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EX-32 - EXHIBIT 32 - ALTERNATE ENERGY HOLDINGS, INC.ex32.htm
EX-31.2 - EXHIBIT 31.2 - ALTERNATE ENERGY HOLDINGS, INC.ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - ALTERNATE ENERGY HOLDINGS, INC.ex31-1.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 

FORM 10-Q


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

For the quarterly period ended June 30, 2012
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                             to                              
 
Commission file number: 000-53451
 
ALTERNATE ENERGY HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
 
 
Nevada
20-5689191
 
(State or other jurisdiction of
(I.R.S. Employer
 
incorporation or organization)
Identification No.)
     
 
911 E. Winding Creek Dr., Suite 150, Eagle, Idaho
83616
 
(Address of principal executive offices)
(Zip Code)

(208) 939-9311
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý                   No o
Indicate by check mark whether the registrant has submitted electronically and where posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ý               No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)
 
Large Accelerated Filer  o                                                                                            Accelerated Filer  o
 
Non- Accelerated Filer  o                                                                                            Smaller reporting company ý
(Do not check if a smaller reporting company)
 
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yeso    No  ý
 
As of August 13, 2012, there were 326,562,791 shares of common stock, $0.001 par value per share, outstanding.
 
 
 

 
 
ALTERNATE ENERGY HOLDINGS, INC.
 
TABLE OF CONTENTS
 
 
Page No.
 PART I - FINANCIAL INFORMATION
     
Item 1.
Consolidated Financial Statements.
3
Item 2.
Management’s Discussion and Analysis of Financial Condition And Results of Operations.
19
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
23
Item 4.
Controls And Procedures.
23
 
PART II - OTHER INFORMATION
Item 1.
Legal Proceedings.
23
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
24
Item 3.
Defaults Upon Senior Securities.
24
Item 4.
Mine Safety Disclosures
24
Item 5.
Other Information.
24
Item 6.
Exhibits.
24
SIGNATURES
 
25
 
the terms “we”, “us”, “our”, “Company” , “AEHI” and “Alternate Energy Holdings” refer to Alternate Energy Holdings, Inc. and our wholly owned subsidiaries.
 
 
2

 

PART I - FINANCIAL INFORMATION
 
 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2012 (Unaudited) AND DECEMBER 31, 2011
 
ASSETS
 
June 30
2012
Unaudited
   
December 31
2011
 
CURRENT ASSETS:
           
Cash and Cash Equivalents
  $ 332,341     $ 268,691  
Cash - Escrow
    2,001,500       2,018,500  
Prepaid Expenses
    5,730       5,604  
Short-Term Investments
    -       1,540,655  
                 
Total Current Assets
    2,339,571       3,833,450  
                 
PROPERTY AND EQUIPMENT - Net
    53,772       61,099  
                 
OTHER ASSET
               
Payette County - Site Work
    9,297       -  
                 
Total Other Asset
    9,297       -  
                 
                 
TOTAL ASSETS
  $ 2,402,640     $ 3,894,549  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY        
                 
CURRENT LIABILITY
               
Accounts Payable
  $ 1,117,366     $ 102,782  
                 
Total Current Liabilities
    1,117,366       102,782  
                 
STOCKHOLDERS' EQUITY:
               
Common Stock, par value $.001, 500,000,000 shares authorized; 326,562,791 issued and 326,162,791 outstanding and 325,962,791 issued and 325,562,791 outstanding, respectively
    326,563       325,963  
Additional Paid in Capital
    27,285,303       27,255,903  
Accumulated Other Comprehensive Income(Loss)
    -       (102,439 )
Treasury Stock (400,000 shares at cost)
    (20,000 )     (20,000 )
Deficit Accumulated During Development Stage
    (26,306,592 )     (23,667,660 )
                 
Total Stockholders' Equity
    1,285,274       3,791,767  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 2,402,640     $ 3,894,549  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
3

 
 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011
AND THE PERIOD FROM INCEPTION (AUGUST 29, 2005) THROUGH JUNE 30, 2012 (Unaudited)
 
   
Three Months
June
2012
   
Three Months
June
2011
   
Six Months
June
2012
   
Six Months
June
2011
   
Inception to
June 30
2012
 
                               
REVENUES
  $ -     $ 373,900     $ -     $ 542,900     $ 923,650  
                                         
COST OF SALES
    -       360,219       -       521,806       929,237  
                                         
GROSS PROFIT
    -       13,681       -       21,094       (5,587 )
                                         
OPERATING EXPENSES:
                                       
General and Administrative Expenses
    1,775,664       972,428       2,441,452       1,633,084       27,117,690  
                                         
NET LOSS FROM OPERATIONS
    (1,775,664 )     (958,747 )     (2,441,452 )     (1,611,990 )     (27,123,277 )
                                         
OTHER INCOME (EXPENSE)
                                       
Investment Income
    392       67,816       25,236       145,064       466,853  
Miscellaneous Income
    -       -       -       -       9,186  
(Loss) Gain on Sales of Investments
    (16,403 )     (27,736 )     (222,716 )     (118,720 )     (516,901 )
Impairment on Deposit
    -       -                       (100,000 )
Impairment on Asset Held for Sale
    -       -       -       -       (38,419 )
Interest Expense
    -       (7 )     -       (48 )     (4,034 )
Total Other Income
    (16,011 )     40,073       (197,480 )     26,296       (183,315 )
                                         
LOSS BEFORE NON-CONTROLLING INTEREST IN VARIABLE INTEREST ENTITY
    (1,791,675 )     (918,674 )     (2,638,932 )     (1,585,694 )     (27,306,592 )
                                         
Non-Controlling Interest in Variable Interest Entity
    -       -       -       -       1,000,000  
                                         
Net Loss before Income Tax
    (1,791,675 )     (918,674 )     (2,638,932 )     (1,585,694 )     (26,306,592 )
                                         
Income Tax Expense
    -       -       -       -       -  
                                         
NET LOSS
  $ (1,791,675 )   $ (918,674 )   $ (2,638,932 )   $ (1,585,694 )   $ (26,306,592 )
                                         
OTHER COMPREHENSIVE INCOME, NET OF TAX
                         
Unrealized Holding (Loss) Gain Arising During the Period
    (1,302 )     17,862       102,439       62,605       -  
                                         
COMPREHENSIVE LOSS
  $ (1,790,373 )   $ (936,536 )   $ (2,741,371 )   $ (1,648,299 )   $ (26,306,592 )
                                         
BASIC AND DILUTED
                                       
NET LOSS PER COMMON STOCK
  $ (0.01 )   $ (0.00 )   $ (0.01 )   $ (0.00 )        
                                         
WEIGHTED AVERAGE SHARES OUTSTANDING
    326,562,791       325,923,208       326,437,791       325,710,708          
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
4

 

ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
AND THE PERIOD FROM INCEPTION (AUGUST 29, 2005) THROUGH JUNE 30, 2012 (Unaudited)
 
2005
 
Price per
Share
   
Number of
Common
Shares Issued
   
Common
Stock
   
Additional
Paid in
Capital
   
Treasury
Stock
   
Accumulated
Other
Comprehensive
Income
   
Net
Loss
   
Total
 
Founder Shares issued August 29, 2005
    -       14,800,000     $ 14,800     $ (14,800 )   $ -     $ -     $ -     $ -  
Issuance of Common Stock for Services
                                                               
October
    0.0176       3,249,999       3,250       54,250       -       -       -       57,500  
Amortization of common stock for services
                                                               
October
            -       -       8,750       -       -       -       8,750  
November
            -       -       8,750       -       -       -       8,750  
December
            -       -       8,750       -       -       -       8,750  
Issuance of Common Stock for Payables:
                                                               
September
    0.0417       600,000       600       24,400       -       -       -       25,000  
November
    0.0500       300,000       300       14,700       -       -       -       15,000  
Net Loss
            -       -       -       -       -       (100,692 )     (100,692 )
Balances, December 31, 2005
            18,949,999       18,950       104,800       -       -       (100,692 )     23,058  
2006
                                                               
