Attached files
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| EX-31.1 - CERTIFICATION - SOUTHERN USA RESOURCES INC. | f10q0610a1ex31i_atlgreen.htm |
| EX-32.1 - CERTIFICATION - SOUTHERN USA RESOURCES INC. | f10q0610a1ex32i_atlgreen.htm |
| EX-32.2 - CERTIFICATION - SOUTHERN USA RESOURCES INC. | f10q0610a1ex32ii_atlgreen.htm |
| EX-31.2 - CERTIFICATION - SOUTHERN USA RESOURCES INC. | f10q0610a1ex31ii_atlgreen.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
(Amendment No. 1)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2010.
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to ______.
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Commission file number 333-143352
Atlantic Green Power Holding Company
(Exact name of registrant as specified in its charter)
| Delaware | 22-3757709 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Bayport One, Suite 455, 8025 Black Horse Pike, West Atlantic City, New Jersey 08232
(Address of principal executive offices, including zip code)
(609) 241-6027
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o
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 (§232.405 of this chapter) during the
preceding 12 months (or for such 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 o Accelerated filer o
Non-accelerated filer o Smaller reporting company x
(Do not check if smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x.
As of August 12, 2010, there were 43,199,750 shares of the registrant’s common stock, par value $.000001 per share, outstanding.
Atlantic Green Power Holding Company
INDEX TO FORM 10-Q
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PART I.
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FINANCIAL INFORMATION
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PAGE
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Item 1.
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Financial Statements
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Consolidated Balance Sheets as of June 30, 2010 (Unaudited) (Restated) and December 31, 2009
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1
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Consolidated Statements of Operations for the three and six months ended June 30, 2010 and
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for the period from September 17, 2009 (Inception) through June 30, 2010 (Unaudited) (Restated)
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2
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Consolidated Statement of Stockholders’ Equity for the period from September 17, 2009
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(Inception) through June 30, 2010 (Unaudited)
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3
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Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and
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for the period from September 17, 2009 (Inception) through June 30, 2010 (Unaudited) (Restated)
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4
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Notes to the Consolidated Financial Statements (Unaudited)
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5
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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19
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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21
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Item 4.
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Controls and Procedures
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21
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PART II.
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OTHER INFORMATION
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Item 1.
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Legal Proceedings
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22
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Item 1A.
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Risk Factors
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22
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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22
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Item 3.
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Defaults upon Senior Securities
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22
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Item 4.
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(Removed and Reserved)
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22
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Item 5.
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Other Information
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22
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Item 6.
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Exhibits
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22
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Signatures
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23
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Index of Exhibits
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E-1
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Forward-Looking Statements
Certain information included in this quarterly report on Form 10-Q and other filings of the registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results.
In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable terminology. Although the registrant believes that the expectations reflected in the forward-looking statements contained herein are reasonable, the registrant cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the registrant, nor any other person, assumes responsibility for the accuracy and completeness of such statements. The registrant is under no duty to update any of the forward-looking statements contained herein after the date of this quarterly report on Form 10-Q.
EXPLANATORY NOTE
Atlantic Green Power Holding Company (the “Company”) is filing this Amendment No. 1 (this “Amendment”) to its quarterly report on Form 10-Q for the three months ended June 30, 2010 filed with the Securities and Exchange Commission (“SEC”) on August 13, 2010 (the “Original Report”) to restate its unaudited consolidated financial statements for the three month period ended June 30, 2010 under Item 1 and to amend Item 2 of Part I of the Original Report. This Amendment does not affect any other items or sections in the Original Report, and no attempt has been made in this Amendment to update other disclosures presented in the Original Report, except as required to reflect the effects of the restatement.
Management determined that certain expenses were inadvertently misclassified during the quarter ended June 30, 2010. These expenses should have been recorded on the Balance Sheet as Deposits related to the quarter ended June 30, 2010 and were inadvertently omitted from the reported second quarter 2010 financial results. The accounting error resulted in an overstatement of professional fees of $38,487, and an overstatement of general and administrative fees of $14,684; totaling an overstatement of net loss by $53,171. The table below presents the effect of the financial statement adjustments related to the restatement of our previously reported unaudited consolidated financial statements for the three months ended June 30, 2010:
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Three Months Ended June 30, 2010:
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As reported
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Adjustment
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As Restated
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Total Operating Expenses
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$ | 181,891 | $ | (53,171 | ) | $ | 128,720 | |||||
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Net Loss
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(180,299 | ) | 53,171 | (127,128 | ) | |||||||
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Net Loss per common share-basic and diluted:
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Net loss per common share
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(0.00 | ) | (0.00 | ) | (0.00 | ) | ||||||
In addition, the number of vested options as of June 30, 2010 reported in Note 5 of Item 1 has been corrected to read 83,338 and not 20,000 as reported in the Original Report.
