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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 10-Q/A

(MARK ONE)

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2011

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________    to       ___________
http://www.solarparkinitiatives.com/home.html

SOLAR PARK INITIATIVES, INC.
(Formerly Known as Critical Digital Data, Inc.)

(Exact name of registrant as specified in its charter)

     
Nevada
333-143672
80-0189455
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
 
100 W. Main Street
Suite 200
Kingstree, SC 29556
 (Address of principal executive offices including zip code)
 
(904) 644-6090
Registrant’s telephone number, including area code:



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 [ ]
 
Indicate by a 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  [X ]   No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ] Accelerated filer [  ] Non-accelerated filer [  ] Smaller Reporting Company  [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  [ ]  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 August 14, 2011 the Company had 60,781,019 shares of its common stock, par value per share $0.001, issued and outstanding.
 
 
1

 
 
Explanatory Note
 
We are filing and amendment Form 10Q/A, for the reason of amending the originally filed 10Q as of June 30, 2011 and to file the XBRL format as of the extension timeline.
 
SOLAR PARK INITIATIVES, INC.
(Formerly Known as Critical Digital Data, Inc.)
A Development Stage Company
FORM 10−Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011
 
 
TABLE OF CONTENTS      Page No.
       
PART  I
  FINANCIAL INFORMATION  
      4
     
Item  1.  Financial Statements (unaudited) 18
    
Item  2.  
Management's Discussion and Analysis of Financial Condition and Results of Operations
22
     
Item  3.  Quantitative and Qualitative Disclosure About Market Risk 22
    
Item  4.   Controls and Procedures  
       
       
PART  II
 
OTHER INFORMATION
 
       
     
Item  1.  Legal Proceedings 22
  
Item  1A.  Risk Factors 22
    
Item  2.  Unregistered Sale of Equity Securities and Use of Proceeds
22
    
Item  3.  Defaults Upon Senior Securities 23
     
Item  4. [Removed and Reserved] 23
     
Item  5. Other Information 23
   
Item  6.   Exhibits  
       
SIGNATURES
    24
 
 
2

 

Cautionary Statement Regarding Forward-Looking Statements
 
This Report on Form 10-Q contains forward-looking statements. Forward-looking statements are statements that do not represent historical facts. We use words such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” “continue” and similar expressions to identify forward-looking statements. Forward-looking statements in this Report on Form 10-Q include, but are not limited to, those discussed in the section entitled "Management's Discussion and Analysis or Plan of Operation”, our plans and expectations regarding future financial results, operating results, business strategies, projected costs, products, competitive positions, management’s plans and objectives for future operations, and industry trends. These forward-looking statements are based on information available to us as of the date of this Report on Form 10-Q and current expectations, forecasts and assumptions and involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. Such risks and uncertainties include a variety of factors, some of which are beyond our control. Please see “Part II; Item 1A: Risk Factors” and our other filings with the Securities and Exchange Commission for additional information on risks and uncertainties that could cause actual results to differ. These forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we are under no obligation to, and expressly disclaim any responsibility to, update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.
 
Estimates of future financial results are inherently unreliable.

From time to time, representatives of Solar Park Initiatives, Inc. (f/k/a Critical Digital Data.) ("SPI,” "Solar Park,” the ”Company," “we,” “our,” or “us”) may make public predictions or forecasts regarding the Company's future results, including estimates regarding future revenues, expense levels, earnings or earnings from operations. Any forecast regarding the Company's future performance reflects various assumptions. These assumptions are subject to significant uncertainties, and, as a matter of course, many of them will prove to be incorrect. Further, the achievement of any forecast depends on numerous factors (including those described in this discussion), many of which are beyond the Company's control. As a result, there can be no assurance that the Company's performance will be consistent with any management forecasts or that the variation from such forecasts will not be material and adverse. Investors are cautioned not to base their entire analysis of the Company's business and prospects upon isolated predictions, but instead are encouraged to utilize the entire available mix of historical and forward-looking information made available by the Company, and other information affecting the Company and its products, when evaluating the Company's prospective results of operations.  In addition, representatives of the Company may occasionally comment publicly on the perceived reasonableness of published reports by independent analysts regarding the Company's projected future performance. Such comments should not be interpreted as an endorsement or adoption of any given estimate or range of estimates or the assumptions and methodologies upon which such estimates are based. Undue reliance should not be placed on any comments regarding the conformity, or lack thereof, of any independent estimates with the Company's own present expectations regarding its future results of operations. The methodologies employed by the Company in arriving at its own internal projections and the approaches taken by independent analysts in making their estimates are likely different in many significant respects. Although the Company may presently perceive a given estimate to be reasonable, changes in the Company's business, market conditions or the general economic climate may have varying effects on the results obtained through the use of differing analyses and assumptions. The Company expressly disclaims any continuing responsibility to advise analysts or the public markets of its view regarding the current accuracy of the published estimates of outside analysts. Persons relying on such estimates should pursue their own independent investigation and analysis of their accuracy and the reasonableness of the assumptions on which they are based.

The following information should be read in conjunction with the condensed consolidated Financial Statements and the accompanying Notes to condensed Financial Statements included in this Report on Form 10-Q. Our fiscal year ends on September 30 of the applicable calendar year. All references to fiscal periods apply to our fiscal quarters or year which ends on the last day of the calendar month end.
 
 
3

 
 
PART I - FINANCIAL INFORMATION

ITEM 1.    Financial Statements (unaudited)
 
Solar Park Initiatives, Inc.
(f/k/a Critical Digital Data, Inc.)
A Development Stage Company
BALANCE SHEETS
 
 
   
(Unaudited)
   
(Audited)
 
   
June 30, 2011
   
September 30, 2010
 
ASSETS
           
Current assets
           
Cash
  $ 10,846     $ 158  
Accounts receivable
    12,000       -  
Prepaid expenses
    12,500       -  
Total current assets
    35,346       158  
                 
Other assets
    198,203       40,203  
                 
Fixed assets, net
    10,956       9,306  
                 
Total assets
  $ 244,505     $ 49,667  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
Current liabilities
               
Accounts payable
  $ 93,032     $ 57,623  
Wages payable
    67,041       25,000  
Convertible debt, net
    259,572          
Current portion of related party debt
    5,870       32,202  
Note payable
    10,000       -  
Accrued expenses
    32,803       5,898  
Total current liabilities
    468,318       120,723  
                 
Long-term liabilities
               
Long-term debt due to related party
    88,883       -  
Total liabilities
    557,201       120,723  
                 
Commitments and contingencies
               
                 
Stockholders' deficit
               
Common stock, $0.001 par; 100,000,000 authorized
               
60,781,019 and 61,605,000 issued, respectively
               
60,781,019 and 60,905,000 outstanding, respectively
    60,780       60,905  
Paid-in capital
    1,996,613       1,220,491  
Common stock payable
    -       1,754  
Deferred compensation
    (391,427 )     (203,325 )
Accumulated deficit
    (1,978,661 )     (1,150,881 )
Total stockholders' deficit
    (312,695 )     (71,056 )
Total liabilities and stockholders' deficit
  $ 244,506     $ 49,667  
 
 
The accompanying notes are an integral part of these condensed financial statements.
 
 
4

 
 
Solar Park Initiatives, Inc.
(f/k/a Critical Digital Data, Inc.)
A Development Stage Company
STATEMENTS OF OPERATIONS
 
 
   
For the Three Months Ended
   
For the Three Months Ended
 
   
June 30, 2011
   
June 30, 2010
 
             
Revenues
  $ 39,000     $ -  
Cost of sales
    15,467       -  
Gross profit
    23,533       -  
                 
Operating expenses
               
Selling, general and administrative 
    329,004       481,152  
 Total operating expenses
    329,004       481,152  
                 
Loss from operations
    (305,471 )     (481,152 )
                 
Other income (expense)
    -       -  
Interest expense
    (53,995 )     -  
 Total other income (expense)
    (53,995 )     -  
                 
Loss before provision for income taxes
    (359,466 )     (481,152 )
Provision for income taxes
    -       -  
Net loss
  $ (359,466 )   $ (481,152 )
                 
                 
Net loss per share – basic and diluted
  $ (0.01 )   $ (0.01 )
                 
Weighted average shares outstanding – basic and diluted
    60,781,019       53,137,500  
 

The accompanying notes are an integral part of these condensed financial statements.
 
