ae10q.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 10-Q/A
(Amendment 1)
|
|
x Quarterly Report
under Section 13 or 15(d) of the Securities Exchange Act of
1934.
|
For the
quarterly period ended: October
31, 2009
|
|
o Transition Report
under Section 13 or 15(d) of the Securities Exchange Act of
1934.
|
For the
transition period from: _______ to _______
Commission
file number: 333-154894
ALTERNATIVE
ENERGY PARTNERS, INC.
(Exact
name of small business issuer as specified in its charter)
|
FLORIDA
|
|
26-2862564
|
|
(State
or other jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer I.D. Number)
|
2400
E Commercial Boulevard, Suite 201, Fort Lauderdale, FL 33308
(Address
of principal executive offices)
(954)
351-2554
(Issuer’s
telephone number)
Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports); and (2) has been subject to such filing requirements for
the past 90 days: Yes x No
0
Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files). Yes o No
0
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
definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated
filer 0 Accelerated
filer 0
Non-accelerated
filer
0
Smaller
reporting company x
(Do not check if a smaller reporting company)
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act) Yes x No 0
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date: As of December 9, 2009, there were
44,547,000 shares of our common stock outstanding.
INDEX
Item
I. Financial
Statements
|
Alternative
Energy Partners, Inc.
|
|
|
(A
Development Stage Company)
|
|
|
|
|
| |
|
|
|
|
|
|
|
October
31, 2009
|
|
|
July
31, 2009
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash
|
|
$ |
2,326 |
|
|
$ |
66,919 |
|
|
Total
Current Assets
|
|
|
2,326 |
|
|
|
66,919 |
|
|
|
|
|
|
|
|
|
|
|
|
Security
Deposit
|
|
|
9,000 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$ |
11,326 |
|
|
$ |
66,919 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$ |
15,319 |
|
|
$ |
4,067 |
|
|
Accrued
liabilities
|
|
|
56 |
|
|
|
2,716 |
|
|
Total
Current Liabilities
|
|
|
15,375 |
|
|
|
6,783 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.0001 par value, 75,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
44,547,000
and 67,047,000 shares issued and outstanding
|
|
|
4,455 |
|
|
|
6,705 |
|
|
Additional
paid-in capital
|
|
|
111,495 |
|
|
|
109,245 |
|
|
Deficit
accumulated during the development stage
|
|
|
(119,999 |
) |
|
|
(55,814 |
) |
|
Total
Stockholders' Equity (Deficit)
|
|
|
(4,049 |
) |
|
|
60,136 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity (Deficit)
|
|
$ |
11,326 |
|
|
$ |
66,919 |
|
|
|
|
|
|
|
|
|
|
|
See notes to
the consolidated financial statements.
|
Alternative
Energy Partners, Inc.
|
|
|
(A
Development Stage Company)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Period from
April 28, 2008 (Inception)
to October
31, 2009 |
|
|
|
|
For
the Three Months Ended
October 31, |
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
64,185 |
|
|
|
3,393 |
|
|
|
119,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(64,185 |
) |
|
$ |
(3,393 |
) |
|
$ |
(119,999 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per common share - basic and diluted
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
during
the period - basic and diluted
|
|
|
46,772,275 |
|
|
|
66,136,451 |
|
|
|
63,167,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to
the consolidated financial statements.
|
Alternative
Energy Partners, Inc.
