SEC Info  
    Home      Search      My Interests      Help      Sign In      Please Sign In

3Power Energy Group Inc. – ‘10-Q’ for 6/30/13

On:  Wednesday, 8/14/13, at 5:56pm ET   ·   For:  6/30/13   ·   Accession #:  1144204-13-45984   ·   File #:  333-103647

Previous ‘10-Q’:  ‘10-Q’ on 2/14/13 for 12/31/12   ·   Next:  ‘10-Q’ on 11/19/13 for 9/30/13   ·   Latest:  ‘10-Q’ on 3/6/18 for 12/31/17

Find Words in Filings emoji
 
  in    Show  and   Hints

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/14/13  3Power Energy Group Inc.          10-Q        6/30/13   72:2.8M                                   Toppan Merrill/FA

Quarterly Report   —   Form 10-Q   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    150K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     27K 
 3: EX-32.1     Certification -- §906 - SOA'02                      HTML     22K 
70: R1          Document And Entity Information                     HTML     43K 
44: R2          Consolidated Balance Sheets                         HTML     87K 
40: R3          Consolidated Balance Sheets (Parenthetical)         HTML     31K 
13: R4          Consolidated Statements of Operations               HTML     72K 
43: R5          Consolidated Statements of Cash Flows               HTML     67K 
26: R6          Organization and Business                           HTML     47K 
60: R7          Significant Accounting Policies                     HTML     49K 
27: R8          Going Concern Matters                               HTML     27K 
32: R9          Note Payable                                        HTML     26K 
14: R10         Common Stock                                        HTML     30K 
29: R11         Related Party Transactions                          HTML     31K 
59: R12         Non Controlling Interest                            HTML     56K 
54: R13         Commitments and Contingencies                       HTML     28K 
41: R14         Subsequent Events                                   HTML     24K 
66: R15         Significant Accounting Policies (Policies)          HTML     82K 
57: R16         Organization and Business (Tables)                  HTML     29K 
12: R17         Significant Accounting Policies (Tables)            HTML     28K 
17: R18         Non Controlling Interest (Tables)                   HTML     55K 
65: R19         Organization and Business (Additional Information)  HTML     43K 
                (Details)                                                        
69: R20         Organization and Business (Summary of Major         HTML     23K 
                Classes of Assets and Liabilities Subsidiary)                    
                (Details)                                                        
71: R21         Organization and Business (Assets and Liabilities   HTML     23K 
                Of The Subsidiaries) (Details)                                   
67: R22         Significant Accounting Policies - (Additional       HTML     22K 
                Information) (Details)                                           
52: R23         Significant Accounting Policies (Summary of         HTML     25K 
                Exchange Rates Translate Amounts in GBP Into USD)                
                (Details)                                                        
15: R24         Going Concern Matters (Additional Information)      HTML     29K 
                (Details)                                                        
25: R25         Note Payable (Additional Information) (Details)     HTML     29K 
20: R26         Common Stock (Additional Information) (Details)     HTML     33K 
19: R27         Related Party Transactions (Additional              HTML     33K 
                Information) (Details)                                           
33: R28         Non Controlling Interest (Additional Information)   HTML     24K 
                (Details)                                                        
51: R29         Non Controlling Interest (Net Loss Attributable To  HTML     32K 
                Company) (Details)                                               
56: R30         Non Controlling Interest (Summary of Changes in     HTML     34K 
                Non Controlling Interest) (Details)                              
39: XML         IDEA XML File -- Filing Summary                      XML     74K 
72: XML.R1      Document And Entity Information                      XML    130K 
31: XML.R2      Consolidated Balance Sheets                          XML    226K 
50: XML.R3      Consolidated Balance Sheets (Parenthetical)          XML     85K 
38: XML.R4      Consolidated Statements of Operations                XML    217K 
36: XML.R5      Consolidated Statements of Cash Flows                XML    206K 
11: XML.R6      Organization and Business                            XML     57K 
45: XML.R7      Significant Accounting Policies                      XML     63K 
10: XML.R8      Going Concern Matters                                XML     41K 
23: XML.R9      Note Payable                                         XML     40K 
35: XML.R10     Common Stock                                         XML     43K 
28: XML.R11     Related Party Transactions                           XML     44K 
24: XML.R12     Non Controlling Interest                             XML     75K 
61: XML.R13     Commitments and Contingencies                        XML     41K 
30: XML.R14     Subsequent Events                                    XML     39K 
68: XML.R15     Significant Accounting Policies (Policies)           XML    140K 
47: XML.R16     Organization and Business (Tables)                   XML     49K 
46: XML.R17     Significant Accounting Policies (Tables)             XML     44K 
49: XML.R18     Non Controlling Interest (Tables)                    XML     79K 
22: XML.R19     Organization and Business (Additional Information)   XML    275K 
                (Details)                                                        
42: XML.R20     Organization and Business (Summary of Major          XML     72K 
                Classes of Assets and Liabilities Subsidiary)                    
                (Details)                                                        
55: XML.R21     Organization and Business (Assets and Liabilities    XML     72K 
                Of The Subsidiaries) (Details)                                   
58: XML.R22     Significant Accounting Policies - (Additional        XML     40K 
                Information) (Details)                                           
62: XML.R23     Significant Accounting Policies (Summary of          XML     56K 
                Exchange Rates Translate Amounts in GBP Into USD)                
                (Details)                                                        
34: XML.R24     Going Concern Matters (Additional Information)       XML     71K 
                (Details)                                                        
18: XML.R25     Note Payable (Additional Information) (Details)      XML    106K 
63: XML.R26     Common Stock (Additional Information) (Details)      XML     94K 
48: XML.R27     Related Party Transactions (Additional               XML    307K 
                Information) (Details)                                           
64: XML.R28     Non Controlling Interest (Additional Information)    XML    102K 
                (Details)                                                        
16: XML.R29     Non Controlling Interest (Net Loss Attributable To   XML    175K 
                Company) (Details)                                               
53: XML.R30     Non Controlling Interest (Summary of Changes in      XML    244K 
                Non Controlling Interest) (Details)                              
37: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS    231K 
 4: EX-101.INS  XBRL Instance -- pspw-20130630                       XML    340K 
 6: EX-101.CAL  XBRL Calculations -- pspw-20130630_cal               XML     70K 
 7: EX-101.DEF  XBRL Definitions -- pspw-20130630_def                XML    353K 
 8: EX-101.LAB  XBRL Labels -- pspw-20130630_lab                     XML    509K 
 9: EX-101.PRE  XBRL Presentations -- pspw-20130630_pre              XML    421K 
 5: EX-101.SCH  XBRL Schema -- pspw-20130630                         XSD    129K 
21: ZIP         XBRL Zipped Folder -- 0001144204-13-045984-xbrl      Zip     58K 


