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 o 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 o   No o

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 November 19, 2010, the Issuer had 40,114,900 shares of its Common Stock outstanding.

 

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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			12
Item 3: Quantitative and Qualitative Disclosures about Market Risk			21
Item 4: Controls and Procedures			21
PART II: OTHER INFORMATION
Item 1: Legal Proceedings			23
Item 1A: Risk Factors			23
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds			23
Item 3: Defaults Upon Senior Securities			23
Item 4: Reserved			23
Item 5: Other Information			23
Item 6: Exhibits			23
SIGNATURES			25

 

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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.).

SPECIAL NOTE REGARDING VOLUNTARY FILER STATUS

The Company is a “voluntary filer” with the U.S. Securities and Exchange Commission. This means that the Company is not required to file Current and Periodic Reports with the U.S. Securities and Exchange Commission. The Company is not a fully reporting company that is subject to review under Section 408 of the Sarbanes-Oxley Act of 2002. Furthermore, the Company is not subject to the going private rules and certain tender offer regulations, and the beneficial holders of the Company’s securities do not need to report on acquisitions or depositions of the Company’s securities or their plans regarding their influence and control over the Company. Therefore the Company’s status a voluntary filer reduces investors’ rights to access significant information regarding the Company and its controlling shareholders.

The Company’s voluntary filer status may lead to its removal from the over the counter bulletin board, as Rule 6530 of the Financial Industry Regulatory Authority provides that issuers must be required to file reports pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 in order to remain listed.

 

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

Plan of Operation

The Company is a development stage business planning to develop and sell solar photovoltaic power and other renewable energies.  Although our Company has a new business purpose, we have not commenced any revenue generating operations under the new business model. We anticipate that we will do business mainly in Europe, and that our Company will operate photovoltaic energy production parks in which solar electrical power is produced for sale to the local electrical grid. We intend to enter into strategic alliances with other companies and organizations engaged in the manufacture and/or assembly of solar modules. 

The Company presently faces a number of challenges, including raising capital, indentifying commercially viable photovoltaic power plant locations, obtaining rights and licenses for development, interacting with local governments, indentifying and entering into agreements with appropriate subcontractors for the development and operation of solar parks, and hiring and retaining qualified staff.

 

The continuing development of our plans are subject to many uncertainties that present material risks to investors.  In addition, because we have not yet commenced any revenue generating operations, our most recent financial statements will not provide sufficient information to assess our future prospects.  Our likelihood of success must be considered in light of all of the relevant risks. Shareholders of the Company and prospective investors are directed to the Risk Factors discussed in our most recent Annual Report on Form 10-K as filed with the U.S. Securities & Exchange Commission which is publicly available at www.sec.gov.

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The Company will require no less than $2,000,000 in additional funding in order to conduct proposed operations for the next year.  Should the Company fail to raise such funds, the Company will not be able to commence construction of the solar power plants. In order to commence construction on all of the Company’s currently contemplated projects, the Company would be required to raise 15,000,000 Euros (approximately $19,220,000) to acquire definitive licenses to own and operate solar parks, and then organize construction bridge loans to pay for the construction of the solar parks.

The Acquisition Agreement dated March 2, 2010 between the Company and GPR Global Power Resources Ltd. requires the Company to facilitate and arrange for long-term debt financing of at least 80% of the purchase price to be paid by GPR Global Power Resources Ltd. The terms of the Acquisition Agreement are subject to review and approval by the relevant third party financing institution. The Acquisition Agreement requires GPR Global Power Resources Ltd. to finance the remainder of the purchase price, and to deliver a Bank Standby Letter of Credit in an amount equal to 20% of the first payment tranche that will be due (4.05 million Euros). 

The Company has engaged in discussions with financial institutions to arrange the long-term debt financing of 80% of the purchase price, however, the Company has received no commitments for these funds, and will not be able to secure such a commitment until GPR Global Power Resources Ltd. delivers a Bank Standby Letter of Credit.  The Company anticipates that it will receive a definitive response regarding GPR’s ability to deliver this Letter of Credit by the end of the year.

Plant and Equipment

We expect to start investing in the installation of solar parks in Italy during 2010. There will be significant investments required to start these development projects in Italy. These investments are expected to be financed through additional equity capital as well as financing loans.

Between March 14, 2010 and March 25, 2010, the Company entered into a total of sixteen Acquisition Agreements to acquire Turnkey Alternative Energy Plants producing a total of 161.20 mega watts of power.  Fourteen of these Acquisition Agreements were with Partner Capital Group Gmbh; the remaining two were with GEO-Service KG/SAS.  The closing of each of these Acquisition Agreements is contingent on the Company’s ability to secure financing, which the Company is presently seeking.  The parties have agreed that the Company will be provided with the necessary information to perform due diligence on these plants prior to closing.

The Company is presently in negotiations with Partner Capital Group Gmbh and GEO-Service KG/SAS to revise the Acquisition Agreements so that the acquisition of control of these Turnkey Alternative Energy Plants would be accomplished by license and not by sale.

On March 29, 2010 the Company entered into a Frame Agreement (the “Hellenic Frame Agreement”) with Hellenic Technologies Monoprosopi EPE, a company organized in Greece (“Hellenic Technologies”).  Pursuant to the Hellenic Frame Agreement, Hellenic Technologies shall supply the Company with certain materials based on certain work orders delivered by the Company from time to time, in accordance with the terms and conditions of the Hellenic Frame Agreement.  The Hellenic Frame Agreement memorializes certain understandings reached on February 1, 2010.  The Hellenic Frame Agreement shall continue until February 1, 2011.  The Hellenic Frame Agreement shall renew for additional one year terms until notice of non-renewal is given.

Employees

As of September 30, 2010, the Company had only one employee: Olivier de Vergnies, the Company’s Acting Chief Executive Officer and Acting Chief Financial Officer. 

On April 27, 2010, the Company announced that it has engaged a team of twelve engineers to manage and supervise the Company’s photovoltaic power plant projects.  These engineers are employed by Hellenic Technologies.  The team is lead by Mr. Dimitris Kazantzis, Chief Executive Officer of Hellenic Technologies.  The Company intends to appoint Mr. Kazantzis as its Chief Operations Officer and will appoint him to the Company’s Board of Directors. 

 

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The engagement of these engineers is governed by the terms of the Hellenic Frame Agreement.  This team is expected to more than double in personnel over the coming two years.  The team scope of work includes the following activities:

 

1.

Preparation of requests for proposals for engineering, procurement and construction, operation and maintenance, engaging security contractors, and coordination of responses to requests for proposals.

2.

The qualification and selection of contractors, and the negotiation and finalization of technical contracts.

3.

Design of the overall command and control system of the photovoltaic power plants and coordination of the operation and maintenance planning.

4.

Project management on behalf of the Company, including, system design authority, supervision of engineering, procurement and construction contractors, reporting on projects, acceptance of projects from contractors, handling of technical claims and issues, supervision of maintenance/operation training, and the supervision of handover following grid connection.

 

 

 

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PART II.         OTHER INFORMATION

ITEM 6.          EXHIBITS

 

Exhibit		Description
10.24		Master Acquisition Agreement, by and between the Company, DFD Select Group Ltd. and Enway SAS, dated as of July 2, 2010.
10.25		Master Acquisition Agreement, by and between the Company and Superserve Ltd., dated as of August 20, 2010.
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.

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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:      November 22, 2010

 

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