Nussential Holdings Inc. shareholders prior to merger
    -       4,252,088       4,252       (4,252 )     -       -       -       -  
Issuance of Common Stock for Services
                                                               
September
    1.0077       1,149,999       1,150       1,157,599       -       -       -       1,158,749  
November
    0.9000       100,000       100       89,900       -       -       -       90,000  
Amortization of common stock for services
                                                               
January
            -       -       8,750       -       -       -       8,750  
February
            -       -       8,750       -       -       -       8,750  
March
            -       -       8,750       -       -       -       8,750  
April
            -       -       8,750       -       -       -       8,750  
May
            -       -       8,750       -       -       -       8,750  
June
            -       -       8,750       -       -       -       8,750  
July
            -       -       8,750       -       -       -       8,750  
August
            -       -       8,750       -       -       -       8,750  
Issuance of Common Stock for Cash
                                                               
March
    0.0500       1,000,000       1,000       49,000       -       -       -       50,000  
May
    0.0500       400,000       400       19,600       -       -       -       20,000  
June
    0.0500       100,000       100       4,900       -       -       -       5,000  
October
    0.6465       273,000       273       176,227       -       -       -       176,500  
November
    0.3333       116,000       116       38,550       -       -       -       38,666  
December
    0.4244       75,000       75       31,758       -       -       -       31,833  
Purchase of Treasury Stock
            -       -       -       (20,000 )     -       -       (20,000 )
Net Loss
            -       -       -       -       -       (1,394,711 )     (1,394,711 )
Balances, December 31, 2006
            26,416,086       26,416       1,738,082       (20,000 )     -       (1,495,403 )     249,095  
2007
                                                               
Issuance of Common Stock for Services
                                                               
February
    0.5000       920,000       920       459,080       -       -       -       460,000  
March
    0.5000       300,000       300       149,700       -       -       -       150,000  
April
    0.2500       100,000       100       24,900       -       -       -       25,000  
June
    0.2500       550,000       550       136,950       -       -       -       137,500  
August
    0.4000       531,552       532       212,089       -       -       -       212,621  
September
    0.1055       4,583,200       4,583       478,697       -       -       -       483,280  
October
    0.4000       366,400       366       146,194       -       -       -       146,560  
November
    0.1453       457,000       457       65,943       -       -       -       66,400  
December
    0.1000       57,500       58       5,692       -       -       -       5,750  
Issuance of Common Stock for Cash
                                                               
January
    0.5300       23,000       23       12,227       -       -       -       12,250  
February
    0.5000       55,000       55       27,445       -       -       -       27,500  
March
    0.5000       10,000       10       4,990       -       -       -       5,000  
April
    0.4000       25,000       25       9,975       -       -       -       10,000  
May
    0.2500       206,000       206       51,294       -       -       -       51,500  
June
    0.2389       180,000       180       42,820       -       -       -       43,000  
July
    0.2500       2,591,000       2,591       645,159       -       -       -       647,750  
August
    0.2494       2,521,036       2,521       626,238       -       -       -       628,759  
September
    0.2500       64,000       64       15,936       -       -       -       16,000  
October
    0.2500       20,000       20       4,980       -       -       -       5,000  
November
    0.2000       287,500       287       57,213       -       -       -       57,500  
December
    0.1000       2,451,000       2,451       242,649       -       -       -       245,100  
Net Loss
            -       -       -       -       -       (3,394,200 )     (3,394,200 )
Balances, December 31, 2007
            42,715,274     $ 42,715     $ 5,158,253     $ (20,000 )   $ -     $ (4,889,603 )   $ 291,365  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
5

 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
AND THE PERIOD FROM INCEPTION (AUGUST 29, 2005) THROUGH JUNE 30, 2012 (Unaudited)
 
2008
 
Price per
Share
   
Number of
Common
Shares Issued
   
Common
Stock
   
Additional
Paid in
Capital
   
Treasury
Stock
   
Accumulated
Other
Comprehensive
Income
   
Net
Loss
   
Total
 
Issuance of Common Stock for Services
                                               
January
    0.1000       1,312,250       1,312       129,913       -       -       -       131,225  
February
    0.1000       70,000       70       6,930       -       -       -       7,000  
March
    0.1000       183,250       183       18,142       -       -       -       18,325  
April
    0.1000       20,000       20       1,980       -       -       -       2,000  
May
    0.1000       14,556,875       14,557       1,441,131       -       -       -       1,455,688  
June
    0.1000       4,365,342       4,365       432,169       -       -       -       436,534  
July
    0.2000       798,625       798       158,927       -       -       -       159,725  
August
    0.2000       71,500       72       14,228       -       -       -       14,300  
September
    0.2000       25,430       25       5,061       -       -       -       5,086  
October
    0.2000       207,147       207       41,222       -       -       -       41,429  
November
    0.2000       10,853       11       2,160       -       -               2,171  
December
    0.1000       3,140,777       3,141       310,934       -       -               314,075  
Issuance of Common Stock for Cash
                                                               
January
    0.1000       7,720,000       7,720       764,280       -       -       -       772,000  
February
    0.1000       1,120,750       1,121       110,954       -       -       -       112,075  
March
    0.1000       225,000       225       22,275       -       -       -       22,500  
April
    0.1000       250,000       250       24,750       -       -       -       25,000  
May
    0.1000       50,000       50       4,950       -       -       -       5,000  
June
    0.1000       576,000       576       57,024       -       -       -       57,600  
July
    0.1021       307,301       308       31,072       -       -       -       31,380  
August
    0.1549       182,000       182       28,018       -       -       -       28,200  
September
    0.2609       153,666       154       39,946       -       -       -       40,100  
December
    0.1000       125,000       125       12,375       -       -       -       12,500  
Net Loss
            -       -       -       -       -       (3,820,601 )     (3,820,601 )
Balances, December 31, 2008
            78,187,040       78,187       8,816,694       (20,000 )     -       (8,710,204 )     164,677  
2009
                                                               
Issuance of Common Stock for Services
                                                               
January
    0.1000       395,290       395       39,134       -       -       -       39,529  
March
    0.0500       138,065       138       6,765       -       -       -       6,903  
April
    0.0500       18,425,000       18,425       902,825       -       -       -       921,250  
May
    0.0500       945,400       945       46,325       -       -       -       47,270  
June
    0.0500       718,500       719       35,206       -       -       -       35,925  
July
    0.0500       755,000       755       36,995       -       -       -       37,750  
August
    0.0500       1,567,957       1,568       76,830       -       -       -       78,398  
September
    0.0500       1,431,340       1,431       70,136       -       -       -       71,567  
October
    0.0500       50,000       50       2,450       -       -       -       2,500  
November
    0.0500       441,580       442       21,637       -       -       -       22,079  
December
    0.0500       3,914,400       3,915       191,805       -       -       -       195,720  
Issuance of Common Stock for Contract Option Fee
                                                               
December
    0.0500       500,000       500       24,500       -       -       -       25,000  
Issuance of Common Stock for Cash
                                                               
January
    0.1000       25,000       25       2,475       -       -       -       2,500  
February
    0.0500       800,000       800       39,200       -       -       -       40,000  
March
    0.0500       330,600       330       16,200       -       -       -       16,530  
April
    0.0500       1,745,000       1,745       85,505       -       -       -       87,250  
May
    0.0500       700,000       700       34,300       -       -       -       35,000  
June
    0.0500       4,345,000       4,345       212,905       -       -       -       217,250  
August
    0.0500       440,000       440       21,560       -       -       -       22,000  
September
    0.0500       2,470,000       2,470       121,030       -       -       -       123,500  
October
    0.0500       3,509,000       3,509       171,941       -       -       -       175,450  
November
    0.0500       5,338,700       5,339       261,596       -       -       -       266,935  
December
    0.0500       8,977,236       8,977       439,933       -       -       -       448,910  
Net Loss
            -       -       -       -       -       (2,377,568 )     (2,377,568 )
Balances, December 31, 2009
            136,150,108       136,150       11,677,947       (20,000 )     -       (11,087,772 )     706,325  
The accompanying notes are an integral part of these consolidated financial statements.
 
