solar thin power, inc. SUBSCRIPTION AGREEMENT October 24, 2007
solar
thin power, inc.
October
24, 2007
TABLE
OF CONTENTS
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Page
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1.
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AGREEMENT
TO SELL AND SUBSCRIPTION
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2
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2.
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INTENTIONALLY
LEFT BLANK
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2
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3.
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CLOSING,
DELIVERY AND PAYMENT
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2
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3.1
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CLOSING
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2
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3.2
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DELIVERY
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2
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4.
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REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
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2
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4.1
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ORGANIZATION,
GOOD STANDING AND QUALIFICATION
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2
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4.2
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SUBSIDIARIES
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2
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4.3
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CAPITALIZATION;
VOTING RIGHTS
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2
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4.4
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AUTHORIZATION;
BINDING OBLIGATIONS
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3
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4.5
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LIABILITIES
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3
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4.6
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AGREEMENTS;
ACTION
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3
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4.7
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OBLIGATIONS
TO RELATED PARTIES
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3
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4.8
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TITLE
TO PROPERTIES AND ASSETS; LIENS, ETC.
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3
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4.9
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VALID
OFFERING
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3
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4.10
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FULL
DISCLOSURE
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3
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5
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REPRESENTATIONS
AND WARRANTIES OF THE SUBSCRIBERS
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4
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5.1
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REQUISITE
POWER AND AUTHORITY
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4
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5.2
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INVESTMENT
REPRESENTATIONS
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4
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5.3
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SUBSCRIBER
BEARS ECONOMIC RISK
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4
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5.4
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ACQUISITION
FOR OWN ACCOUNT
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4
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5.5
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SUBSCRIBER
CAN PROTECT ITS INTEREST
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4
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5.6
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ACCREDITED
INVESTOR
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4
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5.7
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RISK
FACTORS
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4
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6.
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COVENANTS
OF THE COMPANY
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4
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6.1
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USE
OF FUNDS
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4
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6.2
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TAXES
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4
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6.3
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BOOKS
AND RECORDS
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5
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6.4
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PROPERTIES
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5
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7.
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COVENANTS
OF THE COMPANY AND SUBSCRIBERS REGARDING
INDEMNIFICATION
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5
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7.1
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COMPANY
INDEMNIFICATION
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5
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7.2
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SUBSCRIBER'S
INDEMNIFICATION
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5
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8.
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REGISTRATION
RIGHTS
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5
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9.
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ANTI-DILUTION
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9
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10.
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MISCELLANEOUS
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5
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10.1
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GOVERNING
LAW
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5
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10.2
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ENTIRE
AGREEMENT
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6
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10.3
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AMENDMENT
AND WAIVER
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6
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10.4
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DELAYS
OR OMISSIONS
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6
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10.5
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NOTICES
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6
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10.6
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ATTORNEYS'
FEES
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6
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10.7
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TITLES
AND SUBTITLES
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7
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10.8
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COUNTERPARTS
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7
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10.9
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CONSTRUCTION
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7
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SOLAR
THIN POWER, INC.
This
Subscription Agreement (the
“Agreement”)
is made
and entered by and between Solar
Thin Power, Inc.,
a
Nevada corporation (the “Company”
or “Solar Thin Power)
and
Solar Thin Films, Inc., a Delaware corporation (the “Majority
Stockholder”),
and
the Subscribers listed on Exhibit A hereto (the "Subscriber")
as of
the date set forth on the signature page.