‘10-Q’   —   Quarterly Report


This is an HTML Document rendered as filed.  [ Alternative Formats ]



 

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, 2013

 

or

  

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

 

For the transition period from ______to______.

 

3Power Energy Group, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   333-103647   98-0393197

(State or other jurisdiction of incorporation or

organization)

  (Commission File Number)   (I.R.S. Employee Identification No.)

  

PO Box 50006

Sh. Rashid Building

Sh. Zayed Road

Dubai, United Arab Emirates

 (Address of principal executive office, Zip Code)

 

011 97 14 3210312

 (Registrant’s telephone number, including area code)

 

Not Applicable.

 

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

 

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 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x  No ¨

 

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

 

Large accelerated filer ¨ Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)   Smaller reporting company x

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common equity: As of August 9, 2013, 113,146,380 ordinary shares, par value $0.0001 per share are issued and outstanding.

 

 C: 
 
 

 

3POWER ENERGY GROUP, INC.

 

QUARTERLY REPORT ON FORM 10-Q

June 30, 2013

 

TABLE OF CONTENTS

 

    PAGE
PART I: FINANCIAL INFORMATION   4
     
Item 1: Financial Statements   4
  Condensed Consolidated Balance Sheets as of June 30, 2013 (unaudited) and March 31, 2013   4
  Unaudited Condensed Consolidated Statements of Operations for the three months ended June 30, 2013 and 2012   5
  Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2013 and 2012   6
  Notes to the Unaudited Condensed Consolidated Financial Statements   7
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operation   16
Item 3: Quantitative and Qualitative Disclosures about Market Risk   20
Item 4: Controls and Procedures   20
     
PART II: OTHER INFORMATION   21
     
Item 1: Legal Proceedings   21
Item 1A: Risk Factors   21
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds   21
Item 3: Defaults Upon Senior Securities   21
Item 4: Mine Safety Disclosures   21
Item 5: Other Information   21
Item 6: Exhibits   21
     
SIGNATURES   22

  

 C: 
 C: 2
 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

The following cautionary statements identify important factors that could cause our actual results to differ materially from those projected in forward-looking statements made in this Quarterly Report on Form 10-Q (this “Report”) and in other reports and documents published by us from time to time. Any statements about our beliefs, plans, objectives, expectations, assumptions, future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “believes,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intend,” “plan,” “projection,” “outlook” and the like, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, as we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of our Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned to carefully read all “Risk Factors” set forth under Item 1A and not to place undue reliance on any forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments, except as required by the Exchange Act. New factors emerge from time to time, and it is not possible for us to predict which will arise or to assess with any precision the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

Unless otherwise provided in this Report, references to the “Company,” the “Registrant,” the “Issuer,” “we,” “us,” and “our” refer to 3Power Energy Group Inc. and its subsidiaries (formerly known as Prime Sun Power Inc.).

 

 C: 
3
 

 

PART I                   FINANCIAL INFORMATION

 

3POWER ENERGY GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

  

   June 30,   March 31, 
   2013   2013 
   (unaudited)     
ASSETS        
Current assets:          
Cash and cash equivalents  $1,725   $1,725 
Prepaid and other current assets   15,420    15,420 
Total current assets   17,145    17,145 
           
Total assets  $17,145   $17,145 
           
LIABILITIES AND DEFICIT          
Current liabilities:          
Accounts payable and accrued expenses  $6,163,199   $6,083,176 
Accrued interest   421,376    386,051 
Note payable   639,059    639,059 
Due to related parties   1,488,855    1,430,366 
Total current liabilities   8,712,489    8,538,652 
           
