounting for contingencies. In periods after the acquisition date, an acquirer shall account for contingent assets and liabilities that were not recognized at the acquisition date in accordance with other applicable GAAP, as appropriate. Items not recognized as part of the acquisition but recognized subsequently would be reflected in that subsequent period’s income. This guidance, which was effective for the Company when issued, has no impact on the Company’s current financial statements, but will apply to any future acquisitions.

In April 2009, the FASB issued guidance concerning interim disclosures about fair value of financial instruments requiring publicly traded companies to provide disclosure about the fair value of financial instruments whenever interim summarized financial information is reported. Previously, disclosures about the fair value of financial instruments were only required on an annual basis. Disclosure shall include the method(s) and significant assumptions used to estimate the fair value of financial instruments and shall describe changes in method(s) and significant assumptions, if any, during the period. This guidance was effective for interim and annual periods ending after June 15, 2009, and, as such, the Company began including this disclosure with its second quarter 2009 financial statements.

In May 2009, the FASB issued guidance regarding the disclosure of subsequent events. This guidance made no changes to current accounting but added required disclosures regarding the date through which the Company has

evaluated subsequent events and whether that evaluation date is the date of financial statement issuance or the date the financial statements were available to be issued. This guidance was effective for interim and annual periods ending after June 15, 2009.

In June 2009, the FASB issued guidance changing the approach used to determine the primary beneficiary of a variable interest entity. The guidance requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity, amends previous guidance for determining whether an entity is a variable interest entity, and adds as a reconsideration event any change in facts and circumstances where the holders of the equity investment at risk, as a group, lose the power to direct the activities of the entity that most significantly impact the entity’s economic performance. In addition, the revised guidance requires enhanced disclosures regarding an enterprise’s involvement in a variable interest entity. The new guidance is effective for the Company beginning January 1, 2010 and is not expected to have a material impact on the Company’s financial statements.

NOTE 5 – INCOME TAXES

The components of income tax (benefit) expense for the nine months ended September 30, 2009 and September 30, 2008 respectively, are as follows:

	2009		2008
Federal:
Current	$	--	$	--
Deferred		--		--
		--		--

State:
Current		--		--
Deferred		--		--
		--		--

	$	--	$	--

The Company has a net operating loss carryforward to offset future taxable income of $1,220,335. Subject to current regulations, this carryforward will begin to expire in 2022. The amount and availability of the net operating loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carryforwards.

The Company’s income tax expense (benefit) for the nine months ended September 30, 2009 and 2008 respectively, differed from the statutory federal rate of 34 percent as follows:

	2009			2008

Statutory rate applied to loss before income taxes	$	(414,914	)	$	(340,654	)

Increase(decrease) in income taxes resulting from:

State, income taxes		--			--
Other, including reserve for deferred tax asset		414,914			340,654

Income Tax Expense	$	--		$	--

Temporary differences due to statutory requirements in the recognition of assets and liabilities for tax and financial reporting purposes, generally including such items as organizational costs, accumulated depreciation and amortization, allowance for doubtful accounts, organizational and start-up costs and vacation accruals. These differences give rise to the financial statement carrying amounts and tax bases of assets and liabilities causing either deferred tax assets or liabilities, as necessary, as of September 30, 2009 and 2008, respectively:

	September 30,
	2009			2008
Deferred tax assets
Net operating loss carryforwards	$	1,220,335		$	1,001,924
Less: valuation allowances		(1,220,335	)		(1,001,924	)

Net Deferred Tax Asset	$	--		$	--

During the nine months ended September 30, 2009 and 2008, respectively, the reserve for the deferred current tax asset increased by approximately $74,260 and $337,475, respectively.

Significant Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the Company's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experiences and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of the Company's financial statements relate to the allowance for doubtful accounts. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the financial statements included in this on Form l0 for the.

THE FOLLOWING DISCUSSION OF THE RESULTS OF OUR OPERATIONS AND FINANCIAL CONDITION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT. EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE DISCUSSION CONTAINED IN THIS REPORT CONTAINS "FORWARD-LOOKING STATEMENTS" THAT INVOLVE RISK AND UNCERTAINTIES. THESE STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVES," "EXPECTS," "MAY," "WILL," "SHOULD" OR "ANTICIPATES" OR THE NEGATIVE THEREOF OR SIMILAR EXPRESSIONS OR BY DISCUSSIONS OF STRATEGY. THE CAUTIONARY STATEMENTS MADE IN THIS REPORT SHOULD BE READ AS BEING APPLICABLE TO ALL RELATED FORWARD-LOOKING STATEMENTS WHEREVER THEY APPEAR IN THIS REPORT. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THIS REPORT.

Results of Operations

Nine months ended September 30, 2009 vs. September 30, 2008

There was no revenue for the Three months ended September 30, 2009 and no revenue for the Nine months ended September 30, 2008 and no revenue since inception June 3, 2006.

Selling, general and administrative expenses for the Nine months ended September 30, 2009 were $218,411. As compared to $990,000 for the same period in 2008. Of the total Selling, general and administrative expenses $990,000 represents consulting fees paid through the issuance of 9,900,000 shares of restricted common shares at a value of $0.10 per share.

There has been no interest expense or financing costs for the Nine months ended September 30, 2009 and the Nine months ended September 30, 2008 and no costs since inception June 3, 2006.

Liquidity and Capital Resources

The Company has no cash. The investigation of prospective financing candidates involves the expenditure of capital. The Company will likely have to look to Mr. Klamka or to third parties for additional capital. There can be no assurance that the Company will be able to secure additional financing or that the amount of any additional financing will be sufficient to conclude its business objectives or to pay ongoing operating expenses.

Off-balance sheet arrangements

There are no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 3. Controls and Procedures

As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based on this evaluation, these officers have concluded

that the design and operation of our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities & Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On June 1, 2008, the Company issued 9,900,000 shares of common stock that have not been registered to date.

As of September 30, 2009 we had issued 1,150,000 Shares under our S-1 offering

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

Effective September 10, 2009, Solar Acquisition Corp., a Florida, Corporation, (the "Company") changed its principal business address to 215 Dino Dr., Ann Arbor, MI. 48103 The Company's new telephone number is (734)-320-7628

On May 15, 2008 the Company amended its articles of incorporation to increase its authorized share capital to 100,000,000 common shares and to add 1,000,000 preference shares with voting rights equal to 100 common shares per 1 share of preferred stock.

Item 6. Exhibits

31.1	Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SOLAR ACQUISITION CORP.

November 3, 2009	By:	/s/Peter Klamka
		Peter Klamka,
		Chief Executive and
		Principal Accounting Officer

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