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 September 30, 2014


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


Commission File Number: 333-91190


P2 SOLAR, INC.

 (Exact name of registrant as specified in its charter)


Delaware

 

98-0234680

(State or other jurisdiction of incorporation)

 

(IRS Employer Identification Number)

 

Unit 250, 2411 – 160 Street

Surrey, British Columbia, Canada, V3Z 0C8

(Address of principal executive offices)

(778) 371-3571

Registrant’s telephone number, including area code:


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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.  [ X ] Yes   [ ] No


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). [X] Yes   [ ] 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

[ X ] No


As of February 4th, 2015 the Issuer had 67,338,179 shares of common stock issued and outstanding.



1






PART I-FINANCIAL INFORMATION


ITEM 1.

FINANCIAL STATEMENTS.


The financial statements of P2 Solar, Inc., a Delaware corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company in the Company's Form 10-K for the fiscal year ended March 31, 2014 and all amendments thereto.


P2 SOLAR, INC.

(A DEVELOPMENT STAGE COMPANY)

INTERIM FINANCIAL STATEMENTS

PERIOD ENDED SEPTEMBER 30, 2014



INDEX TO FINANCIAL STATEMENTS:

Page

 

 

Interim Condensed Consolidated Balance Sheets

3

 

 

Interim Condensed Consolidated Statements of Operations & Comprehensive Loss

4

 

 

Interim Condensed Consolidated Statements of Stockholders’ Equity (Deficiency)

5

 

 

Interim Condensed Consolidated Statements of Cash Flows

6-7

 

 

Notes to Interim Condensed Consolidated Unaudited Financial Statements   

8-13






2







P2 SOLAR INC.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. dollars)

(Unaudited)


 


September 30,

2014


March 31, 2014

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current

 

 

Cash

$ 11,458

$ 4,610

Receivables

          11,681

 8,489

Prepaid expenses

 68,802

 70,934

 

 

 

Total current assets

 91,941

 84,033

 

 

 

Hydro projects (Note 3)

 73,134

 73,775

 

 

 

Total assets

$ 165,075

$ 157,808

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

 

 

 

 

 

Current

 

 

Accounts payable and accrued liabilities

$ 241,053

$ 162,159

Loans payable (Note 6)

 335,711

 124,659

     Warrant derivative liability (Note 7)

         47,764

          12,532   

Due to related parties (Note 4)

 275,982

 251,067

 

 

 

Total current liabilities

 900,510

 550,417

 

 

 

Loans payable (Note 6)

                     -

         187,217

Total liabilities

         900,510

         737,634

 

 

 

Shareholders' equity (deficiency)

 

 

Capital stock

 

 

Authorized

 

 

500,000,000 common shares, with a par value of $0.001

 

 

5,000,000 preferred shares, with a par value of $0.001

 

 

Issued

 

 

67,338,179 (March 31, 2014 – 65,338,179) common shares

 67,288

 65,288

Additional paid-in capital

 6,534,321

 6,496,321

Share subscriptions

 -

 40,000

Accumulated other comprehensive loss

 (253,924)

 (265,495)

Deficit

 (7,083,120)

 (6,915,940)

 

 

 

 

 (735,435)

 (579,826)

 

 

 

 

$ 165,075

$ 157,808


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




3






P2 SOLAR INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in U.S. dollars)

(Unaudited)


 

 

 

 

 

 

 Six Months Ended

 September 30,

  2014

 

 

 

 

 

 Six Months Ended

 September 30,

  2013

 

 

 

 

 

 Three Months Ended

 September 30,

  2014

 

 

 

 


 Three Months Ended

 September 30,

  2013

 

 

 

 

 

Revenue

$ -   

$ 154,138

$ -   

$ 154,138

Cost of revenue

 -   

 127,459

 -   

 127,459

 

 

 

 

 

Gross profit

 -   

 26,679

 -   

 26,679

 

 

 

 

 

EXPENSES

 

 

 

 