As previously disclosed in the Company’s current report on Form 8-K filed November 12, 2010, after discussions between management and the Company’s independent registered public accounting firm, the Company concluded that the previously issued unaudited consolidated financial statements included in the Original Report should no longer be relied upon because of the errors the Original Report as described above.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ATLANTIC GREEN POWER HOLDING COMPANY
(A Development Stage Company)
Consolidated Balance Sheets
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June 30,
2010
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December 31,
2009
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(Unaudited)
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Current Assets
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Cash
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$ | 362,045 | $ | 1,088,522 | ||||
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Prepaid expenses and other current assets
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21,283 | -- | ||||||
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Total Current Assets
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383,328 | 1,088,522 | ||||||
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Deposits
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538,875 | 49,990 | ||||||
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Total Assets
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$ | 922,203 | $ | 1,138,512 | ||||
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Liabilities and Stockholders’ Equity
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Current Liabilities
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Accounts payable and accrued liabilities
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$ | 31,528 | $ | 5,733 | ||||
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Note payable
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9,518 | -- | ||||||
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Total Current Liabilities
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41,046 | 5,733 | ||||||
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Total Liabilities
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41,046 | 5,733 | ||||||
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Stockholders’ Equity
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Preferred stock, $0.000001 par value; 20,000,000 shares authorized;
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no shares issued and outstanding
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-- | -- | ||||||
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Common stock, $0.000001 par value; 1,000,000,000 shares authorized;
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43,199,750 shares issued and outstanding
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43 | 43 | ||||||
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Additional paid in capital
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1,228,248 | 1,186,646 | ||||||
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Deferred compensation
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(25,841 | ) | -- | |||||
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Deficit accumulated during the development stage
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(321,293 | ) | (53,910 | ) | ||||
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Total Stockholders’ Equity
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881,157 | 1,132,779 | ||||||
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Total Liabilities and Stockholders’ Equity
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$ | 922,203 | $ | 1,138,512 | ||||
See accompanying notes to the consolidated financial statements.
1
ATLANTIC GREEN POWER HOLDING COMPANY
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
(Restated)
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Three Months
Ended
June 30, 2010
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Six Months
Ended
June 30, 2010
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Period from September 17, 2009 (Inception)
Through
June 30, 2010
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Revenue
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$ | -- | $ | -- | $ | -- | ||||||
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Operating Expenses:
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Professional fees
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45,064 | 111,760 | 155,416 | |||||||||
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General and administrative
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83,656 | 159,561 | 170,109 | |||||||||
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Total Operating Expenses
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128,720 | 271,321 | 325,525 | |||||||||
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Loss from Operations
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(128,720 | ) | (271,321 | ) | (325,525 | ) | ||||||
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Other Income (expense):
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Interest income
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1,645 | 3,991 | 4,285 | |||||||||
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Interest (expense)
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(53 | ) | (53 | ) | (53 | ) | ||||||
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Total Other Income (expense)
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1,592 | 3,938 | 4,232 | |||||||||
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Loss Before Income Taxes
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(127,128 | ) | (267,383 | ) | (321,293 | ) | ||||||
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Provision for Income Taxes
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-- | -- | -- | |||||||||
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Net Loss
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$ | (127,128 | ) | $ | (267,383 | ) | $ | (321,293 | ) | |||
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Net loss per common share – basic and diluted
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$ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||
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Weighted average number of common shares outstanding – basic and diluted
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43,199,750 | 43,199,750 | 43,199,750 | |||||||||
See accompanying notes to the consolidated financial statements.
2
ATLANTIC GREEN POWER HOLDING COMPANY
(A Development Stage Company)
Consolidated Statement of Stockholders’ Equity
For the Period from September 17, 2009 (Inception) through June 30, 2010
(Unaudited)
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Additional
Paid In Capital
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Deferred
Compensation
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Deficit
Accumulated
During the
Development
Stage
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Total Stockholders’ Equity
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Common Stock
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Shares
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Amount
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(Restated)
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(Restated)
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September 17, 2009
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(Inception)
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38,099,250 | $ | 38 | $ | 1,476,541 | $ | -- | $ | -- | $ | 1,476,579 | |||||||||||||
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Reverse acquisitionadjustment
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5,100,500 | 5 | (289,895 | ) | -- | (289,890 | ) | |||||||||||||||||
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Net loss
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(53,910 | ) | (53,910 | ) | ||||||||||||||||||||
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Balance, December 31, 2009
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43,199,750 | 43 | 1,186,646 | -- | (53,910 | ) | 1,132,779 | |||||||||||||||||
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Stock options issued for services
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41,602 | (41,602 | ) | -- | ||||||||||||||||||||
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Amortization of deferred compensation
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15,761 | 15,761 | ||||||||||||||||||||||
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Net loss
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(267,383 | ) | (267,383 | ) | ||||||||||||||||||||
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Balance, June 30, 2010
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43,199,750 | $ | 43 | $ | 1,228,248 | $ | (25,841 | ) | $ | (321,293 | ) | $ | 881,157 | |||||||||||
See accompanying notes to the consolidated financial statements.
3
ATLANTIC GREEN POWER HOLDING COMPANY
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
(Restated)
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Six Months
Ended
June 30, 2010
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Period from
September 17,
2009
(Inception)
through
June 30, 2010
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Cash Flows from Operating Activities:
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Net loss
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$ | (267,383 | ) | $ | (321,293 | ) | ||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Stock compensation
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15,761 | 17,761 | ||||||
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Changes in operating assets and liabilities:
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Increase in prepaid expenses and other current assets
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(21,283 | ) | (21,283 | ) | ||||
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Increase in deposits
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(488,885 | ) | (538,875 | ) | ||||
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Increase in accounts payable and accrued liabilities
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25,795 | 31,533 | ||||||
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Net cash used in operating activities
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(735,995 | ) | (832,157 | ) | ||||
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Cash Flows from Financing Activities:
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Proceeds from sale of common stock
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-- | 1,184,684 | ||||||
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Proceeds from notes payable
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10,681 | 10,681 | ||||||
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Prepayment of note payable
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(1,163 | ) | (1,163 | ) | ||||
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Net cash provided by financing activities
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9,518 | 1,194,202 | ||||||
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Increase (decrease) in cash
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(726,477 | ) | 362,045 | |||||
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Cash at beginning of period
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1,088,522 | -- | ||||||
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Cash at end of period
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$ | 362,045 | $ | 362,045 | ||||
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Supplemental Disclosures of Cash Flow Information:
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Cash paid for:
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Interest
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$ | 53 | $ | 53 | ||||
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Income taxes
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$ | 650 | $ | 650 | ||||
See accompanying notes to the consolidated financial statements.