 
5

 

Solar Park Initiatives, Inc.
(f/k/a Critical Digital Data, Inc.)
A Development Stage Company
STATEMENTS OF OPERATIONS
 
 
   
For the Nine Months Ended
   
For the Nine Months Ended
   
For the period from September 25, 2009 (Inception) through
 
   
June 30, 2011
   
June 30, 2010
   
June 30, 2011
 
                   
Revenues
  $ 39,000     $ -     $ 39,000  
Cost of sales
    15,467       -       15,467  
Gross profit
    23,533       -       23,533  
                         
Operating expenses
                       
Selling, general and administrative 
    782,852       481,152       1,933,988  
 Total operating expenses
    782,852       481,152       1,933,988  
                         
Loss from operations
    (759,319 )     481,152       (1,910,455 )
                         
Other income (expense)
    -       -       -  
Interest expense
    (68,461 )     -       (68,461 )
 Total other income (expense)
    (68,461 )     -       (68,461 )
                         
Loss before provision for income taxes
    (827,780 )     (481,152 )     (1,978,916 )
Provision for income taxes
    -       -       -  
Net loss
  $ (827,780 )   $ (481,152 )   $ (1,978,916 )
                         
                         
Net loss per share – basic and diluted
  $ (0.01 )   $ (0.03 )   $ (0.05 )
                         
Weighted average shares outstanding – basic and diluted
    62,192,578       32,470,470       40,105,815  
 
 
The accompanying notes are an integral part of these condensed financial statements.

 
6

 
 
 
Solar Park Initiatives, Inc.
(f/k/a Critical Digital Data, Inc.)
A Development Stage Company
STATEMENT OF STOCKHOLDERS’ DEFICIT
 
   
Common Stock
   
Additional
   
Common
Stock
   
Deferred
   
 Accumulated
   
Total
Stockholders
 
   
Shares
   
Amount
   
Capital
   
Payable
   
Compensation
   
Deficit
   
Equity
 
Balances, September 25, 2009, inception
    -     $ -     $ -     $ -     $ -     $ -     $ -  
                                                         
Shares issued to SNRY for cash, Oct 15, 2009
    34,996,768       34,996       (21,897 )                             13,099  
                                                         
Shares issued for services, Nov 10, 2009
    16,136,969       16,137       (10,097 )                             6,040  
                                                         
Shares issued for private placement, Dec 12, 2009
    667,921       668       99,332                               100,000  
                                                         
Capital contribution in the form of debt extinguishment
      97,963                               97,963  
                                                         
Net loss
                                            (246,465 )     (246,465 )
                                                         
Balances, January 31, 2010
    51,801,658     $ 51,801     $ 165,301     $ -     $ -     $ (246,465 )   $ (29,363 )
                                                         
Shares issued for private placement, Feb 18, 2010
    1,335,842       1,337       198,663                               200,000  
                                                         
Options granted, April 30, 2010
    -       -       297,450                               297,450  
                                                         
Shares issued for reverse merger exchange
    7,767,500       7,768       65,358                               73,125  
                                                         
Exercised cashless options held by Company
              (546 )     546                       -  
                                                         
Forgiveness of debt
                    77,534                               77,534  
                                                         
Stock payable for services agreements
                    221,032       1,208       (222,240 )             -  
                                                         
Deferred compensation expensed
                                    18,915               18,915  
                                                         
Options issued for employment
                    119,391                               119,391  
                                                         
Options issued for acquisition of other assets
              76,309                               76,309  
                                                         
Net loss
                                            (904,416 )     (904,416 )
                                                         
Balances, September 30, 2010
    60,905,000     $ 60,905     $ 1,220,491     $ 1,754     $ (203,325 )   $ (1,150,881 )   $ (71,056 )
                                                         
Stock payable for services agreements
                    84,640       160       (84,800 )             -  
                                                         
Exercised cashless options previously held by Company
    609,551       610       (64 )     (546 )                     -  
                                                         
Stock issued for services agreements
    800,000       800       251,300       (100 )     (252,000 )             -  
                                                         
Deferred compensation expensed
                                    142,604               142,604  
                                                         
Cancelled shares
    (545,551 )     (546 )     546                               -  
                                                         
Net loss
                                            (237,189 )     (237,189 )
                                                         
Balances, December 31, 2010 (unaudited)
    61,769,000     $ 61,769     $ 1,556,913     $ 1,268     $ (397,521 )   $ (1,388,070 )   $ (165,641 )
                                                         
Discount on loans
                    39,004                               39,004  
                                                         
Cashless options granted by Company
                    2,272                               2,272  
                                                         
Stock issued for services agreements
    5,614,484       5,614       298,496       (1,268 )     (207,976 )             94,866  
                                                         
Deferred compensation expensed
                                    109,606               109,606  
                                                         
Cancelled shares
    (7,150,647 )     (7,151 )     7,151                               -  
                                                         
Net loss
                                            (231,124 )     (231,124 )
                                                         
Balances, March 31, 2011 (unaudited)
    60,232,837     $ 60,232     $ 1,903,836     $ -     $ (495,891 )   $ (1,619,195 )   $ (151,017 )
                                                         
Discount on loans
                    40,000                               40,000  
                                                         
Cashless options granted by Company
                    42,361                               42,361  
                                                         
Stock issued for services agreements
    548,182       548       10,416               (10,600 )             364  
                                                         
Deferred compensation expensed
                                    115,064               115,063  
                                                         
Net loss
                                            (359,466 )     (359,466 )
                                                         
Balances, June 30, 2011 (unaudited)
    60,781,019     $ 60,780     $ 1,996,613     $ -     $ (391,427 )   $ (1,978,661 )   $ (312,695 )
 
 
The accompanying notes are an integral part of these condensed financial statements.
 
 
7

 
 
Solar Park Initiatives, Inc.
(f/k/a Critical Digital Data, Inc.)
A Development Stage Company
STATEMENTS OF CASH FLOWS
 
 
`
 
For the Nine Months Ended
   
For the Nine Months Ended
   
For the period from September 25, 2009 (Inception) through
 
   
June 30, 2011
   
June 30, 2010
   
June 30, 2011
 
                   
                   
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net loss
  $ (827,780 )   $ (481,152 )   $ (1,978,661 )
                         
Adjustments to reconcile net loss to net cash used by operating activities: 
                       
Depreciation and amortization
    44,764       -       45,610  
Stock based compensation
    457,136       18,639       1,020,762  
Accretion of discount on convertible debt
    54,576       -       54,576  
Changes in operating assets and liabilities:
                       
Accounts receivable
    (12,000 )     -       (12,000 )
Prepaid expenses and other current assets
    (12,500 )     -       (12,500 )
Wages payable
    42,041       39,807       144,577  
Accounts payable
    85,409       -       143,032  
Due to/from related parties
    (127,449 )     -       (95,247 )
Accrued expenses
    26,905       -       32,803  
Net cash used by operating activities
    (268,898 )     (422,706 )     (657,051 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
Purchase of website assets
    -       -       (10,152 )
Purchase of other assets
    (10,000 )     -       (10,000 )
Purchase of property and equipment
    (4,414 )     -       (4,414 )
Net cash used by investing activities
    (14,414 )     -       (24,566 )
                         