Commitments and contingencies   -    - 
           
Deficit          
Common stock,$0.0001 par value, 300,000,000 shares authorized, 113,146,380 shares issued and outstanding as of June 30, 2013 and March 31, 2013   11,314    11,314 
Additional paid in capital   7,306,067    7,306,067 
Other comprehensive (loss) income   (192)   2,707 
Accumulated deficit   (15,810,148)   (15,639,210)
Total deficit attributable to 3Power Energy Group, Inc.   (8,492,959)   (8,319,122)
Non-controlling interest   (202,385)   (202,385)
Total deficit   (8,695,344)   (8,521,507)
           
Total liabilities and deficit  $17,145   $17,145 

 

See the accompanying notes to these unaudited condensed consolidated financial statements

 

 C: 
4
 

  

3POWER ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

  

   Three months ended June 30, 
   2013   2012 
Operating expenses:          
Selling, general and administrative  $135,614   $469,189 
Total operating expenses   135,614    469,189 
           
Loss from operations   (135,614)   (469,189)
           
Other income (expense):          
Interest expense   (35,325)   (24,130)
Gain on settlement of accrual   -    40,000 
           
Net loss before income taxes   (170,938)   (453,319)
           
Provision for income taxes   -    - 
           
Net loss   (170,938)   (453,319)
           
Non-controlling interest   -    - 
           
NET LOSS ATTRIBUTABLE TO 3POWER ENERGY GROUP, INC.  $(170,938)  $(453,319)
           
Loss per common share (basic and diluted):  $(0.00)  $(0.00)
           
           
Weighted average number of shares outstanding (basic and diluted)   113,146,380    113,060,036 
           
Comprehensive loss:          
Net loss  $(170,938)  $(453,319)
Foreign currency translation (loss) gain   (2,899)   39,048 
           
Comprehensive loss:   (173,838)   (414,271)
Comprehensive loss attributable to non-controlling interest   -    - 
           
Comprehensive loss attributable to 3Power Energy Group, Inc.  $(173,838)  $(414,271)

 

See the accompanying notes to these unaudited condensed consolidated financial statements

 C: 
5
 

 

3POWER ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

   Three months ended June 30, 
   2013   2012 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(170,938)  $(453,319)
Adjustments to reconcile net loss to net cash used in operating activities:          
Common stock issued for services rendered   -    20,000 
Gain on settlement accrual   -    (40,000)
Changes in operating assets and liabilities:          
Prepaid and other current assets   -    (2,069)
Accounts payable and accrued expenses   77,124    181,249 
Accrued interest   35,325    23,964 
Net cash (used in) provided by operating activities:   (58,489)   (270,175)
           
CASH FLOWS FROM INVESTING ACTIVITIES:   -    - 
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Net proceeds from related party advances   58,489    231,051 
Net cash provided by financing activities   58,489    231,051 
           
Effect of foreign currency rate change on cash   -    39,048 
           
Net decrease in cash and cash equivalents   -    (76)
           
Cash and cash equivalents-beginning of period   1,725    6,368 
Cash and cash equivalents-end of period  $1,725   $6,292 
           
Supplemental disclosures of cash flow information:          
Cash paid during the period for:          
Interest  $-   $- 
Income taxes  $-   $- 
           
Non-cash investing and financing activities:  $-   $- 

 

See the accompanying notes to these unaudited condensed consolidated financial statements

 

 C: 
6
 

 

NOTE 1 – ORGANIZATION AND BUSINESS

 

3Power Energy Group, Inc. (the “Company”) was incorporated in the State of Nevada on December 18, 2002.  On March 30, 2011, the Company changed its name from Prime Sun Power Inc. to 3Power Energy Group, Inc. and increased its authorized share capital to 300,000,000 shares. The Company plans to pursue a business model producing renewable generated electrical power and other alternative energies.

 

The Company's primary efforts is to sell electricity generated by solar, wind, hydro, biomass and other renewable energy resources and to develop, build and operate power plants based on these technologies. The core approach of the Company's business is to deliver energy in markets where there is an inherent energy gap between supply and demand or where there exists long term, stable, government back by financial support for development of renewable energy.

 

On May 13, 2011, pursuant to a Stock Purchase Agreement (the “Stock Purchase Agreement”), the Company consummated a reverse merger (“Merger”) with Seawind Energy Limited (“Seawind Energy”), Seawind Services Limited (“Seawind Services”, and together with Seawind Energy, the “Seawind”) and the shareholders of Seawind Energy (the “Seawind Group Shareholders” and together with the Company, and the Seawind Companies, the “Parties”). The Seawind Companies were formed under the laws of the United Kingdom.

 

In connection with the Merger, the Company issued 40,000,000 restricted shares of the Company’s common stock (such acquisition is referred to herein as the “Seawind Acquisition”). The Seawind was the surviving entity.

 

Upon completion of the Stock Purchase Agreement, Seawind became 3Power Group, Inc.'s wholly-owned subsidiary. For accounting purposes, the acquisition has been treated as a recapitalization of Seawind with Seawind as the acquirer (reverse acquisition). The historical financial statements prior to May 13, 2011 are those of Seawind Energy. The Merger was accounted for as a “reverse merger”, since the stockholders of Seawind owned a majority of the Company’s common stock immediately following the transaction and their management has assumed operational, management and governance control.

 

The transaction was accounted for as a recapitalization of Seawind pursuant to which Seawind was treated as the surviving and continuing entity.  The Company did not recognize goodwill or any intangible assets in connection with this transaction.  Accordingly, the Company’s historical financial statements are those of Seawind immediately following the consummation of the reverse merger. The accompanying consolidated financial statements give retroactive effect to the recapitalization.