|
|
(A
Development Stage Company)
|
Statement
of Changes in Stockholders' Equity
(Deficit)
|
|
For
the period from April 28, 2008 ( Inception )
|
|
to October 31, 2009
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
Accumulated
During
the Development
Stage |
|
|
|
|
|
|
|
|
|
|
Additional
Paid-In
Capital |
|
|
|
|
Total
Stockholders'
Equity
(Deficit) |
|
|
|
|
Common
Stock, $0.0001 Par Value
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from the issuance of common stock - founders -
($0.00003/share)
|
|
|
66,000,000 |
|
|
$ |
6,600 |
|
|
$ |
(4,400 |
) |
|
$ |
- |
|
|
$ |
2,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from the issuance of common stock ($0.08/share)
|
|
|
78,000 |
|
|
|
8 |
|
|
|
6,492 |
|
|
|
- |
|
|
|
6,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period from April 28, 2008 (inception) to July 31,
2008
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,000 |
) |
|
|
(3,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- July 31, 2008
|
|
|
66,078,000 |
|
|
|
6,608 |
|
|
|
2,092 |
|
|
|
(3,000 |
) |
|
|
5,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for services ($0.005/share)
|
|
|
300,000 |
|
|
|
30 |
|
|
|
1,470 |
|
|
|
- |
|
|
|
1,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from the issuance of common stock ($0.08/share)
|
|
|
69,000 |
|
|
|
7 |
|
|
|
5,743 |
|
|
|
- |
|
|
|
5,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from the issuance of common stock ($0.17/share)
|
|
|
600,000 |
|
|
|
60 |
|
|
|
99,940 |
|
|
|
- |
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year ended July 31, 2009
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(52,814 |
) |
|
|
(52,814 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- July 31, 2009
|
|
|
67,047,000 |
|
|
|
6,705 |
|
|
|
109,245 |
|
|
|
(55,814 |
) |
|
|
60,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation
of common stock - founders ($0.0001/share)
|
|
|
(22,500,000 |
) |
|
|
(2,250 |
) |
|
|
2,250 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period ended October 31, 2009
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(64,185 |
) |
|
|
(64,185 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- October 31, 2009
|
|
|
44,547,000 |
|
|
$ |
4,455 |
|
|
$ |
111,495 |
|
|
$ |
(119,999 |
) |
|
$ |
(4,049 |
) |
See notes to
the consolidated financial statements.
|
Alternative
Energy Partners, Inc.
|
|
|
(A
Development Stage Company)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Three Months Ended
October 31, |
|
|
For
the Period from
|
|
|
|
|
|
|
April
28, 2008 (Inception)
|
|
|
|
|
2009
|
|
|
2008
|
|
|
to
October 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(64,185 |
) |
|
$ |
(3,393 |
) |
|
$ |
(119,999 |
) |
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for services rendered
|
|
|
- |
|
|
|
1,500 |
|
|
|
1,500 |
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in security deposits
|
|
|
(9,000 |
) |
|
|
- |
|
|
|
(9,000 |
) |
|
Increase
in accounts payable
|
|
|
11,252 |
|
|
|
- |
|
|
|
15,319 |
|
|
Increase
(Decrease) in accrued liabilities
|
|
|
(2,660 |
) |
|
|
- |
|
|
|
56 |
|
|
Net
Cash Used In Operating Activities
|
|
|
(64,593 |
) |
|
|
(1,893 |
) |
|
|
(112,124 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from issuance of common stock
|
|
|
- |
|
|
|
250 |
|
|
|
114,450 |
|
|
Net
Cash Provided By Financing Activities
|
|
|
- |
|
|
|
250 |
|
|
|
114,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) in Cash
|
|
|
(64,593 |
) |
|
|
(1,643 |
) |
|
|
2,326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
- Beginning of Period
|
|
|
66,919 |
|
|
|
5,700 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
- End of Period
|
|
$ |
2,326 |
|
|
$ |
4,057 |
|
|
$ |
2,326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY CASH FLOW
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Paid During the Period for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Interest
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
See notes to
the consolidated financial statements.
Alternative
Energy Partners, Inc.
(A
Development Stage Company)
October
31, 2009
(Unaudited)
Note 1 Basis of
Presentation
The
accompanying unaudited interim financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("GAAP") and the rules and regulations of the United States Securities
and Exchange Commission ("SEC") for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all the information and footnotes necessary for a comprehensive
presentation of financial position, results of operations, or cash flows. It is
management's opinion, however, that all material adjustments (consisting of
normal recurring adjustments) have been made which are necessary for a fair
financial statement presentation.
The
unaudited interim financial statements should be read in conjunction with the
Company’s Annual Report on Form 10-K, which contains the audited financial
statements and notes thereto, together with the Management’s Discussion and
Analysis, for the year ended July 31, 2009. The interim results for
the period ended October 31, 2009 are not necessarily indicative of results for
the full fiscal year.
Note 2 Nature of Operations
and Summary of Significant Accounting Policies
Nature
of Operations
Alternative
Energy Partners, Inc. (the “Company”) was incorporated in the State of Florida
on April 28, 2008.
The
Company intends to become involved in the alternative energy sector. The
Company is searching to acquire emerging growth companies to meet growing
demands worldwide in the alternative energy sector.
Development
Stage
The
Company's financial statements are presented as those of a development stage
enterprise. Activities during the development stage primarily include equity
based financing and further implementation of the business plan. The Company has
not generated any revenues since inception.
