3Power Energy Group Inc. - FORM 10-Q/A

Attached files

file	filename
EX-32.1 - 3Power Energy Group Inc.	v180322_ex32-1.htm
EX-31.1 - 3Power Energy Group Inc.	v180322_ex31-1.htm
EX-10.19 - 3Power Energy Group Inc.	v180322_ex10-19.htm
EX-10.16 - 3Power Energy Group Inc.	v180322_ex10-16.htm
EX-10.17 - 3Power Energy Group Inc.	v180322_ex10-17.htm
EX-10.18 - 3Power Energy Group Inc.	v180322_ex10-18.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

Amendment No. 1

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

¨ 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.)

100 Wall Street, 21st Floor

New York, NY 10005

(Address of principal executive offices)

(866) 523-5551

(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 ¨ No x

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 (Sec.323.405 of this chapter) during the preceding 12 months (or shorter period that the registrant was required to submit and post such files). 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	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 May 19, 2009, the Issuer had 40,114,900 shares of its Common Stock outstanding.

Explanatory Note: This Amendment Number 1 to the Quarterly Report on Form 10-Q for the period ended March 31, 2009 (this “Amendment”) for Prime Sun Power Inc. (the “Company”) has been filed in response to comments received by the Company from the U.S. Securities and Exchange Commission. All disclosures herein refer to the fiscal period ended March 31, 2009 except as otherwise indicated.

TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION

Item 1: Financial Statements		5
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operation		14
Item 3: Quantitative and Qualitative Disclosures about Market Risk		17
Item 4T: Controls and Procedures		17

PART II: OTHER INFORMATION
Item 1: Legal Proceedings		18
Item 1A: Risk Factors		18
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds		18
Item 3: Defaults Upon Senior Securities		18
Item 4: Submission of Matters to a Vote of Security Holders		18
Item 5: Other Information		18
Item 6: Exhibits		19

SIGNATURES		20

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The following cautionary statements identify important factors that could cause our actual results to differ materially from those projected in forward-looking statements made in this Quarterly Report on Form 10-Q (this “Report”) and in other reports and documents published by us from time to time. Any statements about our beliefs, plans, objectives, expectations, assumptions, future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “believes,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intend,” “plan,” “projection,” “outlook” 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 we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are 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 our 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 to carefully read all “Risk Factors” set forth under Item 1A and not to place undue reliance on any forward-looking statements. We disclaim 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. New factors emerge from time to time, and it is not possible for us to predict which will arise or to assess with any precision the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Unless otherwise provided in this Report, references to the “Company,” the “Registrant,” the “Issuer,” “we,” “us,” and “our” refer to Prime Sun Power Inc. (formerly known as ATM Financial Corp.).

PART I

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Prime Sun Power Inc.

(A development stage company)

Balance Sheets

	March 31,			December 31,
	2009			2008
	(Unaudited)
ASSETS

Current Assets
Cash	$	225		$	6,629

Total Current Assets and Total Assets	$	225		$	6,629

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities
Accounts payable and accrued liabilities	$	665,637		$	319,078
Accrued Management Services - related party		104,167
Accrued Interest – related party		16,739			11,222
Loan from shareholder		298,333			298,333

Total Current Liabilities and Total Liabilities		1,084,876			628,633

Stockholders' Equity (Deficiency):
Common Stock, par value $.0001 per share 100,000,000 shares authorized, 40,114,900 shares issues and outstanding at March 31, 2009 and December 31, 2008		4,011			4,011

Additional paid in capital		273,000			222,418
Deficit accumulated during development stage		(1,361,662	)		(848,433	)

Total Stockholders' Deficiency		(1,084,651	)		(622,004	)

Total Liabilities and Stockholders' Deficiency	$	225		$	6,629

See Notes to Financial Statements

Prime Sun Power Inc.

