SOLAR ACQUISITION CORP. - FORM 10-Q/A

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EX-31.1 - CERTIFICATION - SOLAR ACQUISITION CORP.	solar_ex311.htm
EX-32.1 - CERTIFICATION - SOLAR ACQUISITION CORP.	solar_ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q / Amendment No. 1

(Mark One)

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

For the quarterly period ended September 30, 2010

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

For the transition period from ________________ to _______________

000-52225

(Commission file number)

SOLAR ACQUISITION CORP.

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

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

215 Dino Drive, Ann Arbor, MI 48103

(Address of principal executive offices)

734-320-7628

(Issuer's telephone number)

N/A

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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of October 14, 2010 11,541,000–shares of common stock

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

Solar Acquisition Corp.

Index

		Page Number
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Balance Sheet as of September 30, 2010 (unaudited)	3

	Statement of Operations for the nine months ended September 30, 2010 and 2009 and from inception (June3, 2006) to September 30, 2010 (unaudited)	4

	Statement of Stockholders’ Deficit from inception (June 3, 2006) to September 30, 2010(unaudited)	6

	Statements of Cash Flows for the nine months ended September 30, 2010 and 2009 and from Inception(June 3, 2006) to September 30, 2010 (unaudited)	5

	Notes to Interim Financial Statements (unaudited)	7

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

Item 3.	Controls and Procedures	13

PART II. OTHER INFORMATION		13

Item 1.	Legal Proceedings	13

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13

Item 3.	Defaults Upon Senior Securities	14

Item 4.	Submission of Matters to a Vote of Security Holders	14

Item 5.	Other Information	14

Item 6.	Exhibits	14

SIGNATURES		15

EXPLANATORY NOTE:

This report is being amended to revise the certification on Exhibit 31.1

SOLAR ACQUISITION CORP.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	September 30,			December 31,
	2010			2009
	(Unaudited)			(Audited)
ASSETS

CURRENT
Cash	$	1		$	90,935
Due from related party		3,210			3,210

TOTAL ASSETS	$	3,211		$	94,145

LIABILITIES AND SHAREHOLDER EQUITY

CURRENT
Accounts payable	$	-		$	-
Note payable		7,850			7,850

TOTAL LIABILITIES		7,850			7,850

STOCKHOLDER EQUITY

Common stock, authorized, 100,000,000 shares, par value $.001
- issued and outstanding, 11,533,333(December 31, 2009 - 11,533,333)		11,533			11,533

Preference shares, authorized, 1,000,0000
- issued and outstanding - nil (December 31, 2009 - nil)		-			-

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

Deficit accumulated during development stage		(1,447,239	)		(1,356,305	)

Total Stockholder Equity(Deficit)		(4,639	)		86,295

TOTAL LIABILITIES AND STOCKHOLDER EQUITY	$	3,211		$	94,145

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

SOLAR ACQUISITION CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF OPERATIONS(Unaudited)

												June 3, 2006
	THREE MONTHS ENDED					NINE MONTHS ENDED						(Inception)
	SEPTEMBER 30,					SEPTEMBER 30,						To September
	2010		2009			2010			2009				30, 2010

REVENUE	$	-	$	-		$	-		$	-		$	-

OPERATING EXPENSES

Professional fees		-		500			2,500			2,000			17,750
Consulting fees		-		154,000			67,530			154,000			1,320,749
General and administrative		-		60,348			20,904			62,411			108,740

Total Operating Expenses		-		214,848			90,934			218,411			1,447,239

NET INCOME(LOSS)	$	-	$	(214,848	)	$	(90,934	)	$	(218,411	)	$	(1,447,239	)

WEIGHTED AVERAGE NUMBER OF		11,533,333		10,441,777			11,533,333			10,441,777
SHARES OUTSTANDING

BASIC AND DILUTED LOSS PER SHARE	$	-	$	(0.02	)	$	(0.01	)	$	(0.02	)

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

SOLAR ACQUISITION CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS

							June 3, 2006
	NINE MONTHS ENDED						(Inception)
	SEPTEMBER 30,						To September
	2010			2009				30, 2010

CASH FLOWS FROM OPERATING ACTIVITIES
Net income(loss)	$	(90,934	)	$	(218,411	)	$	(1,447,239	)
Changes in assets and liabilities
Stock issued for services		-			-			990,000
Increase(decrease) in accounts payable		-			(6,000	)		-

Cash Used In Operating Activities		(90,934	)		(224,411	)		(457,239	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock		-			452,500			452,600
Advances to related party		-			(1,110	)		(3,210	)
Increase in note payable		-			2,000			7,850

