ae10q.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
x
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Quarterly
Report under Section 13 or 15(d) of the Securities Exchange Act of
1934.
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For the quarterly
period ended: January 31,
2009
o
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Transition
Report under Section 13 or 15(d) of the Securities Exchange Act of
1934.
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For the transition
period from: _______ to _______
Commission
file number: 333-154894
ALTERNATIVE
ENERGY PARTNERS, INC.
(Exact
name of small business issuer as specified in its charter)
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FLORIDA
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26-2862564
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer I.D.
Number)
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2400
E Commercial Boulevard, Suite 201, Fort Lauderdale, FL 33308
(Address
of principal executive offices)
(954)
351-2554
(Issuer’s
telephone number)
Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports); and (2) has been subject to such filing requirements for
the past 90 days: Yes x No
0
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer 0
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Accelerated
filer 0
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Non-accelerated
filer 0
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Smaller
reporting company x
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(Do
not check if a smaller reporting company)
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).Yes 0 No
x
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date: As of March 13, 2009, there were
22,149,000 shares of our common stock outstanding.
INDEX
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Page No.
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PART
1. FINANCIAL INFORMATION
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3
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4
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5
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6
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7
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12
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15
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15
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PART
II. OTHER INFORMATION
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16
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16
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16
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16
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16
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16
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Page(s)
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Financial
Statements:
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4
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5
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6
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7
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Alternative
Energy Partners, Inc.
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(A
Development Stage Company)
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January
31, 2009
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July
31, 2008
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(Unaudited)
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(Audited)
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Assets
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Current
Assets
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Cash
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$ |
1,289 |
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$ |
5,700 |
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Prepaid
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315 |
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- |
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Total
Current Assets
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1,604 |
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5,700 |
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Total
Assets
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$ |
1,604 |
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$ |
5,700 |
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Liabilities Stockholders'
Equity
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Current
Liabilities
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Accounts
payable
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$ |
1,551 |
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$ |
- |
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Total
Current Liabilities
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1,551 |
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- |
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Stockholders'
Equity
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Common
stock, $0.0001 par value, 50,000,000 shares authorized;
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22,149,000
and 22,026,000 shares issued and outstanding
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2,215 |
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2,203 |
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Additional
paid-in capital
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13,735 |
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6,497 |
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Stock
subscription receivable
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(5,500 |
) |
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- |
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Deficit
accumulated during the development stage
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(10,397 |
) |
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(3,000 |
) |
Total
Stockholders' Equity
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53 |
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5,700 |
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Total
Liabilities and Stockholders' Equity
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$ |
1,604 |
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$ |
5,700 |
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Alternative
Energy Partners, Inc.
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(A
Development Stage Company)
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(Unaudited)
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For
the Period from
April 28, 2008 (Inception)
to January
31, 2009
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For
the Three Months Ended
January 31, 2009
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For
the Six Months Ended
January 31, 2009
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Revenues
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$ |
- |
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$ |
- |
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$ |
- |
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Operating
Expenses
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General
and administrative
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4,004 |
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7,397 |
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10,397 |
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Total
Operating Expenses
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4,004 |
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7,397 |
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10,397 |
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Net
loss
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$ |
(4,004 |
) |
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$ |
(7,397 |
) |
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$ |
(10,397 |
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Net
loss per share - basic and diluted
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$ |
(0.00 |
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$ |
(0.00 |
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$ |
(0.00 |
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Weighted
average number of shares outstanding
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during
the period - basic and diluted
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22,127,000 |
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22,086,464 |
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22,061,945 |
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Alternative
Energy Partners, Inc.