6

 
 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
AND THE PERIOD FROM INCEPTION (AUGUST 29, 2005) THROUGH JUNE 30, 2012 (Unaudited)
 
2010
 
Price per
Share
   
Number of
Common
Shares Issued
   
Common
Stock
   
Additional
Paid in
Capital
   
Treasury
Stock
   
Accumulated
Other
Comprehensive
Income
   
Net
Loss
   
Total
 
Issuance of Common Stock for Services
                                               
January
    0.0500       17,500,000       17,500       857,500       -       -       -       875,000  
February
    0.0500       20,475,200       20,475       1,003,285       -       -       -       1,023,760  
March
    0.0500       1,307,546       1,308       64,069       -       -       -       65,377  
April
    0.0500       735,800       735       36,055       -       -       -       36,790  
May
    0.1000       100,000       100       9,900       -       -       -       10,000  
June
    0.1000       5,500,000       5,500       544,500       -       -       -       550,000  
July
    0.1500       5,854,465       5,854       872,316       -       -       -       878,170  
August
    0.5000       462,000       462       230,538       -       -       -       231,000  
October
    0.7000       145,000       145       101,355       -       -       -       101,500  
November
    0.7365       2,056,030       2,056       1,512,124       -       -       -       1,514,180  
Issuance of Common Stock for Contract Option Fee
                                                               
August
    0.4000       500,000       500       199,500       -       -       -       200,000  
September
    0.7000       250,000       250       174,750       -       -       -       175,000  
Issuance of Common Stock for Cash
                                                               
January
    0.0500       4,691,240       4,691       229,871       -       -       -       234,562  
February
    0.0500       42,188,960       42,189       2,067,259       -       -       -       2,109,448  
March
    0.0500       30,048,710       30,049       1,472,387       -       -       -       1,502,436  
April
    0.0500       4,610,000       4,610       225,890       -       -       -       230,500  
May
    0.1000       44,028,600       44,029       4,358,831       -       -       -       4,402,860  
June
    0.1000       7,348,580       7,349       727,509       -       -       -       734,858  
July
    0.4000       65,000       65       25,935       -       -       -       26,000  
August
    0.5000       425,000       425       212,075       -       -       -       212,500  
September
    0.7400       223,547       224       165,200       -       -       -       165,424  
October
    0.7000       279,145       279       195,123       -       -       -       195,402  
November
    0.7000       142,860       143       99,859       -       -       -       100,002  
Net Loss
            -       -       -       -       -       (8,487,722 )     (8,487,722 )
Other Comprehensive Loss
            -       -       -       -       (243,773 )     -       (243,773 )
Balance - December 31, 2010
            325,087,791     $ 325,088     $ 27,063,778     $ (20,000 )   $ (243,773 )   $ (19,575,494 )   $ 7,549,599  
2011
                                                               
Issuance of Common Stock for Services
                                                               
April
    0.1000       100,000       100       9,900       -       -       -       10,000  
May
    0.1031       1,750,000       1,750       178,750       -       -       -       180,500  
September
    0.1000       25,000       25       2,475       -       -       -       2,500  
Cancellation of Common Stock for Services
                                                               
June
    0.7300       (1,000,000 )     (1,000 )     1,000       -       -       -       -  
Net Loss
            -       -       -       -       -       (4,092,166 )     (4,092,166 )
Other Comprehensive Income
            -       -       -       -       141,334       -       141,334  
Balance - December 31, 2011
            325,962,791       325,963       27,255,903       (20,000 )     (102,439 )     (23,667,660 )     3,791,767  
2012
                                                               
Issuance of Common Stock for Services
                                                               
March
    0.0500       600,000       600       29,400       -       -       -       30,000  
Net Loss
            -       -       -       -       -       (2,638,932 )     (2,638,932 )
Other Comprehensive Income
            -       -       -       -       102,439       -       102,439  
Balance - June 30, 2012
            326,562,791       326,563       27,285,303       (20,000 )     -       (26,306,592 )     1,285,274  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
7

 
 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011
AND THE PERIOD FROM INCEPTION (AUGUST 29, 2005) THROUGH JUNE 30, 2012 (Unaudited)
 
   
Six Months
June 30
2012
   
Six Months
June 30
2011
   
Inception to
June 30
2012
 
 CASH FLOWS FROM OPERATING ACTIVITIES:                  
Net Loss
  $ (2,638,932 )   $ (1,585,694 )   $ (26,306,592 )
Adjustments to reconcile Net Loss to Net Cash
         
Used by Operating Activities -
                 
Common Stock Issued for Services
    30,000       190,500       12,659,836  
Common Stock Issued for Contract Option Fee
    -       -       400,000  
Loss from Variable Interest Entity
    -       -       (1,000,000 )
Impairment on Asset Held for Sale
    -       -       38,419  
Depreciation
    8,030       7,222       31,824  
Loss (Gain) on Sales of Investments
    222,716       118,721       516,901  
Change in operating Assets and Liabilities -
         
Prepaid Expenses
    (126 )     -       5,730  
Construction in Progress - Energy Neutral Homes
    -       12,234       -  
Accounts Payable
    1,014,584       (31,300 )     1,117,366  
Accrued Payroll
    -       (25,000 )     -  
Total Adjustments
    1,275,204       272,377       13,770,076  
Net Cash Used by Operating Activities
    (1,363,728 )     (1,313,317 )     (12,536,516 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
         
Purchase of Fixed Assets
    (705 )     -       (85,598 )
Payette County Site work
    (9,297 )     -       (9,297 )
Purchase of Short-Term Investments
    (5,307,941 )     (437,554 )     (20,993,212 )
Proceeds from Sale of Short-Term Investments
    6,728,321       1,953,184       20,464,853  
Proceeds from Sale of Energy Neutral Model Home
    -       278,000       278,000  
Purchase of Energy Neutral Model Home
    -       -       (316,419 )
Net Cash Provided (Used) by Investing Activities
    1,410,378       1,793,630       (661,673 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
         
Receipt of Cash for Common Stock
    -       -       14,552,030  
Proceeds from Short-Term Borrowings
    -       -       50,582  
Payments on Short-Term Borrowings
    -       -       (50,582 )
Transfer to Escrow Account
    (7,150,500 )     -       (9,169,000 )
Proceeds from Escrow Account
    7,167,500       -       7,167,500  
Cash Received from Non-Controlling Members
    -       -       1,000,000  
Purchase of Treasury Stock
    -       -       (20,000 )
Due to Related Party
    46,000       106,914       152,914  
Payment to Related Party
    (46,000 )     (106,914 )     (152,914 )
Payment to Employee
    -       (60,000 )     (60,000 )
Due to Employee
    -       -       60,000  
Net Cash (Used) Provided by Financing Activities
    17,000       (60,000 )     13,530,530  
                         
NET INCREASE IN CASH
    63,650       420,313       332,341  
                         
CASH - BEGINNING
    268,691       234,426       -  
                         
CASH - ENDING
  $ 332,341     $ 654,739     $ 332,341  
                         
                         
                         
Supplemental Disclosures:
                       
Cash paid for Income Taxes
  $ -     $ -     $ -  
Cash paid for Interest
  $ -     $ 48     $ 4,034  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
8

 
 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Alternate Energy Holdings, Inc., (and its subsidiaries Idaho Energy Complex, LLC, Green World Water, LLC, Energy Neutral, LLC and Reactor Development, LLC) formerly Nussentials Holdings Inc., is a development stage enterprise focused on the purchase, optimization and construction of green energy sources – primarily nuclear power plants.

