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EX-32.1 - CERTIFICATION - Novagen Ingenium Inc.novz_10k31dec11x321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

x      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

or

¨      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______________ to _____________

 

Commission file # 333-149617

 

NOVAGEN SOLAR, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada   98-0471927
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification number)
     
284 West Millbrook Road, Raleigh, North Carolina   27609

(Address of principal executive offices)

 

  (Zip Code)

 

Registrant's telephone number: 310-994-7988

 

Securities registered under Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.0001 par value

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
  Yes   ¨     No  x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
  Yes   ¨     No  x
 
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   ¨     No  x 
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.                                                                                                                 
  ¨

 

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 Act (Check one):

 

Large accelerated filer ¨ Accelerated filer ¨
Non-accelerated filer ¨ Smaller reporting company x

 

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

 

The aggregate market value of the Registrant’s Common Stock held by non-affiliates computed by reference to the most recent average bid and asked price of the Common Stock, as of December 31, 2011 was $568,113.

 

As of March 30, 2012 the Registrant had 43,675,900 shares of its Common Stock outstanding.

 
 

FORWARD LOOKING STATEMENTS

 

Certain statements made in this Annual Report are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements made in this Report are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the growth and expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements made in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements made in this Report, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

 

As used in this annual report, the terms “we”, “us”, “our”, “Company” and "Novagen" means Novagen Solar Inc., unless otherwise indicated.

 

PART I

 

Item 1. Business.

 

Overview

 

The world economy has developed rapidly over the past 200 years, significantly expanding opportunities and lifting the living standards of billions of people. However, as the world economy has grown, it has produced large amounts of carbon pollution: the release of carbon dioxide and other greenhouse gases into the atmosphere.

 

When we burn fossil fuels like coal, oil or gas we generate carbon pollution. Carbon pollution also comes from clearing trees and vegetation, the breakdown of food and plant waste, some aspects of farming such as raising cattle and sheep and using fertilizers, and from some industrial processes such as making cement, aluminum or steel.

 

Greenhouse gases in the atmosphere trap radiation given off by the Earth. This helps keep the planet warm enough to sustain life. Since the Industrial Revolution, however, the amount of greenhouse gases in the atmosphere has risen significantly. The rising concentrations of greenhouse gases, like carbon dioxide, cause the atmosphere and the Earth’s surface to heat up. Scientists have estimated that humans are responsible for nearly a third of the carbon dioxide now in the atmosphere.

 

It is beyond reasonable doubt that human activities – the burning of fossil fuels and deforestation – are triggering the changes we are witnessing in the global climate (Australian Climate Commission, The Critical Decade, 2011).

 

If carbon pollution is not curtailed, the world risks serious effects from climate change. Global average temperatures could increase by up to 6.4 degrees Celsius above 1990 temperatures by 2100. Sea levels are estimated to rise by between 0.5 and 1 meter by 2100 from 2000 levels and the acidity of the world’s oceans will increase significantly, threatening species that cannot tolerate the more acidic environment. Cyclones, storms, floods and other extreme weather events are likely to change in severity or frequency. Rainfall patterns around the world will change, making some places drier and other places wetter.

 

Climate change is occurring, is very likely caused primarily by the emission of greenhouse gases from human activities, and poses significant risks for a range of human and natural systems (US National Academies of Science).

 

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Novagen develops and markets products and services that provide clean technology solutions for today’s global challenges. Our current focus is on the renewable energy sector, with an emphasis on solar energy. Our management believes that the increasing demand for clean energy and the emphasis on sustainable renewable resources, provides an opportunity for us to develop multiple core products and services with near-term commercialization opportunities that will generate substantial value for our stockholders while contributing to energy security, social equity, and protection of the ecosystem upon which life depends.

 

Corporate History

 

Novagen was incorporated in the State of Nevada on June 22, 2005 under the name of Pickford Minerals Inc. We were originally engaged in the exploration of mineral deposits in Labrador, Newfoundland, but due to higher than anticipated costs we were unable to implement our exploration program. Motivated by developments in solar technology and believing that market conditions and legislative incentives were favorable, our management made a strategic decision in April 2009 to pursue opportunities in the solar industry. On May 12, 2009, we changed our name to Novagen Solar Inc. and adopted a new business plan to market, sell, design and install solar energy plants across North America.

 

On December 7, 2011, Micheal P. Nugent was appointed the President, Chief Executive Officer and a director of the Company, and Michael Norton Smith was appointed the Chief Financial Officer and Secretary of the Company. On the same date, Thomas Mills resigned as an officer and director of the Company.

 

On December 20, 2011, there was a change in control of Novagen when Twenty Second Trust, a trust organized under the laws of the State of Queensland, Australia acquired control of the Company by purchasing 67% of the issued and outstanding shares of the Company’s common stock from shareholders of the Company. Micheal P. Nugent is the sole trustee of Twenty Second Trust.

 

Following the change in management and control of the Company, the board of directors has determined that the Company should expand its business to include the development of environmentally sustainable energy solutions through innovative and eco-friendly products and technologies.

 

On January 3, 2012, the Company formed Novagen Pty Ltd. under the laws of Australia, as a wholly owned operating subsidiary. All of the Company’s operations are currently conducted through Novagen Pty Ltd.

 

On January 17, 2012, the Company formed Novagen Production Pty Ltd. under the laws of Australia, as a wholly owned non-operating subsidiary.

 

On March 2, 2012, the Company formed Novagen Finance Pty Ltd. under the laws of Australia, as a wholly owned non-operating subsidiary.

 

The address for our head office is 284 West Millbrook Road, Raleigh, North Carolina 27609. Our telephone number is 310-994-7988. Our common stock is quoted under the symbol “NOVZ” on the OTCBB and the OTCQB.

 

Products and Services

 

Solar Energy

 

Novagen intends to operate as a full service solar power developer that markets, sells, designs and installs solar energy plants across North America and Australia, specializing in turnkey commercial power systems, brownfield revitalization, land reclamation and off-grid community developments. We intend to offer a number of solar products and services that seek to generate revenue from initial installation activities, as well as potential recurring revenue from an installed base of customers.

 

·Commercial Solar Installations. We plan to develop, finance, construct and operate commercial solar installations throughout North America and Australia, focusing on rooftop and open-space systems that produce one Megawatt of electricity or less. This is an area of the market that we believe to be underserved. We believe this sector offers faster deployment and better prospects for generating additional business from customers with multiple locations. We will offer property owners a comprehensive range of participation levels and financing packages, including leasing arrangements, that will have the broadest possible appeal. As part of our turnkey system, we will design and specify the appropriate systems, manage their installation and maintenance, and arrange for all of the necessary financing. We will also take care of the required permitting and apply for subsidies. Additionally, we will arrange for monitoring and maintenance to ensure installed systems are kept in peak condition throughout their expected life.

 

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·Solar Power Plants. We intend to develop large scale (in excess of one Megawatt), ground-mounted solar power plants, either alone or in partnership with others.

 

·Brownfield Revitalization. Brownfields are real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Cleaning up and reinvesting in these properties protects the environment, reduces blight, and takes development pressures off greenspaces and working lands. We believe that solar energy technologies are well suited for use at brownfield sites because they require very little maintenance and can be installed on the ground without penetrating the surface or disturbing existing contamination. We intend to work with property owners and municipalities to assist in the revitalization of brownfields by providing turnkey solar energy solutions utilizing best-in-class photovoltaic arrays and building integrated solar energy systems.