                         
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Net proceeds from private placements
    -       100,500       300,500  
Proceeds from notes payable - related party
    -       112,963       112,963  
Principal payments on notes payable - related party
    -       -       (15,000 )
Proceeds from notes payable
    10,000       -       10,000  
Proceeds from convertible debt
    284,000       -       284,000  
Net cash provided by financing activities
    294,000       213,463       692,463  
                         
Net increase (decrease) in cash and cash equivalents
    10,688       (209,243 )     10,846  
                         
Cash and cash equivalents at beginning of period
    158       -       -  
                         
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 10,846     $ (209,243 )   $ 10,846  
                         
SUPPLEMENTAL DISCLOSURES
                       
                         
Interest paid 
  $ -     $ -     $ -  
Taxes paid
  $ -     $ -     $ -  
                         
SCHEDULE OF NON-CASH FINANCING ACTIVITIES
                       
Capital contribution in the form of debt extinguishment
  $ -     $ -     $ 175,496  
Stock payable for deferred compensation
  $ -     $ -     $ 1,754  
Options granted for other assets and services
  $ -     $ -     $ 40,203  
Beneficial conversion feature on convertibel debt
  $ 79,004     $ -     $ 79,004  
Debt assumed for acquisition of assets (including accounts payable of $24,756)
  $ 190,000     $ -     $ 190,000  
Stock issued for accounts payable
  $ 50,000     $ -     $ 50,000  
Stock issued for deferred compensation
  $ 555,376     $ -     $ 555,376  
                         
                         
The accompanying notes are an integral part of these financial statements.
 
 
 
8

 
Solar Park Initiatives, Inc.
(f/k/a Critical Digital Data, Inc.)
A Development Stage Company

NOTES TO CONDENSED FINANCIAL STATEMENT
AS OF JUNE 30, 2011
(UNAUDITED)


1.
NATURE OF OPERATIONS
 
Company Overview

Solar Park Initiatives, Inc., f/k/a Critical Digital Data, Inc. ( the “Company”, “us”, “our” or “we”), was incorporated in the State of Nevada as Critical Digital Data, Inc. as a for-profit company on May 2, 2008 and established a fiscal year end of September 30.  Prior to the merger with Solar Park (as defined below), the Company was a development stage company that intended to develop, launch and operate an online data storage service specifically for data preservation and disaster recovery.  As a result of the merger with Solar Park Initiatives, Inc., privately owned Nevada corporation (“Solar Park”), we have adopted the business plan of Solar Park.

On July 12, 2010, the Company consummated an agreement to acquire all of the outstanding capital stock of Solar Park, in exchange for 31,449,016 shares of the Company’s common stock (“the CDIX Transaction”).  Prior to the CDIX Transaction, the Company was a non-operating public shell company with no operations, nominal assets, accrued liabilities totaling $17,042 and 7,280,000 shares of common stock issued and outstanding; and Solar Park, was a professional services and project developing company.  The CDIX Transaction is considered to be a capital transaction in substance, rather than a business combination.  In as much, the CDIX Transaction is equivalent to the issuance of stock by Solar Park for the net monetary assets of a non-operational public shell company, accompanied by a recapitalization.  CDIX issued 53,137,500 shares of its common stock for all of the issued and outstanding common stock of Solar Park. The accounting for the CDIX Transaction is identical to that resulting from a reverse acquisition, except goodwill or other intangible assets will not be recorded.  Accordingly, these financial statements are the historical financial statements of Solar Park.  Solar Park was incorporated in September 25, 2009.  Therefore, these financial statements reflect activities from September 25, 2009 (date of inception for Solar Park.) through June 30, 2011.

Solar Park, as a Solar Project Developer (“SPD”), will have its main operating line for large scale solar PV energy generation with utility scale solar projects, building upon its current developing pipeline from 200KiloWatt sized projects to over 10MegaWatt sized projects.  With its acquisition of Solar EOS Assets, Solar Park will attempt to increase its month to month operating lines with school and training revenues, in those states where it expects to develop its on going large scale solar projects. Solar Park has also begun developing a more current project pipeline of smaller solar projects from 200KW to 1MW sizes, to effectively maintain month to month revenues with continuous recurring revenues once developed and completed.  The Company anticipates it will provide engineering and construction (“EPC”) via third party vendors, while procuring most of the main system components into those smaller projects.
 
2.
GOING CONCERN
 
Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred losses from operations since our inception, and at the present time will need additional capital to maintain operations and execute our business plan.  As such, our ability to continue as a going concern is contingent upon us being able to secure an adequate amount of debt or equity capital to enable us to meet our cash requirements.  In addition, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets, the competitive environment in which we operate and the current credit shortage facing worldwide markets.

Solar Park Initiatives will attempt to develop land in the United States and foreign markets for large utility scale solar photovoltaic (“PV”) projects.  The Company anticipates it will provide engineering, procurement of products and construction (“EPC”) via third party vendors including its sister company Solar Energy Initiatives, Inc.  The Company anticipates these projects will be funded through both third-party and government incentives, which it hopes to then sell the resultant electrical production to various utilities through a Power Purchase Agreement (“PPA”).  The Company expects to provide energy savings to commercial and municipality users without any out of pocket engineering, procurement or construction (“EPC”) costs to those users of energy.  In addition to being the Solar Project Developer (“SPD”) into the projects, Solar Park Initiatives will recognize energy sales over a 20-year period or longer.
 
 
9

 
 
Solar Park Initiatives, Inc., is a professional services and project developing firm providing renewable energy through photovoltaic (“PV”) and solar thermal technologies.  The Company intends to market its services in states where insolation (sunshine) is high, land is relatively inexpensive, and utility rates are high to compete with local utility rates.  The Company attempts to leverage its energy expertise, solar PV supplier relationships, and procurement processes to help businesses, municipalities and power companies maximize the possible energy savings coupled with reduced emissions enabled by the advent of this new generation source.

Solar Park, as a SPD, will have its main operating line for large scale solar PV energy generation with utility scale solar projects, building upon its current developing pipeline of 2MW’s up to 100MW’s.  With its acquisition of Solar EOS Assets, Solar Park will attempt to increase its month to month operating lines with school and training revenues, in those states where it expects to develop its on going large scale solar projects. Solar Park has also begun developing a more current project pipeline of smaller solar projects from 200KW to 1MW sizes, to effectively maintain month to month revenues with continuous recurring revenues once developed and completed.  The Company anticipates it will provide engineering and construction (“EPC”) via third party vendors, while procuring most of the main system components into those smaller projects.
 
3.
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation

The accompanying condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.  These condensed financial statements should be read in conjunction with the Form 10-K for the year ended September 30, 2010 of the Company.

The condensed financial information is unaudited.  In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of June 30, 2011 and the results of operations and cash flows presented herein have been included in the condensed financial statements.  Interim results are not necessarily indicative of results of operations for the full year.
   
The Company is currently a development stage enterprise reporting under the provisions of Accounting Standards Codification (“ASC”) 915, Development Stage Entity. These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Financial Instruments

The Company's financial instruments consist primarily of cash.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make certain 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. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions we are required to make. Estimates that are critical to the accompanying financial statements arise from our belief that we will secure an adequate amount of cash to continue as a going concern, that our allowance for doubtful accounts is adequate to cover potential losses in our receivable portfolio, that all long-lived assets are recoverable. In addition, the determination and valuation of derivative financial instruments is a significant estimate. The markets for our products are characterized by intense competition, rapid technological development, evolving standards, short product life cycles and price competition, all of which could impact the future realization of our assets. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. It is at least reasonably possible hat our estimates could change in the near term with respect to these matters.
 
 
10

 

Off-Balance Sheet Arrangements

We do not have any 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 our investors.