Advertising and promotion

 1,180

 3,082

                  -

 1,895

Bank charges

 1,045

 1,424

290

 989

Consulting fees

 193

 118,590

-

 18,590 

Legal and accounting

 74,097

 18,187

71,523

 5,444

Rent

 710

 4,850

355

 1,919

Salaries and benefits

 34,359

 37,776

17,200

 19,487

Office and other

 2,765

 2,075

664

 1,049

Telephone and utilities

 -

 1,160

                 -

 554

Travel and trade shows

 4,986

 1,502

4,614

 1,443

Foreign exchange loss (gain)

 2,489

 1,214

            2,489

 1,241

 

 

 

 

 

 

 121,824

 189,860

          97,135

 52,611

 

 

 

 

 

Loss from operations

 (121,824)

 (163,181)

(97,135)

 (25,932)

 

 

 

 

 

 

 

 

 

 

Interest expense

 (10,124)

 (10)

(5,368)

 (10)

     Unrealized gain (loss) on warrant             derivative


       (35,232)


_________-_


            7,462

 

 _______-__

 

 

 

 

 

Loss for the period

 (167,180)

 (163,191)

(95,041)

 (25,942)

 

 

 

 

 

 

 

 

 

 

Net loss

 (167,180)

 (163,191)

(95,041)

 (25,942)

 

 

 

 

 

Foreign exchange translation

 11,571

 24,631

          22,330

 (6,131)

 

 

 

 

 

Net loss and comprehensive loss for the period

$ (155,609)

$ (138,560)

$       (72,711)

$ (32,073)

 

 

 

 

 

Basic and diluted loss per share

$ (0.01)

$ (0.01)

$           (0.01)

$ (0.01)

 

 

 

 

 

Weighted average number of common shares outstanding (basic and diluted)


 66,738,179


 59,550,508

67,338,179


 60,338,179


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



4






P2 SOLAR INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDER EQUITY (DEFICIENCY)

(Expressed in U.S. dollars)

(Unaudited)


 




Common Shares (Number)




Common Shares (Amount)




Additional Paid-In Capital





Share

Subscriptions




Accumulated Other Comprehensive

Loss






Deficit






Total

 

 

 

 

 

 

 

 

Balance (deficiency)

March 31, 2014

 65,338,179

$            65,288

$         6,496,321

$        40,000  

$          (265,495)

$           (6,915,940)

$             (579,826)

 

 

 

 

 

 

 

 

Shares subscriptions issued

 2,000,000

2,000

38,000

(40,000)

-   

-   

-   

Change in foreign

 

 

 

 

 

 

 

currency translation adjustment

-   

-   

-   

-   

11,571

-   

11,571

 

 

 

 

 

 

 

 

Net loss

                    -   

                    -   

                    -   

                    -   

                    -   

                 (167,180)

               (167,180)

 

 

 

 

 

 

 

 

Balance (deficiency)

September 30, 2014

 67,338,179

$           67,288

$             6,534,321

$                          -

$             (253,924)

$              (7,083,120)

$               (735,434)















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




5






P2 SOLAR INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollars)

(Unaudited)


 



Six Months Ended

September 30,

 2014



Six Months Ended

September 30,

2013

 

 

 

OPERATING ACTIVITIES

 

 

Net loss

$ (167,180)

$ (163,191)

Adjustments to reconcile net loss:

 

 

Shares issued for services

                      -

 100,000

Unrealized loss on warrants derivative

 35,232   

 -   

Unrealized foreign exchange

 7,979   

 -   

 

 

 

Accrued Interest expense

 10,124

 -   

           Receivable

(3,192)                       

              3,165

Prepaid expense

                     -

 (793)

 

 

 

          Accounts payable

 68,770

 9,951

          Accrued liabilities

                  -

(15,514)

           Due to related parties

               24,915

             38,610

Unearned income

                      -

 (80,721)

 

 

 

Net cash used in operating activities

 (23,352)

 (108,493)

 

 

 

INVESTING ACTIVITIES

 

 

Investment in hydro project

-   

(17,422)

 

 

 

 

 

 

Net cash used in investing activities

                     -  

 (17,422)