 

·Land Reclamation. Land reclamation refers to the restoration of land damaged by mining, erosion, or some other activity or process. The process of reclamation includes maintaining water and air quality, minimizing flooding, erosion and damage to wildlife and aquatic habitats caused by surface mining. In respect of former mining sites, reclamation generally involves filling in excavations, grading the land to avoid leaving steep slopes, placing the original topsoil on the graded surface, and planting the topsoil with vegetation. Through a collaboration with our industry partners, we plan to provide mining companies with sustainable solar energy solutions for responsible exploration and mining practices, such as providing solar power for mining operations and reclamation activities, and post-reclamation solar power plant development.

 

·Off-Grid Communities. According to Natural Resources Canada, there are over 300 remote communities in Canada with a total population of 200,000. These communities are not connected to the North American electrical grid or piped natural gas network and are permanent or long-term settlements. Many of them are very dependent on imported oil and pay energy costs that can be up to ten times higher than in the rest of Canada. We intend to assist Canada’s remote communities to deploy solar solutions appropriate for their needs, including the development of solar power plants to provide clean, reliable energy. In addition to providing turnkey systems, we will assist communities to establish and nurture a maintenance support infrastructure for their power plant(s). Such an infrastructure, while not complex, must be functional and appropriate for the size, complexity and sophistication of the system deployed. We will provide training for local residents, documentation matched to local capabilities, spare-parts inventory and component resupply. By providing communities with appropriate technology and infrastructure training, we will improve their self-sufficiency while creating jobs and supporting the local economy.

 

Clean Technologies

 

Clean technology refers to the application of innovative technologies to optimize the use of limited natural resources, offering a cleaner or less wasteful alternative to conventional energy practices and traditional products, materials and processes while adding economic value. The dramatic growth in clean technology’s global prominence can be attributed to national and global policy action, local market drivers, high energy prices, increasing technological maturity, better understanding of technology risk, public and private capital investment intended to promote clean technology and product development, and market acceptance of the relevance of clean technology solutions. Growth is happening in all sectors, countries and investment stages as the occurrence of climate change is no longer a topic that is debated, but rather a problem for which solutions are being sought.

 

We plan to identify, develop and commercialize solutions to address the need for renewable energy and clean technologies by developing proprietary technologies satisfying identified market needs and customer demands. We seek to capitalize on our opportunities at multiple points in the value chain based on our assessment of a number of factors, including capital requirements, time to market, distribution and sales channels and the regulatory environment. Working alone or in collaboration with others, we plan to develop and sell manufactured products to end users, provide materials or components to other companies for use in the manufacture of their products, or enter into license arrangements.

 

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Our goal is to become a leading provider of clean technology products, advanced materials and process technologies for the energy and environmental markets. The key elements of our strategy are as follows:

 

·Provide economical clean technology solutions to our customers and partners. As government regulations become increasingly stringent and environmental issues are brought to the forefront of corporate responsibility and consumer focus, it is vital that our products, materials and technologies provide effective and economical solutions for our customers and collaborative partners. We are therefore focused on developing highly effective clean technology solutions that offer significant cost savings and efficiency advantages.

 

·Focus on high-value products, advanced materials and processes with clear near-term commercial opportunities. We intend to pursue the manufacture and sale of products, materials and technologies that are capable of generating and sustaining high gross profit margins. Utilizing proprietary technologies, we plan to create solutions that offer customers significant value beyond what is available today with conventional products, materials and processes. All of our initiatives will be analyzed and evaluated for near-term commercial viability, market size and potential customer interest before we invest our resources in research and development.

 

·Expand and leverage our strategic and business alliances for market penetration. We are pursuing the development of domestic and international strategic and business alliances, which may take the form of joint ventures, strategic partnerships, cost savings agreements or distribution and marketing arrangements in order to accelerate our penetration into both domestic and international energy, environmental and infrastructure markets.

 

·Pursue growth through selected acquisitions. We intend to grow our business through the selective acquisition of businesses, products or intellectual property that serve strategic business and technology purposes.

 

We have only recently expanded our operations to include the development of clean technology products, advanced materials and process technologies. We do not presently have any products, materials or technologies that can be commercialized. There is no assurance that we will ever develop any products, materials or process technologies, or that if we do, that we will ever be able to commercialize them profitably.

 

Suppliers

 

We are not presently substantially dependent on any third-party manufacturers or suppliers.

 

By establishing strategic partnerships with major component suppliers we will ensure that every new solar project is designed and installed with the most advanced technology appropriate for our customers. We will purchase photovoltaic panels used in our solar power systems principally from PowerCom Co. Inc., Green Energy Technology Inc., Day4Energy Inc., Kyocera Solar and Suntech America and we purchase inverters principally from SatCon Power Systems, which components will represent approximately two-thirds of our component requirements. Hardware and other materials will be readily available for off-the-shelf purchase.

 

We intend to remain independent of any one technology or equipment vendor to ensure that we will be able to offer our customers solutions best suited to their individual needs. As such, we do not have supply agreements with our suppliers, except for purchase orders on a case-by-case basis. Although photovoltaic panels are manufactured world-wide, we are subject to market price fluctuation and vendor lead time and inventory for the components that we purchase.

 

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Sales and Marketing

 

We do not presently have any clean technology products ready for commercialization. To date, our commercialization efforts have focused on establishing strategic arrangements and business alliances to assist us in assessing the commercial potential of the products and technologies we are developing, define our market opportunities, identify our customer base and access our markets.

 

We intend to sell our solar power systems directly to commercial, industrial and governmental customers, through an internal sales and marketing staff. We may appoint additional sales representatives as independent contractors to solicit business and identify potential development opportunities.

 

We believe that, depending upon the size of the projects, it is likely that a significant portion of our initial business will derive from a small number of customers. There can be no assurance that the loss of any such customer would not adversely affect our business or results of operations. We expect that our customer mix will change as we expand our operations.

 

Manufacturing

 

Our Queensland facility currently has approximately 3,300 square feet dedicated to pilot scale manufacturing of our products and materials. We believe that our Queensland facility provides sufficient capacity to meet the limited manufacturing activities in which we plan to engage for the first six months of fiscal 2012. We expect to increase our current in-house manufacturing capabilities and significantly expand our contract manufacturing relationships in 2012.

 

We will consider a variety of factors in determining whether to conduct manufacturing activities in-house or through third-party contract manufacturers, including whether a particular product has a well-developed commercial supply base and whether we believe we can maintain control over the use and exploitation of our intellectual property when outsourced. When the supply base is not developed, or our materials, designs or processes require greater trade secret protection, we have and will continue to invest in developing our manufacturing infrastructure.

 

Competition

 

The renewable energy and clean technology markets are intensely competitive and rapidly evolving. We face significant competition with respect to the products and materials that we intend to commercialize. We have only recently commenced operations as a developer of products, materials and processes within the renewable energy and clean technology sectors and do not presently hold a significant competitive market position in either of them. We are currently one of the smallest technology companies and are an infinitely small participant in the renewable energy and clean technology industries.

 

Since our products and materials will be based upon technologies that offer solutions in the energy and environmental industries, we will compete not only at the product and material level for market share, but also at the technology level for market acceptance. The basis of competition may result from various factors including cost, performance, durability, product quality, environmental impact, customer service and technical support as well as the availability of alternative products, materials or process technologies.