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(A
Development Stage Company)
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(Unaudited)
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For
the Period from April
28, 2008 (Inception) to
January 31, 2009
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For
the Six Months Ended
January 31, 2009 |
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CASH
FLOWS FROM OPERATING ACTIVITIES:
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Net
loss
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$ |
(7,397 |
) |
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$ |
(10,397 |
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Adjustments
to reconcile net loss to net cash used in operating
activities:
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Prepaid
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(315 |
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(315 |
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Accounts
payable
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1,551 |
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1,551 |
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Issuance
of common stock for services rendered
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1,500 |
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1,500 |
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Net
Cash Used In Operating Activities
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(4,661 |
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(7,661 |
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CASH
FLOWS FROM FINANCING ACTIVITIES:
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Proceeds
from issuance of common stock
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250 |
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8,950 |
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Net
Cash Provided By Financing Activities
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250 |
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8,950 |
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Net
Increase (Decrease) in Cash
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(4,411 |
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1,289 |
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Cash
- Beginning of Period
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5,700 |
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- |
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Cash
- End of Period
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$ |
1,289 |
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$ |
1,289 |
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SUPPLEMENTARY CASH FLOW
INFORMATION:
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Cash
Paid During the Period for:
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Income
taxes
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$ |
- |
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$ |
- |
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Interest
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$ |
- |
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$ |
- |
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Alternative
Energy Partners, Inc.
(A
Development Stage Company)
January 31,
2009
(Unaudited)
Note 1 Basis of
Presentation
The
accompanying unaudited interim financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America and the rules and regulations of the United States Securities and
Exchange Commission for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all the information and footnotes necessary for a comprehensive presentation of
financial position, results of operations, or cash flows. It is management's
opinion, however, that all material adjustments (consisting of normal recurring
adjustments) have been made which are necessary for a fair financial statement
presentation.
The
unaudited interim financial statements should be read in conjunction with the
Company’s Annual Report on Form S-1, which contains the audited financial
statements and notes thereto, together with the Management’s Discussion and
Analysis, for the period ended July 31, 2008. The interim results for
the period ended January 31, 2009 are not necessarily indicative of results for
the full fiscal year.
Note 2 Nature of Operations
and Summary of Significant Accounting Policies
Nature
of Operations
Alternative
Energy Partners, Inc. (the “Company”), was incorporated in the State of Florida
on April 28, 2008.
The
Company intends to become involved in the alternative energy sector. The
Company is searching to acquire additional emerging growth companies to meet
growing demands worldwide.
Development
Stage
The
Company's financial statements are presented as those of a development stage
enterprise. Activities during the development stage primarily include equity
based financing and further implementation of the business plan. The Company has
not generated any revenues since inception.
Risks
and Uncertainties
The
Company intends to operate in an industry that is subject to rapid technological
change. The Company's operations will be subject to significant risk and
uncertainties including financial, operational, technological, regulatory and
other risks associated with a development stage company, including the potential
risk of business failure.
Alternative
Energy Partners, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
January 31,
2009
(Unaudited)
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid instruments purchased with a maturity of
three months or less and money market accounts to be cash
equivalents. At January 31, 2009 and July 31, 2008, respectively,
there were no balances that exceeded the federally insured limit.
The
Company minimizes its credit risk associated with cash by periodically
evaluating the credit quality of its primary financial institution. The balance
at times may exceed federally insured limits. At January 31, 2009 and
July 31, 2008, respectively, there were no balances that exceeded the federally
insured limit.
Earnings
per Share
Basic
earnings (loss) per share is computed by dividing net income (loss) by weighted
average number of shares of common stock outstanding during each
period. Diluted earnings (loss) per share is computed by dividing net
income (loss) by the weighted average number of shares of common stock, common
stock equivalents and potentially dilutive securities outstanding during the
period. For the period from April 28, 2008 (inception) to January 31, 2009, the
Company had no common stock equivalents that could potentially dilute future
earnings (loss) per share; hence, a separate computation of diluted earnings
(loss) per share is not presented, as the Company reflects a net loss and the
effect of considering any common stock equivalents if outstanding would have
been anti-dilutive.
Stock-Based
Compensation
All
share-based payments to employees will be recorded and expensed in the statement
of operations as applicable under SFAS No. 123R “Share-Based
Payment”.