 

 

 

FINANCING ACTIVITIES

 

 

Due to related party

                     -

 30,715

Loans payable

 30,200

 77,736

 

 

 

Net cash provided by financing activities

 30,200

 108,451

 

 

 

Foreign exchange

                -

 14,458

 

 

 

Change in cash

 6,848

 (3,006)

Cash, beginning of period

 4,610

 2,894

 

 

 

Cash (bank indebtedness), end of period

$ 11,458

$ (112)


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




6






P2 SOLAR INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollars)

(Unaudited)


 



Six Months Ended

September 30,

 2014



Six Months Ended

September 30,

2013

 

 

 

 

 

 

Supplemental information:

 

 

Interest paid

$                -  

$ -   

Income taxes paid

                  -   

 -   

 

 

 

 

 

 

Non-cash investing and financing activities

common stock issued in connection with:

 

 

Services

$                -

$ 100,000   

 

 

 

































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



7






P2 SOLAR INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

SIX MONTHS ENDED SEPTEMBER 30, 2014




1.

BASIS OF PRESENTATION, NATURE OF OPERATIONS AND GOING CONCERN


The Company was incorporated as Spectrum Trading Inc. under the laws of the Province of British Columbia, Canada, on November 21, 1990. On May 14, 1999, the Company was discontinued in British Columbia and was reincorporated as Spectrum International Inc. in the State of Delaware, U.S.A. Effective September 3, 2004, the Company changed its name from Spectrum International Inc. to Natco International Inc. On March 11, 2009, the Company changed its name from Natco International Inc. to P2 Solar, Inc. The Company’s current business operations are focused on the construction of solar and hydro power plants located in India.  

Basis of Presentation

The accompanying unaudited financial statements have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) applicable to interim financial information and with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed, or omitted, pursuant to such rules and regulations. In the opinion of management, the unaudited interim financial statements include all adjustments necessary for the fair presentation of the results of the interim periods presented. All adjustments are of a normal recurring nature, except as otherwise noted below. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended March 31, 2014, included in the Company’s Annual Report on Form 10-K, filed August 4th, 2014, with the Securities and Exchange Commission. The results of operations for the interim periods are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year.

Use of estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.


Fair value of financial instruments


Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market.


The Company uses a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:


Level 1:

Observable inputs such as quoted prices in active markets;

 

 

Level 2:

Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

 

Level 3:

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.


Cash is measured at level 1 of the fair value hierarchy.



8






P2 SOLAR INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

SIX MONTHS ENDED SEPTEMBER 30, 2014



1.

BASIS OF PRESENTATION, NATURE OF OPERATIONS AND GOING CONCERN (cont’d…)


Going Concern


As shown in the financial statements, the Company has not developed a commercially viable product, has not generated any significant revenues to date and has incurred losses since inception, resulting in a net accumulated deficit at September 30, 2014. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company needs additional working capital to continue development of solar and hydro projects or to be successful in any future business activities and continue to pay its liabilities. Therefore, continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to accomplish its objective. Management is presently engaged in seeking additional working capital. The accompanying financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company fail in any of the above objectives and is unable to operate for the coming year.


Basis of consolidation


These consolidated financial statements include the accounts of P2 Solar, Inc. (“the Company”) and its wholly owned subsidiaries, Jagat Energy Pvt. Ltd. (“Jagat”), Gill Powergen Pvt. Ltd. (“Gill Powergen”), Atlantic Power (Rajgarh) Pvt. Ltd. (“Atlantic Rajgarh”) and Atlantic Power (Tibba) Pvt. Ltd. (“Atlantic Tibba”).  All intercompany transactions and balances have been eliminated.


2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Recent authoritative accounting pronouncements


We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial position and cash flows.


3.

HYDRO PROJECTS


During the year ended March 31, 2013, the Company acquired three subsidiaries: Gill Powergen, Atlantic Rajgarh and Atlantic Tibba.  These subsidiaries hold interests in certain hydro projects located in India.  Costs incurred  totalled $73,134(March 31, 2014 - $73,775) as at September 30, 2014.