 

In anticipation of the closing of the Stock Purchase Agreement, the Company changed its name to 3Power Energy Group Inc. and increased its authorized share capital to 300,000,000 shares.

 

On July 4, 2011, the Seawind Energy Limited and Seawind Service Limited changed their name to 3Power Energy Limited and 3Power Project Service Limited, respectively.

 

Acquisition of Shala Energy sh p k:

 

On June 5, 2012, the Company and Shala Energy sh.p.k ("Shala") executed a master acquisition agreement (the “Acquisition Agreement”) where Shala agreed to transfer and the Company agreed to acquire 75% of the equity of Shala. Under the Acquisition Agreement (the “Acquisition”), the closing of the acquisition is subject to the Company’s completion and satisfaction of the due diligence on Shala and Shala’s partners with respect to their shares in Shala and upon the Company’s payment of the first year premium for the insurance bond premium issued in favor of the Ministry of Economy, Trade and Energy of Republic of Albania in replacement of then existing bank guarantee issued in favor of Ministry of Economy, Trade and Energy of Republic of Albania for the Shala River Concession Agreement, in amount of 7,230,315 Euro (the “Required Insurance Bond Premium”).

 

 C: 
7
 

 

On August 10, 2012, after the conclusion of the due diligence efforts, the Company made the first year payment of required Insurance Bond Premium in amount of 164,851 Euro ($211,972), and as such the Acquisition closed. Such acquisition brought the Company 75% of the interest in a hydro-electrical project of a total installed power of 127.6 MW of Shala River in Albania.  The Shala River Project finalization is in process with the Ministry of Albania.

 

Shala Energy being an inactive Company and having no material assets and liabilities as of June 30, 2013.

 

In connection the acquisition of Shala, the Company is obligated for an aggregate of 4% of the total project costs as facilitator fees in either cash or the Company's common stock. During the year ended March 31, 2013, the Company accrued $600,000 due to the facilitator for feasibility studies in process and recorded as expenses. As of June 30, 2013 and March 31, 2013, the Company had $600,000 accrued fees for feasibility studies.

 

Liquidation/winding up of international subsidiaries:

 

On October 8, 2012, the High Court of Justice in the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of 3Power Project Services Limited, a wholly owned subsidiary of the Company’s Subsidiary, 3Power Energy Limited.

 

By the letter of The Insolvency Service dated October 12, 2012, the Company was required to provide information relating to 3Power Project Services Limited to the Official Receiver’s Office (a government body of Plymouth, the United Kingdom) and attend an interview with staff of the Official Receiver’s Office to review the prospect of recovering the assets of 3Power Project Services Limited for the benefit of creditors.

 

The company was also required to deliver to the Official Receiver’s Office certain assets (cash or cheques) and accounting records that are still in its possession or control. The Company has attended the interview and delivered all the available accounting records to the Officer Receiver’s Office. No order confirming a plan of reorganization, arrangement or liquidation has been entered as of this filing.

 

The major classes of liabilities of the subsidiary as of June 30, 2013 are as follows:

 

Current liabilities  $1,676,564 

 

On January 17, 2013, the Company filed a Strike off application with the Registrar of Companies in the United Kingdom to dissolve 3Power Energy Limited, a wholly owned subsidiary of the Company. Such strike-off application has yet to be approved as of date this report. The Company had liabilities as of June 30, 2013 as below:

 

Current liabilities  $177,059 

 

During the year ended March 31, 2013, the Company charged to operation £11,085 ($16,831) as loss on write-off of assets of its international subsidiaries.

 

 

 C: 
8
 

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

 

Interim Financial Statements

 

The following (a) condensed consolidated balance sheet as of March 31, 2013, which has been derived from audited consolidated financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

 

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2013 are not necessarily indicative of results that may be expected for the year ending March 31, 2014. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended March 31, 2013 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on July 22, 2013.

 

Basis of presentation:

 

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

 

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on the Company's financial position and results of operations was not significant.

 

Use of estimates

 

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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.

 

Cash and Cash Equivalents

 

For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents.

 

 

 C: 
9
 

 

Comprehensive Income (Loss)

 

The Company applies Statement of Accounting Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”). ASC 220-10 establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ASC 220-10 requires other comprehensive income (loss) to include foreign currency translation adjustments and unrealized gains and losses on available for sale securities.

 

Functional currency

 

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars ("USD"). The Company's functional currency is British pounds ("GBP"). The consolidated financial statements are translated into USD in accordance with Codification ASC 830, Foreign Currency Matters. All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, shareholders' equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in the shareholders' equity in accordance with Codification ASC 220, Comprehensive Income.

 

Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into GBP at the rate on the date of the transaction and included in the results of operations as incurred. There were no material transaction gains or losses in the periods presented.

 

The exchange rates used to translate amounts in GBP into USD for the purposes of preparing the consolidated financial statements were as follows:

 

   June 30,
2013
   March 31,
2013
 
Period-end GBP: USD exchange rate  $1.5208   $1.5184 
Average Yearly GBP: USD exchange rate  $1.5356   $1.5805 

 

Per share data:

 

The Company accounts for net loss per share in accordance with Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”), which requires presentation of basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS.