Non-Employee
Stock Based Compensation
Stock-based
compensation awards issued to non-employees for services is recorded at either
the fair value of the services rendered or the instruments issued in exchange
for such services, whichever is more readily determinable, using the measurement
date guidelines enumerated in Emerging Issues Task Force Issue EITF No. 96-18,
“Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services” (“EITF 96-18).
Alternative
Energy Partners, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
January 31,
2009
(Unaudited)
Income
Taxes
The
Company accounts for income taxes under the liability method in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes"
under this method, deferred income tax assets and liabilities are determined
based on differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.
The
Company adopted the provisions of FASB Interpretation No. 48; “Accounting for Uncertainty in
Income Taxes-An Interpretation of FASB Statement No. 109” (“FIN
48”). FIN 48 contains a two-step approach to recognizing and measuring uncertain
tax positions. The first step is to evaluate the tax position for recognition by
determining if the weight of available evidence indicates it is more likely than
not, that the position will be sustained on audit, including resolution of
related appeals or litigation processes, if any. The second step is to measure
the tax benefit as the largest amount, which is more than 50% likely of being
realized upon ultimate settlement. The Company considers many factors when
evaluating and estimating our tax positions and tax benefits, which may require
periodic adjustments. At January 31, 2009, the Company did not record
any liabilities for uncertain tax positions.
Segment
Information
The
Company follows Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information." During the fiscal year
end 2009, the Company only operated in one segment; therefore, segment
information has not been presented.
Recent
Accounting Pronouncements
In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(“SFAS 157”), which clarifies the principle that fair value should be
based on the assumptions that market participants would use when pricing an
asset or liability. It also defines fair value and established a
hierarchy that prioritizes the information used to develop
assumptions. SFAS 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007. The adoption of
SFAS 157 did not have a material effect on the Company’s financial position,
results of operations or cash flows.
In
February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial
Assets and Financial Liabilities” (“SFAS 159”), which permits entities to
choose to measure many financial instruments and certain other items at fair
value. The unrealized gains and losses on items for which the fair value option
has been elected should be reported in earnings. The decision to
elect the fair value option is determined on an instrument-by-instrument basis,
should be applied to an entire instrument and is irrevocable. Assets
and liabilities measured at fair values pursuant to the fair value option should
be reported separately in the balance sheet from those instruments measured
using other measurement attributes. SFAS 159 is effective as of the
beginning of the Company’s 2008 fiscal year. The adoption of SFAS 159 did not
have a material effect on the Company’s financial position, results of
operations or cash flows.
Alternative
Energy Partners, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
January 31,
2009
(Unaudited)
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of Accounting Research Bulletin
No 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, changes in a parent’s ownership of a noncontrolling interest,
calculation and disclosure of the consolidated net income attributable to the
parent and the noncontrolling interest, changes in a parent’s ownership interest
while the parent retains its controlling financial interest and fair value
measurement of any retained noncontrolling equity investment. SFAS 160 is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Early adoption
is prohibited. The adoption of SFAS No. 160 is not expected to have a material
effect on the Company’s financial position, results of operations or cash
flows.
In
December 2007, the FASB issued SFAS 141R, “Business Combinations”
(“SFAS 141R”), which replaces FASB SFAS 141, “Business
Combinations”. This Statement retains the fundamental
requirements in SFAS 141 that the acquisition method of accounting be used for
all business combinations and for an acquirer to be identified for each business
combination. SFAS 141R defines the acquirer as the entity that obtains control
of one or more businesses in the business combination and establishes the
acquisition date as the date that the acquirer achieves control. SFAS
141R will require an entity to record separately from the business combination
the direct costs, where previously these costs were included in the total
allocated cost of the acquisition. SFAS 141R will require an entity
to recognize the assets acquired, liabilities assumed, and any non-controlling
interest in the acquired at the acquisition date, at their fair values as of
that date. This compares to the cost allocation method previously
required by SFAS No. 141. SFAS 141R will require an entity to
recognize as an asset or liability at fair value for certain contingencies,
either contractual or non-contractual, if certain criteria are
met. Finally, SFAS 141R will require an entity to recognize
contingent consideration at the date of acquisition, based on the fair value at
that date. This Statement will be effective for business combinations
completed on or after the first annual reporting period beginning on or after
December 15, 2008. Early adoption of this standard is not permitted
and the standards are to be applied prospectively only. Upon adoption
of this standard, there would be no impact to the Company’s results of
operations and financial condition for acquisitions previously
completed. The adoption of SFAS No. 141R is not expected to have a
material effect on the Company’s financial position, results of operations or
cash flows.