4
ATLANTIC GREEN POWER HOLDING COMPANY
(A Development Stage Company)
June 30, 2010
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – ORGANIZATION
Lodestar Mining, Incorporated (“Lodestar”) was incorporated on October 31, 2006 under the laws of the State of Delaware. On February 4, 2010, Lodestar changed its name to Atlantic Green Power Holding Company (the “Company”).
Atlantic Green Power Corporation (“Atlantic”) (a development stage company), was incorporated on September 17, 2009 under the laws of the State of New Jersey. The Company plans to develop renewable energy systems and related activities.
Merger of Atlantic Green Power Corporation
On January 29, 2010, Lodestar entered into an Agreement and Plan of Exchange (the “Share Exchange Agreement”) among Atlantic, Lodestar and Ian McKinnon (“McKinnon”).
Pursuant to the terms of the Share Exchange Agreement, Lodestar agreed to issue an aggregate of 38,099,250 shares of Lodestar's common stock to the Atlantic shareholders in exchange for all of the issued and outstanding shares of Atlantic (the “Share Exchange”). In addition, in accordance with the terms of a Stock Purchase Agreement between Lodestar and McKinnon, Lodestar purchased 15,150,000 shares of its common stock owned by Ian McKinnon for $250,000, using funds received from Atlantic, and retired the purchased common stock. The shares issued in the Share Exchange represented approximately 88.2% of the issued and outstanding common stock immediately after the retirement of the 15,150,000 shares of the Company’s common stock purchased from McKinnon.
As a result of the ownership interests of the former shareholders of Atlantic, for financial statement reporting purposes, the Share Exchange between the Company and Atlantic has been treated as a reverse acquisition with Atlantic deemed the accounting acquirer and the Company deemed the accounting acquiree under the purchase method of accounting in accordance with Section 805-10-55 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification”). The reverse merger is deemed a capital transaction and the net assets of Atlantic (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the combination. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Atlantic which are recorded at historical cost. The equity of the Company is the historical equity of Atlantic retroactively restated to reflect the number of shares issued by the Company in the transaction.
5
Restatement of Financial Statements
As referred to in Note 10 herein, the Company has restated its consolidated financial statements for the three months ended June 30, 2010 for a correction of several errors.
NOTE 2 – SUMMARY OF ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), including those applicable to the preparation of a quarterly report on Form 10-Q and found in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year.
Development stage company
The Company is a development stage company as defined by Section 810-10-20 of the Codification. The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP 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 as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Cash equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
6
Fair value of financial instruments
The Company follows Paragraph 825-10-50-10 of the Codification for disclosures about fair value of its financial instruments and Paragraph 820-10-35-37 of the Codification to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
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Level 1
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Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
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Level 2
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Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
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Level 3
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Pricing inputs that are generally observable inputs and not corroborated by market data.
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The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable and accrued liabilities, approximate their fair values because of the short maturity of these instruments.
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis. Consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at June 30, 2010 or December 31, 2009, nor are any gains or losses reported in the Company’s consolidated statements of operations that are attributable to any change in unrealized gains or losses relating to those assets and liabilities.
Revenue recognition
The Company applies Paragraph 605-10-S99-1 of the Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement that the services have been rendered to the customer, the sales price is fixed or determinable, and collectability is reasonably assured.
Stock-based compensation for obtaining employee services and equity instruments issued to parties other than employees for acquiring goods or services
The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of Section 718-10-30 of the Codification and accounts for equity instruments issued to parties other than employees for acquiring goods or services under the guidance of Section 505-50-30 of the Codification. Pursuant to Paragraph 718-10-30-6 of the Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the third-party performance is complete or the date on which it is probable that performance will occur. The fair value of each option grant estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
7
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June 30, 2010
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Risk-free interest rate
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3.0%
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Dividend yield
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0.00%
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Expected volatility
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100%
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Expected option life
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5 years
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The expected life of the options has been determined using the simplified method as prescribed in Paragraph 718-10-S99-1 FN77 of the Codification. The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. Additionally, the Company’s policy is to issue new shares of common stock to satisfy stock option exercises.
The fair value of each option award is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs shown in the table above for 2010 are as follows:
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· (a) (a) The expected volatility is based on a combination of the historical volatility of the Company’s and comparable companies’ stock over the contractual life of the options.
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· (b) (b) The Company uses historical data to estimate employee termination behavior. The expected life of options granted is derived from paragraph 718-10-S99-1 of the Codification and represents the period of time the options are expected to be outstanding.
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· (c) (c) The risk-free interest rate is based on the U.S. Department of the Treasury yield curve in effect at the time of grant for periods within the contractual life of the option.