(A development stage company)

(Unaudited) Statement of Operations

							Accumulated from
	For the Three Months Ended						December 18, 2002
	March 31,						(Date of Inception)
	2009			2008			to March 31, 2009

Revenue		-			-			-

EXPENSES (INCOME)

Consulting & Director Fees		18,000						151,490
Professional fees		191,268			60,724			522,710
Management Services - related party		104,167						104,167
Personnel Costs		123,476			12,997			320,348
General & Administrative		20,219			2,584			142,667
Interest expense - related party		5,517			-			16,739
Non-cash compensation		50,582			-			103,541

Total Expenses (Income)		513,229			76,305			1,361,662

Net Loss		(513,229	)		(76,305	)		(1,361,662	)

Basic and Diluted Loss Per Share		0.0128			0.0019

Weighted Average Shares Outstanding		40,114,900			40,114,900

Share data has been adjusted to reflect the stock dividend effective February 4, 2008

See Notes to Financial Statements

Prime Sun Power Inc.
(A development stage company)
(Unaudited) Statement of Stockholders' Equity
For the Period from December 18, 2002 (Date of Inception) to March 31, 2009								Deficit
								Accumulated
								During the
	Common Stock				Additional			Development
Balance - December 18, 2002	Shares		Par		Paid-in Capital			Stage			Total
(Date of Inception)	#		Value ($)		($)			($)			($)
Common stock issued for cash at
$0.0001 per share		28,000,000		2,800		(2,400	)					400
Net loss for the period									(21,990	)		(21,990	)
Balance - December 31, 2002		28,000,000		2,800		(2,400	)		(21,990	)		(21,590	)
Net loss for the Year									(24,216	)		(24,216	)
Balance - December 31, 2003		28,000,000		2,800		(2,400	)		(46,206	)		(45,806	)
Net loss for the Year									(13,398	)		(13,398	)
Balance - December 31, 2004		28,000,000		2,800		(2,400	)		(59,604	)		(59,204	)
February 14, 2005 - shares
issued for cash at $0.10 per share		12,114,900		1,211		171,859						173,070
Net loss for the Year									(18,609	)		(18,609	)
Balance - December 31, 2005		40,114,900		4,011		169,459			(78,213	)		95,257
Net loss for the Year									(16,167	)		(16,167	)
Balance - December 31, 2006		40,114,900		4,011		169,459			(94,380	)		79,090
Net loss for the Year									(56,129	)		(56,129	)
Balance - December 31, 2007		40,114,900		4,011		169,459			(150,509	)		22,961
Non-cash compensation						52,959						52,959
Net loss for the Year									(697,924	)		(697,924	)
Balance - December 31, 2008		40,114,900		4,011		222,418			(848,433	)		(622,004	)
Non-cash compensation						50,582						50,582
Net loss for the period									(513,229	)		(513,229	)
Balance - March 31, 2009		40,114,900		4,011		273,000			(1,361,662	)		(1,084,651	)

See Notes to Financial Statements

Prime Sun Power Inc.

(A development stage company)

(Unaudited) Statement of Cash Flow

							Accumulated from
	For the Three Months ended						December 18, 2002
	March 31,						(Date of Inception)
	2009			2008			to March, 31 2009

Operating Activites
Net loss	$	(513,229	)	$	(76,305	)	$	(1,361,662	)
Adjustments to reconcile net loss to net cash used in operations:
Non-cash compensation		50,582			-			103,541
Interest accrued to related party		5,517			-			16,739
Gain in debt settlement		-			-			14,176
Loss on sale of equipment		-			-			909
Change in operating assests and liabilities
Accounts payable and accrued liabilities		346,559			34,202			665,637
Accrued Management Services - related party		104,167						104,167
Net Cash Used in Operating Activities		(6,404	)		(42,103	)		(456,493	)

Investing Activities
Purchase of equipment		-			-			(3,416	)
Proceeds from sale of equipment		-			-			2,507

Net Cash Used in Investing Activities		-			-			(909	)

Financing Activities
Proceeds of Loans from Shareholder		-			(29,138	)		298,333
Gain in debt settlement		-			-			(14,176	)
Common stock issued		-			-			173,470

Net Cash Provided by (Used in) Financing Activities		-			(29,138	)		457,627

Increase (Decrease) in Cash		(6,404	)		(71,241	)		225
Cash - Beginning of Period		6,629			71,241			-

Cash - End of Period	$	225		$	0		$	225

See Notes to Financial Statements

PRIME SUN POWER INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2009

1.	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 month period ended March 31, 2009 are not necessarily indicative of the results that may be expected for the year ended December 31, 2009.