In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative
Instruments and Hedging Activities—An Amendment of FASB Statement
No. 133.” (“SFAS 161”). SFAS 161 establishes the disclosure
requirements for derivative instruments and for hedging activities with the
intent to provide financial statement users with an enhanced understanding of
the entity’s use of derivative instruments, the accounting of derivative
instruments and related hedged items under Statement 133 and its related
interpretations, and the effects of these instruments on the entity’s financial
position, financial performance, and cash flows. This statement is
effective for financial statements issued for fiscal years beginning after
November 15, 2008. The adoption of SFAS No. 161 is not expected to have a
material effect on the Company’s financial position, results of operations or
cash flows.
In April
2008, the FASB issued FASB Staff Position (“FSP”) SFAS No. 142-3, “Determination of the Useful Life of
Intangible Assets”. This FSP amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible
Assets” (“SFAS 142”). The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair
value of the asset under SFAS 141R, and other GAAP. This FSP is effective for
financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. Early adoption is
prohibited. The Company is currently evaluating the impact of SFAS FSP 142-3,
but does not expect the adoption of this pronouncement will have a material
impact on its financial position, results of operations or cash
flows.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS 162”). SFAS 162 identifies the
sources of accounting principles and the framework for selecting principles to
be used in the preparation of financial statements of nongovernmental entities
that are presented in conformity with generally accepted accounting principles
in the United States. This statement is effective 60 days following the
SEC’s approval of the Public Company Accounting Oversight Board’s amendments to
AU section 411, The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles. The Company is currently evaluating the
impact of SFAS 162, but does not expect the adoption of this pronouncement will
have a material impact on its financial position, results of operations or cash
flows.
Alternative
Energy Partners, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
January 31,
2009
(Unaudited)
In
October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a
Financial Asset When the Market For That Asset Is Not Active” (“FSP FAS
157-3”), with an immediate effective date, including prior periods for which
financial statements have not been issued. FSP FAS 157-3 amends FAS 157 to
clarify the application of fair value in inactive markets and allows for the use
of management’s internal assumptions about future cash flows with appropriately
risk-adjusted discount rates when relevant observable market data does not
exist. The objective of FAS 157 has not changed and continues to be the
determination of the price that would be received in an orderly transaction that
is not a forced liquidation or distressed sale at the measurement date.
The adoption of FSP FAS 157-3 is not expected to have a material effect on the
Company’s financial position, results of operations or cash flows.
Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date and
are not expected to have a material impact on the financial statements upon
adoption.
Note 3 Going
Concern
As
reflected in the accompanying financial statements, the Company has a net loss
of $7,397 and net cash used in operations of $4,661 for the six months ended
January 31, 2009; and a deficit accumulated during the development stage of
$10,397 at January 31, 2009. In addition, the Company is in the development
stage and has not yet generated any revenues.
The
ability of the Company to continue as a going concern is dependent on
Management's plans, which include potential asset acquisitions, mergers or
business combinations with other entities, further implementation of its
business plan and continuing to raise funds through debt or equity raises. The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. These financial statements do not
include any adjustments relating to the recovery of the recorded assets or the
classification of the liabilities that might be necessary should the Company be
unable to continue as a going concern.
Note 4 Stockholders’
Equity
In May
2008, the Company issued 22,000,000 shares of common stock to founders for
$2,200 ($0.0001/share).