Risks
and Uncertainties
The
Company intends to operate in an industry that is subject to rapid technological
change. The Company's operations will be subject to significant risk and
uncertainties including financial, operational, technological, regulatory and
other risks associated with a development stage company, including the potential
risk of business failure.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. 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 during the reporting
period.
A
significant estimate in 2009 and 2008 included a 100% valuation allowance for
deferred taxes due to the Company’s continuing and expected future
losses.
Making
estimates requires management to exercise significant judgment. It is at least
reasonably possible that the estimate of the effect of a condition, situation or
set of circumstances that existed at the date of the financial statements, which
management considered in formulating its estimate could change in the near term
due to one or more future confirming events. Accordingly, the actual results
could differ significantly from estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents. At October 31, 2009 and
July 31, 2009, respectively, the Company had no cash equivalents.
The
Company minimizes its credit risk associated with cash by periodically
evaluating the credit quality of its primary financial institution. The balance
at times may exceed federally insured limits. At October 31, 2009 and
July 31, 2009, respectively, there were no balances that exceeded the federally
insured limit.
Alternative
Energy Partners, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
October
31, 2009
(Unaudited)
Earnings
per Share
Basic
earnings (loss) per share is computed by dividing net income (loss) by weighted
average number of shares of common stock outstanding during each
period. Diluted earnings (loss) per share is computed by dividing net
income (loss) by the weighted average number of shares of common stock, common
stock equivalents and potentially dilutive securities outstanding during the
period. For the period from April 28, 2008 (inception) to October 31, 2009, the
Company had no common stock equivalents that could potentially dilute future
earnings (loss) per share; hence, a separate computation of diluted earnings
(loss) per share is not presented.
Share
Based Payments
Generally,
all forms of share-based payments, including stock option grants, restricted
stock grants and stock appreciation rights, are measured at their fair value on
the awards’ grant date, and based on the estimated number of awards that are
ultimately expected to vest. Share-based payment awards issued to non-employees
for services rendered are recorded at either the fair value of the services
rendered or the fair value of the share-based payment, whichever is more readily
determinable. The expense resulting from share-based payments are recorded as a
component of general and administrative expense.
Segment
Information
During
the fiscal years 2009 and 2008, the Company only operated in one segment;
therefore, segment information has not been presented.
Fair
Value of Financial Instruments
The
carrying amounts of the Company’s short-term financial instruments, including
accounts payable and accrued liabilities, approximate fair value due to the
relatively short period to maturity for these instruments.
Recent
Accounting Pronouncements
Effective
July 1, 2009, the Company adopted The “FASB Accounting Standards
Codification” and the Hierarchy of Generally Accepted Accounting Principles (ASC
105). This standard establishes only two levels of U.S. generally accepted
accounting principles (“GAAP”), authoritative and nonauthoritative. The FASB
Accounting Standards Codification (the “Codification”) became the source of
authoritative, nongovernmental GAAP, except for rules and interpretive releases
of the SEC, which are sources of authoritative GAAP for SEC registrants. All
other non-grandfathered, non-SEC accounting literature not included in the
Codification became nonauthoritative. The Company began using the new guidelines
and numbering system prescribed by the Codification when referring to GAAP in
the third quarter of fiscal 2009. As the Codification was not intended to change
or alter existing GAAP, it did not have a material impact on the Company’s
financial statements.
Effective
June 30, 2009, the Company adopted three accounting standard updates which
were intended to provide additional application guidance and enhanced
disclosures regarding fair value measurements and impairments of securities.
They also provide additional guidelines for estimating fair value in accordance
with fair value accounting. The first update, as codified in ASC 820-10-65,
provides additional guidelines for estimating fair value in accordance with fair
value accounting. The second accounting update, as codified in ASC 320-10-65,
changes accounting requirements for other-than-temporary-impairment
(OTTI) for debt securities by replacing the current requirement that a
holder have the positive intent and ability to hold an impaired security to
recovery in order to conclude an impairment was temporary with a requirement
that an entity conclude it does not intend to sell an impaired security and it
will not be required to sell the security before the recovery of its amortized
cost basis. The third accounting update, as codified in ASC 825-10-65, increases
the frequency of fair value disclosures. These updates were effective for fiscal
years and interim periods ended after June 15, 2009. The adoption of these
accounting updates did not have a material impact on the Company’s financial
statements.