Recitals
Whereas,
the
Company is a majority owned subsidiary of the Majority Stockholder, a company
which specializes in the design and construction of high-tech turn-key
production facilities and equipment related to solar photovoltaic (PV) thin-film
manufacturing;
Whereas,
the
Company is seeking investment;
Whereas,
the
Company has authorized for sale of a minimum/maximum of 3,000,000 to 5,000,000
units (the “Units”),
at a
price of $1.00 per Unit, for a $3,000,000 to $5,000,000 minimum/maximum offering
with each Unit consisting of two shares of common stock, (the “Common
Stock”)
$.001
par value per share of the Company, and one series E common stock purchase
warrant (the “Warrants”)
of the
Majority Stockholder (the
shares of common stock of the Company contained in the Units including the
shares of common stock issuable upon exercise of the Warrants are hereinafter
collectively referred to as the “Securities”);
WHEREAS,
the
offering shall commence on the date hereof and shall continue for a period
of 30
days and the Company reserves the right to extend the Offering period for an
additional 30 days;
WHEREAS,
the
Company may offer the Units through broker-dealers who are members of the
National Association of Securities Dealers, Inc. (“NASD”); provided,
however,
sales
made directly to investors by officers or directors of the Company, no
commission or any other form of remuneration will be paid;
Whereas,
the
offering will be offered by the Company on a “best efforts, all or none” basis
with respect to the initial 3,000,000 Units (the “Minimum Offering”) and on a
“best efforts” basis with respect to the balance of the offering;
Whereas,
the
minimum investment is $100,000 (100,000 Units) which may be reduced at the
sole
discretion of the Company;
Whereas,
Subscriber desires to Subscribe for the number of Units set forth on Exhibit
A
hereto; and
Whereas,
the
Company desires to issue and sell the Units to Subscriber on the terms and
conditions set forth herein.
Agreement
Now,
Therefore,
in
consideration of the foregoing recitals and the mutual promises,
representations, warranties and covenants hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Agreement
to Sell and Subscribe. Pursuant
to the terms and conditions
set
forth in this Agreement, as of the date hereof the Subscriber hereby agrees
to
purchase, and the Company hereby agrees to issue and sell to the Subscribers,
the number of Units and for the consideration as set forth next to the
Subscriber's name on Exhibit A (“Purchase Price”).
The
Unit
Subscription shall be known as the “Offering.”
2. Commissions. The
Company may offer the Units through broker-dealers who are members of the NASD.
On sales made directly to investors by officers or directors of the Company,
no
commission or any other form of remuneration will be paid. On sales made by
members of the NASD, the Company may pay a commission of 10% of the principal
amount of each Unit sold of the gross proceeds of this offering. If any
broker-dealer is retained to sell any of the Units and no estimate can be made
on the number of broker-dealers, if any, who may participate in this offering.
In the event that commissions are paid, they will not exceed ten percent (10%)
of the offering for a maximum amount of commissions of $500,000.
3. Closing,
Delivery and Payment.
3.1 Closing.
All
funds
received from subscribers will be directly deposited with Sichenzia ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP into their escrow account until the Minimum Offering
is
achieved. Upon acceptance of this Agreement by the Company, the Subscriber
shall
deliver funds equal to the Purchase Price.
No
escrow account will be used in connection with this offering. The Company cannot
guarantee that it will be able to raise adequate funds in this offering to
implement its business plan. In the event that the Company does not raise
adequate funds and the Subscriber has invested in the Company, then the
Subscriber’s investment may be lost entirely.
3.2 Delivery.
Within a
reasonable time after receipt of the Purchase Price by the Company, subject
to
the terms and conditions hereof, the Company will deliver to the Subscriber
certificates representing the shares of common stock of the Company and the
Warrants in the form attached hereto as Exhibit “B”, in the applicable amount,
and each shall have the appropriate Rule 144 restrictive legends.
4. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Subscriber as of the date of
this
Agreement as set forth below (such representations and warranties do not lessen
or obviate the representations and warranties of the Subscriber set forth in
this Agreement).
4.1 Organization,
Good Standing and Qualification.
The
Company is a Nevada corporation duly organized, validly existing, in good
standing. The Company has the necessary corporate power and authority to own
and
operate its properties and assets, to execute and deliver this Agreement and
all
other agreements referred to herein (collectively, the "Related
Agreements"),
to
issue and sell the Units and to carry out the provisions of this Agreement
and
the Related Agreements and to carry on its business as presently conducted
and
as presently proposed to be conducted. The Company is duly qualified and is
authorized to do business and is in good standing as a foreign corporation
in
all jurisdictions in which the nature of its activities and of its properties
(both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure
to
do so would not have a material adverse effect on the Company or its
business.