 

Our competition will include not only other alternative technology solutions, but also well-established conventional technologies. Most of our competitors have substantially greater financial, research and development, manufacturing and sales and marketing resources than we do, and may complete research, development and commercialization of products and materials more quickly and effectively than we can. They have the capacity to develop new materials and products in-house in an attempt to address new restrictions or new market opportunities around the world. We also face competition from small and emerging businesses, as well as academic institutions, governmental agencies and other public and private organizations pursuing the development of technology that can be used for applications similar to those of our products.

 

We expect competition to intensify greatly as the need for new, clean energy alternatives becomes more apparent and continues to increase.

 

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Research and Development

 

We have only recently commenced operations as a developer of renewable energy and clean technology products, materials and processes, and have not undertaken any research or development over the last two fiscal years. We intend to establish research and development facilities early in 2012 with a view to developing products for commercialization. We may conduct the research or development ourselves, or in conjunction with others. When we collaborate on the development of any intellectual property, we will seek ownership of the intellectual property or the exclusive worldwide right to exploit such intellectual property. We have not established a budget for contributions to research and development. Where appropriate, we may also acquire, commercialize and improve new or existing technologies.

 

Intellectual Property

 

The proprietary nature of, and protection for, our products, materials, processes and know-how are important to our business. We will seek patent protection in the United States and internationally for our intellectual property where available and when appropriate. In addition, we rely on trade secrets, know-how and continuing innovation to develop and maintain our competitive position.

 

Our policy is to patent or in-license the technology, inventions and improvements that we consider important to the development of our business.

 

We do not currently have any patents or patent applications that we either own or that we have licensed.

 

Regulations

 

The market for electricity generation products is heavily influenced by national, regional and local government regulations and policies concerning the electric utility industry, as well as internal policies and regulations promulgated by electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation. In North America, Australia and a number of other countries, these regulations and policies are being modified and may continue to be modified. Customer purchases of, or further investment in the research and development of, alternative energy sources, including solar power technology, could be deterred by these regulations and policies, which could result in a significant reduction in the potential demand for our solar products.

 

Our operations are subject to a variety of national, federal, regional and local laws, rules and regulations relating to worker safety and the use, storage, discharge and disposal of environmentally sensitive materials. Because we outsource and do not manufacture our solar power systems, we do not use, generate, store or discharge toxic, volatile or otherwise hazardous chemicals and wastes.

 

Other than the filing of patent applications with the respective governmental bodies, we are not aware of any approval of our clean technology products, materials or processes that may be required from government authorities at this stage in our development. However, once a product is ready to be commercialized, the governmental approval and regulatory process may become substantial.

 

We believe that we are in compliance in all material respects with all laws, rules, regulations and requirements that affect our business. Further, we believe that compliance with such laws, rules, regulations and requirements does not impose a material impediment on our ability to conduct business.

 

Government Subsidies and Incentives

 

We believe that economic and national security issues, technological advances, environmental regulations seeking to limit emissions by fossil fuel, air pollution regulations restricting the release of greenhouse gasses, aging electricity transmission infrastructure and depletion and limited supply of fossil fuels, has made reliance on traditional sources of fuel for generating electricity less attractive. Government policies, in the form of both regulation and incentives, have accelerated the adoption of renewable energy and clean technologies by businesses and consumers. If any of these subsidies or incentives are discontinued, reduced or substantially modified, if growth in any such subsidies or incentives is reduced, or if renewable portfolio standards or similar production requirements are changed or eliminated, demand for our products could decline or never develop, and our results of operations and financial condition could be materially and adversely affected as a result.

 

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Environmental

 

We are not aware of any environmental laws that are currently applicable to our business, or which could result in any material compliance costs to us or effects on our business.

 

Facilities

 

Our principal offices are located in Queensland, Australia. We lease approximately 3,300 square feet of office, laboratory and manufacturing space through our subsidiary, Novagen Pty Ltd.

 

Employees

 

Novagen Solar Inc. does not have any employees other than our officers and directors. Our wholly owned subsidiary, Novagen Pty Ltd. presently employs seven full-time employees and one part-time employee.

 

Item 1A. Risk Factors

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

Item 1B. Unresolved Staff Comments

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

Item 2. Properties

 

We do not presently own or have an interest in any real property.

 

Item 3. Legal Proceedings

 

Neither Novagen nor any of its officers or directors is a party to any material legal proceeding or litigation and such persons know of no material legal proceeding or contemplated or threatened litigation. There are no judgments against Novagen Solar Inc. or its officers or directors. None of our officers or directors have been convicted of a felony or misdemeanour relating to securities or performance in corporate office.

 

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PART II

 

Item 5. Market For Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

Our shares trade under the symbol “NOVZ” on the OTCBB and the OTCQB. Very limited trading activity with our common stock has occurred during the past two years and the subsequent interim period; therefore, only limited historical price information is available. The following table sets forth the high and low bid prices of our common stock for the last two fiscal years, as reported by Pink OTC Markets Inc. and represents inter dealer quotations, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

 

Quarter Ended High Low
December 31, 2011 $0.04 $0.03
September 30, 2011 $0.03 $0.03
June 30, 2011 $0.03 $0.03
March 31, 2011 - -
December 31, 2010 $0.46 $0.11
September 30, 2010 $1.00 $0.13
June 30, 2010 $0.15 $0.15
March 31, 2010 $0.52 $0.15

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

On August 16, 2010, we issued 15,138,800 shares of our common stock to a creditor of Novagen at a price of $0.01 per share, in full and final settlement of a debt of $151,388 owed by Novagen to the creditor. The shares were issued without registration in reliance upon exemptions provided by Sections 4(2) and 4(6) of the Securities Act and Regulation D promulgated thereunder.

 

On August 16, 2010, we issued 230,000 shares of our common stock to a creditor of Novagen at a price of $0.01 per share, in full and final settlement of a debt of $2,300 owed by Novagen to the creditor. The shares were issued without registration in reliance on an exemption provided by Regulation S promulgated under the Securities Act.

 

On August 16, 2010, we issued 5,855,800 shares of our common stock to Ophion Management Ltd., a company controlled by our sole officer and director, at a price of $0.01 per share, in full and final settlement of a debt of $58,558 owed by Novagen to our sole officer and director. The shares were issued without registration in reliance on an exemption provided by Regulation S promulgated under the Securities Act.

 

On August 16, 2010 we issued 10,000,000 shares of our common stock at a price of $0.01 per share to five purchasers for total cash proceeds of $100,000. The shares were issued without registration in reliance on an exemption provided by Regulation S promulgated under the Securities Act. No general solicitation was made in connection with the offer or sale of these securities. One of the purchasers, who acquired 2,300,000 shares through the offering, is the mother of our former sole officer and director.

 

Holders

 

On March 30, 2012, the stockholders’ list of our shares of common stock showed 40 registered holders of our shares of common stock and 43,675,900 shares of common stock outstanding. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of shares of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

 

Dividend Policy

 

We have not declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.

 

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Convertible Securities

 

We have not issued and do not have outstanding any other securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of our common stock.

 

Penny Stock Regulation

 

Our shares must comply with the Penny Stock Reform Act of 1990, which may potentially decrease our shareholders’ ability to easily transfer their shares. Broker-dealer practices in connection with transactions in "penny stocks" are regulated. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that must comply with the penny stock rules. Since our shares must comply with such penny stock rules, our shareholders will in all likelihood find it more difficult to sell their securities.