4.

RELATED PARTY TRANSACTIONS


Other than as disclosed elsewhere in these financial statements, the following amounts have been recorded as transactions with related parties:


a)

Amounts due to related parties are as follows:


 


September 30,

2014


March 31,

2014

 

 

 

Loans payable to directors and officers of the Company.  The loans are unsecured, due on demand and non-interest bearing.  It is expected that these loans will be repaid within the next twelve months.



$

1,518



$

1,538

 

 

 

Wages and bonus payable to a director and officer of the Company.  This liability is unsecured, due on demand and non-interest bearing.


274,464


249,529

 

 

 

 

$           275,982

$

251,067



9









P2 SOLAR INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

SIX MONTHS ENDED SEPTEMBER 30, 2014





4.

RELATED PARTY TRANSACTIONS (cont’d…)


b)

Salaries and benefits include $34,359 (2013 - $37,776) accrued to a director and officer of the Company.


5.

CAPITAL STOCK


a)

Authorized stock


The Company has authorized 500,000,000 common shares with a par value of $0.001 per share. Each common share shall entitle the holder to one vote, in person or proxy on any matter on which action of the stockholder of the Company is sought. The Company has authorized 5,000,000 shares of preferred stock with a par value of $0.001 per share. The holders of preferred stock have no rights except as determined by the Board of Directors of the Company and/or provided by Delaware General Corporate Law.


b)

Share issuances


During the six-month period ended September 30, 2014, the Company issued 2,000,000 shares with a value of $40,000 for subscription received in fiscal 2014.


c)

Share subscriptions


At September 30, 2014 there were no outstanding share subscriptions.


d)

Warrants


1,000,000 warrants with an exercise price of $0.10 were issued during the six month period ended September 30th, 2014.  290,000 warrants exercisable at $0.25 expired on July 21, 2014


e)

Stock options


No stock options were issued in this period.




10






P2 SOLAR INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

SIX MONTHS ENDED SEPTEMBER 30, 2014




5.

CAPITAL STOCK (cont’d…)


The following table summarizes stock options and warrants outstanding as of September 30, 2014:


 





Warrants


Weighted Average Exercise Price





Options


Weighted Average Exercise Price




Intrinsic

Value

 

 

 

 

 

 

Balance, March 31, 2014

1,020,000

$     0.25

6,400,000

$        0.05

$              -

Issued

1,000,000

0.10

-

-

-

Expired

    (290,000)

            0.25

                  -

                  -

                 -

 

 

 

 

 

 

Balance, September 30, 2014

1,730,000

$    0.16

6,400,000

$        0.05

$              -

 

 

 

 

 

 


The number of exercisable stock options as at September 30, 2014 is 6,400,000 (March 31, 2014 – 6,400,000).


The following stock options were outstanding at September 30, 2014:



Number

of Options

Exercise

Price

 

Expiry Date

 

 

 

 

200,000

$   0.20

 

December 30, 2019

6,200,000

0.05

 

March 31, 2019

 

 

 

 

6,400,000

 

 

 


At September 30, 2014, the following share purchase warrants were outstanding:



Number

of share purchase

warrants


Exercise

Price

 

Expiry Date

 

 

 

 

230,000

          $   0.25

 

July 21, 2016

500,000

0.25

 

May 21, 2015

    1,000,000


1,730,000

 0.10

 

May 27, 2015








11






P2 SOLAR INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

SIX MONTHS ENDED SEPTEMBER 30, 2014



6.

 LOANS PAYABLE


During the period ended September 30, 2014, the Company entered into promissory note agreements whereby it borrowed an aggregate of $30,200 (March 31, 2014 - $268,789).  These notes bear interest between 5% to 10% per annum, are unsecured, and are payable between on demand and two years.  Out of the total amount advanced as of September 30, 2014, $65,000 (March 31, 2014 - $60,000) is convertible at the lender’s option into the Company’s common shares at a conversion rate to be mutually finalized between the Company and the lender within 10 business days of the lender’s conversion request. The contingent conversion rate may give rise to a contingent beneficial conversion feature which will be calculated and adjusted if necessary on settlement of the contingency. There are no other beneficial conversion features or significant items that should be accounted for separately.  