Revenue Recognition

Construction Contracts

Revenue for construction contracts are primarily comprised of projects which are governed by customer contracts that require the Company to deliver functioning solar power systems and are generally completed within three to twelve months from commencement of construction.  The Company recognizes revenue from fixed price construction contracts using the percentage-of-completion method of accounting. Under this method, systems revenue arising from fixed price construction contracts is recognized as work is performed based on the percentage of incurred costs to estimated total forecasted costs.

Incurred costs used in the Company’s percentage-of-completion calculation include all direct material, labor, subcontract costs, and those indirect costs related to contract performance, such as indirect labor, supplies and tools. Project material costs are included in incurred costs when the project materials have been installed by being permanently attached or fitted to the solar power system as required by the project’s engineering design.

In addition to a project deliverable, a limited number of arrangements also include multiple deliverables such as post-installation systems monitoring and maintenance. For contracts with separately priced monitoring and maintenance, the Company recognizes revenue related to such separately priced elements over the contract period. For contracts including monitoring and maintenance not separately priced, the Company determined that post-installation systems monitoring and maintenance qualify as separate units of accounting. Such post-installation monitoring and maintenance are deferred at the time the contract is executed and are recognized to revenue over the contractual term. The remaining revenue is recognized on a percentage-of-completion basis.

In addition, when arrangements include contingent revenue clauses such as penalty payments or customer termination or put rights for non-performance, the Company defers the contingent revenue until such time as the contingencies expire. In certain limited cases, the Company could be required to buy-back a customer’s system at fair value on specified future dates if certain minimum performance thresholds are not met for periods of up to two years. To date, no such repurchase obligations have been required.

Provisions for estimated losses on uncompleted contracts, if any, are recognized in the period in which the loss first becomes probable and reasonably estimable. Contracts may include profit incentives such as milestone bonuses. These profit incentives are included in the contract value when their realization is reasonably assured.

Maintenance services in the solar park projects

Revenue for ongoing maintenance services in the solar park projects will be based upon services agreements and when the services are performed.

Solar School revenue

With its acquisition of Solar EOS Assets, Solar Park will attempt to increase its month to month operating lines with school and training revenues, in those states where it expects to develop its on going large scale solar projects.  This revenue is recognized as the teaching and training services are provided.

Fixed Assets

Fixed assets will be stated at cost less accumulated depreciation and amortization. Depreciation and amortization of fixed assets are provided over the estimated useful lives of the assets, or the related lease terms if shorter, by the straight-line method. Useful lives range as follows:
 
Category
Useful Lives
Computers and networks
3 years
Machinery and equipment
5-7 years
Furniture and fixtures
5-7 years
Office equipment
3-10 years
Website & Solar EOS development costs
3 years
Leasehold improvements
Lesser of lease term or useful life of asset

 
11

 
 
The Company had the following depreciable fixed assets:
   
(Unaudited)
June 30, 2011
   
(Audited)
September 30, 2010
 
             
Website Development Costs   $ 10,152     $ 10,152  
Property and Equipment     4,414       -  
Accumulated Depreciation     (3,610 )     (846 )
Fixed assets, net   $ 10,956     $ 9,306  
 
Other Assets  and Amortization

The Company holds certain other assets acquired from the Solar EOS Assets that will be amortized over three years when the assets are fully developed and revenue is being generated from those assets.  These assets are as follows:
 
Educational and Training Materials
  $ 40,000  
Business Plans and Website
    25,000  
Licensing Rights
    33,756  
Accumulated Amortization     (10,500
 
The Other Assets being amortized from Solar EOS Assets are a favorable leasing arrangement for 18 months starting at close of the acquisition:
 
Favorable leasing agreement
  $ 126,000  
Accumulated Amortization
    (31,500 )
 
Land Development and Pre-Contract Costs

Certain specifically identifiable costs incurred in land development and pre-contract activities are capitalized in accordance with applicable accounting guidance. These costs include pre-construction costs essential to the development of the real estate, development costs, construction costs, permit and interconnection fees, interest costs, real estate taxes and other related costs incurred during the period of development. Determination of the probability of the Company acquiring real estate, or receiving a contract, involves a degree of management judgment. Only specifically identifiable costs incurred in land development and pre-contract activities related to projects that management believes it is probable the Company will acquire the real estate or receive the contract are capitalized; otherwise, such costs are expensed as incurred.

Long-Lived Assets
 
 
The Company evaluates its long-lived assets, including property, plant and equipment and other intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Factors considered important that could result in an impairment review include significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of use of acquired assets and significant negative industry or economic trends. Impairments are recognized based on the difference between the fair value of the asset and its carrying value. Fair value is generally measured based on either quoted market prices, if available, or discounted cash flow analyses.
 
 
12

 

Stock-Based Compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued based on recent sales of common stock or the value of the services, whichever is more readily determinable.

 Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Basic and Diluted Net Loss per Share

Basic net loss per share is computed by dividing the loss for the period by the weighted average number of common shares outstanding for the period. Fully diluted loss per share reflects the potential dilution of securities by including other potential issuances of common stock, including shares to be issued upon exercise of stock options and warrants, in the weighted average number of shares of common stock outstanding for a period and is not presented where the effect is anti-dilutive.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and trade accounts receivable. The Company maintains cash balances at a financial institution in Dallas Texas. Accounts at these institutions are secured by the Federal Deposit Insurance Corporation up to $250,000. At times, balances may exceed federally insured limits. The Company has not experienced any losses in such accounts.
 
4.
RECENT ACCOUNTING PRONOUNCEMENTS
 
In April 2011, the FASB issued new accounting guidance for purposes of measuring the impairment of receivables and evaluating whether a troubled debt restructuring has occurred.  An entity should disclose the total amount of receivables and the allowance for credit losses as of the end of the period of adoption related to those receivables that are newly considered impaired under Section 310-10-35 for which impairment was previously measured under Subtopic 450-20, Contingencies-Loss Contingencies.  Currently, this guidance is anticipated to be effective for interim and annual periods ending after June 15, 2011.  The adoption of this guidance is not expected to have an impact on our consolidated financial position, results of operations, cash flows, or disclosures.

In December 2010, the FASB issued ASU 2010-28, Intangibles – Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.  The ASU does not prescribe a specific method of calculating the carrying value of a reporting unit in the performance of step 1 of the goodwill impairment test (i.e. equity-value-based method or enterprise-value-based method).  However, it requires entities with a zero or negative carrying value to assess, considering qualitative factors such as those used to determine whether a triggering event would require an interim goodwill impairment test (listed in ASC 350-20-35-30, Intangibles – Goodwill and Other – Subsequent Measurement), whether it is more likely than not that a goodwill impairment exists and perform step 2 of the goodwill impairment test if so concluded.  ASU 2010-28 is effective for the Company beginning January 1, 2011 and early adoption is not permitted.  The adoption of this guidance did not have a material impact on our condensed consolidated financial statements.

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 financial statements.
 
 
13

 
 
5.
COMMITMENTS AND CONTINGENCIES

Operating Leases

In March 2011, the Company moved its corporate headquarters to 100 W. Main Street, Suite 200, Kingstree, SC 29556.  This, new office comprised of 2,000 square feet under a month to month lease, at a monthly rental of $1,900, with 0% annual increase on each.

In February 2011, the Company acquired a favorable leasing arrangement for $1 per year the Company may lease 6,000 sq ft for school and office purposes during the next 18 months.  The school is located at 119 Milliken Dr., Kingstree, SC 29556.

Development Contract

During May 2011, the Company contracted with Williamsburg County, SC and Solar Energy Initiatives, Inc. (a related party) to complete energy efficient upgrades to the Kingstree – Millken Plant facility.  The contract signed was for an estimated total of $704,000.  The work is starting in July and working through September, 2011.

Note Payable

During June 2011, the Company singed a Note Payable for $10,000 due and payable as of August 15, 2011, with accrued interest of $625.