 

Item 6. Selected Financial Data

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis of our plan of operation should be read in conjunction with the financial statements and the related notes. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors.

 

Overview

 

Our business is in the early stages of development. We presently have no solar power installations in operation and no products, materials or technological processes ready for commercialization.

 

We have not earned revenue since inception

 

Our currently available capital and cash flows is generated from our activities through share subscriptions and loans from management and non-affiliated third parties and it is management’s intention that this will continue.

 

Our ultimate success will depend upon our ability to raise capital including joint venture projects and debt or equity financings. Future financings through equity investments are likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other derivative securities, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.

 

Our ability to obtain needed financing may be impaired by such factors as the capital markets, both generally and specifically in the renewable energy industry, and the fact that we have not been profitable, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenue from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.

 

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As a result of the foregoing, our auditors have expressed doubt about our ability to continue as a going concern in our financial statements for the year ended December 31, 2011.

 

Results of Operations

 

We recorded a net loss of $18,502 for the year ended December 31, 2011, compared with a net loss of $64,209 for the year ended December 31, 2010. Operating expenses consisted of professional fees, consulting fees and other general corporate expenses.

 

Professional fees were $9,897 for the year ended December 31, 2011, compared with $39,828 for the year ended December 31, 2010. Professional fees incurred in fiscal year 2010 consist of legal and accounting fees associated with a registration statement filed with the SEC on August 27, 2010, preparation of our audited financial statements and our periodic reporting obligations.

 

Consulting fees for the year ended December 31, 2011 were $7,833, compared with $15,667 for the year ended December 31, 2010. All consulting fees incurred by Novagen in fiscal 2011 were related to Novagen’s corporate development initiatives.

 

Liquidity and Capital Resources.

 

As of December 31, 2011, our total liabilities decreased to $267.

 

Item 7a. Quantitative and Qualitative Disclosures About Market Risk.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

 

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Item 8. FINANCIAL STATEMENTS

 

INDEX TO FINANCIAL STATEMENTS

 

NOVAGEN SOLAR INC.

(A Development Stage Company)

 

 

 

FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010

 

Report of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Stockholders Equity (Deficiency)

Statements of Operations and Comprehensive Loss

Statements of Cash Flows

Notes to Financial Statements

 

11
 

MNP LLP

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

Novagen Solar Inc.

 

We have audited the balance sheet of Novagen Solar Inc. (the “Company”) as at December 31, 2011 and the related statements of stockholders’ equity (deficiency), operations and comprehensive loss and cash flows for the year then ended and for the period from June 22, 2005 (date of inception) to December 31, 2011.. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the Company’s financial statements as of and for the year ended December 31, 2010, and the cumulative data from June 22, 2005 (date of inception) to December 31, 2010 in the statements of stockholders’ equity (deficiency), operations and comprehensive loss and cash flows, which were audited by other auditors whose report, dated March 24, 2011 which expressed an unqualified opinion, has been furnished to us. Our opinion, insofar as it relates to the amounts included for cumulative data from June 22, 2005 (date of inception) to December 31, 2010, is based solely on the report of the other auditors.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstance, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as at December 31, 2011 and the result of its operations and its cash flow for the year then ended and for the period from June 22, 2005 (date of inception) to December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements refer to above have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company had recurring losses and requires additional funds to maintain its planned operations. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Vancouver, Canada
March 28, 2012   Chartered Accountants

 

 

ACCOUNTING CONSULTING TAX
2300, 1055 DUNSMUIR STREET, BOX 49148, VANCOUVER, BC  V7X 1J1
1.877.688.8408 P: 604.685.8408 F: 604.685.8594 mnp.ca

12
 

Chang Lee LLP

Chartered Accountants

606-815 Hornby Street

Vancouver, B.C., V6Z 2E6

Tel: 604-687-3776

Fax: 604-688-3373

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors and Stockholders of

 

NOVAGEN SOLAR INC.

(A development stage company)

 

We have audited the accompanying balance sheets of Novagen Solar Inc. (a development stage company) as at December 31, 2010 and 2009 and the related statements of stockholders’ equity, operations and comprehensive loss and cash flows for the years then ended and for the period from June 22, 2005 (date of inception) to December 31, 2010.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.  

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as at December 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended and for the period from June 22, 2005 (date of inception) to December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred losses from operations since inception, has not attained profitable operations and is dependent upon obtaining adequate financing to fulfil its intended business venture. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

 

 

Vancouver, Canada
March 24, 2011      Chartered Accountants

 

 

 

13
 

Novagen Solar Inc.

(A development stage company)

 

Balance Sheets

December 31, 2011 and 2010

(Expressed in U.S. Dollars)

   December 31  December 31
   2011  2010
       
ASSETS          
           
Current Assets          
Cash and cash equivalents  $—     $—   
Prepaid expenses   —      7,833 
           
Total assets  $—     $7,833 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)          
           
Liabilities          
           
Current Liabilities          
Accounts payable and accrued liabilities  $267   $3,968 
Due to a related party   —      4,025 
           
Total Liabilities   267    7,993 
           
Stockholders' Equity (Deficiency)          
           
Share capital          
           
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; no shares issued   —      —   
           
Common stock, $0.0001 par value; 100,000,000 shares authorized; 43,675,900 (December 31, 2010 - 43,675,900) shares issued   4,367    4,367 
           
Additional paid-in capital   516,330    497,935 
           
(Deficit) accumulated during the exploration stage   (520,964)   (502,462)
           
Total stockholders' equity (deficiency)   (267)   (160)
           
Total liabilities and stockholders' equity (deficiency)  $—     $7,833 

 

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

14
 

Novagen Solar Inc.

(A development stage company)

 

Statements of Stockholders' Equity (Deficiency)

For the period from June 22, 2005 (inception) to December 31, 2011

(Expressed in U.S. Dollars)

                      
                  Deficit   
                  accumulated  Total
               Additional  during  shareholder’s
   Preferred Stock  Common Stock  paid-in  exploration  equity
   Shares  Amount  Shares  Amount  capital  stage  (deficiency)
                                    
Balance, December 31, 2005   —     $—      11,251,300   $1,125   $18,931   $(6,418)  $13,638 
                                    
Net (loss) and comprehensive (loss) for the year   —      —      —      —      —      (5,935)   (5,935)
                                    
Balance, December 31, 2006   —     $—      11,251,300   $1,125   $18,931   $(12,353)  $7,703 
                                    
Net income and comprehensive income for the year   —      —      —      —      —      372    372 
                                    
Balance, December 31, 2007   —     $—      11,251,300   $1,125   $18,931   $(11,981)  $8,075 
                                    
Issuance of common stock for cash
on August 6, 2008 at $0.05 per share
   —      —      1,200,000    120    59,880    —      60,000 
                                    
Net (loss) and comprehensive (loss) for the year   —      —      —      —      —      (29,599)   (29,599)
                                    
Balance, December 31, 2008   —     $—      12,451,300   $1,245   $78,811   $(41,580)  $38,476 
                                    
Issuance of common stock
on July 10, 2009 at $0.006 per share
   —      —      3,000,000    300    17,968    —      18,268 
                                    
Rescind issuance of common stock at $0.006 per share   —      —      (3,000,000)   (300)   (17,968)   —      (18,268)
                                    