 


September 30,

2014


March 31,

2014

 

 

 

Balance, beginning of period

$ 311,876

$          117,367

Loan advances

30,200

268,789

     Loan settlement

-

(74,280)

Foreign exchange

             6,305  

                      -

 

 

 

 

335,711

311,876

 

 

 

Less: current portion

        (335,711)

        (124,659)

 

 

 

Balance, end of period

$                   -

$        187,217


7.

WARRANT DERIVATIVE LIABILITY


The Company’s issued and outstanding common share purchase warrants have exercise prices denominated in a foreign currency (US dollar) which is different from the Company’s functional currency (Canadian dollar). These warrants are required to be treated as a derivative liability as the amount of cash the Company will receive on exercise of the warrants will vary depending on the exchange rate. These warrants are classified as a derivative liability and recognized at fair value. Changes in the fair value of these warrants are recognized in earnings until such time as the warrants are exercised or expire. The Company recognized a loss of $35,232 from the change in fair value of the warrants for the period ended September 30, 2014.


The following table presents the reconciliation of the fair value of the warrants:


 


2014

 

 

Balance, beginning of period

$        12,532

Loss on warrant derivatives

         35,232

 

 

Balance, end of period

$        47,764


These common share purchase warrants do not trade in an active securities market, and as such, the Company has estimated the fair value of these warrants using the Black-Scholes option pricing model using the following assumptions at September 30, 2014: weighted average risk-free interest rate of 0.18%, weighted average volatility of 302.04%, expected dividend yield – nil, and weighted average expected life (in years) of 1.01.



12






P2 SOLAR INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. dollars)

(Unaudited)

SIX MONTHS ENDED SEPTEMBER 30, 2014



8.

SIGNIFICANT AND SUBSEQUENT EVENTS



On August 25, 2014 the Company signed a consulting agreement with Sage Stone of Calgary.


On September 18th, 2014, the Company signed the agreement to purchase Barkote 1 project (9.5 MW hydro project located in Northern India).


On January 8th, 2015, the Company signed a MOU with Monterey Renewal to provide equity financing for all its projects in India.





































13






ITEM 2.

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS


CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-Q AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.


Background and Overview


P2 Solar, Inc., incorporated in the State of Delaware, has been in existence as a Company (including our predecessor British Columbia Corporation) since 1990.   The Company’s current business operations are focused on the construction of solar and hydro power plants located in India.  


Results of Operation


The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our results of operation and financial condition for the three months ended September 30, 2014, as compared to the three months ended September 30, 2013.  Our financial statements are stated in US Dollars and are prepared in accordance with generally accepted accounting principles of the United States (“GAAP”).


Three Months ended September 30, 2014


Sales


During the three months ended September 30, 2014, the Company had sales of $nil as compared to sales of $154,138 during the three months ended September 30, 2013.  The decrease in sales recorded by the Company during the three month period ended September 30, 2014 as compared to the three month period ended September 13, 2013 was due to to the fact that the Company did not complete any solar projects during the three months ended September 30, 2014, as compared to the three months September 30, 2013 in which the Company completed the Canada Ticket Solar Project in Langley, British Columbia.





14






Operating Expenses


During the three months ended September 30, 2014, the Company had operating expenses of $97,136 as compared to operating expenses of $52,611 during the three months ended September 30, 2013, an increase of $44,525, or approximately 85%. The increase in operating expenses experienced by the Company was primarily attributable to an increase in accounting costs due to the fact that the Company had to re-audit  its financial statements for 2013 along with 2014 audit due to the delisting of the Company’s previous auditors in the United States.


Loss and Comprehensive Loss


The Company had a loss and comprehensive loss of $95,042 for the three months ended September 30, 2014, as compared to a loss and comprehensive loss of $32,073 for the three months ended September 30, 2013, an increase of $62,969 or approximately 196%. The change in net loss experienced by the Company was primarily attributable to increase in audit fees and currency exchange fluctuations.