During
the period May – July 2008, the Company issued 26,000 shares of common stock for
$6,500 ($0.25/share), under a private placement.
During
August 2008, the Company issued 1,000 shares of common stock for $250
($0.25/share), under a private placement.
During
October 2008, the Company issued 100,000 shares of common stock for services
rendered for $1,500 ($0.015/share), based upon the fair value of the services
provided, for consulting services. Under SFAS 123R, EITF No. 96-18
and APB No. 29, “Accounting
for Nonmonetary Transactions”, fair value of the services provided
reflect a more readily determinable fair value than the shares issued in recent
cash transactions with third parties. The exchange of these
non-monetary assets did not result in a gain or loss. The Company expensed this
stock issuance as a component of general and administrative
expense.
On
January 31, 2009, the Company issued 22,000 shares of common stock in exchange
for a subscription receivable of $5,500 ($0.25/share), under a private
placement. The subscription was collected in February 2009.
Item
2.
Management's Discussion and Analysis of Financial Condition and
Results of Operation
The
following discussion includes certain forward-looking statements within the
meaning of the safe harbor protections of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements that include words such as “believe,” “expect,” “should,”
“intend,” “may,” “anticipate,” “likely,” “contingent,” “could,” “may,” or other
future-oriented statements, are forward-looking statements. Such forward-looking
statements include, but are not limited to, statements regarding our business
plans, strategies and objectives, and, in particular, statements referring to
our expectations regarding our ability to continue as a going concern, generate
increased market awareness of, and demand for, our current products, realize
profitability and positive cash flow, and timely obtain required financing.
These forward-looking statements involve risks and uncertainties that could
cause actual results to differ from anticipated results. The forward-looking
statements are based on our current expectations and what we believe are
reasonable assumptions given our knowledge of the markets; however, our actual
performance, results and achievements could differ materially from those
expressed in, or implied by, these forward-looking statements. Factors within
and beyond our control that could cause or contribute to such differences
include, among others, our critical capital raising efforts in an uncertain and
volatile economical environment, our ability to maintain relationship with
strategic companies, our cash preservation and cost containment efforts, our
ability to retain key management personnel, our relative inexperience with
advertising, our competition and the potential impact of technological
advancements thereon, the impact of changing economic, political, and
geo-political environments on our business, as well as those factors discussed
elsewhere in this Form 10-Q and in “Item 1 - Our Business,” “Item 6 -
Management’s Discussion and Analysis,” and elsewhere in our most recent Form
S-1, filed with the United States Securities and Exchange
Commission.
Readers
are urged to carefully review and consider the various disclosures made by us in
this report and those detailed from time to time in our reports and filings with
the United States Securities and Exchange Commission that attempt to advise
interested parties of the risks and factors that are likely to affect our
business.
Our
Business
Alternative
Energy Partners, Inc. (the “Company”) is a development stage company. The
Company was organized under the laws of the State of Florida on April 28,
2008. We formed our Company for the purpose of establishing a
renewable fuel sources initially within the State of Florida. Ethanol
is our initial intended product and we intend to establish other alternative
energy products. Our intended products, while not technically difficult to
produce, must meet all regulatory requirements prior to being marketed.
Moreover, there is a multitude of competitive products already in the market
place.
Current
Business of the Company
We are a
development stage company which plans to enter into the business of sourcing,
marketing and distribution of renewable biofuels. Initially we intend
to work to source raw materials needed for the domestic manufacture of ethanol
in South Florida. We have entered into a Letter of Intent with Cane Fuel, Inc.,
whereby we intend to enter into agreements to provide sufficient quantities of
ethanol feedstock derived from sources other than corn. Such agreements are
intended to be joint venture agreements whereby we can work to provide feedstock
for ethanol production and participate in the distribution of the blended
product. Cane Fuel, Inc. is in the process of obtaining 40,000 acres for its
first plant in Hendry County, Florida, known for its sugar, citrus and other
crops. The proposed plant would have production capability of 50 million gallons
of ethanol annually. The ethanol expected to be produced is intended to be used
by refineries or blenders and ultimately blended with gasoline for internal
combustion engines. We intend to work with sugar cane, sweet sorghum and other
available sources of cellulosic materials to produce ethanol.