Issuance of common stock for service
on September 8, 2009 at $0.55 per share
   —      —      200,000    20    109,980    —      110,000 
                                    
Net (loss) and comprehensive (loss) for the year   —      —      —      —      —      (396,673)   (396,673)
                                    
Balance, December 31, 2009   —     $—      12,651,300   $1,265   $188,791   $(438,253)  $(248,197)
                                    
Issuance of common stock
in August 16, 2010 at $0.01 per share
   —      —      10,000,000    1,000    99,000    —      100,000 
Issuance of common stock for debt settlement
in August 16, 2010 at $0.01 per share
   —     —     21,224,600    2,122    210,124    —      212,246 
                                    
Cancellation of common stock   —      —      (200,000)   (20)   20    —      —   
                                    
Net (loss) and comprehensive (loss) for the year   —      —      —      —      —      (64,209)   (64,209)
                                    
Balance, December 31, 2010   —     $—      43,675,900   $4,367   $497,935   $(502,462)  $(160)
                                    
Debt forgiven by related parties   —      —      —      —      18,395    —      18,395 
Net (loss) and comprehensive (loss) for the year   —      —      —      —      —      (18,502)   (18,502)
                                    
Balance, December 31, 2011   —     $—      43,675,900   $4,367   $516,330   $(520,964)  $(267)

 

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

15
 

Novagen Solar Inc.

(A development stage company)

 

Statements of Operations and Comprehensive Loss

(Expressed in U.S. Dollars)

          
   Cumulative from      
   June 22, 2005      
   (inception) to  Year ended  Year ended
   December 31, 2010  December 31, 2011  December 31, 2010
                
EXPENSES               
                
Bank charges (recovery)  $390   $(21)  $150 
Consulting fees   27,212    7,833    15,667 
Director fees   110,000    —      —   
Interest expenses   1,811    —      —   
Marketing expenses   184,591    —      —   
Office expenses   15,801    —      5,199 
Professional fees   93,582    9,897    39,828 
Resource property acquisition and exploration costs   7,568    —      —   
Transfer expenses   3,894    855    455 
Travel expenses   17,211    —      628 
Write-off Exploration program security deposit   7,610    —      —   
Project investigation   50,000    —      —   
                
Operating Loss   519,670    18,564    61,927 
                
Other income and expenses               
Foreign exchange gain (loss)   (1,294)   62    (2,282)
                
Net loss and comprehensive loss for the period  $(520,964)  $(18,502)  $(64,209)
                
Basic and diluted loss per share       $(0.00)  $(0.03)
                
Weighted average number of common shares outstanding               
- Basic and diluted        43,675,900    24,220,533 

 

The accompanying notes are an integral part of these financial statements

16
 

Novagen Solar Inc.

(A development stage company)

 

Statements of Cash Flows

(Expressed in U.S. Dollars)

          
   Cumulative from      
   June 22, 2005      
   (inception) to  Year ended  Year ended
   December 31, 2011  December 31, 2011  December 31, 2010
                
Cash flows from (used in) operating activities               
Net income (loss) for the period  $(520,964)  $(18,502)  $(64,209)
                
Adjustment for items not involving cash:               
- Project investigation   50,000    —      —   
- Consulting fees   110,000    —      —   
- Debt forgiven by related parties   18,395    18,395    —   
                
Changes in operating assets and liabilities               
- (increase) decrease in prepaid expenses   7,833    7,833    (7,833)
- accounts payable and accrued liabilities   146,121    (3,701)   1,806 
                
Net cash from (used in) operating activities   (188,614)   4,025    (70,236)
                
Cash flows from financing activities               
Convertible debenture – related party   (50,000)   —      (50,000)
Due to a related party   58,558    (4,025)   19,932 
Proceeds from issuance of common stock   180,056    —      100,000 
                
Net cash from (used in) financing activities   188,614    (4,025)   69,932 
                
Increase (decrease) in cash and cash equivalents   —      —      (304)
                
Cash and cash equivalents, beginning of period   —      —      304 
                
Cash and cash equivalents, end of period  $—     $—     $—   
                
Supplemental disclosure with respect to cash flows:               
                
Interest paid in cash  $—     $—     $—   
                
Income tax paid in cash  $—     $—     $—   
                
Non-cash flows information:               
                
Issuance of common shares for settlement of debt  $230,641   $18,395   $212,246 

 

The accompanying notes are an integral part of these financial statements

17
 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Novagen Solar Inc. (hereinafter “the Company”), was incorporated in the State of Nevada, U.S.A., on June 22, 2005 under the name of Pickford Minerals, Inc. The Company’s fiscal year end is December 31. On May 12, 2009, the Company changed its name to Novagen Solar Inc.

 

The Company was originally engaged in the exploration of mineral deposits in Labrador, Newfoundland, but was unable to implement its exploration program. In April 2009, the Company began to pursue business opportunities relating to photovoltaic solar energy.

 

On December 20, 2011, there was a change in control of the Company when Twenty Second Trust, a trust organized under the laws of the State of Queensland, Australia acquired control of the Company by purchasing 67% of the issued and outstanding shares of the Company’s common stock from shareholders of the Company.

 

Following the change in control of the Company, the board of directors has determined that the Company should expand its business to include the development of environmentally sustainable energy solutions through innovative and eco-friendly products and technologies.

 

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America applicable to a going concern which assume that the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has incurred accumulated losses of $520,964 since inception and has not generated any revenue. The future of the Company is dependent upon its ability to develop profitable sales and distribution operations. These factors create doubt as to the ability of the Company to continue as a going concern. Realization values may be substantially different from the carrying values as shown in these financial statements should the Company be unable to continue as a going concern. Management is in the process of identifying sources for additional financing, or will provide the necessary financial support, to fund the ongoing development of the Company's business.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates that have been made using careful judgment. The financial statements have, in management’s opinion been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

 

Accounting Method

 

The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. The Company reviews its estimates on an ongoing basis. The estimates were based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from these estimates. The Company believes the judgments and estimates required in its accounting policies to be critical in the preparation of the Company’s financial statements.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. As at December 31, 2011 and 2010, there were no cash equivalents.

 

18
 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Concentration of Credit Risk

 

The Company places its cash and cash equivalents with high credit quality financial institutions in uninsured accounts.

 

Foreign Currency Transactions

 

The Company is located and operating outside of the United States of America. It maintains its accounting records in U.S. Dollars as follows:

 

At the transaction date each asset, liability, revenue and expense is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities are re-measured by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations.

 

Fair Value of Financial Instruments

 

The Company's financial instruments as defined by Accounting Standards Codification (“ASC”) 825, "Disclosures about Fair Value of Financial Instruments," include accounts payable and accrued liabilities. Fair values were assumed to approximate carrying value for these financial instruments, except where noted. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The Company is operating outside the United States of America and has significant exposure to foreign currency risk due to the fluctuation of currency in which the Company operates and U.S. dollars.

 

Long-lived assets impairment

 

Long-lived assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets.

 

Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis.

 

Stock-Based Compensation

 

The Company adopted ASC 718, "Share-Based Payment", to account for its stock options and similar equity instruments issued. Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. ASC 718 requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.

 

The Company did not grant any stock options during the years ended December 31, 2011 and 2010.

 

Comprehensive Income

 

The Company adopted ASC 220, Reporting Comprehensive Income, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statement of Stockholders' Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has no elements of “other comprehensive income” for the years ended December 31, 2011 and 2010.