4.2 Subsidiaries.
The
Company does not own or control any other interest of any other corporation,
limited partnership or other business entity that
represents more than fifty percent (50%) of the voting power of that
corporation, limited partnership or other business entity (“Subsidiary”).
4.3 Capitalization;
Voting Rights.
(a) As
of the
present date, the Company has 64,500,000 shares of common stock issued and
outstanding. In
the
event that all the Units are sold in this Offering, the maximum number of shares
of common stock of the Company that will be issued and outstanding after this
offering shall consist of 74,500,000.
-2-
(b) Other
than shares of common stock reserved for issuance under the Units being sold
pursuant to this Agreement (including shares of common stock issuable upon
exercise of warrants), there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal), proxy
or stockholder agreements, or arrangements or agreements of any kind for
the
issuance
of shares of common stock of the Company.
(c) The
rights, preferences, privileges and restrictions of the Securities are as stated
in the Certificate of Incorporation (the "Charter").
When
issued in compliance with the provisions of this Agreement and the Company's
Charter, the Securities and the Warrants will be validly issued, fully paid
and
nonassessable, and will be free of any liens or encumbrances; provided,
however,
that
the Securities may be subject to restrictions on transfer under state and/or
federal interest laws as set forth herein or as otherwise required by such
laws
at the time a transfer is proposed.
4.4 Authorization;
Binding Obligations.
All
corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization of this Agreement and the Related
Agreements, the performance of all obligations of the Company hereunder and
the
authorization, sale, issuance and delivery of the Units pursuant hereto and
the
Related Agreements has been taken or will be taken. The Agreement and the
Related Agreements, when executed and delivered, will be valid and binding
obligations of the Company enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights, and (b) as limited by general principles that restrict
the availability of equitable remedies.
4.5 Liabilities.
The
Company has no material liabilities and, to the best of its knowledge, knows
of
no material contingent liabilities, except current liabilities incurred in
the
ordinary course of business which are not, either in any individual case or
in
the aggregate, material.
4.6 4.6
Agreements; Action. Except
as
contemplated by the terms of this Agreement or any other agreements to be
entered into between the Company and the Subscriber, there are no agreements,
understandings, instruments, contracts, proposed transactions, judgments,
orders, writs or decrees to which the Company is a party or to its knowledge
by
which it is bound which may provide for (i) obligations (contingent or
otherwise) of, or payments to, the Company in excess of $250,000 (other than
obligations of, or payments to, the Company arising from Subscription or sale
agreements entered into in the ordinary course of business), or (ii) the
transfer or license of any patent, copyright, trade secret or other proprietary
right to or from the Company (other than licenses arising from the Subscription
of "off the shelf" or other standard products), or (iii) provisions
restricting the development, manufacture or distribution of the Company's
products or services, or (iv) indemnification by the Company with respect
to infringements of proprietary rights.
4.7 Valid
Offering.
Assuming
the accuracy of the representations and warranties of the Subscriber contained
in this Agreement, the offer, sale and issuance of the Units will be exempt
from
the registration requirements of the Securities Act of 1933, as amended (the
"Securities
Act"),
and
will have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements
of
all applicable state laws. Neither the Company nor any agent on its behalf
has
solicited or will solicit any offers to sell or has offered to sell or will
offer to sell the Units to any person or persons so as to bring the sale of
such
Units by the Company within the registration provisions of the Securities Act
or
any state securities laws.
4.8 Full
Disclosure.
The
Company has provided the Subscriber with all information requested by the
Subscriber in connection with its decision to Subscribe for the Units. Neither
this Agreement, the exhibits and schedules hereto, the Related Agreements nor
any other document delivered by the Company to Subscriber or its attorneys
or
agents in connection herewith or therewith or with the transactions contemplated
hereby or thereby, contain any untrue statement of a material fact nor omit
to
state a material fact necessary in order to make the statements contained herein
or therein not misleading. To the Company's knowledge, there are no facts which
(individually or in the aggregate) materially adversely affect the business,
assets, liabilities, financial condition, prospects or operations of the Company
that have not been set forth in the Agreement, the exhibits and schedules
hereto, the Related Agreements or in other documents delivered to Subscriber
or
its attorneys or agents in connection herewith.