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· (d) (d) The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the option.
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Income taxes
The Company accounts for income taxes under Section 740-10-30 of the Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date.
8
The Company adopted Section 740-10-25 of the Codification. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods, and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
Net loss per common share
Net loss per common share is computed pursuant to Section 260-10-45 of the Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period to reflect the potential dilution that could occur from common shares issuable through stock options, warrants, and convertible debt, which excludes stock options to purchase 220,000 shares of the Company’s common stock. These potential shares of common stock were not included as they were anti-dilutive.
Commitment and contingencies
The Company follows Subtopic 450-20 of the Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Cash flows reporting
The Company adopted Paragraph 230-10-45-24 of the Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method as defined by Paragraph 230-10-45-25 of the Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to Paragraph 830-230-45-1 of the Codification.
9
Subsequent events
The Company follows the guidance in Section 855-10-50 of the Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements are issued. Pursuant to ASU 2010-09 of the Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
Recently Issued Accounting Pronouncements
In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-01 “Equity Topic 505 – Accounting for Distributions to Shareholders with Components of Stock and Cash,” which clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in earnings per share (“EPS”) prospectively and is not a stock dividend for purposes of applying Topics 505 and 260 (Equity and Earnings Per Share). Those distributions should be accounted for and included in EPS calculations in accordance with paragraphs 480-10-25- 14 and 260-10-45-45 through 45-47 of the Codification. The amendments in this update also provide a technical correction to the Codification. The correction moves guidance that was previously included in the Overview and Background Section to the definition of a stock dividend in the Master Glossary. That guidance indicates that a stock dividend takes nothing from the property of the corporation and adds nothing to the interests of the stockholders. It also indicates that the proportional interest of each shareholder remains the same, and is a key factor to consider in determining whether a distribution is a stock dividend. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-02 “Consolidation Topic 810 – Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification,” which provides amendments to Subtopic 810-10 and related guidance within U.S. GAAP to clarify that the scope of the decrease in ownership provisions of the subtopic and related guidance applies to the following:
|
|
(a)
|
a subsidiary or group of assets that is a business or nonprofit activity;
|
|
|
(b)
|
a subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture; and
|
|
|
(c)
|
an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture).
|
10
The amendments in this update also clarify that the decrease in ownership guidance in Subtopic 810-10 does not apply to the following transactions even if they involve businesses:
|
|
(a)
|
sales of in substance real estate (entities should apply the sale of real estate guidance in Subtopics 360-20 (Property, Plant, and Equipment) and 976-605 (Retail/Land) to such transactions); and
|
|
|
(b)
|
conveyances of oil and gas mineral rights (entities should apply the mineral property conveyance and related transactions guidance in Subtopic 932-360 (Oil and Gas-Property, Plant, and Equipment) to such transactions).
|
If a decrease in ownership occurs in a subsidiary that is not a business or nonprofit activity, an entity first needs to consider whether the substance of the transaction causing the decrease in ownership is addressed in other U.S. GAAP, such as transfers of financial assets, revenue recognition, exchanges of nonmonetary assets, sales of in substance real estate, or conveyances of oil and gas mineral rights, and apply that guidance as applicable. If no other guidance exists, an entity should apply the guidance in Subtopic 810-10. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-06 “Fair Value Measurements and Disclosures (Topic 820) Improving Disclosures about Fair Value Measurements,” which provides amendments to Subtopic 820-10 that require new disclosures as follows:
|
|
(a)
|
Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers.
|
|
|
(b)
|
Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number).
|
This update provides amendments to Subtopic 820-10 that clarify existing disclosures as follows:
|
|
(a)
|
Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities.
|
|
|
(b)
|
Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3.
|
11
This update also includes conforming amendments to the guidance on employers' disclosures about postretirement benefit plan assets (Subtopic 715-20). The conforming amendments to Subtopic 715-20 change the terminology from major categories of assets to classes of assets and provide a cross reference to the guidance in Subtopic 820-10 on how to determine appropriate classes to present fair value disclosures. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In February 2010, the FASB issued the FASB Accounting Standards Update No. 2010-09 “Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements,” which provides amendments to Subtopic 855-10 as follows:
|
|
(a)
|
An entity that either (i) is an SEC filer or (ii) is a conduit bond obligor for conduit debt securities that are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local or regional markets) is required to evaluate subsequent events through the date that the financial statements are issued. If an entity meets neither of those criteria, then it should evaluate subsequent events through the date the financial statements are available to be issued.
|
|
|
(b)
|
An entity that is an SEC filer is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between Subtopic 855-10 and the SEC's requirements.
|
|
|
(c)
|
The scope of the reissuance disclosure requirements is refined to include revised financial statements only. The term revised financial statements is added to the glossary of Topic 855. Revised financial statements include financial statements revised either as a result of correction of an error or retrospective application of U.S. GAAP.
|
All of the amendments in this update are effective upon issuance of the final Update, except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In April 2010, the FASB issued the FASB Accounting Standards Update No. 2010-17 “Revenue Recognition — Milestone Method (Topic 605) Milestone Method of Revenue Recognition,” which provides guidance on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. A corporation can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive.