Alternative
Energy Partners, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
October
31, 2009
(Unaudited)
Effective
June 30, 2009, the Company adopted a new accounting standard for subsequent
events, as codified in ASC 855-10. The update modifies the names of the two
types of subsequent events either as recognized subsequent events (previously
referred to in practice as Type I subsequent events) or non-recognized
subsequent events (previously referred to in practice as Type II subsequent
events). In addition, the standard modifies the definition of subsequent events
to refer to events or transactions that occur after the balance sheet date, but
before the financial statements are issued (for public entities) or available to
be issued (for nonpublic entities). It also requires the disclosure of the date
through which subsequent events have been evaluated. The update did not result
in significant changes in the practice of subsequent event disclosures, and
therefore the adoption did not have a material impact on the Company’s financial
statements.
Effective
January 1, 2009, the Company adopted an accounting standard update
regarding the determination of the useful life of intangible assets. As codified
in ASC 350-30-35, this update amends the factors considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under intangibles accounting. It also requires a
consistent approach between the useful life of a recognized intangible asset
under prior business combination accounting and the period of expected cash
flows used to measure the fair value of an asset under the new business
combinations accounting (as currently codified under ASC 850). The update also
requires enhanced disclosures when an intangible asset’s expected future cash
flows are affected by an entity’s intent and/or ability to renew or extend the
arrangement. The adoption did not have a material impact on the Company’s
financial statements.
In
February 2008, the FASB issued an accounting standard update that delayed
the effective date of fair value measurements accounting for all non-financial
assets and non-financial liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at
least annually), until the beginning of the first quarter of fiscal 2009. These
include goodwill and other non-amortizable intangible assets. The Company
adopted this accounting standard update effective January 1, 2009. The
adoption of this update to non-financial assets and liabilities, as codified in
ASC 820-10, did not have a material impact on the Company’s financial
statements.
Effective
January 1, 2009, the Company adopted a new accounting standard update
regarding business combinations. As codified under ASC 805, this update requires
an entity to recognize the assets acquired, liabilities assumed, contractual
contingencies, and contingent consideration at their fair value on the
acquisition date. It further requires that acquisition-related costs be
recognized separately from the acquisition and expensed as incurred; that
restructuring costs generally be expensed in periods subsequent to the
acquisition date; and that changes in accounting for deferred tax asset
valuation allowances and acquired income tax uncertainties after the measurement
period be recognized as a component of provision for taxes. The adoption did not
have a material impact on the Company’s financial statements.
In
September 2009, the FASB issued Update No. 2009-13,
“Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging
Issues Task Force” (ASU 2009-13). It updates the existing multiple-element
revenue arrangements guidance currently included under ASC 605-25, which
originated primarily from the guidance in EITF Issue No. 00-21, “Revenue
Arrangements with Multiple Deliverables” (EITF 00-21). The revised guidance
primarily provides two significant changes: 1) eliminates the need for objective
and reliable evidence of the fair value for the undelivered element in order for
a delivered item to be treated as a separate unit of accounting, and 2)
eliminates the residual method to allocate the arrangement consideration. In
addition, the guidance also expands the disclosure requirements for revenue
recognition. ASU 2009-13 will be effective for the first annual reporting period
beginning on or after June 15, 2010, with early adoption permitted provided
that the revised guidance is retroactively applied to the beginning of the year
of adoption. The Company is currently assessing the future impact of this new
accounting update to its financial statements.
Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting
Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards
Codification (the “Codification”) as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with U.S.
GAAP. Rules and interpretive releases of the SEC under authority of federal
securities laws are also sources of authoritative U.S. GAAP for SEC registrants.
All guidance contained in the Codification carries an equal level of authority.
The Codification superseded all existing non-SEC accounting and reporting
standards. All other non-grandfathered, non-SEC accounting literature not
included in the Codification is non-authoritative. The FASB will not issue new
standards in the form of Statements, FASB Staff Positions or Emerging Issues
Task Force Abstracts. Instead, it will issue Accounting Standards Updates
(“ASUs”). The FASB will not consider ASUs as authoritative in their own right.
ASUs will serve only to update the Codification, provide background information
about the guidance and provide the bases for conclusions on the change(s) in the
Codification. References made to FASB guidance throughout this document have
been updated for the Codification.
Effective
July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurements and
Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments
to ASC 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities. ASU 2009-05 provides clarification that in circumstances in which a
quoted price in an active market for the identical liability is not available, a
reporting entity is required to measure fair value using certain techniques. ASU
2009-05 also clarifies that when estimating the fair value of a liability, a
reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of a liability. ASU 2009-05 also clarifies that both a quoted price in
an active market for the identical liability at the measurement date and the
quoted price for the identical liability when traded as an asset in an active
market when no adjustments to the quoted price of the asset are required are
Level 1 fair value measurements. Adoption of ASU 2009-05 did not have a material
impact on the Company’s results of operations or financial
condition.