-3-
5. Representations
and Warranties of the Subscriber.
The
Subscriber hereby represents and warrants to the Company with respect to itself
or himself as follows (such representations and warranties do not lessen or
obviate the representations and warranties of the Company set forth in this
Agreement):
5.1 Requisite
Power and Authority.
Subscriber
has all necessary power and authority under all applicable provisions of law
to
execute and deliver this Agreement and the Related Agreements and to carry
out
their provisions. All action on Subscriber's part required for the lawful
execution and delivery of this Agreement and the Related Agreements have been
or
will be effectively taken prior to the sale of the Units pursuant to this
Agreement. Upon their execution and delivery, this Agreement and the Related
Agreements will be valid and binding obligations of Subscriber, enforceable
in
accordance with their terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights.
5.2 Investment
Representations.
Subscriber understands that the Units are being offered and sold pursuant to
an
exemption from registration contained in the Securities Act based in part upon
Subscriber's representations contained in this Agreement.
5.3 Subscriber
Bears Economic Risk.
Subscriber has substantial experience in evaluating and investing in private
placement transactions in companies similar to the Company so that it is capable
of evaluating the merits and risks, including the risks listed on Schedule
5.7,
of its
investment in the Company and has the capacity to protect its own interests.
Subscriber must bear the economic risk of this investment until the Units are
sold
by
Subscriber.
Subscriber is not a broker, broker dealer or an affiliate of a broker
dealer.
5.4 Acquisition
for Own Account.
Subscriber is acquiring the Units for Subscriber's own account for investment
only, and not with a view towards their distribution.
5.5 Subscriber
Can Protect Its Interest.
Subscriber represents that by reason of its, or of its management's, business
or
financial experience, Subscriber has the capacity to protect its own interests
in connection with the transactions contemplated in this Agreement, and the
Related Agreements. Further, Subscriber is aware of no publication of any
advertisement in connection with the transactions contemplated in the
Agreement.
5.6 Accredited
Investor.
Subscriber represents that it is an accredited investor within the meaning
of
Regulation D under the Securities Act.
5.7 Risk
Factors. Subscriber
represents that it has read and fully understands the risks associated with
the
Company and the Units listed on Schedule
5.7.
6. Covenants
of the Company. The
Company covenants and agrees with the Subscriber as follows:
6.1 Use
of Funds.
The
Company undertakes to use the proceeds of the Subscriber's funds for working
capital and the development of solar power projects throughout the
world.
-4-
6.2 Taxes.
The
Company will promptly pay and discharge, or cause to be paid and discharged,
when due and payable, all lawful taxes, assessments and governmental charges
or
levies imposed upon the income, profits, property or business of the Company;
provided, however, that any such tax, assessment, charge or levy need not be
paid if the validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company shall have set aside on its books
adequate reserves with respect thereto, and provided, further, that the Company
will pay all such taxes, assessments, charges or levies forthwith upon the
commencement of proceedings to foreclose any lien which may have attached as
security therefor.
6.3 Books
and Records. The
Company will keep true records and books of account in which full, true and
correct entries will be made of all dealings or transactions in relation to
its
business and affairs in accordance with generally accepted accounting principles
applied on a consistent basis.
6.4 Properties.
The
Company will keep its properties in good repair, working order and condition,
reasonable wear and tear excepted, and from time to time make all needful and
proper repairs, renewals, replacements, additions and improvements thereto;
and
the Company will at all times comply with each provision of all leases to which
it is a party or under which it occupies property if the breach of such
provision could reasonably be expected to have a material adverse effect on
the
Company.
7. Covenants
of the Company and Subscriber Regarding Indemnification.
7.1 Company
Indemnification.