 

Income Taxes

 

The Company has adopted ASC 740, Accounting for Income Taxes, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

 

19
 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Basic and Diluted Loss Per Share

 

In accordance with ASC 260 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would be outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As at December 31, 2011 and 2010, the basic loss per share was equal to diluted loss per share as there was no dilutive instrument.

 

Business Combinations

 

ASC 805 applies the acquisition method of accounting for business combinations established in ASC 805 to all acquisitions where the acquirer gains a controlling interest, regardless of whether consideration was exchanged. ASC 805 establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.  The adoption of the standard did not have a material impact on the Company

 

Non-controlling Interests in Consolidated Financial Statements

 

ASC 160 requires companies with noncontrolling interests to disclose such interests clearly as a portion of equity but separate from the parent’s equity. The noncontrolling interest’s portion of net income must also be clearly presented on the Income Statement.

 

Disclosure about Derivative Instruments and Hedging Activities

 

ASC 815-10 requires companies with derivative instruments to disclose information that should enable financial-statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under ASC 815 "Accounting for Derivative Instruments and Hedging Activities" and how derivative instruments and related hedged items affect a company's financial position, financial performance and cash flows.

 

Determination of the Useful Life of Intangible Assets

 

The Company adopted FSP No. 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP 142-3”), as codified in ASC subtopic 350-30, Intangibles — Goodwill and Other: General Intangibles Other than Goodwill (ASC 350-30) and ASC topic 275, Risks and Uncertainties (ASC 275), which amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under FASB Statement No. 142, as codified in ASC topic 350, Intangibles Goodwill and Other (ASC 350). This new guidance applies prospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions.

 

Accounting for Convertible Debt Instruments

 

The Company adopted FASB Staff Position (“FSP”) APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)”, as coded in ASC 470 “debt”. ASC 470 specifies that issuers of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods.

 

Accounting for Financial Guarantee Insurance Contracts

 

The Company adopted ASC 944-20, “Accounting for Financial Guarantee Insurance Contracts” (formerly SFAS No. 163, Accounting for Financial Guarantee Insurance – an interpretation of FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises). ASC 944-20 requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. The adoption of ASC 944-20 has no effect on the Company’s financial reporting at this time.

 

20
 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Share-Based Payments Transactions

 

The Company adopted ASC 260-10, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” ASC 260-10 provides that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Upon adoption, a company is required to retrospectively adjust its earnings per share data (including any amounts related to interim periods, summaries of earnings and selected financial data) to conform with the provisions of ASC 260-10.

 

Equity Method Investment Accounting Considerations

 

On April 1, 2009, the Company adopted ASC 323-10, “Equity Method Investment Accounting Considerations” that addresses how the initial carrying value of an equity method investment should be determined, how an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment should be performed, how an equity method investee’s issuance of shares should be accounted for, and how to account for a change in an investment from the equity method to the cost method. The adoption of ASC 323-10 did not have a material impact on our financial condition or results of operations.

 

Fair Value Measurement and Disclosures

 

The Company adopted ASC 820 Fair Value Measurements and Disclosures (“ASC 820”). As defined in ASC 820, fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

 

·   Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

·   Level 2: Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly.

·   Level 3: Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs

 

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

 

The Company’s financial instruments consist principally of cash and cash equivalents, accounts payable and accrued liabilities, convertible debenture – related party, and due to a related party. Pursuant to ASC 820, the fair value of cash and cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

 

New Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

 

NOTE 3 – PREPAID EXPENSES

 

On August 24, 2010, the Company entered into a consulting agreement with a shareholder of the Company for corporate development services and fund raising for a period of six months commencing on September 1, 2010. The Company agreed to pay $23,500 for the service in advance. As at December 31, 2010, the Company made the payment of $23,500 of which $15,667 was expensed in consulting fees in fiscal 2010 and the remaining $7,833 was expensed in fiscal 2011.

 

21
 

NOTE 4 – CONVERTIBLE NOTE – RELATED PARTY

 

The Company issued a non-interest bearing note in an amount equal to $50,000 that is convertible at the rate of the average volume weighted closing price of the common shares on the NASD over-the-counter bulletin board for a period of 10 business days prior to the surrender date and the conversion is deemed to have been effected on the 61st day following the surrender date. In accordance with EITF 98-5 “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios”, the Company determined that the convertible notes contained no embedded beneficial conversion feature as the convertible notes were issued with a conversion price the same as the fair market value of the Company’s common shares at the time of issuance, being $0.53 per share. The carrying value of the convertible notes was equal to the fair value as they were non-interest bearing and due on demand. The note was paid in full by the Company on August 10, 2010.

 

NOTE 5 - PREFERRED AND COMMON STOCK

 

The Company has 50,000,000 shares of preferred stock authorized and none issued.

 

The Company has 100,000,000 shares of common stock authorized, of which 43,675,900 shares are issued and outstanding. All shares of common stock are non-assessable and non-cumulative, with no preemptive rights.

 

On September 8, 2009, the Company issued 200,000 common shares to a director of the Company as consideration for his services as a director at the fair market value of $0.55 per share for a total of $110,000. On March 31, 2010 the former director surrendered these shares to the Company.

 

Under the terms of the Reorganization, on July 10, 2009, the Company issued 3,000,000 common shares at deemed value of $0.006 per share to the shareholders of Novagen Solar (Canada) Ltd. The shares were surrendered to the Company on December 1, 2009, as part of the Rescission.

 

On August 16, 2010, the Company issued 21,224,600 shares of common stock to three of its creditors at a price of $0.01 per share, in full and final settlement of a debt of $212,246 owed to the creditors. One of the creditors was the sole director of the Company, and he received 5,855,800 shares of common stock in full and final settlement of $58,558 owed to him by the Company for expenses incurred on the Company’s behalf.

 

On August 16, 2010 the Company issued 10,000,000 shares of common stock at a price of $0.01 per share to five purchasers for total cash proceeds of $100,000.

 

NOTE 6 – SEGMENTED INFORMATION

 

The Company identifies its segments based on the way management organizes the Company to assess performance and make operating decisions regarding the allocation of resources. In accordance with the criteria in FASB ASC 280 "Segment Reporting", the Company has concluded it has one reportable segment and the Company currently conducts all of its operations in Australia.

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

During the fiscal year 2009, the Company issued 200,000 common stock to one of its directors as consideration for his services as a director at the fair market value of $0.55 per share for a total of $110,000. On March 31, 2010 these shares were surrendered to the Company and recorded as additional paid-in capital.

 

On August 16, 2010, the Company issued 5,855,800 shares of common stock to its sole director at a price of $0.01 per share, in full and final settlement of a debt of $58,558 owed to him by the Company for expenses incurred on the Company’s behalf.

 

In connection with the issuance of 10,000,000 common shares at a price of $0.01 to five purchasers, 2,300,000 shares of common stock were issued to the mother of our sole director for total proceeds of $23,000.

 

On August 16, 2010 the Company issued 15,368,800 shares of common stock at a price of $0.01 per share to a creditor in full and final settlement of a debt of $153,688. Upon the issuance, the creditor owned 36% of the Company.

 

As at December 31, 2011, the Company owed $Nil (2010 - $4,025) to any director or officer of the Company.

 

On December 7, 2011, a former director of the Company released the Company from all debt owing to him for disbursements incurred on behalf of the Company. As a result of the release, $13,395 was forgiven and recorded in additional paid in capital.