Our
business model recognizes that the vast majority of agricultural enterprises use
distillate fuel oil in their respective operations. We believe our intended
product(s) could represent a real alternative and, because most of the
constituent components will be domestically produced, a more stable and cost
effective source for the U.S. consumer. Ethanol is a renewable
biofuel for which demand is increasing throughout the U.S. Ethanol
refineries are expected to increase production capacities in an effort to
decrease dependence on foreign oil.
The vast
majority of all agricultural enterprises use distillate fuel oil in their
operations. We believe our intended biofuel product(s) could
represent a real alternative and, because most of the constituent components
will be domestically produced, a more stable and cost effective source for their
fuel energy needs.
Initially,
our largest target market will be the consumers able to utilize ethanol as the
primary blend component in E85, an unleaded gasoline alternative. In order to
reach that market, we must begin by establishing and proving our fuel reliable
and as easily distributed as current competitors.
We are a
development stage company which plans to enter into the business of sourcing,
marketing and distribution of renewable biofuels. Initially we intend
to work to source raw materials needed for the domestic manufacture of ethanol
in South Florida. We have entered into a Letter of Intent with Cane Fuel, Inc.,
whereby we intend to enter into agreements to provide sufficient quantities of
ethanol feedstock derived from sources other than corn. Such agreements are
intended to be joint venture agreements whereby we can work to provide feedstock
for ethanol production and participate in the distribution of the blended
product. Cane Fuel, Inc. is in the process of obtaining 40,000 acres for its
first plant in Hendry County, Florida, known for its sugar, citrus and other
crops. The proposed plant would have production capability of 50 million gallons
of ethanol annually. The ethanol expected to be produced is intended to be used
by refineries or blenders and ultimately blended with gasoline for internal
combustion engines. We intend to work with sugar cane, sweet sorghum and other
available sources of cellulosic materials to produce ethanol.
On
January 1, 2009, we entered into a Distribution Agreement (the “Agreement”) with
CutVersion Technologies Corp. (“Cutversion”) whereby the Company, upon EPA
approval, has the right to market and sell an E-85 ethanol conversion kit in the
Southeastern U.S. The conversion kit allows all fuel injected vehicles to run on
virtually any form of E-85 ethanol regardless of feedstock source. The Company
can maintain its exclusive arrangement with Cutversion through the sale of a
minimum of 1000 kits within the 12 month period from the time final product
becomes available for sale under EPA requirements. The Agreement is effective
for a term of three (3) years and continued thereafter for successive one year
terms.
Our
business model recognizes that the vast majority of agricultural enterprises use
distillate fuel oil in their respective operations. We believe our intended
product(s) could represent a real alternative and, because most of the
constituent components will be domestically produced, a more stable and cost
effective source for the U.S. consumer. Ethanol is a renewable
biofuel for which demand is increasing throughout the U.S. Ethanol
refineries are expected to increase production capacities in an effort to
decrease dependence on foreign oil.
The vast
majority of all agricultural enterprises use distillate fuel oil in their
operations. We believe our intended biofuel product(s) could
represent a real alternative and, because most of the constituent components
will be domestically produced, a more stable and cost effective source for their
fuel energy needs.
Initially,
our largest target market will be the consumers able to utilize ethanol as the
primary blend component in E85, an unleaded gasoline alternative. In
order to reach that market, we must begin by establishing and proving our fuel
reliable and as easily distributed as current competitors. In addition, the E-85
conversion kit will expand our target market to literally millions of non-flex
fuel fuel injected vehicles.
Results
of Operations for Period Ended January 31, 2009
As of
January 31, 2009, the Company has earned revenues of $-0- and has incurred a net
loss to date of $7,397. Operations have been attributed primarily to start up
and business development.