12
Determining whether a milestone is substantive is a matter of judgment made at the inception of the arrangement. The following criteria must be met for a milestone to be considered substantive. The consideration earned by achieving the milestone should:
(a) Be commensurate with either of the following:
(i) The corporation’s performance to achieve the milestone; or
(ii) The enhancement of the value of the item delivered as a result of a specific outcome resulting from the corporation’s performance to achieve the milestone.
(b) Relate solely to past performance.
(c) Be reasonable relative to all deliverables and payment terms in the arrangement.
A milestone should be considered substantive in its entirety. An individual milestone may not be bifurcated. An arrangement may include more than one milestone, and each milestone should be evaluated separately to determine whether the milestone is substantive. Accordingly, an arrangement may contain both substantive and nonsubstantive milestones.
A corporation’s decision to use the milestone method of revenue recognition for transactions within the scope of the amendments in this update is a policy election. Other proportional revenue recognition methods also may be applied as long as the application of those other methods does not result in the recognition of consideration in its entirety in the period the milestone is achieved.
A corporation that is affected by the amendments in this Update is required to provide all of the following disclosures:
(a) A description of the overall arrangement;
|
|
(b) A description of each milestone and related contingent consideration;
|
|
(c) A determination of whether each milestone is considered substantive;
(d) The factors that the entity considered in determining whether the milestone or milestones are substantive; and
(e) The amount of consideration recognized during the period for the milestone or milestones.
13
The amendments in this update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. If a corporation elects early adoption and the period of adoption is not the beginning of the entity's fiscal year, the entity should apply the amendments retrospectively from the beginning of the year of adoption. Additionally, a corporation electing early adoption should disclose the following information at a minimum for all previously reported interim periods in the fiscal year of adoption:
(a) Revenue;
(b) Income before income taxes;
(c) Net income;
(d) Earnings per share; and
(e) The effect of the change for the captions presented.
A corporation may elect, but is not required, to adopt the amendments in this update retrospectively for all prior periods. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
NOTE 3 – GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying consolidated financial statements, the Company had a deficit accumulated during the development stage of $321,293, a net loss and net cash used in operations of $267,383 and $735,995, respectively, for the six months ended June 30, 2010. These conditions raise substantial doubt about its ability to continue as a going concern.
The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
NOTE 4 – DEPOSITS
Deposits reflect the costs incurred by the Company to obtain the local zoning board approvals and other permits necessary to construct the Pittsgrove solar farm. Deposits were $538,875 and $49,990 at June 30, 2010 and December 31, 2009, respectively.
14
NOTE 5 - STOCKHOLDERS’ EQUITY
Stock Options
In February 2010, the Company’s stockholders approved the Atlantic Green Power Holding Company Equity Incentive Plan (“Incentive Plan”). The Incentive Plan went into effect on February 3, 2010. 10,000,000 shares of the Company’s common stock were reserved for issuance under the Incentive Plan. At June 30, 2010, 9,780,000 shares remained available for issuance under the Incentive Plan.
On February 5, 2010, the Company granted under the Incentive Plan a nonqualified option to purchase 200,000 shares of its common stock to Rania Pontikos, Director of Technology and Strategic Planning of the Company. The nonqualified option was granted as compensation for services to the Company in reliance upon the exemption from registration provided under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”). The nonqualified option granted to Ms. Pontikos has an exercise price of $.25 per share and expires on February 4, 2015. The shares underlying the nonqualified option vest as follows: 16,674 shares vested on February 5, 2010; 16,666 shares vested on each of March 1, 2010, April 1, 2010; May 1, 2010; and June 1, 2010; and 16,666 shares vest on the first day of each month thereafter with the final 16,666 shares vesting on January 1, 2011.
On March 8, 2010, the Company granted under the Incentive Plan a nonqualified option to purchase 20,000 shares of its common stock to Daniel Schohl. The nonqualified option was granted as compensation for services to the Company in reliance upon the exemption from registration provided under Section 4(2) of the Securities Act. The nonqualified option granted to Mr. Schohl has an exercise price of $.25 per share and expires on March 7, 2015. The shares underlying the nonqualified option vest as follows: 10,000 shares vest on March 8, 2011 and 10,000 shares vest on March 8, 2012.
The aggregate fair value of the nonqualified stock options granted in February and March 2010 under the Incentive Plan using the Black-Scholes Option Pricing Model was $41,602 at the dates of grant. For the three and six month period ended June 30, 2010, the Company recorded stock-based compensation of $9,456 and $15,761 respectively, for shares vested.