The balance sheet at December 31, 2008 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, 2008.

2.	BUSINESS DESCRIPTION

Organization and Business Description

Prime Sun Power Inc. (the “Company”) was incorporated in the State of Nevada on December 18, 2002 and is a development stage company as defined by Statement of Financial Accounting Standards No. 7, “Development Stage Companies”. On January 10, 2008, a change of control of the Company occurred and Rudana Investment Group AG, (“Rudana”) a corporation formed under the laws of Switzerland, became the new majority shareholder of the Company (“Rudana”), controlling approximately 70% of the issued and outstanding shares of the Company’s common stock. On April 1, 2008, we changed our name from ATM Financial Corp. to Prime Sun Power Inc. The Company plans to pursue a business model producing solar generated electrical power and other alternative renewable energies.

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 shown in the accompanying financial statements, the Company has incurred a net loss of $1,361,662 for the period from inception (December 18, 2002) to March 31, 2009, and has not generated any revenue. These factors, among others, raise substantial doubt as to the Company’s ability to continue as a going concern and to emerge from the development stage is dependent upon, among other things, its successful execution of its plan of operations and ability to raise additional financing or capital. There is no guarantee that the Company will be able to raise additional financing capital or sell any of services or products 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.

3.	SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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. The actual results experienced by the Company may differ materially from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected and the effect could be material.

Financial instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued liabilities.

The fair value of these financial instruments approximates their carrying values.

Cash and Cash equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s accounts at these institutions may, at times, exceed the Federally insured limits. The Company has not experienced any losses in such accounts.

Comprehensive loss

The Company has adopted Statement of Financial Accounting Standards No. 130 (SFAS 130) “ Reporting Comprehensive Income/(Loss ),” which establishes standards for the reporting and display of comprehensive income or loss and its components and accumulated balances. Comprehensive loss comprises equity, except those resulting from investments by owners and distributions to owners.

Income taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109) which requires that deferred tax assets and liabilities be recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, SFAS 109 requires recognition of future tax benefits, such as carry forwards, to the extent that realization of such benefits is more likely than not and that a valuation allowance be provided when it is more likely than not that some portion of the deferred tax asset will not be realized.

Impairment of long-lived assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine if impairment exists, the Company compares the estimated future undiscounted cash flows from the related long-lived assets to the net carrying amount of such assets. Once it has been determined that impairment exists, the carrying value of the asset is adjusted to the fair value. Factors considered in the determination of the fair value include current operating results, trends and the present value of estimated expected future cash flows.

Stock based compensation

The Company has adopted Statement of Financial Accounting Standards No. 123R, which requires the Company to expense stock options based on grant date fair value in its financial statements. Further, the adoption of SFAS 123R requires additional accounting relating to the income tax effects and additional disclosures regarding the cash flow effects resulting from share-based payment arrangements. The adoption of SFAS 123R has no effect on the Company’s cash flows, but is expected to have a material impact on its results of operations.

Loss per share

Loss per share is computed using the weighted average number of shares outstanding during the period. The Company has adopted SFAS No. 128 “Earnings Per Share”. Diluted loss per share is equivalent to basic loss per share.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations, a replacement of FASB Statement No. 141 (SFAS No. 141(R)), which significantly changes the principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement is effective prospectively, except for certain retrospective adjustments to deferred tax balances, on January 1, 2009. The Company will assess the impact of this statement upon any future business combinations.

In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (SFAS No. 160). This statement established accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The accounting and reporting for minority interests will be re-characterized as non-controlling interests and classified as a component of equity separate from the parent’s equity. In addition, SFAS No. 160 establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. This statement is effective prospectively, except for certain retrospective disclosure requirements, on January 1, 2009. The adopted SFAS No. 160 did not have a material impact on the Company’s financial statement.