Sunbelt Energy Resources Inc. was formed on August 29, 2005 to operate in the alternate energy industry and has limited operational activity.  In September 2006, Sunbelt acquired Nussential Holdings, Inc. by exchanging 17,900,000 shares of Sunbelt which represented 100% of the outstanding shares for 21,399,998 shares of common stock of Nussential Holdings Inc.  As a result of the acquisition, the shareholders of Sunbelt owned a majority of the voting stock of Nussentials Holdings, Inc. which changed its name to Alternate Energy Holdings, Inc.  The merger has been accounted for as a reverse merger whereby Alternate Energy Holdings, Inc. is the accounting acquirer resulting in a recapitalization of Alternate Energy Holdings, Inc.’s equity.  In connection with and simultaneous to the reverse merger, Nussentials Corporation, a wholly owned subsidiary of Nussentials Holdings Inc. was transferred to Nussential Holdings, Inc. majority shareholder through issuance of 4,252,088 shares of common stock.

Our Company

We are a holding company comprised of five operating corporate entities: Idaho Energy Complex, LLC, Reactor Land Development, LLC, Energy Neutral, LLC, Energy Neutral Development, LLC and Green World Water, LLC (which was formed in 2010, and has succeeded to the business formerly conducted by a fifth, inactive subsidiary, International Reactors Incorporated).

Idaho Energy Complex, LLC
 
Idaho Energy, an Idaho limited liability company and 100% wholly-owned subsidiary of the Company that was formed in March 2007, is the operating entity for our proposed $10 billion nuclear complex near Payette, Idaho.  Idaho Energy is the manager of Reactor Land Development LLC, a Delaware limited liability company that is attempting to obtain funding for the nuclear facility land, water rights and the NRC operating license.  Five thousand acres have been dedicated to the Project, which will provide enough electricity to power Idaho’s growth, as well as generate income through the sale of power to out-of-state markets.  The Payette facility will feature a new advanced nuclear reactor design that does not require large amounts of water for cooling.   The Company plans to build up to six advanced reactors at Idaho Energy and operate as an Independent Power Product (“IPP”).  
 
 
9

 
 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Reactor Land Development, LLC
 
Reactor Land Development, LLC, a 99% owned subsidiary of Idaho Energy, is a Delaware limited liability company.  Reactor Land Development, LLC began operations in September 2007, with Idaho Energy as its manager.  Its purpose is to acquire funding for land and water rights, permits and licenses, development rights and such other properties and services necessary to develop approved sites in Idaho for one or more nuclear reactors.
 
Energy Neutral, LLC
 
Energy Neutral™, a 100% wholly-owned subsidiary of the Company, was formed to assist homeowners, businesses and farmers to operate with minimal or no reliance on the electrical grid.  Energy Neutral’s primary services are:  design and construction of residential “energy neutral” homes, evaluating existing homes, businesses and farms for conservation and renewable energy potential; drafting plans to attain or approach energy neutrality; and working with wind, conservation and solar suppliers and installers to install products in the marketplace.   During 2010 and early 2011, Energy Neutral completed construction of six “energy neutral” homes in Boise, Idaho, which feature unique design elements as well as standard “energy neutral” elements, including the Energy Star certification and solar power generation.   All five homes and our model home were sold during the year of 2011, representing our first revenues, for gross sales proceeds of $923,650. We plan to begin franchising the concept to developers and builders in a few select markets starting during fiscal year 2013 through Energy Neutral Development, LLC, a wholly owned subsidiary of Energy Neutral, LLC.

Green World Water, LLC
 
Green World Water,™ a 100% wholly-owned subsidiary of the Company was formed in 2010 to assist developing countries with power generation, as well as the production of potable water.  Green World Water has succeeded to the business of another Company subsidiary, International Reactors Incorporated, a Nevada corporation, which was formed in November 2007 but now is inactive.  Green World Water seeks to construct, in conjunction with other third parties, commercial nuclear reactors on oceanfront sites, particularly in Africa and western-friendly Middle Eastern countries to co-generate clean energy and desalinate water.  Green World Water believes that advanced nuclear technology can be used to address electrical energy needs while simultaneously producing fresh water from ocean intake.  The Company has an agreement with China National Nuclear Corporation (CNNC) to produce desalinization reactors in China to market on a worldwide basis.

 
10

 

ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
 
Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities.   Accordingly, actual results could differ from those estimates.

Cash and Cash Equivalents

Alternate Energy Holdings, Inc. considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  Cash equivalents are stated at cost, which approximates fair value. The Federal Deposit Insurance Corporation insures balances of up to $250,000 per institution at June 30, 2012 and December 31, 2011.   The uninsured balances at June 30, 2012 and December 31, 2011 was $-0-.

Basic and Diluted Net Loss per Share

Basic and diluted net loss per share calculations are presented in accordance with FASB ASC 260-10, and are calculated on the basis of the weighted average number of common shares outstanding during the year.  They include the dilutive effect of common stock equivalents in years with net income.  Basic and diluted net loss per share are the same due to the absence of common stock equivalents.

Stock Based Compensation

Alternate Energy Holdings, Inc.’s non-employees, share-based expenses are recorded in accordance with FASB ASC 505-50. Alternate Energy Holdings, Inc. has not issued any stock options or stock warrants since its inception through June 30, 2012. For the six months ended June 30, 2012 and 2011, 600,000 shares valued at $30,000 and -0- shares of restricted stock were issued for officer/board services, respectively.

Fair Value Measurements

The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.  The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value:
 
 
11

 
 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Fair Value Measurements - continued

- Level 1 – Quoted prices in active market for identical assets or liabilities.

- Level 2 – Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

 
- Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
 
Recently Issued Accounting Pronouncements

In June 2011, the FASB issued Accounting Standards Update (“ASU” 2011-05, Presentation of Comprehensive Income.)  This ASU is intended to increase the prominence of other comprehensive income to financial statements by presenting components of net income and other comprehensive income in financial statements by presenting the components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or two separate, but consecutive statements.  The new guidance eliminates the current option to report other comprehensive income and it components in the statement of changes in stockholders’ equity.  This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011.

While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. Adoption of the new guidance was effective in the first quarter fiscal 2012.

In May 2011, the FASB issued ASU 2011-04, (Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRSs”), which amends ACS 820, Fair Value Measurement. ASU 2011-04 does not extend the use of fair value accounting, but provides guidance on how it should be applied where its use is already required or permitted by other standards within U.S. GAAP or IFRSs.  ASU 2011-14 changes the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements.

 
12

 

ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Recently Issued Accounting Pronouncements - continued

Additionally, ASU 2011-14 clarifies the FASB’s intent about the application of existing fair value measurements.  ASU 2011-14 is effective for interim and annual periods beginning after December 15, 2011 and is applied prospectively; therefore, the Company has adopted ASU 2011-04 in its first quarter of fiscal 2012.

Alternate Energy Holdings, Inc. does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on their financial position, results of operations, or cash flow.

Revenue Recognition on Sale of Real Estate

Sales and the associated gains and losses of real estate assets are recognized in accordance with the provisions of ASC Topic 360-20, “Property, Plant and Equipment – Real Estate Sale”. The specific timing of a sale is measured against various criteria in ASC Topic 360-20 related to the transaction and any continuing involvement in the form of management of financial assistance associated with the properties.

The Company utilizes the full accrual method and if the criteria are not met, the Company defers some or all of the gain recognition and account for the continued operations of the property by applying the finance, leasing, deposit, installment or cost recovery methods, as appropriate, until the sale criteria are met.

Payette County Site Work

Amount represents land improvements made to the entrance road of the future site of the Idaho Energy Complex.
 
Interim Statements

In the opinion of the management the accompanying unaudited financial statements contain all adjustments necessary for a fair presentation of the results for such periods.  The results of any interim period are not necessary indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the Company’s most recent audited financial statements included in its report on Form 10-K for the year ended December 31, 2011.
 
NOTE 2 - INCOME TAXES

Alternate Energy Holdings, Inc. uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.  Alternate Energy Holdings, Inc. incurred net losses in the six months ending June 30, 2012 and 2011 and therefore, has no tax liability.  The deferred tax asset generated by the carry-forward is approximately $19,206,082 at June 30, 2012 and will expire in 2029.
 