 

Basic and diluted net loss per common share is calculated by dividing net loss, by the weighted average number of outstanding shares of common stock, adjusted to give effect to the exchange ratio in the Share Exchange in May 2011 (see Note 1), which was accounted for as recapitalization of the Company. The Company had no common stock equivalents as of June 30, 2013 and 2012.

 

Income taxes

 

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carry forwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized.

 

 C: 
10
 

 

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of June 30, 2013 and March 31, 2013, the Company has not recorded any unrecognized tax benefits.

 

Segment Information

 

Accounting Standards Codification subtopic Segment Reporting 280-10 (“ASC 280-10”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

 

Accounting for Stock-Based Compensation

 

The Company accounts for stock, stock options and warrants using the fair value method promulgated by Accounting Standards Codification subtopic 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”) which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services. Therefore, results include non-cash compensation expense as a result of the issuance of stock, stock options and warrants and we expect to record additional non-cash compensation expense in the future.

 

The Company follows Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”) which requires that all share-based payments to both employees and non-employees be recognized in the income statement based on their fair values.

 

Recent Accounting Pronouncements

 

There were various updates recently issued by the Financial Accounting Standards Board, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

 

NOTE 3 - GOING CONCERN MATTERS

 

The accompanying unaudited condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern.  As of June 30, 2013, the Company has a deficit of $15,810,148 applicable to controlling interest compared with deficit of $15,639,210 applicable to controlling interest as of March 31, 2013, and has incurred significant operating losses and negative cash flows. For the three months ended June 30, 2013, the Company sustained a net loss of $170,938 compared to a net loss of $453,319 for the three months ended June 30, 2012. The Company will need additional financing which may take the form of equity or debt and the Company has converted certain liabilities into equity.

 

The Company has undertaken further steps as part of a plan to improve operations with the goal of sustaining its operations for the next twelve months and beyond to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof.  However, there can be no assurance that the Company can successfully accomplish these steps and or business plans, and it is uncertain that the Company will achieve a profitable level of operations and be able to obtain additional financing.

 

 C: 
11
 

 

In the event the Company is not able to increase its working capital, the Company will not be able to implement or may be required to delay all or part of its business plan, and their ability to attain profitable operations, generate positive cash flows from operating and investing activities and materially expand the business will be materially adversely affected. The accompanying unaudited condensed consolidated financial statements do not include any adjustments relating to the classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the company be unable to continue in existence.

 

NOTE 4 - NOTE PAYABLE

 

On March 2, 2010, the Company issued an unsecured Senior Promissory Note ("Note") for 470,000 Euros ($639,059 at June 30, 2013) initially due on December 31, 2010 including interest at 7.5% per annum. Upon default by the Company on January 1, 2011, the interest rate of 15% per annum applies. On November 14, 2012, the note holder filed a complaint in the District Court of Southern District of New York demanding payment. (See Note 8 below) The Note has not been paid by the Company.

 

NOTE 5 - COMMON STOCK

 

The Company is authorized to issue 300,000,000 shares of $0.0001 par value common stock. As of June 30, 2013 and March 31, 2013, 113,146,380 shares were issued and outstanding.

 

NOTE 6 - RELATED PARTY TRANSACTIONS

 

The Company’s current and former officers and stockholders have advanced funds on a non-interest bearing basis to the Company for travel related and working capital purposes. The Company has not entered into any agreement on the repayment terms for these advances. As of June 30, 2013 and March 31, 2013, there were $1,488,855 and $1,430,366 advances outstanding, respectively.

 

 C: 
12
 

 

As of June 30, 2013 and March 31, 2013 the Company owed approximately £117,918 ($179,330) and £117,918 ($179,047), respectively, to Seawind Marine Limited, a company controlled by the directors, Mr. T P G Adams and Mr. J R Wilson.

 

As of June 30, 2013 and March 31, 2013 the Company owed approximately £177,548 ($270,015) and £177,548 ($269,589), respectively to Seawind International Limited, a company controlled by the directors, Mr. T P G Adams and Mr. J R Wilson.

 

As of June 30, 2013 and March 31, 2013, the Company owed approximately £88,753 ($134,976) and £88,753 ($134,762), respectively to Power Products Ltd (f/k/a Enerserve Limited), a company under the control of Mr. T P G Adams and Mr. J R Wilson.

 

At June 30, 2013 and March 31, 2013, the company owed Mr. J R Wilson (ex-Director) £1,144 ($1,740) and £1,144 ($1,737), respectively.

 

During the three months ended June 30, 2013 and 2012, the Company charged to operation $90,000 and $135,000 as salary to Board members, respectively.

 

NOTE 7 - NON CONTROLLING INTEREST

 

The Company has a 50% interest in American Seawind Energy LLC, a company registered in the State of Texas, United States of America and as of June 30, 2013, 75% interest in Shala Energy sh pk, a Company registered in the Republic of Albania. Both companies are inactive as of June 30, 2013

 

A reconciliation of the non-controlling loss attributable to the Company:

 

 C: 
13
 

 

Net loss Attributable to the Company and transfers (to) from non-controlling interest for the three months ended June 30, 2013:

 

   American
Seawind
Energy LLC
   Shala
Energy
sh pk
 
Net loss  $-   $- 
Average Non-controlling interest percentage   50.0%   25.0%
Net loss attributable to the non-controlling interest  $-   $- 

 

 

Net loss Attributable to the Company and transfers (to) from non-controlling interest for the three months ended June 30, 2012:

 