Alternative
Energy Partners, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
October
31, 2009
(Unaudited)
Note 3 Going
Concern
As
reflected in the accompanying financial statements, the Company has a net loss
of $64,185 and net cash used in operations of $64,593 for the year ended August
31, 2009; and a working capital deficit of $13,049, an accumulated deficit of
$119,999 and a stockholders’ deficit of $4,049 at August 31, 2009.
These
factors, among others, raise doubt about the Company’s ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments related to recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.
In
response to these problems, management has taken the following
actions:
· the
Company is seeking third party debt and/or equity financing; and
· the
Company is cutting operating costs
Note 4 Fair
Value
The
Company has categorized assets and liabilities recorded at fair value based upon
the fair value hierarchy specified by GAAP.
The
levels of fair value hierarchy are as follows:
|
|
·
|
Level
1 inputs utilize unadjusted quoted prices in active markets for identical
assets or liabilities that the Company has the ability to
access;
|
|
|
·
|
Level
2 inputs utilize other-than-quoted prices that are observable, either
directly or indirectly. Level 2 inputs include quoted prices for similar
assets and liabilities in active markets, and inputs such as interest
rates and yield curves that are observable at commonly quoted intervals;
and
|
|
|
·
|
Level
3 inputs are unobservable and are typically based on our own assumptions,
including situations where there is little, if any, market
activity.
|
In
certain cases, the inputs used to measure fair value may fall into different
levels of the fair value hierarchy. In such cases, the Company categorizes such
financial asset or liability based on the lowest level input that is significant
to the fair value measurement in its entirety. Our assessment of the
significance of a particular input to the fair value measurement in its entirety
requires judgment and considers factors specific to the asset or
liability.
Both observable and unobservable inputs may be used to determine
the fair value of positions that are classified within the Level 3
category. As a result, the unrealized gains and losses for assets within the
Level 3 category presented in the tables below may include changes in fair
value that were attributable to both observable and unobservable inputs.
Alternative
Energy Partners, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
October
31, 2009
(Unaudited)
Note 5 Lease
Agreement
On August
15, 2009, the Company entered into an operating lease for office
space. This lease expires on August 15, 2014 and has an option to
extend the lease for an additional 3 years at the end of the 5th
year. On September 25, 2009, the Company paid a $9,000 security
deposit associated with the execution of this lease.
The
following schedule shows committed amounts due for the lease agreement for the
years ended July 31:
|
2010:
|
|
$
|
33,000
|
|
|
2011:
|
|
|
33,960
|
|
|
2012:
|
|
|
38,196
|
|
|
2013:
|
|
|
39,336
|
|
|
2014:
|
|
|
40,512
|
|
|
|
|
|
|
|
|
Total:
|
|
$
|
185,034
|
|
|
|
|
|
|
|
Note 6 Advances – Related
Party
During
September and October 2009, the Company advanced $5,000 to its Chairman and
CEO. These loans were non-interest bearing, unsecured and due on
demand. These loans were repaid in October 2009.
Note 7 Stockholders’ Equity
(Deficit)
In May
2008, the Company issued 66,000,000 shares of common stock to founders for
$2,200 ($0.00003/share). On August 10, 2009, the Company cancelled
22,500,000 shares of common stock, having a fair value of $750 ($0.00003/share),
held by a founder for no additional consideration.
During
the period May – July 2008, the Company issued 78,000 shares of common stock for
$6,500 ($0.08/share), under a private placement.
During
August 2008, the Company issued 3,000 shares of common stock for $250
($0.08/share), under a private placement.
During
October 2008, the Company issued 300,000 shares of common stock for services
rendered for $1,500 ($0.005/share), based upon the fair value of the services
provided, for consulting services. The fair value of the
services provided reflect a more readily determinable fair value than the shares
issued in recent cash transactions with third parties. At July 31,
2009, the Company expensed this stock issuance as a component of general and
administrative expense.
On
January 31, 2009, the Company issued 66,000 shares of common stock for $5,500
($0.08/share), under a private placement.
On April
15, 2009, the Company issued 600,000 shares of common stock for $100,000
($0.17/share), under a private placement.
On August
5, 2009, the Company effected a stock dividend. Each stockholder of record
as of August 19, 2009 received 2 shares of common stock for each share of common
stock they owned. All share and per share amounts have been
retroactively restated.