6.
ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following at June 30, 2011 and September 30, 2010:
 
   
(Unaudited)
June 30, 2011
   
(Audited)
September 30, 2010
 
             
Acconts payable   $ 93,032     $ 57,623  
Wages payable     67,041       25,000  
Convertible debt     259,572       32,202  
Current portion of long-term debt     15,870       -  
Accrued expenses     32,803       5,898  
Total   $ 468,318     $ 120,723  

7.
CONVERTIBLE DEBT

During January 2011 the Company entered into a one year convertible note agreement for $100,000 at a rate of 7.5% due in twelve months.  The note holder can convert at any time on the then current market rate.

On February 7, 2011, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $60,000 (the "Asher Note 1").  The financing closed on February 10, 2011.  The beneficial conversion discount on the note is $27,065 of which $21,427 has been amortized as of June 30, 2011.  There were also $3,000 of loan fees of which $2,500 has been amortized as of June 30, 2011.

The Asher Note 1 bears interest at the rate of 8% per annum.  All interest and principal must be repaid on November 9, 2011.  The Asher Note 1 is convertible into common stock, at Asher’s option, at a 39% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion.  In the event the Company prepays the Asher Note 1 in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by (i) 130% if prepaid during the period commencing on the closing date through 90 days thereafter, (ii) 135% if prepaid 91 days following the closing through 120 days following the closing, (iii) 140% if prepaid 121 days following the closing through 151 days following the closing and (iv) 150% if prepaid 151 days following the closing through 180 days following the closing.  After the expiration of 180 days following the date of the Asher Note 1, the Company has no right of prepayment. 
 
 
14

 

Asher has agreed to restrict its ability to convert the Asher Note 1 and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock.   The total net proceeds the Company received from this offering on February 7, 2011 was $57,000.

On March 29, 2011, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $37,500 (the "Asher Note 2").  The financing closed on March 29, 2011.  The beneficial conversion discount on the note is $11,939 of which $6,996 has been amortized as of June 30, 2011.  There were also $2,500 of loan fees of which $1,458 has been amortized as of June 30, 2011.

The Asher Note 2 bears interest at the rate of 8% per annum.  All interest and principal must be paid on December 19, 2011.  The Asher Note 2 is convertible into common stock, at Asher’s option, at a 39% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion.  In the event the Company prepays the Asher Note 2 in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by (i) 130% if prepaid during the period commencing on the closing date through 90 days thereafter, (ii) 135% if prepaid 91 days following the closing through 120 days following the closing, (iii) 140% if prepaid 121 days following the closing through 151 days following the closing and (iv) 150% if prepaid 151 days following the closing through 180 days following the closing.  After the expiration of 180 days following the date of the Asher Note 2, the Company has no right of prepayment. 

On April 7, 2011, the Company entered into a Securities Purchase Agreement with JDF Capital, Inc. ("JDF"), for the sale of an 12% convertible promissory note in the principal amount of $100,000 (the "JDF Note").  The financing closed on April 9, 2011.  The beneficial conversion discount on the JDF Note is $40,000 of which $18,444 has been amortized as of June 30, 2011.  There were also $5,000 of loan fees of which $2,500 has been amortized as of June 30, 2011.

The JDF Note bears interest at the rate of 12% per annum.  All interest and principal must be paid on April 5, 2012.  The JDF Note is convertible into common stock, at JDF’s option, at a 40% discount to the average of the three lowest closing bid prices of the common stock during the 20 trading day period ending one day prior to conversion.  The JDF Note contains a prepayment option whereby the Company may make a payment to JDF equal to 150% of all amounts owed under the Note during the one hundred fifty (150) day period beginning on the date of issuance of the JDF Note and expiring on the 150 day anniversary. 

The  Company  claims an  exemption  from the  registration  requirements  of the Securities  Act of 1933,  as amended  (the "Act") for the private  placement  of these  securities  pursuant  to  Section  4(2) of the Act  and/or  Regulation  D promulgated  there under since,  among other  things,  the  transaction  did not involve a public  offering,  Asher is an accredited  investor, Asher had access to information about the Company  and their  investment,  Asher  took the  securities  for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.
 
8.
ACQUISITION OF OTHER ASSETS
 
The Company acquired other assets in September 2010 in the amount of $40,263 and evaluates these assets with finite lives for impairment.

On September 20, 2010, the Company entered into and closed  an Asset Purchase Agreement (the “Maple Leaf APA”) with Maple Leaf Renewables Group, Inc. (“Maple Leaf”) pursuant to which the Company acquired the rights to various solar park development projects that Maple Leaf was in the process of developing (the “Maple Leaf Assets”).   Mr. Surette, the Company’s Chief Executive Officer and Chief Financial Officer was also the majority stockholder, director and executive officer of Maple Leaf.

In consideration for the purchase and sale of the Maple Leaf Assets, the Company assumed various liabilities and issued Mr. Surette the following common stock purchase warrants:

·   common stock purchase warrant to acquire 250,000 shares of common stock on a cashless basis at an exercise price of $0.35 per share for a period of five years.
 
 
15

 

·   stock options to acquire 375,000 shares of common stock on a cashless basis at an exercise price of $0.35 per share for a period of five years, which shall vest upon the Company executing a power purchase agreement equal to or in excess of four megawatts.

·   Stock options to acquire 375,000 shares of common stock on a cashless basis at an exercise price of $0.35 per share for a period of five years, which shall vest upon the Company executing an additional power purchase agreement equal to or in excess of four megawatts.

On February 15, 2011, the Company entered into and closed  an Asset Purchase Agreement (the “Solar EOS APA”) with a related party Solar Energy Initiatives, Inc. (“Solar EOS”) pursuant to which the Company acquired the rights to various solar education and training materials, website, business model, qualified certification from US Green Business Council and other assets that Solar Energy Initiatives, Inc. was in the process of developing (the “Solar EOS Assets”).

In consideration for the purchase and sale of the Solar EOS Assets, the Company paid total compensation of $200,000 in the following manner:

-$10,000 cash on the date of close;

-assumed various liabilities for $24,756,

-and issued Solar Energy Initiatives, Inc. a 3 year Note with 7.5% interest accrued and paid semi-annually, principal paid at maturity with a balance of $165,244.  The Company may offset intercompany recievables with Solar Energy as payment towards the note.  As of June 30, 2011 there were $76,361 offsetting intercompany receivables due from Solar Energy, thus the net note due as of June 30, 2011 was $88,883 long-term debt from related party.

The asset allocation of the Solar EOS Assets are as follows:
 
-Educational and training material net of assumed accounts payable
  $
15,244
 
-Favorable 18 month rental agreement
   
126,000
 
-Business plans and website
   
  25,000
 
-Licensing Rights
   
  33,756
 

These Solar EOS Assets once fully developed and revenue is generated will be amortized over a three year period.
 
9.
NET LOSS PER SHARE

In calculating basic loss per share, net loss is divided by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the assumed exercise or conversion of all dilutive securities, such as options and warrants.  No such exercise or conversion is assumed where the effect is anti-dilutive, such as when there is a net loss from operations or when the exercise price of the potentially dilutive securities is greater than the market value of the Company’s stock.  Stock options to purchase 4,278,571 shares of common stock and stock warrants to purchase 250,000 shares of common stock that were outstanding at June 30, 2011 were not included in the computation of diluted earnings per share for the three and nine months ended June 30, 2011 because the Company had a net loss from operations and the impact of the assumed exercise of the stock options and warrants is anti-dilutive.
 