   American
Seawind
Energy LLC
   Shala
Energy
sh pk
 
Net loss  $-   $- 
Average Non-controlling interest percentage   50.0%   25.0%
Net loss attributable to the non-controlling interest  $-   $- 

 

The following table summarizes the changes in Non-controlling Interest from April 1, 2012 through June 30, 2013:

 

   American
Seawind
Energy LLC
   Shala
Energy sh pk
   Total 
Balance, April 1, 2012  $608   $-   $608 
Net loss attributable to the non-controlling interest   -    (202,993)   (202,993)
Balance, March 31, 2013   608    (202,993)   (202,385)
Net loss attributable to the non-controlling interest   -    -    - 
Balance,  June 30, 2013  $608   $(202,993)  $(202,385)

 

 C: 
14
 

 

NOTE 8- COMMITMENTS AND CONTINGENCIES 

 

Litigations

 

On November 14, 2012, CRG Finance AG (“CRG”) filed a complaint in the District Court for Southern District of New York for allegedly beaching a promissory note (See Note 4 above). However, the Company’s contention is that the promissory note was satisfied by a third party, Rudana Investment Group AG.

 

On January 17, 2013, the Company filed a motion to compel arbitration and on May 23, 2013, the Court granted the Company’s Motion to Compel and ordered that CRG file its claims as a AAA arbitration. On June 5, 2013, CRG filed its statement of claim with the AAA in the International Center for Disputed Resolution division. The Company’s answer is due on or before July 8, 2013. The Company denies the allegations in the Complaint and claims it is without merit. As of the date of filing of this report, there has been no change in status of this litigation,

 

The Company is subject to certain legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.

 

NOTE 9 - SUBSEQUENT EVENTS 

 

The Company has evaluated subsequent events through, August 14, 2013, the date the financial statements are available to be issued. As of August 14, 2013 there are no subsequent events.

 

 C: 
15
 

 

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

 

Overview

 

We were formed on December 18, 2002 as a Nevada “C” Corporation as ATM Financial Corp.  On November 10, 2006, our President and Chief Executive officer resigned to pursue other interests. We suspended all prior business plans as of that date. During the first quarter of the year ended December 31, 2008, we began considering a new business model involving solar power and other renewable energies.  On April 1, 2008, we changed our name from “ATM Financial Corp.” to “Prime Sun Power Inc.”  On April 15, 2008, we changed our stock symbol from “AFIC” to “PSPW.” On March 30, 2011, we changed our name to 3Power Energy Group, Inc.

 

The Business

 

The principle business of Company is to sell electricity generated by solar, wind, hydro, biomass and other renewable energy resources and to develop, build and operate power plants based on these technologies. The core approach of the Company’s business is to deliver energy in markets where there is an inherent energy gap between supply and demand or where there exists long term, stable, government-backed financial support for the development of renewable energy.  The strategic plan of the Company is to develop power plants and sell electricity in mature and emerging international energy markets at secure rates with the highest potential margins for return on investment.

 

The Company’s focus is in the Balkan Countries (Turkey, Albania, Bulgaria, Romania and Italy). The Company also has plans to expand into the US market.

 

The Company presently faces a number of challenges, including raising additional capital, identifying commercially viable qualified projects, obtaining rights and licenses for development, interacting with local governments, identifying and entering into agreements with appropriate subcontractors for the development and operation of our energy production facilities, and hiring and retaining qualified staff.

 

Current Focus and Plan of Operation 

 

We currently have only one project, a hydro-electrical project of a total installed power of 127.6 MW of Shala River in Albania, and the commercialization of this project is in its infancy. Our intended markets may not utilize our producible products, and it may not be commercially successful. We intend to develop additional projects but none have proven to be commercially viable or successful.

 

Albania Hydro Power Concession

 

On August 10, 2012, we closed the acquisition of 75% of the equity of Shala Energy sh.p.k (“Shala Energy”). Shala Energy possesses the concession right in a hydro-electrical project of a total installed power of 127.6 MW of Shala River in Albania. 

 

In connection with the acquisition of Shala, the Company is obligated to pay an aggregate of 4% of the total project costs as facilitator fees in either cash or the Company's common stock. The Company has not made such payment yet. As of June 30, 2013, the Company has accrued $600,000 due to the facilitator for feasibility studies in process.

 

 C: 
16
 

 

After closing and through March 2013, the Company refined and updated its feasibility study initially completed in 2009. Starting February 2013, the Company has commenced the preliminary project design. The Company engaged a consortium of Indian industrial companies with leading expertise globally in hydro power projects engineering, financing, construction and operation. The consortium undertook to cover the cost of the development work and produce the bankable study in cooperation and with 3power control. The consortium is getting in return the exclusive first right on the project construction as a general contractor.  The power plant’s total construction cost is estimated to be USD 250M.  The Company is now seeking capital to fund the project. As of June 30, 2013, Shala Energy is an inactive company and has no material assets and liabilities.

 

Recent Development

 

3Power Services (formerly known as Seawind Service) Liquidation

 

On October 8, 2012, the High Court of Justice in the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of 3Power Services (formerly known as Seawind Service), a wholly owned subsidiary of the Company’s Subsidiary, 3Power Energy (formerly known as Seawind Energy).