 

Also during the year ended December 31, 2011, a company related to an officer of the Company forgave $5,000 used to pay for outstanding bills and the amount was recorded in additional paid in capital.

 

See Note 4.

 

22
 

NOTE 8 – INCOME TAXES

 

At December 31, 2011, the Company had deferred tax assets of approximately $182,300 principally arising from net operating loss carryforwards for income tax purposes. As our management cannot determine that it is more likely than not that we will realize the benefit of the deferred tax asset, a valuation allowance equal to the deferred tax asset has been established at December 31, 2011. The significant components of the deferred tax asset at December 31, 2011 and 2010 were as follows:

 

  December 31, 2011 December 31, 2010
Net operating loss carryforwards at tax rate of 35% $  182,300 $  175,900
Valuation allowance (182,300) (175,900)
Net deferred tax asset $             - $             -

 

At December 31, 2011, the Company had net operating loss carryforwards of approximately $521,000, which expire in the year 2026 through to 2032.

 

NOTE 9 – SUBSEQUENT EVENTS, COMMITMENT AND CONTINGENCY

 

On January 3, 2012, the Company formed Novagen Pty Ltd. under the laws of Australia, as a wholly owned operating subsidiary. All of the Company’s operations are currently conducted through Novagen Pty Ltd.

 

On January 17, 2012, the Company formed Novagen Production Pty Ltd. under the laws of Australia, as a wholly owned non-operating subsidiary.

 

On March 2, 2012, the Company formed Novagen Finance Pty Ltd. under the laws of Australia, as a wholly owned non-operating subsidiary.

23
 

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

 

None.

 

Item 9A. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by our management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of 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 (“Exchange Act”)) as of December 31, 2011. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.

 

Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were not effective. Management intends to improve the adequacy of its disclosure controls and procedures during the course of 2012, subject to available resources.

 

Management’s Report on Internal Control Over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and Rule 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

 

  • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;

 

  • provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and

 

  • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

 

The Company’s management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). As a result of this assessment, management identified a material weakness in internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

 

The material weakness identified is described below.

 

Procedures for Control Evaluation. Management has not established with appropriate rigor the procedures for evaluating internal controls over financial reporting. Due to limited resources and lack of segregation of duties, documentation of the limited control structure has not been accomplished.

 

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Lack of Audit Committee. To date, the Company has not established an Audit Committee. It is management’s view that such a committee, including a financial expert, is an utmost important entity level control over the financial reporting process.

 

Insufficient Documentation of Review Procedures. We employ policies and procedures for reconciliation of the financial statements and note disclosures, however, these processes are not appropriately documented. The Company has only one individual responsible for the preparation of the financial records.

 

Insufficient Information Technology Procedures. Management has not established methodical and consistent data back-up procedures to ensure loss of data will not occur.

 

As a result of the material weaknesses in internal control over financial reporting described above, the Company’s management has concluded that, as of December 31, 2011, the Company’s internal control over financial reporting was not effective based on the criteria in Internal Control – Integrated Framework issued by COSO.

 

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

 

Changes in Internal Control Over Financial Reporting

 

As of the end of the period covered by this report, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the year ended December 31, 2011, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

CEO and CFO Certifications

 

Appearing immediately following the Signatures section of this report there are Certifications of our CEO and CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

 

PART III

 

Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(A) of the Exchange Act

 

The following sets forth our directors, executive officers, promoters and control persons, their ages, and all offices and positions held. Directors are elected for a period of one year and thereafter serve until the stockholders duly elect their successor. Officers and other employees serve at the will of the Board.

 

 

Name

 

Position

 

Age

Term Period Served as Director/Officer
       
Micheal P. Nugent CEO, President and a director 48 2011 to present
       
Michael Norton-Smith CFO, Secretary and a director 65 2011 to present

 

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Micheal Nugent

 

Micheal P. Nugent has served as the President, Chief Executive Officer and as a director of the Company since December 2011. Mr. Nugent has held senior executive positions and directorships with public and private companies in the United States and Australia since 1995. He is a certified diesel fitter in Australia. Mr. Nugent’s technical and corporate experience is expected to assist the Company with its efforts to implement profitable operations.

 

During the past five years, Mr. Nugent has held the following positions:

 

Position(s) Held From To Employer Business Operations
         
CEO 2011 Present Loadstone Motor Corporation Pty Ltd. engine development and manufacture
director, CEO 2009 Present Roadships Holdings, Inc. transport logistics
director, CEO 2008 Present Nugent Aerospace, Inc. non-operating
director, CEO 2008 Present Fire From Ice, Inc. non-operating
CEO 2006 Present Adbax Truckside Management Pty Ltd. transport industry service provider
CEO 2003 Present Cycclone Magnetic Engines, Inc. engine development
director 2001 Present Roadships Australia Pty Ltd. transportation logistics
director 2001 Present Bronzelink Pty Ltd. holding company

 

Michael Norton-Smith

 

Michael Norton-Smith has served as a director of the Company as well as its Treasurer and Secretary since December 2011. As Treasurer of the Company, Mr. Norton-Smith acts as the Company’s Chief Financial Officer and Principal Accounting Officer. Mr. Norton-Smith, is a certified public accountant in Australia with 35 years of financial and corporate experience. His engagement is expected to assist the Company with its efforts to implement profitable operations.

 

During the past five years, Mr. Norton-Smith has held the following positions:

 

Position(s) Held From To Employer Business Operations
         
Director, Secretary 2009 Present ACN 108 217 947 Pty Ltd accounting & taxation services
Chief Financial Officer 2011 Present Loadstone Motor Corporation Pty Ltd engine development and manufacture
Director, Secretary 2003 Present Patanga Investments Pty Ltd consulting services
Director, Secretary, CFO 2010 Present Remote Contractors Pty Ltd earthmoving contractor
Director 2006 Present Classic Livestock Management Services Pty Ltd livestock assessment
Director 2010 Present Coldgold Ltd abalone farming
Director 2007 Present MNSRA Pty Ltd plantation investment
Director, Secretary 2010 Present Platinum River Developments Pty Ltd property development
Director, Secretary 2010 Present Queensland Venture Capital Pty Ltd non-operating
Director, Secretary 2010 Present Southdav Australia Pty Ltd non-operating
Director, Secretary 2010 Present Southdav Pacific Pty Ltd non-operating
Director/Secretary 2010 Present JJM Property Investments Pty Ltd non-operating
Director/Secretary 2009 Present Carbonleaf Limited non-operating

 

Family Relationships:

 

There is no family relationship among any of our officers and directors.

 

Involvement in Certain Legal Proceedings

 

Except as noted herein or below, during the last ten years none of our directors or officers have:

 

26
 

(1)had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

(2)been convicted in a criminal proceeding or subject to a pending criminal proceeding;

 

(3)been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

 

(4)been found by a court of competent jurisdiction in a civil action, the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

 

Committees of the Board

 

All proceedings of the board of directors for the fiscal year ended December 31, 2011 were conducted by resolutions consented to in writing by our board of directors and filed with the minutes of the proceedings of our board of directors. Novagen does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by the board of directors.

 

Novagen does not have any defined policy or procedure requirements for stockholders to submit recommendations or nominations for directors. The board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. The board of directors will assess all candidates, whether submitted by management or stockholders, and make recommendations for election or appointment.

 

A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our President, Micheal Nugent, at the address appearing on the first page of this registration statement.