 
13

 

ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 2 - INCOME TAXES - continued

Components of deferred tax assets at June 30, 2012 are as follows:
 
Deferred tax asset – net operating loss Carry-forwards
  $ 19,206,082  
Valuation allowance
    (19,206,082 )
Net deferred tax asset
  $ -0-  

The Company has adopted ASC 740-10 “Income Taxes”. As a result of the assessment the Company has recognized no material tax adjustments to the unrecognized tax benefits.  At the adoption date of January 1, 2008 and as of June 30, 2012, the Company has no unrecognized tax benefits.  By statute, tax years ending December 31, 2011 through 2009 remain open to examination by the major taxing jurisdictions to which the Company is subject.

The reconciliation of the effective income tax rate of the Company to the statutory income tax rate for the fiscal year ended on December 31, 2011 and 2010 is as follows:

 
 
2011
   
2010
 
Federal Income Tax Rate
    34 %     34 %
State Income Tax Rate
    0 %     0 %
Increase in Valuation Allowance
    (34 %)     (34 %)
Effective Tax Rate
    0 %        0 %

NOTE 3 - COMMON STOCK

During 2006, Alternate Energy Holdings, Inc.
 
-
Issued 4,252,088 shares of common stock to the Nussential Holdings shareholders in the reverse merger – See Note 1 for the details.
 
-
Issued 1,249,999 shares of common stock valued at $1,318,749 for services.
 
-
Issued 1,964,000 shares of common stock for cash received in the amount of $321,999.
 
-
Purchase 400,000 shares of treasury stock for cash in the amount of $20,000.
During 2007, Alternate Energy Holdings, Inc.
 
-
Issued 7,865,652 shares of common stock valued at $1,687,111 for services.
 
-
Issued 8,433,536 shares of common stock for cash received in the amount of $1,749,359.
During 2008, Alternate Energy Holdings, Inc.
 
-
Issued 24,762,049 shares of common stock valued at $2,587,558 for services.
 
-
Issued 10,709,717 shares of common stock for cash received in the amount of $1,106,355.

 
14

 

ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - COMMON STOCK -continued

During 2009, Alternate Energy Holdings, Inc.
 
Issued 28,282,532 shares of common stock valued at $1,433,891 for services.
 
Issued 500,000 shares of common stock valued at $25,000 for a contract option fee.
 
-
Issued 29,180,536 shares of common stock for cash received in the amount of $1,460,325.
During 2010, Alternate Energy Holdings, Inc.
 
-
Issued  54,136,041 shares of common stock valued at $5,094,064 for services.
 
-
Issued  750,000 shares of common stock valued at $375,000 for two contract option fees.
 
-
Issued 134,051,642 shares of common stock for cash received in the amount of $9,913,992.
During 2011, Alternate Energy Holdings, Inc.
 
-
Issued 1,875,000 shares of common stock valued at $193,000 for services.
 
-
Cancelled 1,000,000 shares of common stock.
 
-
In June 2011, the Company and a consultant entered into an agreement to rescind 1,000,000 shares of common stock previously awarded to them.
During 2012, Alternate Energy Holdings, Inc.
 
Issued 600,000 shares of common stock valued at $30,000 for services.

NOTE 4 - COMMITMENTS

Alternate Energy Holdings, Inc leases its office space under a two year lease and a home/office on a month-to-month basis under another lease. The two year lease is dated April 1, 2010 and expired April 30, 2012 and required monthly payments of $2,000. The current lease expired April 30, 2012 and was extended for one more year at a monthly payment of $2,150. Rent expense for the six months ending June 30, 2012 and 2011 was $12,150 and $25,000, respectively. The following is a schedule of future minimum payments under the operating lease at June 30, 2012:
 
For the year Ended
December 31
     
2012
  $ 12,900  
2013
  $ 8,600  
Total
  $ 21,500  
                                              
Alternate Energy Holdings, Inc. has entered into three contracts dated February 23, 2011, August 10, 2010 and September 10, 2010 to purchase land in Idaho. This option holds the contract open until December 11, 2011, January 10, 2012 and September 10, 2011, respectively.  The option dated September 30, 2011 was extended for six months at a cost of a $500,000 nonrefundable deposit. The expenses of the other contracts are shown as Issuance of Common Stock for Option Fee on the Stockholder’s Equity statement.
 
 
15

 
 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 
NOTE 5 - VARIABLE INTEREST ENTITY

FASB ASC 810 requires consolidation of certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Reactor Development, LLC was formed for the purpose of developing and managing an energy complex power plant site. Alternate Energy Holdings, Inc. invested $1,000,000 which represents approximately 50% of Reactor Development LLC’s capital structure as of December 31, 2007.  Furthermore, the daily operating decisions of Reactor Development, LLC are made by the members of Alternate Energy Holdings, Inc.’s management.

Under FASB ASC 810 Reactor Development, LLC is deemed a Variable Interest Entity to Alternate Energy Holdings, Inc. and as such Reactor Development, LLC’s financial information has been consolidated with Alternate Energy Holdings, Inc.

The consolidated financial statements include the full operating activities of Reactor Development, LLC, with amounts allocated to Reactor Development, LLC disclosed under “Non-Controlling Interest in Variable Interest Entity” in the accompanying consolidated income statement.  Assets and liabilities of Reactor Development, LLC were $ -0- and $ -0-, respectively, at June 30, 2012 and December 31, 2011, respectively.

NOTE 6 – ASSET HELD FOR SALE

Alternate Energy Holdings, Inc constructed a model home to demonstrate that a competitively priced and energy cost efficient home can be constructed using energy-efficient techniques.  The home creates more power than it uses on a month-to-month basis. The home was to be used to market the Energy Neutral brand name, however it was sold in March 2011.

NOTE 7 – AVAILABLE-FOR-SALE-SECURITIES

The Company’s short-term investments consist of mutual funds that are professionally managed by an investment company.  The Company’s investments are classified as available-for sale and are recorded on the consolidated balance sheet at fair value based on Level 1 inputs.  Unrealized gains and losses on the investments are included as a separate component of other comprehensive income.  The Company will recognize an impairment charge if a decline in the fair value of its investments below cost basis is judged to be other-than-temporary.  Unrealized gains (losses), included in other comprehensive income at June 30, 2012 and 2011 were $-0- and $(181,161), respectively

 
16

 
 
ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
.
NOTE 8 – DUE TO RELATED PARTY

In January 2011, the CEO advanced the Company $106,914 to cover working capital expenses. There were no formal repayment terms or interest charged on this advance. The monies were repaid in full in March 2011.

NOTE 9 – ESCROW

Cash in escrow represents monies held in an escrow account for a potential funding/investment agreement.

NOTE 10 – LEGAL PROCEEDINGS

Currently, a civil action initiated by the U.S. Securities and Exchange Commission (“SEC”) is pending in the U.S. District Court for the District of Idaho, alleging, among other things, that our Company, a officer and another person employed with the Company, violated federal securities laws, among other things making false and misleading statements, artificially inflating the Company’s stock price, and subsequently liquidating the stock through secret sales (the “SEC” action).  The Company’s accounts were frozen on December 18, 2010 following the filing of the SEC action. However, a federal judge subsequently dropped the freeze on all of the Company’s assets February 4, 2011, that imposed certain relief pending a final adjudication on the merits of the SEC allegations.  The action is currently in the discovery phase and management is unable to determine the likelihood of an unfavorable outcome.  The trial is scheduled for October 2012. The Company’s directors and liability insurance policy’s reimbursable limit was exceeded in the second quarter of 2012; therefore the Company is now paying its own legal expenses to defend the Company and its officers in this case and expects legal expenses to continue through the trial.
 
On January 11, 2011, a class action lawsuit was filed in the U.S. District Court of the District of Idaho by Lance Teague on behalf of purchasers of the common stock of the Company between September 20, 2006 through December 14, 2010, against the Company, an officer and director and another person employed by the Company.  On June 17, 2011, an amended compliant was filed listing Perry Pehike, Jr. as lead plaintiff.  The complaint alleges claims against the Company and certain senior officers and directors for violation of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 there under and claims against certain of its senior officers and directors for violations of Section 20A and Section 20(a) of the Exchange Act.