The
Company agrees to indemnify, hold harmless, reimburse and defend Subscriber,
each of Subscriber's officers, directors, agents, affiliates, control persons,
and principal shareholders, against any claim, cost, expense, liability,
obligation, loss or damage (including reasonable legal fees) of any nature,
incurred by or imposed upon the Subscriber which results, arises out of or
is
based upon (i) any misrepresentation by Company or breach of any warranty by
Company in this Agreement or in any exhibits or schedules attached hereto or
any
Related Agreement, or (ii) any breach or default in performance by Company
of
any covenant or undertaking to be performed by Company hereunder, or any other
agreement entered into by the Company and Subscriber relating
hereto.
7.2 Subscriber's
Indemnification. Subscriber
agrees to indemnify, hold harmless, reimburse and defend the Company and each
of
the Company’s officers, directors, agents, affiliates, control persons and
principal stockholders, at all times against any claim, cost, expense,
liability, obligation, loss or damage (including reasonable legal fees) of
any
nature, incurred by or imposed upon the Company which results, arises out of
or
is
based upon (a) any misrepresentation by Subscriber or breach of warranty by
Subscriber in this Agreement or in any exhibits or schedules attached hereto
or
any Related Agreement; or (b) any breach or default in performance by Subscriber
of any covenant or undertaking to be performed by Subscriber hereunder, or
any
other agreement entered into by the Company and Subscriber relating
hereto.
8. Registrations
Rights/Put Option.
The
Company hereby undertakes to complete a PCAOB audit and file a registration
statement (the “Registration Statement”) on Form SB-2 (or an alternative if the
Company is not eligible to file a Form SB-2) with the SEC registering the shares
of common stock within eighteen (18) months (the “Listing Date”) of the Closing,
and use its best efforts to have the Registration Statement declared effective.
In the event that Company is not a publicly listed company by the Listing Date,
the purchasers, at their option, may require the Majority Stockholder, to
acquire half of the shares of common stock of the Company from the Subscribers
purchased in this Offering for the aggregate Purchase Price (the “Put Option”).
In order to effectuate the Put Option, the Subscriber shall have 30 calendar
days after the Listing Date to notify the Majority Stockholder of its intent
to
sell its shares of common stock to the Majority Stockholder. Upon receipt of
such notice, the Company shall make the required payment pursuant to the Put
Notice with 60 calendar days of receipt of such notice.
9.
Intentionally
left blank.
10. Miscellaneous
-5-
10.1
Governing Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to principles of conflicts of laws. Any action
brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of
New
York or in the federal courts located in the state of New York. Both parties
and
the individuals executing this Agreement and other agreements on behalf of
the
Company agree to submit to the jurisdiction of such courts and waive trial
by
jury. The prevailing party shall be entitled to recover from the other party
its
reasonable attorney's fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid
or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any
agreement.
10.2
Entire Agreement.
This
Agreement, the exhibits and schedules hereto, the Related Agreements and the
other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and no party shall be liable or bound to any other in any manner by
any
representations, warranties, covenants and agreements except as specifically
set
forth herein and therein.
10.3
Amendment and Waiver.
(a) This
Agreement may be amended or modified only upon the written consent of the
Company and the Subscriber.
(b) The
obligations of the Company and the rights of the holders of the Units under
the
Agreement may be waived only with the written consent of such holders of the
Units.
10.4 Delays
or Omissions.
It
is
agreed that no delay or omission to exercise any right, power or remedy accruing
to any party, upon any breach, default or noncompliance by another party under
this Agreement or the Related Agreements, shall impair any such right, power
or
remedy, nor shall it be construed to be a waiver of any such breach, default
or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on the Subscriber's
part of any breach, default or noncompliance under this Agreement, the Interest
or the Related Agreements or any waiver on such party's part of any provisions
or conditions of the Agreement, or the Related Agreements must be in writing
and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement, the Interest or the Related
Agreements, by law or otherwise afforded to any party, shall be cumulative
and
not alternative.
10.5
Notices.
All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
Company at the address as set forth on the signature page hereof.
10.6 Attorneys'
Fees.
In the
event that any suit or action is instituted to enforce any provision in this
Agreement, the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses of enforcing any right of
such prevailing party under or with respect to this Agreement, including,
without limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.
-6-
10.7 Titles
and Subtitles.
The
titles of the sections and subsections of the Agreement are for convenience
of
reference only and are not to be considered in construing this
Agreement.