 

2015

 

2014

2013

 

Q1

Q2

Q4

Q3

Q2

Q1

Q4

Q3

Q2

Sales

$          -

$           -

$                      -

$           -

$          -

$             -

$           -

$           -

$           -

Gross Profit

-

-

-

-

28,320

-

-

-

-

Loss

(72,138)

(95,042)

(188,891)

(72,105)

(25,942)

(137,249)

(66,546)

(29,810)

(71,087)

Loss & Comprehensive Loss

(82,898)

(72,711)

(177,517)

(61,151)

(32,073)

(106,487)

(72,104)

(26,089)

(71,699)

Loss per Share

(0.01)

(0.01)

(0.00)

(0.00)

(0.00)

(0.01)

(0.00)

(0.00)

(0.00)


Six months ended September 30, 2014


Sales


During the six months ended September 30, 2014, the Company had sales of $nil as compared to sales of $154,138 during the six months ended September 30, 2013.  The decrease in sales recorded by the Company during the six month period ended September 30, 2014 as compared to the six month period ended September 13, 2013 was due to to the fact that the Company did not complete any solar projects during the six months ended September 30, 2014, as compared to the six months end September 30, 2013 in which the Company completed the Canada Ticket Solar Project in Langley, British Columbia.

.


Operating Expenses


During the six months ended September 30, 2014, the Company had operating expenses of $121,824 as compared to operating expenses of $189,860 during the six months ended September 30, 2013, a decrease of $68,036, or approximately 36%. The decrease in operating expenses experienced by the Company was primarily attributable to decrease in consulting expense during this period.


Loss and Comprehensive Loss


The Company had loss and comprehensive loss of $155,609 for the six months ended September 30, 2014, as compared to a loss and comprehensive loss of $138,560 for the six months ended September 30, 2013, a change of $17,049 or approximately 12%.  The change in loss and comprehensive loss experienced by the Company was primarily attributable to the difference in exchange rates.




15






Liquidity and Capital Resources


As of September 30, 2014, the Company’s unaudited balance sheet reflects total assets of $165,075, as compared to total assets of $157,808 as at March 31, 2014, an increase of $7,267 or approximately 4.6%.  The increase was primarily attributable to currency exchange differences.


Our unaudited balance sheet reflects that as of September 30, 2014, we have total current liabilities of $900,510, as compared to total current liabilities of $550,417 at March 31, 2014, an increase of $350,093 or approximately 64%.  The increase was primarily attributable to the fact that during the Six months ended September 30, 2014, some of the loans were reclassified as current loans and the Company received loans of approximately $30,200 from unrelated parties, plus directors’ accrued wages, and increase in accounts payable to be used to fund operating expenses and ongoing expenses related to projects in India.  


The Company does not have sufficient assets or capital resources to pay its on-going expenses.  Additionally, the Company does not currently have the funds necessary to proceed with the development of power plants in India. To date, the Company has primarily financed its operations through equity investment from investors, shareholder loans, and credit facilities from Canadian chartered banks and increases in payables and share subscriptions. Most of the financing has been debt financing from related and un-related parties.  Currently, our estimated fixed costs at this time are approximately $4,500 per month; that figure includes $500 for utilities, $3,000 for loan interest and principle payments, and $1,000 for miscellaneous expenses. We will have to raise approximately $4,500 per month to cover operating expenses, and additional funds to cover expenses of the two acquired projects in India to establish the two power plants.


The Company estimates that the total aggregate costs for the construction of the two hydro projects will be approximately $3.7 million dollars and further $9.5 million will be required to finance the acquisition of recently announced project, Barkote 1.  The hydro project in Rajgarh located in Ludhiana, Punjab, India is estimated to cost $2.2 million and the hydro project in Tibba located in Ludhiana, Punjab, India Tibba is estimated to cost $1.5 million.   The Company anticipates that it will attempt to raise the money from local individual investors by selling convertible preferred shares.  We are currently working on the terms of the preferred shares. Furthermore, we have recently signed a Memorandum of Understanding (MOU) with a fund to finance all our projects and the fund is in the process of doing their Due Diligence on all our projects; we are hopeful that we will be able to obtain financing though this fund.  However, there is no guarantee that we will be successful in raising any additional capital.  If we are unable to finance the Company by debt or equity financing, or a combination of the two, we will have to look for other sources of funding to meet our requirements.  That source has not yet been identified.   