On
November 10, 2009, the Company amended its articles of incorporation to increase
the authorized common stock to 75,000,000 shares.
Note 8 Subsequent
Events
The
Company has evaluated for subsequent events between the balance sheet date of
October 31, 2009 and December 21, 2009, the date the financial statements were
issued.
Item
2.
Management's Discussion and Analysis of Financial Condition and
Results of Operation
The
following discussion includes certain forward-looking statements within the
meaning of the safe harbor protections of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements that include words such as “believe,” “expect,” “should,”
“intend,” “may,” “anticipate,” “likely,” “contingent,” “could,” “may,” or other
future-oriented statements, are forward-looking statements. Such forward-looking
statements include, but are not limited to, statements regarding our business
plans, strategies and objectives, and, in particular, statements referring to
our expectations regarding our ability to continue as a going concern, generate
increased market awareness of, and demand for, our current products, realize
profitability and positive cash flow, and timely obtain required financing.
These forward-looking statements involve risks and uncertainties that could
cause actual results to differ from anticipated results. The forward-looking
statements are based on our current expectations and what we believe are
reasonable assumptions given our knowledge of the markets; however, our actual
performance, results and achievements could differ materially from those
expressed in, or implied by, these forward-looking statements. Factors within
and beyond our control that could cause or contribute to such differences
include, among others, our critical capital raising efforts in an uncertain and
volatile economical environment, our ability to maintain relationship with
strategic companies, our cash preservation and cost containment efforts, our
ability to retain key management personnel, our relative inexperience with
advertising, our competition and the potential impact of technological
advancements thereon, the impact of changing economic, political, and
geo-political environments on our business, as well as those factors discussed
elsewhere in this Form 10-Q and in “Item 1 - Our Business,” “Item 6 -
Management’s Discussion and Analysis,” and elsewhere in our most recent Form
10-K, filed with the United States Securities and Exchange
Commission.
Readers
are urged to carefully review and consider the various disclosures made by us in
this report and those detailed from time to time in our reports and filings with
the United States Securities and Exchange Commission that attempt to advise
interested parties of the risks and factors that are likely to affect our
business.
Our
Business
Alternative
Energy Partners, Inc. (the “Company”) is a development stage company. The
Company was organized under the laws of the State of Florida on April 28,
2008. We formed our Company for the purpose of establishing a
renewable fuel sources initially within the State of Florida. Ethanol
is our initial intended product and we intend to establish other alternative
energy products including, but not limited to, solar and biodiesel. Our intended
products, while not technically difficult to produce, must meet all regulatory
requirements prior to being marketed. Moreover, there is a multitude of
competitive products already in the market place.
Current
Business of the Company
We are a
development stage company which plans to enter into the business of sourcing,
marketing and distribution of renewable biofuels. Initially we intend
to work to source raw materials needed for the domestic manufacture of ethanol
in South Florida. We entered into a Letter of Intent with Cane Fuel, Inc.,
whereby we had intended to enter into agreements to provide sufficient
quantities of ethanol feedstock derived from sources other than corn. Such
agreements were intended to be joint venture agreements whereby we could work to
provide feedstock for ethanol production and participate in the distribution of
the blended product. We intended to work with a strategic partner to develop a
plant having substantial production capability of ethanol. The proposed plant
would have production capability of 50 million gallons of ethanol
annually. The ethanol expected to be produced is intended to be used
by refineries or blenders and ultimately blended with gasoline for internal
combustion engines. We intend to work with sugar cane, sweet sorghum
and other available sources of cellulosic materials to produce ethanol. Our
strategic partner has not commenced land acquisition and plant development as of
the date hereof. The Company is still pursuing opportunities in the ethanol
industry.
Our
business model recognizes that the vast majority of agricultural enterprises use
distillate fuel oil in their respective operations. We believe our
intended products could represent a real alternative and, because most of the
constituent components will be domestically produced, a more stable and cost
effective source for the U.S. consumer. Ethanol is a renewable
biofuel for which demand is increasing throughout the U.S. Ethanol
refineries are expected to increase production capacities in an effort to
decrease dependence on foreign oil.
The vast
majority of all agricultural enterprises use distillate fuel oil in their
operations. We believe our intended biofuel and alternative energy
products could represent a real alternative and, because most of the constituent
components will be domestically produced, a more stable and cost effective
source for their fuel energy needs.