 
16

 

   
For the Three Months Ended
   
For the Three Months Ended
 
   
June 30, 2011
   
June 30, 2010
 
Numerator
           
Net loss
  $ (359,466 )   $ (481,152 )
                 
Numerator for diluted loss per share
               
available to common stockholders
  $ (359,466 )   $ (481,152 )
                 
                 
Denominator
               
Weighted average shares
    60,781,019       53,137,500  
Effect of dilutive securities:
               
Treasury method, effect of employee stock options & warrants
    -       -  
                 
Denominator for loss per share adjusted
               
weighted shares after assumed exercises
    60,781,019       53,137,500  
                 
                 
Loss per common share - basic:
               
Loss
  $ (0.01 )   $ (0.01 )
Net loss per common share
  $ (0.01 )   $ (0.01 )
                 
                 
Loss per common share - diluted:
               
Loss
  $ (0.01 )   $ (0.01 )
Net loss per common share
  $ (0.01 )   $ (0.01 )
 
   
For the Nine Months Ended
   
For the Six Months Ended
   
For the period from September 25, 2009 (Inception) through
 
   
June 30, 2011
   
June 30, 2010
   
June 30, 2011
 
Numerator
                 
Net loss
  $ (359,466 )   $ (481,152 )   $ -  
                         
Numerator for diluted income per share
                       
available to common stockholders
  $ (359,466 )   $ (481,152 )   $ -  
                         
                         
Denominator
                       
Weighted average shares
    62,192,578       43,000,000       43,000,000  
Effect of dilutive securities:
                       
Treasury method, effect of employee stock options & warrants
    -       -       -  
                         
Denominator for diluted income per share adjusted
                       
weighted shares after assumed exercises
    62,192,578       43,000,000       43,000,000  
                         
                         
Loss per common share - basic:
                       
Loss
  $ (0.01 )   $ (0.01 )   $ -  
Net loss per common share
  $ (0.01 )   $ (0.01 )   $ -  
                         
                         
Loss per common share - diluted:
                       
Loss
  $ (0.01 )   $ (0.01 )   $ -  
Net loss per common share
  $ (0.01 )   $ (0.01 )   $ -  
 
10.
STOCKHOLDERS’ DEFICIT

Common Stock

During October 2010 the Company issued 250,000 Rule 144 restricted shares for cashless option agreements expensed during April 2010 based upon black-scholes calculation of $47,948.

During October 2010 the Company issued 100,000 Rule 144 restricted shares for consulting services with a total value of $15,000.  Deferred compensation expense recognized during the three months ended December 31, 2010 totaled $3,750.

During October 2010 the Company issued 545,551 Rule 144 restricted shares for stock options exercised during the period ended September 30, 2010.

During October 2010 the Company recorded a stock payable for 160,000 shares for legal services valued at $84,800.  Deferred compensation expenses recognized during the three months ended December 31, 2010 totaled $84,800.

During November 2010 there were 64,000 cashless stock options exercised and issued as common stock.
 
During November 2010 the 700,000 shares issued but held in September 2010 were delivered by the company to one director for a twenty four month consulting agreement approved in November 2010.  The shares were valued at $292,000, with $21,000 deferred compensation expenses recognized during the three months ended December 31, 2010.

The Company cancelled 545,551 shares of stock from negotiations with shareholders prior to the reverse merger on July 13, 2010.

As of December 29, 2010 the Company filed an S-1 Registration statement and spun-off 21,112,702 shares held by Solar Energy Initiatives, Inc. awaiting the effective distribution date for those shares by SEC approval.
 
 
17

 

As of December 31, 2010 Solar Energy Initiatives, Inc., the majority owner, retained ownership of 56.7% as the controlling interest in the Company.  Upon distribution of 21,112,702 shares, Solar Energy Initiatives, Inc. retained approximately 22% ownership.  The S-1 Registration statement and spin-off from Solar Energy went effective on January 26, 2011.
 
During January 2011 the Company filed Form S-8 pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the “Securities Act”), registering 5,000,000 shares under this Registration Statement which shall also cover any additional shares of Common Stock attributable to these registered shares which become issuable under the 2011 Incentive Stock Plan.

During January 2011 the Company issued 1,000,000 S-8 shares for a stock payable under deferred compensation for consulting services initially in September, 2010.

During January 2011 the Company issued 602,889 S-8 shares for consulting services with a total value of $94,866 for five consultants, of which $50,000 had been included in accounts payable.

During January and February 2011 the Company issued 3,011,595 S-8 shares for legal, and consulting services on  a deferred compensation basis.  The total value of deferred compensation was $208,244. and related expenses of $2,208.

During February 2011, 950,000 incentive stock options under the 2010 incentive stock option plan were granted to officers and directors.  Using the Black-Scholes method of valuation the amount of compensation expense for these, options was $2,272.

During March 2011 the Company cancelled or shares to be cancelled amounted to 8,150,647 post merger shares as negotiated with share holders.  At par the net value of shares to be cancelled amounted to $6,151.

During March 2011 the amortization of the beneficial conversion discounts on convertible loans was $39,716 reflected in interest during the period ending June 30, 2011.

On April 7, 2011, the Company entered into a Securities Purchase Agreement with JDF Capital, Inc. ("JDF"), for the sale of an 12% convertible promissory note in the principal amount of $100,000 (the "JDF Note").  The financing closed on April 9, 2011.  

The Note bears interest at the rate of 12% per annum.  All interest and principal must be paid on April 5, 2012.  The JDF Note is convertible into common stock, at JDF’s option, at a 40% discount to the average of the three lowest closing bid prices of the common stock during the 20 trading day period ending one day prior to conversion.  The Note contains a prepayment option whereby the Company may make a payment to JDF equal to 150% of all amounts owed under the Note during the one hundred fifty (150) day period beginning on the date of issuance of the Note and expiring on the 150 day anniversary. 

On April 18, 2011, the Company amended its articles of incorporation to increase its authorized shares of common stock from 100,000,000 to 500,000,000 (the “Increase Amendment”).  The Increase Amendment was approved by the board of directors as well as the shareholders holding a majority of the issued and outstanding shares of common stock pursuant to a written consent dated March 16, 2011.

During April 2011 the Company filed Form S-8 pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the “Securities Act”), registering 5,000,000 shares under this Registration Statement which shall also cover any additional shares of Common Stock attributable to these registered shares which become issuable under the 2011 Incentive Stock Plan.

During April 2011, 2,428,571 incentive stock options under the 2010 incentive stock option plan were granted to officers and directors.  Using the Black-Scholes method of valuation the amount of compensation expense for these, options was $21,850.
 
During June 2011, 3,000,000 incentive stock options under the 2010 incentive stock option plan were granted to officers and directors.  Using the Black-Scholes method of valuation the amount of compensation expense for these, options was $3,843.

During June 2011 the Company issued 18,182 S-8 shares for consulting services with a total value of $363 for one consultant.
 
11. 
SUBSEQUENT EVENTS
 
None.
 
 
18

 

ITEM 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto.

Limited Operating History
 
There is limited historical financial information about our Company upon which to base an evaluation of our future performance.  Our Company generated $0 in revenues for the three-month period ended December 31, 2010.  We cannot guarantee that we will be successful in our business.  We are subject to risks inherent in a development stage company, including limited capital resources, possible delays in developing our sales channels, and possible margin reductions due to pricing inefficiencies and competition.  There is no assurance that future financing will be available to our Company on acceptable terms. Additional equity financing could result in dilution to existing shareholders.
 
Company Description and Overview
 
Solar Park Initiatives, Inc., f/k/a Critical Digital Data, Inc. ( the “Company”, “us”, “our” or “we”), was incorporated in the State of Nevada as Critical Digital Data, Inc. as a for-profit company on May 2, 2008 and established a fiscal year end of September 30.  Prior to the CDIX Transaction (as defined below), the Company was a development stage company that intended to develop, launch and operate an online data storage service specifically for data preservation and disaster recovery.  As a result of the CDIX Transaction with Solar Park Initiatives, Inc., privately owned Nevada corporation (“Solar Park”), we have adopted the business plan of Solar Park. 