The table below summarizes the Company’s Incentive Plan stock option activities through June 30, 2010:
|
Number of
Option Shares
|
Exercise Price Range
Per Share
|
Weighted Average Exercise Price
|
Weighted
Average
Remaining
(in years)
Contractual
Term
|
Intrinsic
Value
(in thousands)
|
|||||||||||||||
|
Balance, January 1, 2010
|
---
|
$
|
---
|
$
|
---
|
$ |
---
|
||||||||||||
|
Granted
|
220,000
|
$
|
0.25
|
$
|
0.25
|
.5
|
$ |
---
|
|||||||||||
|
Cancelled
|
---
|
$
|
---
|
$
|
---
|
$ |
---
|
||||||||||||
|
Balance, June 30, 2010
|
220,000
|
$
|
0.25
|
0.25
|
|||||||||||||||
| Vested and Exercisable | |||||||||||||||||||
|
June 30, 2010
|
83,338
|
$
|
0.25
|
$
|
0.25
|
.5
|
$ |
---
|
|||||||||||
15
The following table summarizes information concerning outstanding and exercisable stock options as of June 30, 2010:
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||||
|
Range of Exercise Prices
|
Number Outstanding
|
Average Remaining Contractual Life (in years)
|
Weighted Average Exercise Price
|
Number Exercisable
|
Average Remaining Contractual Life (in years)
|
Weighted Average Exercise Price
|
|||||||||||
| $ | 0.25 |
220,000
|
0.50
|
$
|
0.25
|
83,338
|
0.50
|
$
|
0.25
|
||||||||
| $ | 0.25 |
220,000
|
0.50
|
$
|
0.25
|
83,338
|
0.50
|
$
|
0.25
|
||||||||
NOTE 6 – RELATED PARTY TRANSACTIONS
Effective November 30, 2009, the Company’s subsidiary, Atlantic, entered into a Ground Lease Agreement (the “Ground Lease”) with respect to property in Pittsgrove, New Jersey with Edward Stella, Jr., a director of Atlantic and the Company and the Vice President of Project Development of the Company. See “NOTE 7 – COMMITMENTS AND CONTINGENCIES – Ground Lease.”
Rania K. Pontikos, Director of Technology and Strategic Planning for the Company, is also a principal in Millennium Power, Inc. (“Millennium Power”), an engineering consulting firm that provides strategic planning and engineering services for the Company.
During the three and six months ended June 30, 2010, the Company was billed and remitted $7,310 to Millennium Power.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Ground Lease
Effective November 30, 2009, Atlantic entered into the Ground Lease with Edward Stella, Jr., a director of Atlantic and who was subsequently elected as a director and appointed as Vice President of Project Development of the Company upon the consummation of the Share Exchange on February 3, 2010. The Ground Lease was negotiated between the parties at arms’ length. The Ground Lease permits Atlantic to construct and operate a solar farm on the leased premises located in Pittsgrove, New Jersey, and which is for an initial term of twenty-five years with an annual base rent of $1.3 million, which will be phased-in as construction of the solar farm facilities progresses as provided in the Ground Lease. Base rent will be due at the rate of $18,571.42 per year, or $1,547.61 per month for each ten (10) acres for which construction is completed and electricity is being generated. Atlantic has the option to extend the Ground Lease for four (4) successive periods of five (5) years each beyond the initial term.
On August 6, 2010, Atlantic and Mr. Stella restructured the Ground Lease into two separate lease agreements, each relating to one of the two tracts of property leased by Atlantic pursuant to the original Ground Lease. See “NOTE 9 – SUBSEQUENT EVENTS” below.
16
Note Payable – Insurance
On May 6, 2010, the Company entered into a finance agreement with AFCO. Pursuant to the terms of the agreement, AFCO loaned the Company the principal amount of $10,680.87, which would accrue interest at the rate of 6% per annum, in order to partially fund the payment of the premium of the Company’s Director and Officer liability insurance. The agreement requires the Company to make nine monthly payments of $1,216.63, including interest. The first payment was made by the Company on June 6, 2010. As of June 30, 2010, the outstanding balance related to this finance agreement was $9,518.
NOTE 8 – CREDIT RISK
Credit risk
Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. As of June 30, 2010, a majority of the Company’s cash and cash equivalents were held by two major financial institutions located in the United States. However, the Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant risks on such accounts.
NOTE 9 – SUBSEQUENT EVENTS
The Company evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued. The management of the Company determined that there are reportable subsequent events to be disclosed as follows:
On July 2, 2010, the Company entered into a Finder’s Agreement with Millennium Power, an engineering consulting firm in which Rania Pontikos, Director of Technology and Strategic Planning for the Company, is a principal. Pursuant to the Finder’s Agreement, Millennium Power is to identify prospective candidates interested in making an investment in, or pursuing a strategic initiative with, the Company. Millennium Power is engaged by the Company under the Finder’s Agreement as a non-exclusive independent contractor and is compensated at a rate equal to a maximum of two percent (2%) of the investment amount in the Company made by any investor introduced to the Company by Millennium Power.
On August 6, 2010, Atlantic and Mr. Stella restructured the Ground Lease into two separate lease agreements, each relating to one of the two tracts of property leased by Atlantic pursuant to the original Ground Lease: the East Tract Ground Lease Agreement relating to the 130-acre eastern tract, of which approximately 90 acres are suitable for development of a solar farm, and the West Tract Ground Lease Agreement relating to the 520-acre western tract, of which approximately 422 acres are suitable for development of a solar farm. Each of these restructured lease agreements was negotiated at arm’s length.