10.8 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together shall constitute one
instrument.
10.9 Construction.
Each
party acknowledges that its legal counsel participated in the preparation of
this Agreement and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Agreement to favor any party against the
other.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-7-
In
Witness Whereof,
the
parties hereto have executed the Subscription
Agreement
as of
________, 2007.
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COMPANY:
Solar
thin power, inc.
By:___________________________________________
Name:
Title:
Address:
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SUBSCRIBER:
By:___________________________________________
Name:
Address:
|
|
|
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COMPANY:
By:___________________________________________
Name:
Title:
Address:
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[Securities
Purchase Agreement Signature Page]
List
of Exhibits and schedules
Exhibit
A
Schedule of Subscribers
Exhibit
B
Form of Warrant
Schedule
5.7 Risk
Factors
EXHIBIT
A
SCHEDULE
OF SUBSCRIBERS
|
Subscriber
|
Purchase
Price
|
Number
of Units
|
Aggregate
Purchase
Price
|
|
$
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EXHIBIT
B
Schedule
5.7
Risk
Factors
You
should carefully consider the risks described below as well as other information
provided to you in this document, including information in the section of this
document entitled “Information Regarding Forward Looking Statements.” The risks
and uncertainties described below are not the only ones facing the Company.
Additional risks and uncertainties not presently known to the Company or that
the Company currently believes are immaterial may also impair the Company’s
business operations. If any of the following risks actually occur, the Company’s
businesses, financial condition or results of operations could be materially
adversely affected, the value of the Company common stock could decline, and
you
may lose all or part of your investment.
Risks
Related to Our Business
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As
a start-up or development stage company, an investment in our company
is
considered a high risk investment whereby you could lose your entire
investment.
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We
have
just commenced operations and, therefore, we are considered a “start-up” or
“development stage” company. We have never owned and/or operated solar
power plants. We will incur significant expenses in order to implement our
business plan. As an investor, you should be aware of the difficulties,
delays and expenses normally encountered by an enterprise in its development
stage, many of which are beyond our control, including unanticipated
developmental expenses, inventory costs, employment costs, and advertising
and
marketing expenses. We cannot assure you that our proposed business plan
will materialize or prove successful, or that we will ever be able to operate
profitably. If we cannot operate profitably, you could lose your entire
investment
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Solar
Thin Power has not generated revenues and it may never achieve
profitability.
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The
Company has not generated any revenues since its inception on October 18, 2007.
Our existence is dependent upon management’s ability to develop profitable
operations. We cannot assure you that the Company can achieve or sustain
profitability in the future. Solar Thin Power’s operations are subject to the
risks and competition inherent in the establishment of a business enterprise.
There can be no assurance that future operations will be profitable. Revenues
and profits, if any, will depend upon various factors, including our ability
to
develop viable solar power plants and achieve market acceptance. The Company
may
not achieve its business objectives and the failure to achieve such goals would
have an adverse impact on our Company. These matters raise substantial doubt
about the Company’s ability to continue as a going concern.
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Evaluating
our business and future prospects may be difficult due to the rapidly
changing market landscape.
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There
is
limited historical information available about our company upon which you can
base your evaluation of our business and prospects.
The
market we are addressing is rapidly evolving and is experiencing technological
advances and new market entrants. Our future success will require us to scale
our manufacturing capacity significantly beyond the capacity of our
manufacturing facility, and our business model and technology are unproven
at
significant scale. We have limited experience upon which to predict whether
it
will be successful. As a result, you should consider our business and prospects
in light of the risks, expenses and challenges that we will face as an
early-stage company seeking to develop and manufacture new products in a growing
and rapidly evolving market.
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We
are unable to predict when any facility will be completed, what our
costs
will be or, consequently, whether Solar Thin Power will be profitable.