On July 12, 2010, the Company consummated an agreement to acquire all of the outstanding capital stock of Solar Park, in exchange for 31,449,016 shares of the Company’s common stock (“the CDIX Transaction”).  Prior to the CDIX Transaction, the Company was a non-operating public shell company with no operations, nominal assets, accrued liabilities totaling $17,042 and 7,280,000 shares of common stock issued and outstanding; and Solar Park, was a professional services and project developing company.  The CDIX Transaction is considered to be a capital transaction in substance, rather than a business combination.  In as much, the CDIX Transaction is equivalent to the issuance of stock by Solar Park, for the net monetary assets of a non-operational public shell company, accompanied by a recapitalization.  CDIX issued 53,137,500 shares of its common stock for all of the issued and outstanding common stock of Solar Park. The accounting for the CDIX Transaction is identical to that resulting from a reverse acquisition, except goodwill or other intangible assets will not be recorded.  Accordingly, these financial statements are the historical financial statements of Solar Park.  Solar Park was incorporated in September 25, 2009.  Therefore, these financial statements reflect activities from September 25, 2009 (date of inception for Solar Park.) and forward.

Solar Park Initiatives will attempt to develop land in the United States and foreign markets for large utility scale solar photovoltaic (“PV”) projects.  The Company anticipates it will provide engineering, procurement of products and construction (“EPC”) via third party vendors including Solar Energy Initiatives, Inc., a shareholder of the Company    The Company anticipates these projects will be funded through both third-party and government incentives, which it hopes to then sell the resultant electrical production to various utilities through a Power Purchase Agreement (“PPA”).  The Company expects to provide energy savings to commercial and municipality users without any out of pocket engineering, procurement or construction (“EPC”) costs to those users of energy.  In addition to being the Solar Project Developer (“SPD”) into the projects, Solar Park Initiatives will recognize energy sales over a 20-year period or longer.

Business Overview and Plan of Operations
 
Solar Park is a professional services and project developing firm providing renewable energy through PV and solar thermal technologies.  The Company intends to market its services in states where insolation (sunshine) is high, land is relatively inexpensive, and utility rates are high to compete with local utility rates.  The Company attempts to leverage its energy expertise, solar PV supplier relationships, and procurement processes to help businesses, municipalities and power companies maximize the possible energy savings coupled with reduced emissions enabled by the advent of this new generation source.
 
The Company is currently focused on locating properties suitable for development and/or current projects available needing completion; and construct energy generation facilities utilizing its integrated partner relationships. The Company intends its main line of renewable energy generation will come from large scale solar arrays.  Other renewable energy generation whether; wind, bio-mass or geo-thermal may be part of the Company’s portfolio it is not expected to be its main component.
 
 
19

 

Solar Park, as a SPD, will have its main operating line for large scale solar PV energy generation with utility scale solar projects, building upon its current developing pipeline of 2MW’s up to 100MW’s.  With its acquisition of Solar EOS Assets, Solar Park will attempt to increase its month to month operating lines with school and training revenues, in those states where it expects to develop its on going large scale solar projects. Solar Park has also begun developing a more current project pipeline of smaller solar projects from 200KW to 1MW sizes, to effectively maintain month to month revenues with continuous recurring revenues once developed and completed.  The Company anticipates it will provide engineering and construction (“EPC”) via third party vendors, while procuring most of the main system components into those smaller projects.

The Company is seeking logistically and economically suitable host sites to add to its current pipeline of developing projects, to obtain 20 year power purchase agreements, and to construct large scale solar arrays on those host sites. With its significant internal EPC experience, financial relationships and with current external EPC relationships the Company plans to develop these solar arrays by building, owning and operating medium and large scale solar photovoltaic energy generation facilities.  The Company will set up individual project limited liability companies known as special purpose vehicles (“SPV’s”) to own and develop each project.  Each project can be funded through external investment, government incentives (e.g. federal ARRA stimulus grants and/or local feed in tariffs), or from host site owners.

Comparison of Results of Operations for the Three Months Ended June 30, 2011 and 2010:

Revenues
 
The Company reported total revenue from operations of $39,000 for the three-month period ended June 30, 2011 as compared to $0 for the three-month period ended June 30, 2010.  The revenue was generated from our Solar EOS business.

Cost of Revenues
 
Our total cost of revenues from was $15,467 for the three-month period ended June 30, 2010.

Selling, general and administrative
 
Selling, general and administrative expenses for the three-month periods ended June 30, 2011 were $329,004.  Payroll-related expenses were approximately $111,101 for the three-month periods ended through June 30, 2011.  Stock based compensation of approximately $115,427 and legal and professional costs of approximately $47,914 mainly comprised the selling, general and administrative expenses for the three-month period ended June 30, 2011.

Selling, general and administrative expenses for the three-month period ended June 30, 2010 were $481,152.  Payroll-related expenses were approximately $67,259 for the three-month period ended through June 30, 2010.  Stock based compensation of approximately $297,450 and legal and professional costs of approximately $67,889, and travel expenses of approximately $19,652 mainly comprised the selling, general and administrative expenses for the three-month period ended June 30, 2010.

Interest expense
 
Interest expenses for the three-month periods ended June 30, 2011 and 2010 were $53,995 and $0, respectively.
 
Net Loss
 
Net loss was $359,466 and $481,152 for the three-month periods ended June 30, 2011 and 2010, respectively.  The net losses primarily reflect our expenses relating to business activities that have been incurred ahead of our ability to recognize revenues from our business plan.
 
Comparison of Results of Operations for the Nine months Ended June 30, 2011 and 2010:

Revenues
 
The Company reported total revenue from operations of $39,000 for the nine-month period ended June 30, 2011 as compared to $0 for the three-month period ended June 30, 2010.  The revenue was generated from our Solar EOS business.

Cost of Revenues
 
Our total cost of revenues from was $15,467 for the nine-month period ended June 30, 2011.

 
20

 
  
Selling, general and administrative
 
Selling, general and administrative expenses for the nine-month period ended June 30, 2011 were $782,852.  Payroll-related expenses were approximately $185,897 for the nine-month period ended through June 30, 2011.  Stock based compensation of approximately $372,568 and legal and professional costs of approximately $115,573 mainly comprised the selling, general and administrative expenses for the nine-month period ended June 30, 2011.

Selling, general and administrative expenses for the nine-month period ended June 30, 2010 were $820,035.  Payroll-related expenses were approximately $186,069 for the nine-month period ended through June 30, 2010.  Stock based compensation of approximately $316,089 and legal and professional costs of approximately $163,124, travel expenses of approximately $60,477, and marketing and advertising expenses of $35,254 mainly comprised the selling, general and administrative expenses for the nine-month period ended June 30, 2010.

Interest expense
 
Interest expenses for the nine-month periods ended June 30, 2011 and 2010 were $68,461 and $0, respectively.
 
Net Loss
 
Net loss was $827,780 and $820,035 for the nine-month periods ended June 30, 2011 and 2010, respectively.  The net losses primarily reflect our expenses relating to business activities that have been incurred ahead of our ability to recognize revenues from our business plan.

Liquidity and Capital Resources
 
As of June 30, 2011, we had cash of $10,846, and working capital deficit of $432,972.
 
For the nine-month period ended June 30, 2011, we used $372,462 of cash in operations.  Investing activities used $267 of cash during the nine-month period and financing activities provided $382,883of net cash during the nine-month period, which resulted primarily from private placement subscription, warrant calls and notes payable proceeds.   

The cost of our solar park projects are somewhat volatile and are influenced by supply and demand of components. While the cost of solar PV panels dropped significantly during our fiscal year 2009, we saw a bottom reached with PV panel pricing reversing direction and moving up. We believe this was due to excess demand for PV panels in Europe where many of the rich incentives that were available for the installation of solar arrays will either be reduced or eliminated in the future. We therefore believe that both pricing and delivery times will improve in 2011. A significant increase in cost of materials that we cannot pass on to our customers could cause us to run out of cash which we are not forecasting in our future plans, and would require us to raise additional funds or curtail operations.
 