During
the three and six month periods ended January 31, 2009, we incurred operating
expenses in the amount of $4,004 and $7,397, respectively. These operating
expenses included professional fees and office and general
expenses.
Liquidity
and Capital Resources
To date,
we have financed our operations from funds raised from private investment. In
addition, we have engaged in selling efforts to sell 200,000 shares of publicly
registered shares of our common stock for a total subscription amount of
$100,000. To date, we have not closed the offering. As of January 31,
2009, we had cash on hand of $1,289.
Recent
Accounting Pronouncements
In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(“SFAS 157”), which clarifies the principle that fair value should be
based on the assumptions that market participants would use when pricing an
asset or liability. It also defines fair value and established a
hierarchy that prioritizes the information used to develop
assumptions. SFAS 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007. The adoption of
SFAS 157 did not have a material effect on the Company’s financial position,
results of operations or cash flows.
In
February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial
Assets and Financial Liabilities” (“SFAS 159”), which permits entities to
choose to measure many financial instruments and certain other items at fair
value. The unrealized gains and losses on items for which the fair value option
has been elected should be reported in earnings. The decision to
elect the fair value option is determined on an instrument-by-instrument basis,
should be applied to an entire instrument and is irrevocable. Assets
and liabilities measured at fair values pursuant to the fair value option should
be reported separately in the balance sheet from those instruments measured
using other measurement attributes. SFAS 159 is effective as of the
beginning of the Company’s 2008 fiscal year. The adoption of SFAS 159 did not
have a material effect on the Company’s financial position, results of
operations or cash flows.
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of Accounting Research Bulletin
No 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, changes in a parent’s ownership of a noncontrolling interest,
calculation and disclosure of the consolidated net income attributable to the
parent and the noncontrolling interest, changes in a parent’s ownership interest
while the parent retains its controlling financial interest and fair value
measurement of any retained noncontrolling equity investment. SFAS 160 is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Early adoption
is prohibited. The adoption of SFAS No. 160 is not expected to have a material
effect on the Company’s financial position, results of operations or cash
flows.
In
December 2007, the FASB issued SFAS 141R, “Business Combinations”
(“SFAS 141R”), which replaces FASB SFAS 141, “Business
Combinations”. This Statement retains the fundamental
requirements in SFAS 141 that the acquisition method of accounting be used for
all business combinations and for an acquirer to be identified for each business
combination. SFAS 141R defines the acquirer as the entity that obtains control
of one or more businesses in the business combination and establishes the
acquisition date as the date that the acquirer achieves control. SFAS
141R will require an entity to record separately from the business combination
the direct costs, where previously these costs were included in the total
allocated cost of the acquisition. SFAS 141R will require an entity
to recognize the assets acquired, liabilities assumed, and any non-controlling
interest in the acquired at the acquisition date, at their fair values as of
that date. This compares to the cost allocation method previously
required by SFAS No. 141. SFAS 141R will require an entity to
recognize as an asset or liability at fair value for certain contingencies,
either contractual or non-contractual, if certain criteria are
met. Finally, SFAS 141R will require an entity to recognize
contingent consideration at the date of acquisition, based on the fair value at
that date. This Statement will be effective for business combinations
completed on or after the first annual reporting period beginning on or after
December 15, 2008. Early adoption of this standard is not permitted
and the standards are to be applied prospectively only. Upon adoption
of this standard, there would be no impact to the Company’s results of
operations and financial condition for acquisitions previously
completed. The adoption of SFAS No. 141R is not expected to have a
material effect on the Company’s financial position, results of operations or
cash flows.
In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative
Instruments and Hedging Activities—An Amendment of FASB Statement
No. 133.” (“SFAS 161”). SFAS 161 establishes the disclosure
requirements for derivative instruments and for hedging activities with the
intent to provide financial statement users with an enhanced understanding of
the entity’s use of derivative instruments, the accounting of derivative
instruments and related hedged items under Statement 133 and its related
interpretations, and the effects of these instruments on the entity’s financial
position, financial performance, and cash flows. This statement is
effective for financial statements issued for fiscal years beginning after
November 15, 2008. The adoption of SFAS No. 161 is not expected to have a
material effect on the Company’s financial position, results of operations or
cash flows.