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Development
of solar power facilities is an inherently risky activity, subject to
significant uncertainties and a lengthy development cycle. Uncertainties and
risks include those relating to costs and availability of supplies and labor,
fluctuations in the prices available for the sale of facility output and timing
of completion of construction. Furthermore, obtaining the large number of
agreements, permits and approvals necessary to develop, install, operate and
manage any of solar power facilities, as well as to market the energy and other
co-products and to provide necessary related resources and services, involves
a
long development cycle and decision-making process. Solar Thin Power may be
required to enter into or obtain some or all of the following in connection
with
the development of its facilities:
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Site
agreements;
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Supply
contracts;
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Design/build
or other construction-related agreements;
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Power
sales contracts;
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Various
co-product sales agreements;
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Technological
changes in the solar power industry could render our solar power
facilities es uncompetitive or obsolete, which could reduce our market
share and cause our sales to decline.
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Our
failure to further refine our technology and develop and introduce the next
generation of solar power facilities could cause our products to become
uncompetitive or obsolete, which could reduce our market share and cause our
sales to decline. The solar power industry is rapidly evolving and competitive.
We will need to invest significant financial resources in research and
development to keep pace with technological advances in the solar power industry
and to effectively compete in the future. We believe that a variety of competing
solar power technologies are under development by other companies that could
result in lower manufacturing costs or higher product performance than those
utilized in the development of our solar power facilities. Our development
efforts may be rendered obsolete by the technological advances of others and
other technologies may prove more advantageous for the commercialization of
solar power products.
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We
face risks associated with the marketing, development and sale of
our
ability to develop solar power plant facilities internationally,
and if we
are unable to effectively manage these risks, it could impair our
ability
to expand our business abroad.
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To
date,
Solar Thin Power has yes to develop solar power plant. We expect to seek to
develop solar power plant facilities on an international basis. It will require
significant management attention and financial resources to successfully develop
our international sales channels either internally or externally. In addition,
the marketing, development and sale of our solar power plant internationally
could expose us to a number of markets with which we have limited experience.
If
we are unable to effectively manage these risks, it could impair our ability
to
grow our business abroad. These risks include:
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Difficult
and expensive compliance with the commercial and legal requirements
of
international markets, with which we have only limited
experience;
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Inability
to obtain, maintain or enforce intellectual property
rights;
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encountering
trade barriers such as export requirements, tariffs, taxes and other
restrictions and expenses, which could affect the competitive pricing
of
our solar power plant facilities;
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difficulty
in recruiting and retaining individuals skilled in international
business
operations; and
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difficulty
of enforcing revenue collection
internationally.
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We
expect
that a portion of our international sales will be denominated in United States
dollars. As a result, increases in the value of the United States dollar
relative to foreign currencies would cause our products to become less
competitive in international markets and could result in limited, if any, sales
and profitability.
Furthermore,
in the development of our facilities in foreign markets, we may encounter legal
restrictions, commercial restrictions and incur taxes and other expenses to
establish our manufacturing facilities in certain countries. In addition, we
may
potentially forfeit, voluntarily or involuntarily, foreign assets due to
economic or political instability in the countries where our local manufacturing
facilities are located.
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We
may not be able to successfully develop and commercialize our solar
thin
power plant facilities which would result in continues losses and
may
require us to curtail or cease
operations
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We
have
not generated any revenues and we are unable to project when we will achieve
profitability, if at all. As is the case with any new technology, we expect
the
development process to continue. We cannot assure that our engineering resources
will be able to modify the product fast enough to meet market requirements.
We
can also not assure that our product will gain market acceptance and that we
will be able to successfully commercialize the technologies. The failure to
successfully develop and commercialize the technologies passed its current
stage
would result in continued losses and may require us to curtail or cease
operations
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We
do not maintain theft or casualty insurance and only maintain modest
liability and property insurance coverage and therefore we could
incur
losses as a result of an uninsured
loss.
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We
do not
maintain theft or casualty insurance and we have modest liability and property
insurance coverage. We cannot assure that we will not incur uninsured
liabilities and losses as a result of the conduct of our business. Any such
uninsured or insured loss or liability could have a material adverse affect
on
our results of operations.
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The
failure to develop strategic relationships used in the development
and
marketing of our products, could impede our ability to develop our
solar
power plant facilities and result in a material adverse effect causing
the
business to suffer.