17
NOTE 10 – RESTATEMENT OF PRIOR PERIOD FINANCIAL STATEMENTS
Management determined that certain expenses were inadvertently misclassified during the quarter ended June 30, 2010. These expenses should have been recorded on the Balance Sheet as Deposits related to the quarter ended June 30, 2010 and were inadvertently omitted from the reported second quarter 2010 financial results. The accounting error resulted in an overstatement of professional fees of $38,487, and an overstatement of general and administrative fees of $14,684; totaling an overstatement of net loss by $53,171. The tables below present the effect of the financial statement adjustments related to the restatement of our previously reported unaudited consolidated financial statements for the three months ended June 30, 2010:
|
Statement of Operations
Three Months Ended June 30, 2010:
|
As reported
|
Adjustment
|
As Restated
|
|||||||||
|
Total Operating Expenses
|
$ | 181,891 | $ | (53,171 | ) | $ | 128,720 | |||||
|
Net Loss
|
(180,299 | ) | 53,171 | (127,128 | ) | |||||||
|
Net Loss per common share-basic and diluted:
|
||||||||||||
|
Net loss per common share
|
(0.00 | ) | (0.00 | ) | (0.00 | ) | ||||||
|
Balance Sheet
June 30, 2010:
|
As reported
|
Adjustment
|
As Restated
|
|||||||||
|
Assets
|
||||||||||||
|
Deposits
|
444,540 | 94,335 | 538,875 | |||||||||
|
Stockholders’ Equity
|
||||||||||||
|
Deficit accumulated during the development stage
|
(415,628 | ) | (94,335 | ) | (321,293 | ) | ||||||
|
Statement of Cash Flows
Three Months Ended June 30, 2010:
|
As reported
|
Adjustment
|
As Restated
|
|||||||||
|
Cash Flows from Operating Activities
|
||||||||||||
|
Net Loss
|
$ | 361,718 | $ | (94,335 | ) | $ | 267,383 | |||||
|
Increase in deposits
|
(394,550 | ) | 94,335 | (488,885 | ) | |||||||
|
Cash at end of period
|
362,045 | - | 362,045 | |||||||||
18
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
The following discussion and analysis is intended to provide information about the Company’s financial condition and results of operations for the three and six months ended June 30, 2010. The following information should be read together with the Company’s unaudited financial statements for the three and six months ended June 30, 2010 and related notes appearing elsewhere in this report.
Overview
The Company was incorporated in the State of Delaware on October 31, 2006 under the name “Lodestar Mining, Incorporated.” From its inception until January 28, 2010, the Company was an exploration stage company with plans to search for mineral deposits or reserves.
On February 3, 2010, the Company acquired all of the issued and outstanding shares of common stock of Atlantic pursuant to the Share Exchange, and Atlantic became a wholly-owned subsidiary of the Company. The Company issued an aggregate of 38,099,250 shares of common stock to the former shareholders of Atlantic, and the Company changed its corporate name to “Atlantic Green Power Holding Company.” As a result of the Share Exchange, the Company ceased its prior operations and commenced the operation of Atlantic as its sole line of business. Atlantic is a renewable energy company primarily focused on the location and development of utility-scale solar energy generation projects in the Mid-Atlantic United States, including the development of a utility-scale solar farm in Pittsgrove, New Jersey.
Development Stage Company
From inception until the consummation of the Share Exchange, the Company was an exploration stage company. Since February 4, 2010, the effective date of the Share Exchange, the Company is considered a development stage company in accordance with the guidance contained in the Codification Topic No. 915, “Development Stage Entities.” The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
Results of Operations
For the three and six months ended June 30, 2010
Net Income (Loss). For the three months ended June 30, 2010, net loss from operations was $127,128. For the six months ended June 30, 2010, net loss from operations was $267,383.
Revenues. We did not have any revenues for the three or six months ended June 30, 2010.
Expenses. Total operating expenses for the three months ended June 30, 2010 were $128,720. Operating expenses for the three months ended June 30, 2010 consisted of $45,064 in professional fees and $83,656 in general and administrative expenses. For the six months ended June 30, 2010, total operating expenses were $271,321 which consisted of professional fees of $111,760 and general and administrative expenses of $159,561.
19
Interest Income. We had interest income of $1,645 for the three months ended June 30, 2010 and $3,991 for the six months ended June 30, 2010.
Income Taxes. No income tax provision has been made for the three or six months ended June 30, 2010.
Liquidity and Capital Resources
On February 3, 2010, the Company consummated the Share Exchange with Atlantic. As a result of the Share Exchange, the Company changed its business focus from the acquisition and exploration of mineral resources to the location and development of utility-scale solar energy generation projects in the Mid-Atlantic United States, including the development of a utility-scale solar farm in Pittsgrove, New Jersey. In July 2010, the Company received final site plan approval from the Pittsgrove Township Land Use Board for the development of approximately 90 acres of the eastern site of the Pittsgrove solar farm, but did not receive preliminary site plan approval from the Land Use Board for the 422-acre western site of the Pittsgrove solar farm.
As of August 13, 2010, the Company’s cash position was approximately $220,000. The Company anticipates that its cash position is sufficient to fund current operations and its continued pursuit of local zoning board approvals and other permits necessary to develop the western site of the Pittsgrove solar farm. However, the Company estimates expenditures related to the development and construction of the solar farm on the eastern site will be in the range of $60 million, and therefore, without any additional financing, the Company will not be able to commence construction of the solar farm on the eastern site. The Company anticipates it will seek additional capital through debt or equity financings, or possibly strategic alternatives, including, but not limited to, partnering with another energy supplier or other company, to fund the development of the Upper Pittsgrove solar farm. Any additional equity financing may result in substantial dilution to the Company’s stockholders.
The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business for the foreseeable future. Since inception, the Company has not generated any revenue and accumulated losses aggregating to $321,293. In addition, the Company may not have sufficient working capital to meet operating needs for the next twelve months as described above. All of these factors raise substantial doubt about the Company’s ability to continue as a going concern.
The officers and directors of the Company have not, as of the date of this filing, loaned any funds to the Company. There are no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans.