 

Audit Committee Financial Expert

 

We do not have a standing audit committee. Our directors perform the functions usually designated to an audit committee. Our board of directors has determined that Michael Norton-Smith qualifies as an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S-K. All of our board members are also executive officers of the Company and therefore our board of directors has determined that we do not have a board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the NASD Rules.

 

We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. Our board of directors does not believe that it is necessary to have an audit committee because management believes that the functions of an audit committees can be adequately performed by the board of directors. In addition, we believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash flows from operations to date.

 

As we generate revenue in the future, we intend to form a standing audit committee and identify and appoint a financial expert to serve on our audit committee.

 

27
 

Indemnification

 

Under our Articles of Incorporation and Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

 

Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

 

Item 11. Executive Compensation

 

To date we have no employees other than our sole officer and director. No compensation has been awarded, earned or paid to our sole officer and director. We have no employment agreements with our officer. We do not contemplate entering into any employment agreements until such time as we have positive cash flows from operations.

 

There is no arrangement pursuant to which any of our directors has been or is compensated for services provided as one of our directors.

 

There are no stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers or directors. We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters

 

The following table sets forth, as of March 30, 2012, information concerning ownership of the Company’s securities by (i) each Director, (ii) each executive officer, (iii) all directors and executive officers as a group; and (iv) each person known to the Company to be the beneficial owner of more than five percent of each class. The number and percentage of shares beneficially owned includes any shares as to which the named person has sole or shared voting power or investment power and any shares that the named person has the right to acquire within 60 days.

 

  Beneficial Ownership

 

 

Name of Beneficial Owner

 

 

Title of Class

 

Number of Shares Beneficially Owned

Percentage

of

Class

Micheal Peter Nugent (1) Common Stock 29,297,600 67%
Michael Norton Smith Common Stock Nil Nil
All directors and executive officers, as a group Common Stock 29,297,600 67%
Twenty Second Trust (1) Common Stock 29,297,600 67%

 

(1)By operation of Rule 16a-8 of the Exchange Act of 1934, as amended, the holding of 29,297,600 shares of the Company’s common stock by Twenty Second Trust is attributable to Micheal Peter Nugent as the sole trustee of Twenty Second Trust.

 

The mailing address for all directors, executives officers and beneficial owners of more than 5% of our common stock is 284 West Millbrook Road, Raleigh, North Carolina 27609.

 

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Unless otherwise noted, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. For purposes hereof, a person is considered to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof, upon the exercise of warrants or options or the conversion of convertible securities. Each beneficial owner's percentage ownership is determined by assuming that any such warrants, options or convertible securities that are held by such person (but not those held by any other person) and which can be exercised within 60 days from the date hereof, have been exercised.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence

 

On December 31, 2009, we issued a non-interest bearing convertible debenture to Novagen Solar (Canada) Ltd. in an amount equal to $50,000. On August 10, 2010, we repaid the debenture in full. Thomas Mills, our former sole officer and director, was a controlling shareholder of Novagen Solar (Canada) Ltd. until July 1, 2010, when he divested himself of all beneficial ownership of it.

 

As at August 1, 2010, the Company owed $58,558 to Thomas Mills for disbursements he incurred on behalf of the Company. On August 4, 2010, we agreed to issue 5,855,800 shares of our common stock to Ophion Management Ltd., a company controlled by Mr. Mills, at a price of $0.01 per share, in full and final settlement of the amount owing to Mr. Mills. The shares were issued on August 16, 2010.

 

On August 4, 2010, we accepted a subscription for 2,300,000 shares of our common stock from Gisela Mills at $0.01 per share, for gross proceeds of $23,000. The shares were issued on August 16, 2010. Gisela Mills is the mother of Thomas Mills, our sole officer and director.

 

On December 7, 2011, a former director of the Company released the Company from all debt owing to him for disbursements incurred on behalf of the Company. As a result of the release, $13,395 was forgiven and recorded in additional paid in capital.

 

Also during the year ended December 31, 2011, a company related to an officer of the Company forgave $5,000 used to pay for outstanding bills and the amount was recorded in additional paid in capital.

 

Item 14. Principal Accounting Fees and Services

 

Audit Fees

 

The aggregate fees billed by Chang Lee LLP, our former certifying accountant, for professional services rendered for the audit of our annual financial statements included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2010 were C$6,272.

 

The aggregate fees billed by MNP LLP for professional services rendered for the audit of our annual financial statements included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2011 will be approximately C$6,000.

 

Audit Related Fees

 

For the fiscal years ended December 31, 2011 and 2010, the aggregate fees billed for assurance and related services by Chang Lee LLP, our former certifying accountant, relating to our quarterly financial statements which are not reported under the caption “Audit Fees” above, were C$1,232 and C$7,890, respectively.

 

For the fiscal year ended December 31, 2011, the aggregate fees billed for assurance and related services by MNP LLP relating to our quarterly financial statements which are not reported under the caption “Audit Fees” above, were C$2,184.

 

29
 

Tax Fees

 

For the fiscal years ended December 31, 2011 and 2010, the aggregate fees billed for tax compliance, by Chang Lee LLP were nil.

 

For the fiscal year ended December 31, 2011, the aggregate fees billed for tax compliance, by MNP LLP were nil.

 

All Other Fees

 

For the fiscal years ended December 31, 2011 and 2010, the aggregate fees billed by Chang Lee LLP for other non-audit professional services, other than those services listed above, totaled nil.

 

For the fiscal year ended December 31, 2011 the aggregate fees billed by MNP LLP for other non-audit professional services, other than those services listed above, totaled nil.

 

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before MNP LLP is engaged by us or our subsidiaries to render any auditing or permitted non-audit related service, the engagement be:

 

·approved by our audit committee; or

 

·entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.

 

We do not have an audit committee. Our entire board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the entire board of directors either before or after the respective services were rendered.

 

PART IV

 

ITEM 13. EXHIBITS

 

Exhibit Title
   
3.1 Articles of Incorporation, Novagen Solar Inc., incorporated by reference from the amended Form 10-K filed May 17, 2010 (1)
3.2 Amended and Restated Bylaws, Novagen Solar Inc., incorporated by reference from the amended Form 10-K filed May 17, 2010 (1)
4.1 Form of Stock certificate, Novagen Solar Inc. (2)
14.1 Code of Ethics for Senior Financial Officers, Novagen Solar Inc. (2)
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1) Previously included as an exhibit to the Registration Statement on Form S-1 filed August 27, 2010.

(2) Previously included as an exhibit to the Annual Report on Form 10-K filed March 31, 2010.

 

30
 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

NOVAGEN SOLAR INC.

 

 

Date: March 30, 2012

 

 

 

 

By: /s/ Micheal P. Nugent

Micheal P. Nugent

Chief Executive Officer, President,

Chief Financial Officer and

Principal Accounting Officer

   

 

Date: March 30, 2012

 

 

 

 

By: /s/ Michael Norton-Smith

Michael Norton-Smith

Chief Financial Officer and

Principal Accounting Officer

 

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

SIGNATURE TITLE DATE

 

 

/s/ Micheal P. Nugent

Micheal P. Nugent

 

 

Chief Executive Officer, President and a director

 

 

March 30, 2011

     

 

 

/s/ Michael Norton-Smith

Michael Norton-Smith

 

 

Chief Financial Officer, Principal Accounting Officer and a director

 

 

March 30, 2011