Our financial statements have been prepared on the going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Operations to date have been primarily financed by long-term debt and equity transactions as well as increases in payables and related party loans. Our future operations are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the continued support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurance that we will be successful. If we are not, we will be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy working capital and other cash requirements.


Significant and Subsequent Events


On August 25, 2014 the Company signed a consulting agreement with Sage Stone of Calgary to help raise the funds required to construct and acquire all of company’s projects.


On September 18th, 2014, the Company signed the agreement to purchase Barkote 1 project (9.5 MW hydro project



16






located in Northern India).


On January 8th, 2015, the Company signed a MOU with Monterey Renewal to provide equity financing for all its projects in India.


Off Balance Sheet Arrangements


The Company does not have any off-balance sheet arrangements.


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


As defined by Rule 12b-2 of the Exchange Act, the Company is a smaller reporting company, and as such, is not required to provide the information required under this item


ITEM 4.

CONTROLS AND PROCEDURES.


Disclosure Controls and Procedures


The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a Company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.


As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report due to the existence of material weaknesses in our internal controls over financial reporting.  


The material weakness is the result of insufficient segregation of duties in our finance and accounting functions due to limited personnel.  During the quarter ended September, 2014, the Chief Financial Officer with the assistance of a director handled all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and systems, the ability to post and record journal entries and responsibility for the preparation of the financial statements.  This creates a lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC.  These control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected.




17






Changes in Internal Control over Financial Reporting


There was no change in the Company's internal control over financial reporting during the period ended September 30, 2014, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.



PART II-OTHER INFORMATION


ITEM 1.

LEGAL PROCEEDINGS.


None.


ITEM 1A.

 RISK FACTORS.


Not Applicable.


ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


None.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.


None.


ITEM 4.

MINE SAFETY DISCLOSURES.


None.


ITEM 5.    

OTHER INFORMATION.


None.



18








ITEM 6.

EXHIBITS.


(a)

The following exhibits are filed herewith:


31.1

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


31.2

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


32.2

Certifications 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 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.


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.


                                      

 P2 Solar, Inc.

                                   

 By: /s/ Raj-Mohinder S. Gurm

                                      

 -----------------------------------

                                     

 Name: Raj-Mohinder S. Gurm

 Date: February 10, 2015              

 Title: Chief Executive Officer & Chief Financial Officer




19





Exhibit 31.1


CERTIFICATION


I, Raj-Mohinder S. Gurm, certify that:


1.         I have reviewed this quarterly report on Form 10-Q of P2 Solar, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.         The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a+15(e) and 15d+15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a+15(f) and 15d+15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.         The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

Date: February 10, 2015

/s/ Raj-Mohinder S. Gurm

Chief Executive Officer







Exhibit 31.2

CERTIFICATION


I, Raj-Mohinder S. Gurm, certify that:


1.         I have reviewed this quarterly report on Form 10-Q of P2 Solar, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.         The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a+15(e) and 15d+15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a+15(f) and 15d+15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.         The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

Date: February 10, 2015

/s/ Raj-Mohinder S. Gurm

Chief Financial Officer






Exhibit 32.1


Certification of the President

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



In connection with the quarterly report of P2 Solar, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Raj-Mohinder S. Gurm, the Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Raj-Mohinder S. Gurm
Chief Executive Officer


Date: February 10, 2015







Exhibit 32.2



Certification of the Principal Accounting Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



In connection with the quarterly report of P2 Solar, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Raj-Mohinder S. Gurm, the Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Raj-Mohinder S. Gurm
Chief Financial Officer


Date: February 10, 2015




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