20
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
The Company is a smaller reporting company and is therefore not required to provide the information required by this item.
|
Item 4.
|
Controls and Procedures
|
As required by Rule 13a-15 under the Securities Exchange Act of 1934 as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report on Form 10-Q, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company’s management, including the Company’s President and Chief Executive Officer and the Company’s Chief Operating Officer, who concluded that, at this time, the Company’s disclosure controls and procedures are not effective to provide reasonable assurance that: (i) information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure by the Company; and (ii) information required to be disclosed in reports that filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.
During the last fiscal quarter, the Company engaged a part-time controller to assist with the preparation of the Company’s financial statements and periodic reports to be filed with the SEC, which the Company believes has had a material effect on the Company’s internal control over financial reporting. Management will continue to discuss with the Board of Directors what further actions and steps are necessary for the Company to implement effective controls and procedures, such as whether to hire a full-time controller.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s President and Chief Executive Officer and Chief Operating Officer, to allow timely decisions regarding required disclosure.
21
PART II. OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
None.
|
Item 1A.
|
Risk Factors
|
The Company is a smaller reporting company and is therefore not required to provide the information required by this item.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
None.
|
Item 3.
|
Defaults Upon Senior Securities
|
None.
|
Item 4.
|
(Removed and Reserved.)
|
|
Item 5.
|
Other Information
|
On July 15, 2010, the Company received final site plan approval from the Land Use Board of Upper Pittsgrove Township, Salem County, New Jersey for the development of the 130-acre eastern site, of which approximately 90 acres are suitable for the development of a solar farm. However, the Company did not obtain preliminary site plan approval from the Land Use Board for the 520-acre tract western site (of which approximately 422 acres are suitable for the development of a solar farm) of the Pittsgrove solar farm. Despite this development, the Company intends to continue to evaluate its options to facilitate the development of the western site. Please see the Company’s Current Report on Form 8-K filed with the SEC on July 20, 2010.
On August 6, 2010, in light of the Company receipt of final site plan approval for the eastern site of the Pittsgrove solar farm, Atlantic and Edward J. Stella, Jr., Vice President of Project Development and a director of the Company and Atlantic, restructured the Ground Lease previously entered into between Atlantic and Mr. Stella effective November 30, 2009 pursuant to which Atlantic leased the eastern site and western site in Upper Pittsgrove Township, New Jersey from Mr. Stella. The Ground Lease was restructured into separate lease agreements, each relating to one of the two tracts of property leased by Atlantic pursuant to the original Ground Lease: the East Tract Ground Lease Agreement relating to the 130-acre eastern site, and the West Tract Ground Lease Agreement relating to the 520-acre western site. Each of these restructured lease agreements was negotiated at arm’s length. Please see the Company’s Current Report on Form 8-K dated August 6, 2010, and filed with the SEC on August 12, 2010.
|
Item 6.
|
Exhibits
|
Reference is made to the Index of Exhibits beginning on page E-1 herein.
22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Atlantic Green Power Holding Company | |
| Registrant | |
| Date: December 14, 2010 | /s/ Robert Demos, Jr. |
| Robert Demos, Jr. | |
| President and Chief Executive Officer | |
| (Principal Executive Officer) | |
| Date: December 14, 2010 | /s/ R. Scott Byrne |
| R. Scott Byrne | |
| Chief Operating Officer, Secretary, | |
| Treasurer (Principal Financial Officer) |
23
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EXHIBIT INDEX
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Exhibit No.
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Description
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2.1
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Agreement and Plan of Exchange by and among the Company, Atlantic Green Power Corporation and Ian McKinnon, dated January 29, 2010 (Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on February 4, 2010).
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2.2
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Stock Purchase Agreement by and between the Company and Ian McKinnon, dated January 29, 2010 (Incorporated by reference to Exhibit 2.2 to the Company’s Form 8-K filed with the SEC on February 4, 2010).
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3.1
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Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on February 4, 2010).
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3.2
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Amended and Restated By-laws of the Company (Incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on February 4, 2010).
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10.1
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Mineral Claim Option Agreement between the Company and Claim Lake Nickel, Inc. dated March 13, 2007 (Incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form SB-2 filed with the SEC on May 30, 2007).
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10.2
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Amendment #1 to Mineral Claim Option Agreement between the Company and Claim Lake Nickel, Inc. dated March 13, 2007 (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-K filed with the SEC on April 15, 2009).
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10.3
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Amendment #2 to Mineral Claim Option Agreement between the Company and Claim Lake Nickel, Inc. dated March 13, 2007 (Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-K filed with the SEC on April 15, 2009).
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10.4
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Atlantic Green Power Holding Company Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on February 4, 2010).
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10.5
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Ground Lease Agreement between Edward Stella, Jr. and Atlantic Green Power Corporation, effective November 30, 2009 (Incorporated by reference to Exhibit 10.5 to the Company’s Form 10-K filed with the SEC on March 31, 2010).
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10.6
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East Tract Ground Lease Agreement between Edward J. Stella, Jr. and Atlantic Green Power Corporation dated August 6, 2010 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on August 12, 2010).
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10.7
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West Tract Ground Lease Agreement between Edward J. Stella, Jr. and Atlantic Green Power Corporation dated August 6, 2010 (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on August 12, 2010).
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31.1
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Section 302 Certification of Principal Executive Officer.
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31.2
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Section 302 Certification of Principal Financial Officer.
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32.1
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Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
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32.2
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Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.
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E-1