 

By the letter of The Insolvency Service dated October 12, 2012, the Company was required to provide information relating to 3Power Project Services Limited to the Official Receiver’s Office (a government body of Plymouth, the United Kingdom) and attend an interview with staff of the Official Receiver’s Office to review the prospect of recovering the assets of 3Power Project Services Limited for the benefit of creditors.

 

The company was also required to deliver to the Official Receiver’s Office certain assets (cash or cheques) and accounting records that are still in its possession or control. The Company has attended the interview and delivered all the available accounting records to the Officer Receiver’s Office. No order confirming a plan of reorganization, arrangement or liquidation has been entered as of this report. 

 

3Power Energy (formerly known as Seawind Energy) Dissolution

 

On January 17, 2013, the Company filed a Strike off application with the Registrar of Companies in the United Kingdom to dissolve 3Power Energy (formerly known as Seawind Energy), a wholly owned subsidiary of the Company. Such Strike off application has yet to be approved as of this report. 

 

Results of Operations For The Three Months Ended June 30, 2013 And 2012

 

We have revenues from operations in the amount of $Nil for the three months ended June 30, 2013 and 2012.

 

We incurred operating expenses of $135,614 for the three months ended June 30, 2013 compared to $469,189 for the three months ended June 30, 2012. This decrease was mostly attributable to reductions in staffing and operating costs in the current period as compared to the same period prior year. The only expenses incurred in the current period were in connection with finalizing projects for execution.

 

Our interest expense was $35,325 for the three months ended June 30, 2013 as compared to $24,130 for the same period last year. The increase of $11,195 or 46% is due primarily to compounding of interest associated with note obligations.

 

During the three months ended June 30, 2012, we realized a gain on settlement of an outstanding accrual of $40,000 compared to $Nil for the same period, current year.

 

Liquidity and Capital Resources

 

 C: 
17
 

 

Our total cash and cash equivalents as of June 30, 2013 was $1,725 compared to the total cash and cash equivalents of $1,725 as of March 31, 2013.

 

As of June 30, 2013, our total assets were $17,145 compared to total assets $17,145 as of March 31, 2013 and the total current liabilities were $8,712,489 as of June 30, 2013 compared to $8,538,652 as of March 31, 2013. The increase in current liabilities was primarily due to increase in accounts payable, accrued expense and accrued interest of $115,348 and the amount due to related parties of $58,489.

 

Net cash used in operating activities was $58,489 for the three months ended June 30, 2013 compared to net cash used in operating activities of $270,175 for the three months ended June 30, 2012. The negative cash flow from operating activities consists of $170,938 net loss, net with increase in accounts payable and accrued expenses of $77,124 and increase in accrued interest of $35,325.

 

Net cash used in investing activities was $Nil for the three months ended June 30, 2013 and 2012.

 

Net cash provided by financing activities was $58,489 for the three months ended June 30, 2013 compared to net cash provided by financing activities of $231,051 for the three months ended June 30, 2012. The decrease in cash provided by financing activities was due to a decline in loans being issued by shareholders and related parties.

 

Our pre-operational activities to date have consumed substantial amounts of cash. Our negative cash flow from operations is expected to continue and accelerate in the foreseeable future as the Company invests in capital expenditures to commence operations.

 

We will need to raise additional capital to implement our business plan and continue operations for any length of time. We are seeking alternative sources of financing, through private placement of securities and loans from our shareholders in order for us to maintain our operations. We cannot guarantee that we will be successful in raising additional cash resources for our operations.

 

The independent registered public accounting firm’s report on our March 31, 2013 consolidated financial statements included in our Form 10-K states that our difficulty in generating sufficient cash flow to meet our obligations and sustain operations raise substantial doubts about the our ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

 

Critical Accounting Policies

 

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with our Board of Directors, we have identified several accounting principles that we believe are key to the understanding of our financial statements. These important accounting policies require management’s most difficult, subjective judgments.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

 

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on the Company's financial position and results of operations was not significant.

 

 C: 
18
 

 

Foreign Currency Translation and Transactions

 

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars (“USD”). The functional currency of our subsidiaries is British pounds (“GBP”). The financial statements of subsidiaries are translated into USD in accordance with the Codification ASC 830, “Foreign Currency Matters”.  All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, shareholders’ equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods.  The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in shareholders’ equity in accordance with the Codification ASC 220, “Comprehensive Income.”

 

Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into GBP at the rate on the date of the transaction and included in the results of operations as incurred.  There were no material transaction gains or losses in the periods presented.

 

Income taxes

 

Income tax provisions or benefits for interim periods are computed based on the Company’s estimated annual effective tax rate. Based on the Company's historical losses and its expectation of continuation of losses for the foreseeable future, the Company has determined that it is not more likely than not that deferred tax assets will be realized and, accordingly, has provided a full valuation allowance. As the Company anticipates or anticipated that its net deferred tax assets at June 30, 2013 and March 31, 2013 would be fully offset by a valuation allowance, there is no federal or state income tax benefit for the three months ended June 30, 2013 and 2012 related to losses incurred during such periods.

 

Accounting for Stock-Based Compensation

 

We account for stock, stock options and warrants using the fair value method promulgated by Accounting Standards Codification subtopic 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”) which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services. Therefore, our results include non-cash compensation expense as a result of the issuance of stock, stock options and warrants and we expect to record additional non-cash compensation expense in the future.

 

We follow Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”) which requires that all share-based payments to both employees and non-employees be recognized in the income statement based on their fair values.