In accordance with a Short-Form settlement Agreement (“Agreement”) entered into on April 2, 2012, the Company, Donald Gillispie and Jennifer Ransom have agreed to settle the previously-disclosed securities class action litigation, Case No. 1:10-cv-00634-BLW pending in the U.S. District Court, District of Idaho.

 
17

 

ALTERNATE ENERGY HOLDINGS, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – LEGAL PROCEEDINGS - continued

As set forth in the agreement, if the settlement became final in June 2011, among other things, (i) the claims against the Defendants will be dismissed with prejudice and released, such that every member of the settlement class will be forever barred from asserting claims against the Defendants any claims alleged in the compliant or arising from the complaint, and (ii) a payment of $450,000 was made by the Company in June 2012.  The Defendants have denied and continue to deny each and all claims alleged by the plaintiffs in the Class Action Litigation.  Nonetheless, the defendants have agreed to the agreement to eliminate the uncertainty, distraction, burden and expense of further litigation. In June 2012, the payment of $450,000 was paid out of insurance proceeds under the Company’s Director’s and Liability insurance policy.
 
Burlile et al v AEHI Litigation – Lawsuit filed in April 2012 that attempts to overturn the County of Payette rezoning of the Payette County site.  The Company plans to vigorously defend the case as it references many of the same complaints of the SEC litigation.  A motion to dismiss the Compliant is scheduled to be heard on August 27, 2012.
 
The Company anticipates that it will from time to time become subject to claims and legal proceedings arising in the ordinary course of business.  It is not feasible to predict the outcome of any such proceedings and the Company cannot assure that their ultimate disposition will not have a materially adverse effect on the Company business, financial condition, cash flows or results of operations.
 
NOTE 11- GOING CONCERN

Alternate Energy Holdings Inc’s financial statements have been prepared on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction in the normal course of business. The Company has accumulated a deficit of $26,306,592 at June 30, 2012.

The Company’s continued existence is dependent upon its ability to raise capital or to successfully market and sell its products.  The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
 
 
18

 
 
ITEM 2.         MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the provisions of the Private Securities Litigation Reform Act of 1995 which represent our projections, estimates, expectations or beliefs concerning among other things, financial items that relate to management’s future plans or objectives or to our future economic and financial performance.  In some cases, you can identify these statements by terminology such as “may”, “should”, “plans”, “believe”, “will”, “anticipate”, “estimate”, “expect” “project”, or “intend”, including their opposites or similar phrases or expressions.  You should be aware that these statements are projections or estimates as to future events and are subject to a number of factors that may tend to influence the accuracy of the statements.  These forward-looking statements should not be regarded as a representation by the Company or any other person that the events or plans of the Company will be achieved.  You should not unduly rely on these forward-looking statements, which speak only as of the date of this Quarterly Report.  We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this Quarterly Report or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the reports we file from time to time with the Securities and Exchange Commission (“SEC”) after the date of this Quarterly Report. Actual results may differ materially from any forward looking statement.
 
Overview
 
Description of Business

Alternate Energy Holdings, Inc., (and its subsidiaries Idaho Energy Complex, LLC, Green World Water, LLC, Energy Neutral, LLC and Reactor Development, LLC) formerly Nussentials Holdings Inc., is a development stage enterprise focused on the purchase, optimization and construction of green energy sources – primarily nuclear power plants.

Sunbelt Energy Resources Inc. was formed on August 29, 2005 to operate in the alternate energy industry and has limited operational activity.  In September 2006, Sunbelt acquired Nussential Holdings, Inc. by exchanging 17,900,000 shares of Sunbelt which represented 100% of the outstanding shares for 21,399,998 shares of common stock of Nussential Holdings Inc.  As a result of the acquisition, the shareholders of Sunbelt owned a majority of the voting stock of Nussentials Holdings, Inc. which changed its name to Alternate Energy Holdings, Inc.  The merger has been accounted for as a reverse merger whereby Alternate Energy Holdings, Inc. is the accounting acquirer resulting in a recapitalization of Alternate Energy Holdings, Inc.’s equity.  In connection with and simultaneous to the reverse merger, Nussentials Corporation, a wholly owned subsidiary of Nussentials Holdings Inc. was transferred to Nussential Holdings, Inc. majority shareholder through issuance of 4,252,088 shares of common stock.

Our Company

We are a holding company comprised of five operating corporate entities: Idaho Energy Complex, LLC, Reactor Land Development, LLC, Energy Neutral, LLC, Energy Neutral Development, LLC and Green World Water, LLC (which was formed in 2010, and has succeeded to the business formerly conducted by a fifth, inactive subsidiary, International Reactors Incorporated).

Idaho Energy Complex, LLC
 
Idaho Energy, an Idaho limited liability company and 100% wholly-owned subsidiary of the Company that was formed in March 2007, is the operating entity for our proposed $10 billion nuclear complex near Payette, Idaho.  Idaho Energy is the manager of Reactor Land Development, LLC, a Delaware limited liability company that is attempting to obtain funding for the nuclear facility land, water rights acquisition and the NRC operating license.  Five thousand acres have been dedicated to the Project, which will provide enough electricity to power Idaho’s growth, as well as generate income through the sale of power to out-of-state markets.  The Payette facility will feature a new advanced nuclear reactor design that does not require large amounts of water for cooling.   The Company plans to build up to six advanced reactors at Idaho Energy and operate as an Independent Power Product (“IPP”).  
 
Reactor Land Development, LLC
 
Reactor Land Development, LLC, a 99% owned subsidiary of Idaho Energy, is a Delaware limited liability company.  Reactor Land Development, LLC began operations in September 2007, with Idaho Energy as its manager.  Its purpose is to acquire funding for land and water rights, permits and licenses, development rights and such other properties and services necessary to develop approved sites in Idaho for one or more nuclear reactors.

Energy Neutral, LLC
 
Energy Neutral™, a 100% wholly-owned subsidiary of the Company, was formed to assist homeowners, businesses and farmers to operate with minimal or no reliance on the electrical grid.  Energy Neutral’s primary services are:  design and construction of residential “energy neutral” homes, evaluating existing homes, businesses and farms for conservation and renewable energy potential; drafting plans to attain or approach energy neutrality; and working with wind, conservation and solar suppliers and installers to install products in the marketplace.   During 2010 and early 2011, Energy Neutral completed construction of six “energy neutral” homes in Boise, Idaho, which feature unique design elements as well as standard “energy neutral” elements, including the Energy Star certification and solar power generation.   All five homes and the model home were sold during the year of 2011, representing our first revenues, for gross sales proceeds of approximately $923,650. We plan to begin franchising the concept to developers and builders in a few select markets starting during the fiscal year 2013 through Energy Neutral Development, LLC, a wholly owned subsidiary f Energy Neutral, LLC.

Green World Water, LLC
 
Green World Water,™ a 100% wholly-owned subsidiary of the Company was formed in 2010 to assist developing countries with power generation, as well as the production of potable water.  Green World Water has succeeded to the business of another Company subsidiary, International Reactors Incorporated, a Nevada corporation, which was formed in November 2007 but now is inactive.  Green World Water seeks to construct, in conjunction with other third parties, commercial nuclear reactors on oceanfront sites, particularly in Africa and western-friendly Middle Eastern countries to co-generate clean energy and desalinate water.  Green World Water believes that advanced nuclear technology can be used to address electrical energy needs while simultaneously producing fresh water from ocean intake.  The Company has an agreement with China National Nuclear Corporation (CNNC) to produce desalinization reactors in China to market on a worldwide basis.
 
 
19

 

Plan of Operations
 
The Company estimates the total cost of the first phase of the Payette County project will be approximately $150.0 million.  The initial $150.0 million is planned to be raised through a private placement by Reactor Development, LLC, which shall result in the investors receiving in the aggregate up to a 5% ownership in the form of common stock.  Any shortfall will have to be funded through such things as debt financing, cost-sharing by contractors and suppliers, or public offering.
 