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We
have
established a plan of operations under which we rely on a strategic relationship
with strategic partners, which provides marketing, installation and software
development services. A loss of any of these relationships for any reason could
cause us to experience difficulties in completing the further development of
our
product and implementing our business strategy. There can be no assurance that
we could establish other relationships of adequate expertise in a timely manner
or at all.
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We
may need to raise additional capital which may not be available on
acceptable terms or at all
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The
Company currently anticipates that its available cash resources will be
sufficient to meet its presently anticipated working capital and capital
expenditure requirements for at least the next twelve months. The Company may
have future acquisitions or capital expenditures that could potentially exceed
available funds. Therefore, the Company may need to raise additional funds
in
order to support more rapid expansion, acquire complementary businesses or
technologies or take advantage of unanticipated opportunities through public
or
private financing, strategic relationships or fulfill our research and
development plans or other arrangements. There can be no assurance that such
additional funding, if needed, will be available on terms acceptable to the
Company, or at all. If adequate funds are not available on acceptable terms,
the
Company may be unable to develop or enhance its products or take advantage
of
future opportunities either of which could have a material adverse effect on
the
Company's business, results of operations and financial condition and may reduce
our ability to continue to conduct business operations. Any additional
equity financing may involve substantial dilution to our then existing
shareholders.
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Our
operating results are likely to fluctuate
significantly
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As
a
result of our limited operating history and the rapidly changing nature of
the
markets in which Solar Thin Power competes, our quarterly and annual revenues
and operating results are likely to fluctuate from period to period. These
fluctuations may be caused by a number of factors, many of which are beyond
our
control. These factors include the following, as well as others discussed
elsewhere in this section:
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how
and when we introduce new products and services and enhance our existing
products and services;
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our
ability to attract and retain new customers and satisfy our customers'
demands;
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the
timing and success of our brand-building and marketing
campaigns;
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our
ability to establish and maintain strategic
relationships;
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our
ability to attract, train and retain key
personnel;
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the
emergence and success of new and existing
competition;
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varying
operating costs and capital expenditures related to the expansion
of our
business operations and infrastructure, domestically and internationally,
including the hiring of new
employees;
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changes
in the mix of products and services that we sell to our
customers;
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costs
and effects related to the acquisition of businesses or technology
and
related integration; and
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costs
of litigation and intellectual property
protection.
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In
addition, because the market for our products and services is relatively new
and
rapidly changing, it is difficult to predict future financial
results.
For
these
reasons, you should not rely on period-to-period comparisons of our financial
results, if any, as indications of future results. Our future operating results
could fall below the expectations of public market analysts or investors and
significantly reduce the market price of our common stock. Fluctuations in
our
operating results will likely increase the volatility of our stock
price.
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Loss
of ▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇, our executive officers and directors
could
impair our ability to
operate.
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If
we
lose our key employees, ▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇, or are unable to attract
or
retain qualified personnel, our business could suffer. Our success is highly
dependent on our ability to attract and retain qualified management personnel.
We are highly dependent on our management who are all critical to the
development of our financing arrangements, technologies and business. The
employment agreement entered with ▇▇. ▇▇▇▇▇, ▇▇. ▇▇▇▇▇ and our company is for
a
term of three years through October 2010. The loss of the services of Messrs.
▇▇▇▇▇ or ▇▇▇▇▇ could have a material adverse effect on our operations. If we
were to lose any one of these individuals, we may experience difficulties in
competing effectively, developing our technology and implementing our business
strategies or financing arrangements. We do not have key man life insurance
in
place for any person working for us.
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There
is no public market for our common stock.
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At
the
present time, there is no public market for our common stock.
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We
have not paid cash dividends in the past and do not expect to pay
cash
dividends in the future. Any return on investment may be limited
to the
value of our stock.
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We
have
never paid cash dividends on our stock and do not anticipate paying cash
dividends on our stock in the foreseeable future. The payment of cash dividends
on our stock will depend on our earnings, financial condition and other business
and economic factors affecting us at such time as the board of directors may
consider relevant. If we do not pay cash dividends, our stock may be less
valuable because a return on your investment will only occur if our stock price
appreciates.