As we continue to increase the level of management and other operating requirements of developing our business, our cash needs have increased and therefore we will need to execute on our business plans which include positive cash flow operations, and/or acquire additional financing to supplement cash flows.  Unless we can attain sufficient levels of revenues, we will need to raise additional funds during the next twelve month period.  We will require approximately $1,000,000 of additional capital funding, to allow us to continue the execution of our business plan through December 31, 2011.  If we are not successful in raising the required capital, or begin one or more of the projects in our business pipeline, we will need to reduce the breadth of our business.
 
We have few staff throughout the current fiscal year, however as the project pipeline continues to develop and as we proceed through the year, we anticipate adding staff such as project management staff, sales and marketing staff, solar engineers, and accounting and administrative staff. We expect, although we cannot guarantee, that most of these staff additions will not precede revenue generation and are included in the requirements listed above We expect that additional supply of solar panels from various manufacturers will be available.  While this bodes well for the overall economics of the sale of solar to potential customers, increased competition and the reduction in revenue per project or less gross margin on each panel sold, could cause additional capital to be required.

Since inception, our operations have primarily been funded through private equity financing, and accounts payable debt.  We expect to continue to seek additional funding through private or public equity and debt financing as our business expands, and potentially seek a larger funding round to quickly drive the business forward.
 
However, there can be no assurance that our plans discussed above will materialize and/or that we will be successful in funding our estimated cash shortfalls through additional debt or equity capital and/or any cash generated by our operations. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.
 
To operate our current business groups, we will need up to $2.0 million in funds over the next twelve months. Part of this funding may be needed as the time required to realize revenues and cash from large commercial projects can be lengthy, with costs to develop these projects incurred up front.  As of June 30, 2011 we had approximately $10,846 in cash on hand, which means there will be an anticipated shortfall of $1.99 million as we project our current cash requirements for the next twelve months.  To sustain operations and continue development, we expect that will need to raise additional capital.  As of our fiscal year end, there were no known demands or commitments, employment agreements of the executives, that will necessitate liquidation of the Company.  The current level of cash is not enough to cover the employees and office rent for the next twelve months.

Assuming we are successful in our sales and project development effort we believe that we will be able to raise additional funds through the sale of our stock to either current or new shareholders. Of course there is no guarantee that we will be able to raise additional funds or to do so at an advantageous price.

 
21

 
 
  
ITEM  3.    Quantitative and Qualitative Disclosure About Market Risk

Pursuant to Item 305(e) of Regulation S-K the Company, as a smaller reporting company, is not required to provide the information required by this item.

ITEM  4.    Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures
 
The Company has established disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known on a timely basis to the officers who certify its financial reports and to other members of senior management and the Company’s board of directors. Based on their evaluation as of June 30, 2011, the principal executive officer and principal financial officer of the Company have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Changes in Internal Control Over Financial Reporting

There were no changes to internal controls over financial reporting that occurred during the three months ended June 30, 2011 that have materially affected, or are reasonably likely to materially impact, our internal controls over financial reporting.
.
 

PART II - OTHER INFORMATION

ITEM 1.    Legal Proceedings
 
From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. The Company is currently not aware of, nor has any knowledge of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.
 
ITEM 1A.   Risk Factors

There were no material changes from the risk factors previously disclosed in Risk Factors within “Item 1. Description of Business” included in our Annual Report on Form 10-K for the transition period from February 1, 2010 to September 30, 2010.
  
ITEM 2.    Unregistered Sale of Equity Securities and Use of Proceeds
 
On April 7, 2011, the Company entered into a Securities Purchase Agreement with JDF Capital, Inc. ("JDF"), for the sale of a 12% convertible promissory note in the principal amount of $100,000 (the "Note").  The financing closed on April 9, 2011.  
 
 
22

 

The Note bears interest at the rate of 12% per annum.  All interest and principal must be paid on April 5, 2012.  The Note is convertible into common stock, at JDF’s option, at a 40% discount to the average of the three lowest closing bid prices of the common stock during the 20 trading day period ending one day prior to conversion.  The Note contains a prepayment option whereby the Company may make a payment to JDF equal to 150% of all amounts owed under the Note during the one hundred fifty (150) day period beginning on the date of issuance of the Note and expiring on the 150 day anniversary. 

The Company  claims an  exemption  from the  registration  requirements  of the Securities  Act of 1933,  as amended  (the "Act") for the private  placement  of these  securities  pursuant  to  Section  4(2) of the Act  and/or  Regulation  D promulgated  there under since,  among other  things,  the  transaction  did not involve a public  offering,  Asher is an accredited  investor, Asher had access to information about the Company  and their  investment,  Asher  took the  securities  for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.

ITEM  3.    Defaults Upon Senior Securities

On February 7, 2011, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $60,000 (the "February 2011 Note").  The financing closed on February 10, 2011.  On March 29, 2011, the Company entered into a Securities Purchase Agreement with Asher for the sale of an 8% convertible note in the principal amount of $37,500 (the "March 2011 Note").  The financing closed on March 29, 2011.   On June 7, 2011, as a result of the Suspension (as defined below), Asher provided the Company with a notice of default and demanded immediate payment of $146,250 under the February 2011 Note and the March 2011 Note.  

ITEM  4.    [Removed and Reserved]

ITEM  5.    Other Information
 
On June 7, 2011, the U.S. Securities and Exchange Commission entered an Order of Suspension  suspending the trading in the securities of the Company effective June 7, 2011 at 9:30 a.m. EDT through June 20, 2011 at 11:59 p.m. EDT. (the “Suspension”).  As a result of the Suspension, are shares of common stock are no longer traded on the OTCBB or OTC Markets.
 
ITEM  6.    Exhibits
                                        
Exhibit Number   
 
Description
2.1
 
Agreement and Plan of Merger and Reorganization (the “Agreement”) by and among  Critical Digital Data, Inc., Solar Park Acquisition Corp., a Nevada corporation and Solar Park Initiatives, Inc., a Nevada corporation, dated July 6, 2010. (1) (2)
 
       
3.1
 
Certificate of Amendment of Articles of Incorporation of Critical Digital Data, Inc. (1) (2)
 
       
3.2
 
Articles of Merger of Solar Park Initiatives, Inc. and Solar Park Acquisition Corp.(1) (2)
 
       
10.1
 
2010 Equity Incentive Plan (1) (2)
 
       
31.1
 
Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (2)
 
       
32.1
 
Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)
 
       
EX-101.INS
 
XBRL INSTANCE DOCUMENT (3)
 
       
EX-101.SCH
 
XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT (3)
 
       
EX-101.CAL
  XBRL TAXONOMY EXTENSION CALCULATION LINKBASE (3)  
       
EX-101.DEF
  XBRL TAXONOMY EXTENSION DEFINITION LINKBASE (3)  
       
EX-101.LAB
  XBRL TAXONOMY EXTENSION LABEL LINKBASE (3)  
       
EX-101.PRE
  XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE (3)  
 
(1)  
Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on July 19, 2010. 
(2)  
These exhibits were previously included or incorporated by reference in Solar Park Initiatives, Inc. Quarterly Report on Form10-Q for the quarterly period ended June 30, 2011, filed with the Securities and Exchange Commission on August 15, 2011.
(3)  
The XBRL related information in Exhibit 101 shall not be deemed "filed" for purposes of section 18 of the Security Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
 
 
23

 
 
SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
SOLAR PARK INITIATIVES, INC.
     
Dated: September 14, 2011
By:
/s/David J. Surette
   
David J. Surette
   
Chief Executive Officer and Chief Financial Officer
   
(Principal Executive Officer and Accounting Officer)
     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
24