Cash Provided By Financing Activities		-			453,390			457,240

NET CHANGE IN CASH		(90,934	)		228,979			1

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		90,935			26			-

CASH AND CASH EQUIVALENTS - September 30,	$	1		$	229,005		$	1

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

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

SOLAR ACQUISITION CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDER EQUITY

FROM INCEPTION(JUNE 3, 2006) TO SEPTEMBER 30, 2010

					ADDITIONAL		ACCUM-
	COMMON STOCK				PAID IN		ULATED
	SHARES		AMOUNT		CAPITAL		DEFICIT			TOTALS

Balance - June 3, 2006		-	$	-	$	-	$	-		$	-

Common stock issued		100,000		100		-		-			100

Net loss		-		-		-		(9,350	)		(9,350	)

Balance - December 31, 2006		100,000		100		-		(9,350	)		(9,250	)

Net income(loss) - December 31, 2007		-		-		-		-			-

Balance - December 31, 2007		100,000		100		-		(9,350	)		(9,250	)

Issuance of stock for services		9,900,000		9,900		980,100		-			990,000

Net income(loss) - December 31, 2008		-		-		-		(992,574	)		(992,574	)

Balance - December 31, 2008		10,000,000		10,000		980,100		(1,001,924	)		(11,824	)

Issuance of stock for cash		1,533,333		1,533		450,967		-			452,500

Net income(loss) - December 31, 2009		-		-		-		(354,381	)		(354,381	)

Balance - December 31, 2009		11,533,333		11,533		1,431,067		(1,356,305	)		86,295

Net income(loss) - September 30, 2010		-		-		-		(90,934	)		(90,934	)

Balance - September 30, 2010		11,533,333	$	11,533	$	1,431,067	$	(1,447,239	)	$	(4,639	)

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

SOLAR ACQUISITION CORP.

A Development Stage Company

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a)

Organization and Business:

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

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

The year end of the Company is December 31.

(b)

Basis of Presentation

The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has adopted a year end of December 31. These interim financial statements include all of the necessary adjustments to make them not misleading.

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

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

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

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

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

(c)

Use of Estimates:

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

(d)

Cash and Cash Equivalents:

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

(e)

Income Taxes:

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.

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

(f)

Loss per Common Share:

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments.

(g)

Fair Value of Financial Instruments:

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

NOTE 2 - ADVANCES TO A RELATED PARTY

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

NOTE 3 - NOTE PAYABLE:

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

NOTE 4 - CAPITAL STOCK:

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

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

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

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

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

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

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

NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS:

In October, 2009, the FASB issued ASU 2009-15, “Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing (amendments to ASC Topic 470, “Debt”)”, and provides guidance for accounting and reporting for own-share lending arrangements issued in contemplation of a convertible debt issuance. At the date of issuance, a share-lending arrangement entered into on an entity’s own shares should be measured at fair value in accordance with Topic 820 and recognized as an issuance cost, with an offset to additional paid-in capital. Loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs. The amendments also require several disclosures including a description and the terms of the arrangement and the reason for entering into the arrangement. The effective dates of the amendments are dependent upon the date the share-lending arrangement was entered into and include retrospective application for arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009. The Company is currently evaluating the potential impact of ASU 2009-15 on its financial statements.

In December 2009, FASB issued ASU 2009-16, “Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets”. ASU 2009-16 amends the FASB ASC for the issuance of SFAS 166, “Accounting for Transfers of Financial Assets—an amendment of SFAS 140”. The amendments in ASU 2009-16 improve financial reporting by eliminating the exceptions for qualifying special-purpose entities from the consolidation guidance and the exception that permitted sale accounting for certain mortgage securitizations when a transferor has not surrendered control over the transferred financial assets. In addition, the amendments require enhanced disclosures about the risks that a transferor continues to be exposed to because of its continuing involvement in transferred financial assets. ASU 2009-16 is effective as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009. The Company expects the adoption of ASU 2009-16 will have a material impact on the Company’s results of operations or financial position.

In December 2009, FASB issued ASU 2009-17, “Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities”. ASU 2009-17 amends the FASB ASC for the issuance of SFAS 167, “Amendments to FASB Interpretation No. 46(R”). The amendments in ASU 2009-17 replace the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. ASU 2009-17 also requires additional disclosures about an enterprise's involvement in variable interest entities. ASU 2009-17 is effective as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009. The Company expects the adoption of ASU 2009-17 will not have a material impact on the Company’s results of operations or financial position.

