Attached files
Exhibit 99.1
Clean Wind Energy, Inc.
(A Development Stage Company)
(A Development Stage Company)
Index to Financial Statements
Page | ||
Report of Independent Registered Public Accounting Firm
|
F-2 | |
Balance Sheet September 30, 2010
|
F-3 | |
Statement of Operations for the period from July 26, 2010 (date
of inception) through September 30, 2010
|
F-4 | |
Statement of Stockholders Equity for the period from July 26,
2010 (date of inception) through September 30, 2010
|
F-5 | |
Statement of Cash Flows for the period from July 26, 2010 (date
of inception) through September 30, 2010
|
F-6 | |
Notes to Financial Statements
|
F-7 to F-9 |
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Clean Wind Energy, Inc.
We have audited the accompanying balance sheet of Clean Wind Energy, Inc. (the Company), a
development stage company as of September 30, 2010 and the related statements of operations,
changes in stockholders equity and cash flows for the period from July 26, 2010 (date of
inception) through September 30, 2010. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States of America). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of internal control
over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Companys internal control over financial reporting. Accordingly, we express no such opinion. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to the above present fairly, in all material
respects, the financial position of Clean Wind Energy, Inc. as of September 30, 2010, and the
results of operations, stockholders equity and cash flows for the period from July 26, 2010 (date
of inception) through September 30, 2010 in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a
going concern. As discussed in Note 3 to the accompanying financial statements, the Company is a
development stage company and is incapable of
generating sufficient cash flow to sustain its operations without securing additional financing,
which raises substantial doubt about its ability to continue as a going concern. Managements plans
in regard to this matter are described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ RBSM LLP
New York, New York
December 29, 2010
December 29, 2010
F-2
Clean Wind Energy, Inc.
(A Development Stage Company)
Balance Sheet
(A Development Stage Company)
Balance Sheet
September 30, | ||||
2010 | ||||
Assets: |
||||
Current assets: |
||||
Cash |
$ | 75 | ||
Total assets |
75 | |||
Liabilities and Stockholders Equity (Deficit): |
||||
Stockholders equity: |
||||
Common stock, par value $0.001, 100,000 shares authorized;
75,000 shares issued and outstanding at September 30, 2010 |
75 | |||
Deficit accumulated during development stage |
| |||
Total stockholders equity |
75 | |||
Total liabilities and stockholders equity |
$ | 75 | ||
The accompanying notes are an integral part of these financial statements.
F-3
Clean Wind Energy, Inc.
(A development Stage Company)
Statement of Operations
(A development Stage Company)
Statement of Operations
For the Period | ||||
from July 26, 2010 | ||||
(date of inception) | ||||
through September | ||||
30, 2010 | ||||
Revenue |
$ | | ||
Expenses |
| |||
Net income/(loss) |
$ | | ||
Net income/(loss) per common share: |
||||
Basic |
$ | | ||
Diluted |
$ | | ||
Weighted average number
of common shares
outstanding basic
and diluted |
75,000 |
The accompanying notes are an integral part of these financial statements.
F-4
Clean Wind Energy, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders Equity
(A Development Stage Company)
Statement of Changes in Stockholders Equity
Common Stock Par Value | ||||||||||||||||
$0.001 Per Share | ||||||||||||||||
Accumulated | Total | |||||||||||||||
Retained Earnings | Stockholders | |||||||||||||||
Shares | Amount | / (Deficit) | Equity | |||||||||||||
Balance July 26, 2010 |
| $ | | $ | | | ||||||||||
Issuance of common stock |
75,000 | 75 | | 75 | ||||||||||||
Balance September 30, 2010 |
75,000 | $ | 75 | $ | | 75 | ||||||||||
The accompanying notes are an integral part of these financial statements.
F-5
Clean Wind Energy, Inc.
(A Development Stage Company)
Statement of Cash Flows
(A Development Stage Company)
Statement of Cash Flows
For the Period | ||||
from July 26, 2010 | ||||
(date of inception) | ||||
through September | ||||
30, 2010 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||
Net income (loss) |
$ | | ||
Net cash provided by operating activities |
| |||
Cash flows from financing activities: |
||||
Proceeds from issuance of common stock |
75 | |||
Net increase in cash and cash equivalent |
75 | |||
Cash and cash equivalent, at beginning of period |
| |||
Cash and cash equivalent, at end of period |
$ | 75 | ||
Supplemental Disclosures of Cashflow Information: |
||||
Interest paid |
$ | | ||
Income taxes paid |
$ | |
The accompanying notes are an integral part of these financial statements.
F-6
Clean Wind Energy, Inc.
(A Development Stage Company)
Notes to Financial Statements
(A Development Stage Company)
Notes to Financial Statements
Note 1 Nature of Operations
Clean Wind Energy, Inc. (the Company) a Delaware corporation was formed on July 26, 2010 the
Company is developing plans to design and construct large downdraft towers that use benevolent,
non-toxic natural elements to generate electricity and clean water economically (Downdraft
Towers) by integrating and synthesizing numerous proven as well as emerging technologies. In
addition to constructing Downdraft Towers in the United States and abroad, the Company intends to
be prepared to establish partnerships at home and abroad to propagate these systems and meet
increasing global demand for clean water and electricity.
Note 2 Summary of Significant Accounting Policies
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Development stage entity
The Company is considered to be a development stage entity, as defined by the Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) Topic 915. The Company has not
generated any revenues to date, has no significant expenses and has no recurring losses.