In March 2008 the FASB issued FAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133”. FAS No. 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide disclosures about (a) how and why derivative instruments are used, (b) how derivative instruments and related hedged items are accounted for under FSS No. 133, “ Accounting for Derivative Instruments and Hedging Activities , and its related interpretations, and (c) how derivative instruments and related hedged items affect the entity’s financial position, financial performance and cash flows. FAS No. 161 is effective January 1, 2009. The Company is currently evaluating the impact of adopting this statement.

4.	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. The statement of Stockholders’ Equity and per share amounts have been retroactively adjusted to reflect the historical impact of the stock dividend.

On January 7, 2009 the company granted an option to purchase fifty thousand (50,000) shares of the Company’s common stock to the Chief Operating Officer, Mr. Frank Juergens. These options were granted at an exercise price of $0.40 per share which was equal to the closing price of the Company’s common stock as quoted on the Nasdaq Over-the-Counter Bulletin Board on the day immediately preceding the date of grant.

The Company accounted for this grant under the fair value method of accounting using a Black Scholes valuation model to measure stock option expense at the date of grant. The fair value of the stock option is amortized to expense over the vesting period of one year. Using the Black Scholes options pricing model, the options were valued at $0.28 per share for a total of $14,398, of which $2,919 was expensed as of March 31, 2009.

The fair value was estimated based on the following assumptions:

Risk-free rate		1.875	%
Expected volatility		75	%
Expected life	5 Year
Dividend yield		-

5.	RELATED PARTY TRANSACTIONS

At March 31, 2009, Rudana, the Company’s majority shareholder, had loaned the Company a total of $298,333. The funds were used by the company for general corporate use. These loans bear interest at 7.5% per annum and are due thirty (30) days after demand.

The Company accrued interest of $16,739 as of March 31, 2009 which is included in accounts payable and accrued liabilities on the accompanying balance sheet. Interest expense to Rudana was $5517 for the three months ended March 31, 2009.

6.	EMPLOYMENT AGREEMENT

Effective as of January 7, 2009, the Company entered into an Employment Agreement with Frank Juergens regarding his service as Chief Operating Office of the Company.

Under the Employment Agreement, Mr. Juergens has agreed to serve as Chief Operating Officer for a two year period. In consideration for services rendered to the Company, Mr. Juergens shall be paid a base salary of 130,000 Swiss Francs per year. In addition, Mr. Juergens was granted options to purchase 50,000 shares of common stock of the Company. The Employment Agreement contains provisions regarding protection of Company trade secrets, non-solicitation of Company employees or customers and non-competition with the Company during the term of the Agreement.

7.	SUBSEQUENT EVENT

Transfer Agreements

On April 15, 2009, Prime Sun Power Inc. (the “Company”) entered into four agreements to obtain licenses and land lease call option rights for the development of certain photovoltaic power plant projects in Italy. These agreements included two Transfer Agreements: one for a project located in San Paolo, Italy (referred to herein as “Project San Paolo”) and one for a project located in Foggia/Apricena, Italy (referred to herein as “Project Puglia” and together with Project San Paolo, the “Projects”). Both of the Projects will be located in the Puglia region of Italy.

Pursuant to the Transfer Agreements for the Projects, the Company will acquire option contracts from another party (referred to herein as the “Transferor”), as acquired from various landlords, and which, subject to the receipt of the necessary government permits, will allow the Company to acquire or lease certain land at specified prices for the purpose of constructing and installing photovoltaic plants. The Transferor will assist the Company in obtaining certain key licenses. The Company will pay the Transferor certain transaction fees upon the performance of certain conditions by the Transferor.

The Projects may collectively cover a total installed capacity of up to 83 MW (megawatts). The acquisition of the licenses and the land lease call option rights are an important step for the Company in its goals to develop and manage photovoltaic plant projects in Italy. The Company is in discussion with the municipality of San Paolo for the development of further photovoltaic plants.

Advisory Agreements

In addition, the Company has entered into two Advisory Agreements, one for each of Project San Paolo and Project Puglia. Pursuant to these agreements, a local advisor will assist the Company in the development of each of the Projects. The Company will pay the advisor certain success fees related to the aggregate building and installing costs of the PV Plants upon the achievement of certain milestones.