In April
2008, the FASB issued FASB Staff Position (“FSP”) SFAS No. 142-3, “Determination of the Useful Life of
Intangible Assets”. This FSP amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible
Assets” (“SFAS 142”). The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair
value of the asset under SFAS 141R, and other GAAP. This FSP is effective for
financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. Early adoption is
prohibited. The Company is currently evaluating the impact of SFAS FSP 142-3,
but does not expect the adoption of this pronouncement will have a material
impact on its financial position, results of operations or cash
flows.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS 162”). SFAS 162 identifies the
sources of accounting principles and the framework for selecting principles to
be used in the preparation of financial statements of nongovernmental entities
that are presented in conformity with generally accepted accounting principles
in the United States. This statement is effective 60 days following the
SEC’s approval of the Public Company Accounting Oversight Board’s amendments to
AU section 411, The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles. The Company is currently evaluating the
impact of SFAS 162, but does not expect the adoption of this pronouncement will
have a material impact on its financial position, results of operations or cash
flows.
In
October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a
Financial Asset When the Market For That Asset Is Not Active” (“FSP FAS
157-3”), with an immediate effective date, including prior periods for which
financial statements have not been issued. FSP FAS 157-3 amends FAS 157 to
clarify the application of fair value in inactive markets and allows for the use
of management’s internal assumptions about future cash flows with appropriately
risk-adjusted discount rates when relevant observable market data does not
exist. The objective of FAS 157 has not changed and continues to be the
determination of the price that would be received in an orderly transaction that
is not a forced liquidation or distressed sale at the measurement date.
The adoption of FSP FAS 157-3 is not expected to have a material effect on the
Company’s financial position, results of operations or cash flows.
Other
accounting standards have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date and
are not expected to have a material impact on the financial statements upon
adoption.
Item
3. Quantitative and Qualitative Disclosures About
Market
We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information required under this item.
Item
4T. Controls and Procedures
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for the Company. Under the supervision and with
the participation of our management, including the Principal Executive Officer
and Principal Financial Officer, we have evaluated the effectiveness of the
design and operation of our disclosure controls and procedures pursuant to
Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered by this
report. Based on that evaluation, the Principal Executive Officer and Principal
Financial Officer have concluded that these disclosure controls and procedures
were effective such that the material information required to be filed in our
SEC reports is recorded, processed, summarized and reported within the required
time periods specified in the SEC rules and forms. There were no changes in our
internal control over financial reporting during the quarter ended January 31,
2009 that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting. Potential investors
should be aware that the design of any system of controls and procedures is
based in part upon certain assumptions about the likelihood of future events.
There can be no assurance that any system of controls and procedures will
succeed in achieving its stated goals under all potential future conditions,
regardless of how remote.
Item
1. Legal Proceedings
Neither
the Company nor any of our officers or directors are involved in any litigation
either as plaintiffs or defendants and we have no knowledge of any threatened or
pending litigation against us or any of our officers or directors.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
During
the six months ended January 31, 2009, we accepted subscriptions for 22,000
shares of common stock, pursuant to a rights offering to our existing
shareholders at a price of $0.25 per share.
Item
3. Defaults Upon Senior Securities
There
were no defaults since we have no debt and no senior securities
outstanding.
Item
4. Submission of Matters to a Vote of Security Holders
There
were no matters submitted to a vote of our shareholders.
Item
5. Other Information.
None
Item
6. Exhibits
Exhibit
No.
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Description
of Exhibit
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In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, hereunto duly
authorized.
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Alternative Energy Partners,
Inc. |
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Date:
March 13, 2009
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By:
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/s/ Jack
L. Stapleton |
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Jack
L. Stapleton |
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Principal
Executive Officer
Principal
Financial Officer
Principal
Accounting Officer
and
Director
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