 

Off Balance Sheet Transactions

 

We do not have any off-balance sheet transactions.

 

Recently Issued Accounting Pronouncements

 

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our consolidated financial position, results of operations or cash flows.

 

Inflation

 

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.

 

 C: 
19
 

 

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this Report, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934 (the “Exchange Act”). In carrying out that evaluation, management identified a material weakness (as defined in Public Company Accounting Oversight Board Standard No. 2) in our disclosure controls and procedures regarding a lack of adequate personnel and adequate segregation of duties.  Based on management’s evaluation of our disclosure controls and procedures as of June 30, 2013, our Chief Executive Officer/Chief Financial Officer has concluded that, as of that date, our disclosure controls and procedures were not effective for the material weakness as a result of a lack of adequate personnel and adequate segregation of duties.

 

Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control system. Therefore while there are some compensating controls in place, it is difficult to ensure effective segregation of accounting and financial reporting duties. Management reported a material weakness resulting from the combination of the following significant deficiencies:

 

  Lack of segregation of duties in certain accounting and financial reporting processes including the approval and execution of disbursements;

 

  The Company’s corporate governance responsibilities are performed by the Board of Directors; we do not have independent Board of Directors, we do not have an audit committee or compensation committee. Because our Board of Directors only meets periodically throughout the year, several of our corporate governance functions are not performed concurrent (or timely) with the underlying transaction, evaluation, or recordation of the transaction.

 

While we strive to segregate duties as much as practicable, there is an insufficient volume of transactions at this point in time to justify additional full time staff. We may not be able to fully remediate the material weakness until we increase operations at which time we would expect to hire more staff.

 

Plan for Remediation of Material Weaknesses

 

To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow, we expect to increase our number of employees and engage outsourced accounting professionals, which will enable us to implement adequate segregation of duties within the internal control framework. We will continue to monitor and assess the costs and benefits of additional staffing.

 

Changes in Internal Control over Financial Reporting

 

No changes were made to our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 C: 
20
 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

Except as described in the sections entitled “3Power Project Services Limited Liquidation” and “3Power Energy Limited” under Recent Developments of Item 2 above and as set forth below, there are no material pending legal proceedings to which we or any of our subsidiaries is a party or of which any of our property is the subject.

 

CRG Finance

The Company issued a senior promissory note to CRG Finance AG (“CRG Finance”) in the amount of 470,000 Euros ($639,059) as on March 2, 2010. The principal of the note, along with interest at an annual rate of 7.5%, was due on December 31, 2010.

 

On November 14, 2012, CRG Finance filed a complaint in the District Court for Southern District of New York (the “District Court Action”) for allegedly beaching a promissory note. CRG Finance claimed that the Company failed to pay the note when it came due.

 

On January 17, 2013, the Company filed a motion to compel arbitration, and on May 23, 2013 the Court granted the Company’s Motion to Compel and ordered that CRG Finance file its claims as an AAA arbitration. On June 5, 2013, CRG Finance filed its statement of claim with the AAA in the International Center for Disputed Resolution (ICDR) division. CRG Finance’s statement of claim mirrors its complaint in the District Court Action. The parties and the ICDR case administrator have conducted an initial conference regarding administrative matters. The Company filed its statement answer on July 8, 2013. The Company denies the allegations in CRG Finance’s statement of claim.

 

The CRG Finance Loan shows as note payable on the Company’s unaudited condensed consolidated balance sheet for the quarter ended June 30, 2013. As of June 30, 2013, the interest due under such note was $338,254. 

 

Item 1A. Risk Factors

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

The information regarding CRG Finance contained under Item 1 of Part II above is incorporated herein by reference in response to this item.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits.

 

(a)  Exhibits

 

Exhibit
Number
  Description
     
31.1*   Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*   Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+   Certification of Principal Executive officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**   XBRL Instance Document
101.SCH**   XBRL Taxonomy Extension Schema Document
101.CAL**   XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB**   XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**   XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF**   XBRL Taxonomy Extension Definition Linkbase Document.

 

* Filed with this report.

+ In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

** Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.

 

 C: 
21
 

 

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.

 

  3POWER ENERGY GROUP INC.
     
 Dated:  August 14, 2013 By:   /s/ Sharif Rahman
    Name:    Shariff Rahman
    Title: Chief Executive Officer and Chief Financial Officer
      (Principal Executive Officer, Principal Financial and Chief Accounting Officer)

 

 C: 
22

 

 

 

 

 

 

 

 

 

 

 

 

 


Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
3/31/1410-K,  NT 10-K
Filed on:8/14/13
7/22/1310-K
7/8/13
For Period end:6/30/13
6/5/13
5/23/13
3/31/1310-K,  NT 10-K
1/17/13
11/14/12
10/12/12
10/8/12
8/10/12
6/30/1210-Q,  10-Q/A,  NT 10-Q
6/5/12
4/1/12
7/4/11
5/13/118-K,  8-K/A
3/30/11
1/1/11
12/31/1010-K,  NT 10-K
3/2/108-K,  8-K/A
12/31/0810-K,  10-K/A,  NT 10-K
4/15/088-K
4/1/08
11/10/06
12/18/02
 List all Filings 
Top
Filing Submission 0001144204-13-045984   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
AboutPrivacyRedactionsHelp — Fri., Mar. 29, 7:26:40.2am ET