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. On April 1, 2008, we changed our name from “ATM Financial Corp.” to “Prime Sun Power Inc.” 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.

The Company address is 100 Wall Street, 21 st Floor, New York, NY 10005. The Company’s telephone number is 866-523-5551.

Plan of Operation

As of the date hereof, the Company has not yet commenced its operations. The Company is in the advanced stage of business development. We have formulated our general business plan of operating as a utility producing electrical power by means of renewable and clean energy sources, such as wind, Photovoltaic (PV) Solar and nuclear power plants. We intend to develop, install and operate power plants. We anticipate starting our first operational activity in Italy by end of 2009.

Subsequent to the period covered by this Report, the Company obtained substantial elements of the necessary governmental authorizations for the installation of PV Solar power plants in the regions of San Paolo and Foggia, in the province Puglia, Italy. In addition, the Company has, subsequent to the period covered by this Report, entered into agreements pursuant to which land lease call option rights will be transferred to the Company. The Company will endeavor to secure the remaining governmental authorizations for these projects in the third quarter of 2009. We are currently in discussions regarding the financing of these projects, the assignment of an Engineering, Procurement and Construction (EPC) contractor, and the sourcing of solar modules. In addition, we are presently engaged in discussions with the appropriate government officials in Italy for the necessary authorizations for a further 400 MWp of electrical production capacity.

For our Italian operational activities we intend to establish an Italian subsidiary. We may allocate some portion of the capital of this subsidiary to strategic investors to assist the Company’s growth and development.

Revenues

During the quarter ended March 31, 2009, the Company had no revenues from operations.

Results of Operations

We have not yet commenced operations. As of March 31, 2009, our Company had no operations, no revenues and substantially no assets. The Company has incurred a significant increase in expenses during this reporting period from the last comparative period. The Company’s total expenses were $513,229 for the three months ended March 31, 2009, as opposed to $76,305 for the three months ended March 31, 2008. The increased expenses are related to the legal and due diligence fees regarding the four agreements to obtain licenses and land lease call option rights for the development of certain photovoltaic power plant projects in Italy. During the last comparative period the Company had minimal personnel requirements which have since been expanded to include a Chief Technology Officer and a Chief Operating Officer.

The Company’s professional fees for the three month period ended March 31, 2009 were $295,435, as opposed to $60,724 for the three month period ended March 31, 2008. Personnel costs were $123,476 for the period ended March 31, 2009, as opposed to $12,997 for the three month period ended March 31, 2008. General and administrative expenses increased from $2,584 for the three month period ended March 31, 2008 to $20,219 for the three month period ended March 31, 2009.

Liquidity and capital resources

As of the date of this Report, we have not yet generated any revenues from our business operations. Since inception, the Company has incurred total expenses of $1,361,662, including total expenses of $513,229 during the three months ended March 31, 2009.

Our consolidated cash balance at March 31, 2009 was $225. As of March 31, 2009, our total current assets were $225 and our total liabilities were $1,084,876.

During the three months ended March 31, 2009 and through the date of this Report, our primary source of capital has been loans from Rudana Investment Group AG, the majority shareholder of our Company. Our pre-operational activities 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 to commence operations.

To date, the Company has received loans in aggregate of $298,333 from Rudana (the “Shareholder Loans”). The Company has used the proceeds from the Shareholder Loans 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 Loans, the Company executed notes setting forth the terms thereof.

On May 10, 2008, we entered into an agreement with Synergy Investments & Finance Holding Limited (“Synergy”) formerly known as Arimathea Limited, to assist us to raise capital. In consideration for assisting us in the raising of equity and debt capital, we have entered into a warrant agreement with Synergy which, as amended, will have an exercise term of three years and will become exercisable for the purchase of a number of our shares of common stock equal to (i) 5% of the amount of capital raised by the Company made by Synergy, 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. The Synergy Warrant does not contain any call provisions and there is no obligation on the part of Synergy to exercise its warrant at any time. As a result of the contingent nature of the vesting of the Synergy Warrant, no expense has been recognized. We cannot guarantee that Synergy will be successful in assisting us to raise capital for our operations. As of the date of this Report, no financing warrants under the Amended Warrant have been issued to Synergy and no firm commitments have been made by Synergy with respect to financing.