While the success of the Project does not depend on financial assistance from the government, management believes that based on the 2005 Energy Policy Act, the Project may be eligible for an 80% Federal loan guarantee for the construction of new nuclear facilities, and an applicable Federal tax credit of $1.0 billion over eight years, which should be sufficient to cover all operating expenses during that timeframe.  Furthermore, the excess heat for this plant may be used to produce biofuels from local crops and agriculture waste.
 
The intended use of the funds for the Reactor Land Project is shown below:
 
   
In millions ($)
 
Payment to owner for site land
   
5
 
Payment for COLA plus 10% price escalation due to delays
   
50
 
Payments for third party project management, engineering support and G&A
   
25
 
         
Adjacent land with water rights
   
20
 
Long lead time equipment order deposit; reactor vessel and turbine
   
50
 
   Total
 
$
150
 
 
From inception through June 30, 2012, the Reactor Land Development private placement has raised gross proceeds of $1,000,000 in exchange for a 1% equity interest in Reactor Land Development.  If the Reactor Land Development, LLC private placement does not raise the entire $150.0 million listed above, the Company will seek to raise the remaining balance through debt financing and/or a public or private equity offering.  The Company may adjust the budget categories in the execution of its permitting and development plans.  The above line items represent managements best estimates, none of the line items is to be considered fixed or unchangeable.
 
Although the Company reserves the right to reallocate the funds according to field experience, the Company believes that the net proceeds from the planned offering will be sufficient to fund its initial capital requirements for the next year for operations.  The foregoing assumes the offering will be fully subscribed, but there can be no assurance the Company will not require additional funds if unforeseen issues arise.  Any additional required funds over the maximum offering amount will need to be financed as a loan.  The availability and terms of any future financing will depend on market and other conditions. The amount of proceeds and uses are based upon the projections by management, which may also change according to unforeseen future events and market changes.  There are no commitments for loans as of June 30, 2012.

In the continuance of the Company’s business operations it does not intend to purchase or sell any significant assets and the Company does not expect a significant change in the number of its employees, although the Company may add additional contractors during the fourth quarter of 2012.

In addition, the United States and the global business community is experiencing severe  instability in the commercial  and investment  banking  systems which is likely to continue to have far-reaching  effects on the economic activities in the country for an indeterminable  period. The long-term impact on the United States economy and the Company’s operating activities and its ability to raise capital cannot be predicted at this time, but could be substantial.

Project Economics
 
The Company believes that if it is able to raise $150.0 million, it may develop a site licensed for construction of the advanced reactor by the end of 2015. The Company believes that by acquiring and  obtaining the required permits and approvals for the proposed site now, it will be able to offer a site and an NRC  license 3 to 4 years  sooner  than might  otherwise  be achievable, which will offer  additional value to the Idaho site due to earlier power generation/revenue potential of the site. 

 
20

 

Consolidated Results of Operations

Comparison of the Three Months Ended June 30, 2012 to June 30, 2011
 
During the three months ended June 30, 2012, we recognized revenues of $-0- as compared to $373,900 and cost of sales of $-0- and $360,219 for the same period in the prior fiscal year.  The decrease in revenues is due to no sales of any Energy Neutral homes in 2012 as compared to two sales that occurred during the three months ended June 30, 2011.  During the three months ended June 30, 2012, we incurred operating expenses of $1,775,664 compared to $972,428 during the three months ended June 30, 2011. The following table is a comparison of the significant operational expenses that we incurred during the three months ended June 30, 2012 and 2011:
 
   
Three Months Ended
       
   
June 30,
2012
   
June 30,
2011
   
INCREASE
(DECREASE)
 
                   
Consulting services
 
$
84,999
   
$
284,469
   
$
 (199,470
)
Marketing services
 
$
-0-
   
$
42,871
   
$
(42,871
)
Board/Officer Services
 
$
-0-
   
$
153,000
   
$
(153,000
)
Legal fees
 
$
1,209,218
   
$
92,723
   
$
1,116,495
 
Land Option Fees
 
$
100,000
   
$
-0-
   
$
100,000
 
 
During the three months ended June 30, 2012 the Company engaged various attorneys in connection with our legal proceedings and the fact the Company's directors and liability insurance policy has exceeded its limit of reimbursable expenses, therefore the Company is paying all of the legal expenses in connection with defending the Copanmy and it Officers. We did not have any expense for marketing services. Marketing expenses for the prior year’s period were incurred in connection with the efforts to obtain Payette County rezone approval which occurred during the second quarter of fiscal year 2012.  Land Option fees relate to the Payette County site.
 
During the three months ended June 30, 2012, we recognized a net loss of $(1,791,675) compared to a net loss of $(918,674) during e three months ended June 30, 2011. The increase of $873,001 in net loss was due mainly to higher legal expenses incurred during the three months ended June 2012. The Company’s basic and diluted loss per share was $.01 and $.00 during the three months ended June 30, 2012 and 2011, respectively.
 

Comparison of the Six Months Ended June 30, 2012 to June 30, 2011
 
During the six months ended June 30, 2012, we recognized revenues of $-0- as compared to $542,900 and cost of sales of $-0- and $521,806 for the same period in the prior fiscal year.  The decrease in revenues is due to no sales of any Energy Neutral homes in 2012 as compared to three sales that occurred during the six months ended June 30, 2011.  During the six months ended June 30, 2012, we incurred operating expenses of $2,441,452 compared to $1,633,084 during the six months ended June 30, 2011. The following table is a comparison of the significant operational expenses that we incurred during the six months ended June 30, 2012 and 2011:
 
   
Six Months Ended
       
   
June 30,
2012
   
June 30,
2011
   
INCREASE
(DECREASE)
 
                   
Consulting services
 
$
179,365
   
$
366,977
   
$
 (187,612
)
Marketing services
 
$
-0-
   
$
79,175
   
$
(79,175
)
Board/Officer Services
 
$
30,000
   
$
153,000
   
$
(123,000
)
Legal fees
 
$
1,306,391
   
$
321,630
   
$
984,761
 
Land Option Fees
 
$
100,000
   
$
-0-
   
$
100,000
 
 
During the six months ended June 30, 2012 the Company engaged as various attorneys in connection with our legal proceedings and the fact the Company's directors and liability insurance policy has exceeded its limit of reimbursable expenses, therefore the Company is paying all of the legal expenses in connection with defending the Copanmy and it Officers. We did not have any expense for marketing services. Marketing expenses for the prior year’s period were incurred in connection with the efforts to obtain Payette County rezone approval which occurred during the second quarter of fiscal year 2012.  Travel related expenses are higher in 2012 due to Greene World Water travel expenses to market and promote the desalinization units.
 
During the six months ended June 30, 2012, we recognized a net loss of $(2,638,932) compared to a net loss of $(1,585,694) during the six months ended June 30, 2011. The increase of $1,053,238 in net loss was due mainly to higher legal expenses incurred during the six months ended June 2012. The Company’s basic and diluted loss per share was $.00 during the six months ended June 30, 2012 and 2011.
 
 
21

 
 
Liquidity and Capital Resources
 
As of June 30, 2012, we had total of cash and cash equivalents of $332,341, total current assets of $2,339,571 and current liabilities of $1,117,366. The following table provides detailed information about our net cash flow for all financial statements periods presented in this report.
 
   
Cash Flow
Six Months Ended
June 30,
 
   
2012
   
2011
 
             
Net cash used by operating activities
 
$
(1,363,728
)
 
$
(1,313,317
)
Net cash provided by investing activities
 
$
1,410,378
   
$
1,793,630
 
Net cash used by financing activities
 
$
17,000
)
 
$
(60,000
)
Net cash inflow
 
$
63,650
   
$
420,313
 
 
Operating Activities
  
During the six months ended June 30, 2012, the net cash used in our operating activities was $1,363,728. During the six months ended June 30, 2011, the net cash used in our operating activities was $1,313,317. Net cash used in our operating activities increased by $50,411 for the six months ended June 30, 2012 as compared to the same period in 2011. This increase in funds used by our operating activities was primarily due to a increase of the cash expenditures for the legal expenses in 2012.