Initially,
our largest target market is intended to be the consumers able to utilize
ethanol as the primary blend component in E85, an unleaded gasoline alternative.
In order to reach that market, we must begin by establishing and proving that
our fuel reliable and as easily distributed as current
competitors. For any alternative energy product (i.e. solar,
biodiesel), we intend to prove market viability prior to engaging in
distribution.
We are a
development stage company which plans to enter into the business of sourcing,
marketing and distribution of renewable biofuels and alternative energy
products. Initially we intend to work to source raw materials needed
for the domestic manufacture of ethanol in South Florida. We have entered into a
Letter of Intent with Cane Fuel, Inc., whereby we intended to enter into
agreements to provide sufficient quantities of ethanol feedstock derived from
sources other than corn. Such agreements were intended to be joint venture
agreements whereby we can work to provide feedstock for ethanol production and
participate in the distribution of the blended product. As of the date hereof,
our strategic partner (Cane Fuel) has not commenced the property acquisition and
development of an ethanol plant and will not for the foreseeable
future.
On
January 1, 2009, we entered into a Distribution Agreement (the “Agreement”) with
Cutversion Technologies Corp. (“Cutversion”) whereby the Company, upon EPA
approval, has the right to market and sell an E-85 ethanol conversion kit in the
Southeastern U.S. The conversion kit, when completed and approved, will allow
all fuel injected vehicles to run on virtually any form of E-85 ethanol
regardless of feedstock source. The Company can maintain its exclusive
arrangement with Cutversion through the sale of a minimum of 1000 kits within
the 12 month period from the time final product becomes available for sale under
EPA requirements. The Agreement is effective for a term of three (3) years and
continued thereafter for successive one year terms. The conversion kit is not
ready for sale and distribution as of the date hereof.
Our
business model recognizes that the vast majority of agricultural enterprises use
distillate fuel oil in their respective operations. We believe our intended
product(s) could represent a real alternative and, because most of the
constituent components will be domestically produced, a more stable and cost
effective source for the U.S. consumer. Ethanol is a renewable
biofuel for which demand is increasing throughout the U.S. Ethanol
refineries are expected to increase production capacities in an effort to
decrease dependence on foreign oil.
The vast
majority of all agricultural enterprises use distillate fuel oil in their
operations. We believe our intended biofuel product(s) could
represent a real alternative and, because most of the constituent components
will be domestically produced, a more stable and cost effective source for their
fuel energy needs.
We have
also pursued other alternative energy products in the areas of solar and
biodiesel.
Results
of Operations for Period Ended October 31, 2009
As of
October 31, 2009, the Company has earned revenues of $-0- and has incurred a net
loss since inception of $119,999. Operations have been attributed primarily to
start up and business development.
During
the three month period ended October 31, 2009, we incurred operating expenses in
the amount of $64,185. These operating expenses included professional fees
and office and general expenses.
Liquidity
and Capital Resources
To date,
we have financed our operations from funds raised from private investment and
publicly registered shares. As of October 31, 2009, we had cash on
hand of $2,326.
Critical
Accounting Policies
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
We
believe that the following critical policies affect our more significant
judgments and estimates used in preparation of our financial
statements.
Furniture
and equipment are recorded at cost and depreciated on a declining balance and
straight-line basis over their estimated useful lives, principally two to seven
years. Accelerated methods are used for tax depreciation. Maintenance and
repairs are charged to operations when incurred. Betterments and renewals are
capitalized. When furniture and equipment are sold or otherwise disposed of, the
asset account and related accumulated depreciation account are relieved, and any
gain or loss is included in operations.
The
Company has incurred deferred offering costs in connection with raising
additional capital through the sale of its common stock. These costs are
capitalized and charged against additional paid-in capital when common stock is
issued. If there is no issuance of common stock, the costs incurred are charged
to operations.
Research
and development costs are charged to operations when incurred and are included
in operating expenses.
New
Accounting Pronouncements
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of Accounting Research Bulletin
No 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, changes in a parent’s ownership of a noncontrolling interest,
calculation and disclosure of the consolidated net income attributable to the
parent and the noncontrolling interest, changes in a parent’s ownership interest
while the parent retains its controlling financial interest and fair value
measurement of any retained noncontrolling equity investment. SFAS 160 is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Early adoption
is prohibited. The adoption of SFAS No. 160 did not have a material effect on
the Company’s financial position, results of operations or cash
flows.