We will need to raise additional capital to implement our new business plan and continue operations for any length of time. 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. Rudana Investment Group AG, the majority shareholder of our Company, has loaned the Company funds for operations in the past, and has indicated that it will continue to loan funds as their financial circumstances may permit. Rudana, however, is under no obligation to make additional loans in the future.

The Company will require no less than $2,000,000 in additional funding in order to conduct proposed operations for the next year. As of the end of the period covered by this Report, the Company lacked funds to commence or continue operations for any length of time.

Plant and Equipment

We expect to start investing in the installation of solar parks in Italy at the end of 2009. There will be significant investments required to start these development projects in Italy. These investments will be financed through additional capital as well as financing loans.

Employees

Effective as of January 7, 2009, Frank Juergens was appointed as the Company’s Chief Operating Officer and Interim Chief Executive Officer. On the same date, Mathias Kaiser was appointed as the Company’s Chief Financial Officer. Gerald Sullivan resigned as the Company’s Chief Financial Officer and Interim Chief Executive Officer effective as of January 7, 2009.

As of the end of the period covered by this Report, the Company had five employees: Frank Juergens, our Chief Operating Officer and Interim Chief Executive Officer, Mathias Kaiser, our Chief Financial Officer, Barbara Salz, our Corporate Secretary, Cesare Boffa, our Chief Technology Officer and Liz Thurrott, our Administrator. We expect to hire a core project management team of three to four experienced professionals who will supervise the photovoltaic park installation and development towards the end of the year. Mr. Juergens and Mr. Kaiser each resigned as an officer of the Company as of June 19, 2009.

Research and Development

We have not yet determined our anticipated spending on research and development activities for the year ending December 31, 2009. Research and development efforts are expected to be overseen by our Chief Technology Officer, Cesare Boffa.

Subsequent Events

Termination of Project San Paolo and Project Puglia

Subsequent to the period covered by this Report, Project San Paolo and Project Puglia have been terminated, as the Company was unable to obtain the necessary licenses to proceed with the Projects. All of the applicable agreements have terminated in accordance with their terms.

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.

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 March 31, 2009, 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 March 31, 2009 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 1A.

RISK FACTORS

N/A

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

Exhibit 10.8

Employment Agreement, by and between the Company and Frank Juergens, dated as of January 13, 2009, incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 20, 2009.

Exhibit 10.9

Director’s Agreement, by and between the Company and Olivier de Vergnies, dated as of January 16, 2009, incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 20, 2009.

Exhibit 10.10

Director’s Agreement, by and between the Company and Bruno Colle, dated as of March 18, 2009, incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 20, 2009.

Exhibit 10.11

Director’s Agreement, by and between the Company and Roberto Gerbo, dated as of March 24, 2009, incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 20, 2009.

Exhibit 10.16

Project San Paolo Transfer Agreement, by and between the Company and Alternative Solutions World S.r.l, dated as of April 7, 2009.*

Exhibit 10.17

Project San Paolo Advisory Agreement, by and between the Company and Marcus Hewland LLC, dated as of April 7, 2009.*

Exhibit 10.18

Project Puglia Transfer Agreement, by and between the Company and Alternative Solutions World S.r.l, dated as of April 7, 2009.*

Exhibit 10.19

Project Puglia Advisory Agreement, by and between the Company and Marcus Hewland LLC, dated as of April 7, 2009.*

Exhibit 31.1

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 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.

* Portions of those exhibits marked with an asterisk have been omitted and filed separately with the Commission pursuant to a request for confidential treatment.

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/ Olivier de Vergnies
	Name:	Olivier de Vergnies
	Title:	Acting Chief Executive Officer Acting Principal Financial Officer and Acting Principal Accounting Officer

Dated: April 8, 2010

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