Investing Activities
 
During the six months ended June 30, 2012, the net cash provided by our investing activities was $1,410,378, comprised of the net proceeds from the sale of short-term investments. The net cash provided in our investing activities was $1,793,630 for the six months ended June 30, 2011, comprised of net proceeds from the sale of short-term investments and the purchase of the Energy Neutral model home.


Financing Activities
 
Net cash used provided by financing activities for 2012 of $17,000 compared to used of $60,000 in 2011. The increase by $77,000 for the six months ended June 30, 2012 as compared to the same period of 2011 was primarily due to the repayment of amount due to employee in 2011.
 
As discussed above, we estimate that we will need to raise approximately $150 million in order to fund the Project. We plan on funding the Project through a private placement or other offering of securities of our subsidiary, Reactor Land Development, LLC, which would result in investors receiving up to 5% ownership in the first reactor unit. Any shortfall will have to be funded through other means, such as a debt financing, cost-sharing with contractors and suppliers, or other securities offerings, including a securities offering by our company or any of our other subsidiaries. If additional funds are raised through the issuance of equity securities, there may be a significant dilution in the value of our outstanding common stock.
 
Critical Accounting Policies

The Company has identified the policies below as critical to the Company business operations and the understanding of the Company results from operations.  The impact and any associated risks related to these policies on the Company’s business operations is discussed throughout Management’s Discussion and Analysis of Financial Conditions and Results of Operations where such policies affect our reported and expected financial results.  For a detailed discussion on the application of these and other accounting policies, see Note 1 in the Notes to the Consolidated Financial Statements beginning on page 9 for the three months ended June 30, 2012.  Note that the Company’s preparation of this document requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Company’s financial statements, and the reported amounts of expenses during the reporting periods.

Estimates

The preparation of financial statements in conformity with accounting principles generally  accepted in the United States of America requires  management to make estimates and assumptions that affect reported  amounts of assets,  liabilities, revenues  and  expenses  and  the  and  disclosures  of  contingent  assets  and liabilities.  Accordingly, actual results could differ from those estimates. It is management’s opinion that all adjustments necessary for the fair statement of the results for the interim period have been made. All adjustments are of normal recurring nature or a description of the nature and amount of any adjustments other than normal recurring adjustments.
 
 
22

 

Cash and Cash Equivalents

Alternate Energy Holdings, Inc. considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  Cash equivalents are stated at cost, which approximates fair value. The Federal Deposit Insurance Corporation insures balances of up to $250,000 per institution at June 30, 2012 and December 31, 2011.  The uninsured balances at June 30, 2011 and December 31, 2011 was $-0-.

Stock-Based Compensation

The Company’s non-employees, share-based expenses are recorded in accordance with FASB ASC 505-50. The Company has not issued any stock options or stock warrants since its inception through June 30, 2012.

Off-Balance Sheet Arrangement

As of June 30, 2012, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.
 
 
ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
Changes in United States interest rates would affect the interest earned on our cash and cash equivalents.   Based on our overall cash and cash equivalents interest rate exposure at June 30, 2012, a near-term change in interest rates, based on historical movements, would not have a material adverse effect on our financial position or results of operations.
 
We have operated primarily in the United States. Accordingly, we have not had any significant exposure to foreign currency rate fluctuations.
 
ITEM 4.         CONTROLS AND PROCEDURES.
 
The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in its reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
 
The Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of June 30, 2012, the end of the period covered by this Quarterly Report.  Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective as of June 30, 2012.

There were no significant changes in the Company’s internal controls over financial reporting, during the quarter ended June 30, 2012, that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
 
PART II - OTHER INFORMATION
 
ITEM 1.         LEGAL PROCEEDINGS.
 
Class Action Litigation
 
On January 11, 2011, a class action lawsuit was filed in the U.S. District Court of the District of Idaho by Lance Teague on behalf of purchasers of the common stock of the Company between September 20, 2006 through December 14, 2010, against the Company, an officer and director and another person employed by the Company.  On June 17, 2011, an amended compliant was filed listing Perry Pehike, Jr. as lead plaintiff.  The complaint alleges claims against the Company and certain senior officers and directors for violation of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 there under and claims against certain of its senior officers and directors for violations of Section 20A and Section 20(a) of the Exchange Act.
 
 
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In accordance with a Short-Form settlement Agreement (“Agreement”) entered into on April 2, 2012, the Company, Donald Gillispie and Jennifer Ransom have agreed to settle the previously-disclosed securities class action litigation, Case No. 1:10-cv-00634-BLW pending in the U.S. District Court, District of Idaho.

As set forth in the agreement, if the settlement became final in June 2012, among other things, (i) the claims against the Defendants will be dismissed with prejudice and released, such that every member of the settlement class will be forever barred from asserting claims against the Defendants any claims alleged in the compliant or arising from the compliant, and (ii) a payment of $450,000 will be made by the Company in June 30, 2012.  The Defendants have denied and continue to deny each and all claims alleged by the plaintiffs in the Class Action Litigation.  Nonetheless, the defendants have agreed to the agreement to eliminate the uncertainty, distraction, burden and expense of further litigation.  The payment of the $450,000 was paid out of insurance proceeds under the Company’s Director’s and Liability Insurance Policy.
 
Other Legal Proceedings

Currently, a civil action initiated by the U.S. Securities and Exchange Commission (“SEC”) is pending in the U.S. District Court for the District of Idaho, alleging, among other things, that our Company, a officer and another person employed with the Company, violated federal securities laws, among other things making false and misleading statements, artificially inflating the Company’s stock price, and subsequently liquidating the stock through secret sales (the “SEC” action).  The Company’s accounts were frozen on December 18, 2010 following the filing of the SEC action. However, a federal judge subsequently dropped the freeze on all of the Company’s assets February 4, 2011, that imposed certain relief pending a final adjudication on the merits of the SEC allegations.  The action is currently in the discovery phase and management is unable to determine the likelihood of an unfavorable outcome.  The trial is scheduled for October 2012. The Company’s directors and liability insurance policy’s reimbursable limit was exceeded in the second quarter of 2012; therefore the Company is now paying its own legal expenses to defend the Company and its officers in this case and expects legal expenses to continue through the trial.
 
Burlile et al v AEHI Litigation – Lawsuit filed in April 2012 that attempts to overturn the County of Payette rezoning of the Payette County site.  The Company plans to vigorously defend the case as it references many of the same complaints of the SEC litigation. A motion to dismiss the Compliant is scheduled to be heard on August 27, 2012.
 
The Company anticipates that it will from time to time become subject to claims and legal proceedings arising in the ordinary course of business.  It is not feasible to predict the outcome of any such proceedings and the Company cannot assure that their ultimate disposition will not have a materially adverse effect on the Company business, financial condition, cash flows or results of operations.
 
 
ITEM 2.         UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
 
During the six months ended June 30, 2012, we issued an aggregate of 600,000 shares of our common stock, par value $.001 per share (“Common Stock”), 200,000 shares of common stock to each of our three newly appointed Board members.  The 600,000 shares had an aggregate value of $30,000 based on the current market price of our stock. The foregoing shares were issued in reliance of the exemption provided by section 4(2) of the Securities Act of 1933, as amended as such issuances were isolated private transactions by the Company which did not involve a public offering.
 
ITEM 3.         DEFAULTS UPON SENIOR SECURITIES.
 
None
 
ITEM 4.         MINE SAFETY DISCLOSURES
– Not Applicable.
 
ITEM 5.         OTHER INFORMATION
 
None
 
ITEM 6.         EXHIBITS.
 
 
(a)
Exhibits:
 
 
31.1
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  *
 
 
31.2
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  *
 
 
32
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
 

*
Filed herewith
 
 
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  SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 

Date: August 13, 2012

 
ALTERNATE ENERGY HOLDINGS, INC.
     
     
 
By:
/s/ DONALD L. GILLISPIE                                                                           
 
Donald L. Gillispie President,  Chief Executive Officer and Director (principal executive officer)
     
     
 
By:
/s/ RICK J. BUCCI    
 
Rick J. Bucci Vice-President and Chief Financial Officer (principal financial officer and principal accounting officer)