In
December 2007, the FASB issued SFAS 141R, “Business Combinations”
(“SFAS 141R”), which replaces FASB SFAS 141, “Business
Combinations”. This Statement retains the fundamental
requirements in SFAS 141 that the acquisition method of accounting be used for
all business combinations and for an acquirer to be identified for each business
combination. SFAS 141R defines the acquirer as the entity that obtains control
of one or more businesses in the business combination and establishes the
acquisition date as the date that the acquirer achieves control. SFAS
141R will require an entity to record separately from the business combination
the direct costs, where previously these costs were included in the total
allocated cost of the acquisition. SFAS 141R will require an entity
to recognize the assets acquired, liabilities assumed, and any non-controlling
interest in the acquired at the acquisition date, at their fair values as of
that date. This compares to the cost allocation method previously
required by SFAS No. 141. SFAS 141R will require an entity to
recognize as an asset or liability at fair value for certain contingencies,
either contractual or non-contractual, if certain criteria are
met. Finally, SFAS 141R will require an entity to recognize
contingent consideration at the date of acquisition, based on the fair value at
that date. This Statement will be effective for business combinations
completed on or after the first annual reporting period beginning on or after
December 15, 2008. Early adoption of this standard is not permitted
and the standards are to be applied prospectively only. Upon adoption
of this standard, there would be no impact to the Company’s results of
operations and financial condition for acquisitions previously
completed. The adoption of SFAS No. 141R did not have a material
effect on the Company’s financial position, results of operations or cash
flows.
In
October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a
Financial Asset When the Market For That Asset Is Not Active” (“FSP FAS
157-3”), with an immediate effective date, including prior periods for which
financial statements have not been issued. FSP FAS 157-3 amends FAS 157 to
clarify the application of fair value in inactive markets and allows for the use
of management’s internal assumptions about future cash flows with appropriately
risk-adjusted discount rates when relevant observable market data does not
exist. The objective of FAS 157 has not changed and continues to be the
determination of the price that would be received in an orderly transaction that
is not a forced liquidation or distressed sale at the measurement date.
The adoption of FSP FAS 157-3 is not expected to have a material effect on the
Company’s financial position, results of operations or cash flows.
In April
2009, the FASB issued FSP SFAS 157-4, “Determining Whether a Market Is Not
Active and a Transaction Is Not Distressed,” which further clarifies the
principles established by SFAS No. 157. The guidance is effective for the
periods ending after June 15, 2009 with early adoption permitted for the periods
ending after March 15, 2009. The adoption of FSP FAS 157-4 did not have a
material effect on the Company’s financial position, results of operations, or
cash flows.
Other
recent accounting pronouncements issued by the FASB (including its EITF), the
AICPA, and the SEC did not or are not believed by management to have a material
impact on the Company’s present or future financial statements.
Item
3. Quantitative and Qualitative Disclosures About
Market
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
4. Controls and Procedures
The
Company’s Chief Executive Officer, also serving as Chief Financial Officer and
Principal Accounting Officer, has evaluated the effectiveness of the Company’s
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of and for the period covered by this Quarterly
Report on Form 10-Q. Based upon such evaluation, management concluded that, as
of the end of such period, the Company’s disclosure controls and procedures were
not effective. The controls were determined to be ineffective due to the lack of
segregation of duties. Currently, the Chief Executive Officer serves in the
capacity of Chief Financial Officer and Principal Accounting Officer and there
is no segregation of duties and there is no independent audit committee. Until
such time as the Company has received additional funding, it will be unable to
remediate the weakness.
Changes
in Internal Control Over
Financial Reporting
No change
in the Company’s internal control over financial reporting occurred during the
three months ended October 31, 2009, that materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting
Item
1. Legal Proceedings
Neither
the Company nor any of our officers or directors are involved in any litigation
either as plaintiffs or defendants and we have no knowledge of any threatened or
pending litigation against us or any of our officers or directors.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
During
the three months ended October 31, 2009, we have conducted no sales of the
Company’s equity securities.
Item
3. Defaults Upon Senior Securities
There
were no defaults since we have no debt and no senior securities
outstanding.
Item
4. Submission of Matters to a Vote of Security Holders
There
were no matters submitted to a vote of our shareholders.
Item
5. Other Information.
None
Item
6. Exhibits
Exhibit
No. Description of Exhibit
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, hereunto duly
authorized.
Alternative Energy Partners,
Inc.
Date: Feburary 11, 2010
/s/ Jack L. Stapleton
Jack L. Stapleton
Principal Executive
Officer
Principal Financial
Officer
Principal Accounting
Officer
and Director