Consequently, its operations are subject to all the risks inherent in the establishment of a new
business enterprise. For the period from July 26, 2010 (date of inception) through September 30,
2010, the Company has no significant losses.
Basic and diluted net loss per share
We utilize ASC 260, Earnings Per Share for calculating the basic and diluted loss per share. In
accordance with ASC 260, the basic and diluted loss per share is computed by dividing net loss
available to common stockholders by the weighted average number of common shares outstanding.
Diluted net loss per share is computed similar to basic net loss per share except that the
denominator is adjusted for the potential dilution that could occur if stock options, warrants, and
other convertible securities were exercised or converted into common stock. Potentially dilutive
securities were not included in the calculation of the diluted net loss per share as their effect
would be anti-dilutive. The Company has no common stock equivalents at September 30, 2010.
Income taxes
The Company utilizes ASC 740 Income Taxes which requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred income taxes are recognized for
the tax consequences in future years of differences between the tax bases of assets and liabilities
and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax
rates applicable to the periods in which the differences are expected to affect taxable income.
Cash and cash equivalents
For purposes of the statement of cash flows, cash and cash equivalents includes demand deposits,
saving accounts and money market accounts. The Company considers all highly liquid debt
instruments with maturities of three months or less when purchased to be cash and cash equivalents.
F-7
Revenue recognition
The Company has generated no revenues to date. It is the Companys policy that revenue from
product sales or services will be recognized in accordance with ASC 605 Revenue Recognition. Four
basic criteria must be met before revenue can be recognized:
(1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price
is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria
(3) and (4) are based on managements judgments regarding the fixed nature of the selling prices of
the products delivered and the collectability of those amounts. Provisions for discounts and
rebates to customers, estimated returns and allowances, and other adjustments are provided for in
the same period the related sales are recorded. The Company will defer any revenue for which the
product was not delivered or is subject to refund until such time that the Company and the customer
jointly determine that the product has been delivered or no refund will be required.
Research and development
In accordance with ASC 730, Research and Development, the Company expenses all research and
development costs as incurred. The Company had incurred no research and development costs since
inception date, July 26, 2010 through September 30, 2010.
Recently Adopted Accounting Principles
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and
does not expect the future adoption of any such pronouncements to have a significant impact on its
results of operations, financial condition or cash flow.
Note 3 Going Concern
The accompanying financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in the normal course of
business. The Company is a development stage entity and has not established any sources of revenue
to cover its operating expenses. The Company will engage in very limited activities without
incurring any significant liabilities that must be satisfied in cash until a source of funding is
secured. As shown in the accompanying financial statements, the Company has not generated any
revenue for the period from July 26, 2010 (date of inception) through September 30, 2010. The
Company had $75 cash balance at September 30, 2010 from the issuance of common stocks to its
founders and officers since its date of inception. These factors raise substantial doubt about the
Companys ability to continue as a going concern.
The Companys ability to continue existence is dependent upon commencing its planned operations,
managements ability to develop and achieve profitable operations and/or upon obtaining additional
financing to carry out its planned business. The Company intends to fund its business
development, acquisition endeavors and operations through equity and debt financing arrangements.
Subsequent to September 30, 2010, certain shareholders of the Company have committed to meeting
operating expenses. However, there can be no assurance that these arrangements will be sufficient
to fund its ongoing capital expenditures, working capital, and other cash requirements. The
outcome of these matters cannot be predicted at this time.
There can be no assurance that any additional financings will be available to the Company on
satisfactory terms and conditions, if at all. In the event we are unable to continue as a going
concern, we may elect or be required to seek protection from our creditors by filing a voluntary
petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date,
management has not considered this alternative, nor does management view it as a likely occurrence.
The accompanying financial statements do not include any adjustments related to the recoverability
or classification of asset-carrying amounts or the amounts and classification of liabilities that
may result should the Company be unable to continue as a going concern.
Note 4 Commitments and Contingencies
The Company has no lease and employment commitments as of September 30, 2010.
F-8
Note 5 Stockholders Equity
The Company is authorized to issue 100,000 shares of its common stock, with par value of $0.001 per
share.
On September 22, 2010, the Company issued 75,000 shares of common stock to its founders for
$75.
As of September 30, 2010 there were 75,000 shares of common stock issued and outstanding.
Note 6 Subsequent Events
Merger transaction
In
late December 29, 2010, the Company merged with a wholly owned subsidiary of Superior Silver Mines,
Inc., (Superior) a Nevada corporation, pursuant to an Agreement and Plan of Merger. Under the
terms of the Agreement, each share of Clean Wind capital stock was converted into the right to
receive 4,000 shares of Superiors common stock.
Superior is a publicly registered corporation with no significant operations prior to the merger.
For accounting purposes, Clean Wind shall be the surviving entity. The transaction is accounted for
as a recapitalization of Clean Wind pursuant to which Clean Wind is treated as the surviving and
continuing entity although Superior is the legal acquirer rather than a reverse acquisition.
Accordingly, the registrant or Superiors historical financial statements are those of Clean Wind
immediately following the consummation of the reverse merger.
Related Parties
During the period of November and December 2010, the Companys president and chairman of the board
has advanced the Company the sum of $71,333; cash received and deposited of $22,000 and the balance
of $49,333 represents reimbursable expenses. These amounts are interest free advances.
The Company also owes reimbursable expenses of approximately $15,000 to the chief operating officer
and director.
F-9