In January 2010, FASB issued ASU 2010-2, “Accounting and Reporting for Decreases in Ownership of a Subsidiary- a Scope Clarification”. ASU 2010-2 addresses implementation issues related to the changes in ownership provisions in the Consolidation—Overall Subtopic (Subtopic 810-10) of the FASB ASC, originally issued as SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements”. Subtopic 810-10 establishes the accounting and reporting guidance for noncontrolling interests and changes in ownership interests of a subsidiary. An entity is required to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary. Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary at fair value. The gain or loss includes any gain or loss associated with the difference between the fair value of the retained investment in the subsidiary and its carrying amount at the date the subsidiary is deconsolidated. In contrast, an entity is required to account for a decrease in ownership interest of a subsidiary that does not result in a change of control of the subsidiary as an equity transaction. ASU 2010-2 is effective for the Company starting January 3, 2010. The Company expects the adoption of ASU 2010-2 will not have a material impact on the Company's results of operations or financial position.

In January 2010, FASB issued ASU 2010-6, “Improving Disclosures about Fair Measurements". ASU 2010-6 provides amendments to subtopic 820-10 that require separate disclosure of significant transfers in and out of Level 1 and Level 2 fair value measurements and the presentation of separate information regarding purchases, sales, issuances and settlements for Level 3 fair value measurements. Additionally, ASU 2010-6 provides amendments to subtopic 820-10 that clarify existing disclosures about the level of disaggregation and inputs and valuation techniques. ASU 2010-6 is effective for financial statements issued for interim and annual periods ending after December 15, 2010. The Company expects the adoption of ASU 2010-06 will not have a material impact on the Company’s results of operations or financial position.

In February 2010, FASB issued ASU 2010-9 Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements”. ASU 2010-9 amends disclosure requirements within Subtopic 855-10. 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. ASU 2010-9 is effective for interim and annual periods ending after June 15, 2010. The Company expects the adoption of ASU 2010-06 will not have a material impact on the Company’s results of operations or financial position.

NOTE 5 – INCOME TAXES

The components of income tax (benefit) expense for the nine months ended September 30, 2010 and September 30, 2009 respectively, are as follows:

	2010		2009
Federal:
Current	$	-	$	-
Deferred		-		-
		-		-

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

The Company has a net operating loss carry forward to offset future taxable income of $1,447,239. Subject to current regulations, this carry forward will begin to expire in 2022. The amount and availability of the net operating loss carry forwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carry forwards.

The Company’s income tax expense (benefit) for the nine months ended September 30, 2010 and 2009 respectively, differed from the statutory federal rate of 34 percent as follows:

	2010			2009

Statutory rate applied to loss before income taxes	$	(492,061	)	$	(414,914	)

Increase(decrease) in income taxes resulting from:

State, income taxes		-			-
Other, including reserve for deferred tax asset		492,061			414,914

Income Tax Expense	$	-		$	-

Temporary differences due to statutory requirements in the recognition of assets and liabilities for tax and financial reporting purposes, generally including such items as organizational costs, accumulated depreciation and amortization, allowance for doubtful accounts, organizational and start-up costs and vacation accruals. These differences give rise to the financial statement carrying amounts and tax bases of assets and liabilities causing either deferred tax assets or liabilities, as necessary, as of September 30, 2010 and 2009, respectively:

	September 30,
	2010			2009

Deferred tax assets
Net operating loss carry forwards	$	1,447,239		$	1,220,335
Less: valuation allowances		(1,447,239	)		(1,220,335	)

Net Deferred Tax Asset	$	-		$	-

Results of Operations

Three months ended September 30, 2010 vs. September 30, 2009

There was no revenue for the Three months ended September 30, 2010 and no revenue for the Three months ended September 30, 2009 and no revenue since inception June 3, 2006.

Selling, general and administrative expenses for the Three months ended September 30, 2010 were $0. As compared to $500 for the same period in 2009.

There has been no interest expense or financing costs for the Three months ended September 30, 2010 and the Three months ended September 30, 2009 and no costs since inception June 3, 2006.

nine months ended September 30, 2010 vs. September 30, 2009

There was no revenue for the nine months ended September 30, 2010 and no revenue for the nine months ended September 30, 2009 and no revenue since inception June 3, 2006.

Selling, general and administrative expenses for the nine months ended September 30, 2010 were $67,530. As compared to $154,000 for the same period in 2009.

There has been no interest expense or financing costs for the nine months ended September 30, 2010 and the nine months ended September 30, 2009 and no costs since inception June 3, 2006.

Liquidity and Capital Resources

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

Off-balance sheet arrangements

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

Item 3. Controls and Procedures

As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based on this evaluation, these officers have concluded that the design and operation of our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

None

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

None

Item 3. Defaults Upon Senior Securities

None

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

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

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

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

SIGNATURES

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

	SOLAR ACQUISITION CORP.

Dated: February 28, 2010	By:	/s/ Peter Klamka
		Peter Klamka, Chief Executive and
		Principal Accounting Officer

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