Note 1. Financial Statement Presentation
|3 Months Ended|
Oct. 31, 2012
|Accounting Policies [Abstract]|
|Note 1. Financial Statement Presentation||
Note 1. Financial Statement Presentation
Sky Power Solutions Corp. (the Company or Sky Power) following the merger with our the Companys wholly-owned subsidiary on April 2, 2011, (formed for the sole purpose of merging with its parent), continues to work on the further development of the lithium batteries technology licensed from Li-ion Motors Corp. (Li-ion Motors), the Companys former parent. Consultants for the Company are continuing work on the solar concentrating electric power generating system working independently.
As of August 1, 2008, the Company is considered a development stage enterprise as defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 915, Development Stage Entities (ASC 915). The Company has limited revenue to date, continues to raise capital and there is no assurance that ultimately the Company will achieve a profitable level of operations.
The summary of significant accounting policies is presented to assist in the understanding of the financial statements. The financial statements and notes are the representations of management. These accounting policies conform to accounting policies generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
History and Nature of Business
On April 2, 2011, the Companys Board of Directors (the Board) authorized the merger with our wholly-owned subsidiary, Sky Power Solutions Corp., and in the merger the name of our Company was changed to Sky Power Solutions Corp.
On April 15, 2008, Li-ion Motors sold its controlling interest of the Companys outstanding common stock to Blue Diamond Investments, Inc. (Blue Diamond) With the sale of our VoIP telecommunications business, named Zingo Telecom, Inc., on May 15, 2008, the Company intends to concentrate efforts on further development of the lithium batteries technology licensed from Li-ion Motors, the Companys former parent.
Effective April 15, 2008, the Company entered into a License Agreement (License Agreement) with Li-ion Motors providing for Li-ion Motors' license to the Company of Li-ion Motors patent applications and technologies for rechargeable lithium-ion batteries for hybrid vehicles and other applications (Licensed Products).
Under the License Agreement, Li-ion Motors has the right to purchase its requirements of lithium ion batteries from the Company, and its requirements of lithium ion batteries shall be supplied in preference to, and on a priority basis as compared with, supply and delivery arrangements in effect for our other customers. Li-ion Motors' cost for lithium ion batteries purchased from the Company is the actual manufacturing costs for such batteries for our fiscal quarter in which Li-ion Motors purchase takes place.
On May 25, 2010, the agreement was amended to grant the Company the exclusive license rights for the United States and Li-ion Motors may grant other companies rights elsewhere around the world.
Under the terms of the License Agreement, the Company agreed to invest a minimum of $1,500,000 in each of the first two years under the License Agreement in development of the technology for the Licensed Products. To date, we have not met the minimum requirements in the development of the technology, and therefore, are not compliant with our obligations under this covenant of the License Agreement. Li-ion Motors has advised the Company that it will not give notice of default against the Company for its failure to comply with this covenant over the term of the License Agreement.
Effective April 16, 2008, the Company agreed to lease approximately 5,000 square feet of space in Li-ion Motors North Carolina facility. The leased space was suitable, and utilized by the Company, for developmental and manufacturing operations for licensed products pursuant to the license agreement. The lease was terminated May 2012. Also, effective April 16, 2008, the Company purchased certain equipment and supplies related to the license agreement from Li-ion Motors for the purchase price of $29,005.
Basis of Presentation
The Companys financial statements for the period ended October 31, 2012, have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company did not have any revenue and as of October 31, 2012, there was a working capital deficit of approximately $1 million. Management recognized that the Companys continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses.
Since its incorporation, the Company financed its operations almost exclusively through advances from its controlling shareholders. The Company expects to finance operations through the sale of equity or other investments for the foreseeable future, as the Company does not receive significant revenue from its new business operations. There is no guarantee that the Company will be successful in arranging financing on acceptable terms.
The Company's ability to raise additional capital is affected by trends and uncertainties beyond its control. The Company does not currently have any arrangements for financing and it may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor sentiment. Market factors may make the timing, amount, terms or conditions of additional financing unavailable to it. These uncertainties raise substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.
On September 17, 2009, the Board declared a three-for-one forward stock split that was affected in the form of a stock dividend.
Effective April 26, 2011, the Company filed with SOSN a Certificate of Change that affected a 1:300 reverse split in our outstanding common stock and a reduction of our authorized common stock in the same 1:300 ratio, from 750,000,000 shares to 2,500,000 shares.
On June 6, 2011, the Board approved the filing of a Certificate of Amendment with the Secretary of State of Nevada (SOSN) which gave the Company the authority to issue 100 million shares of common stock and 10 million shares of preferred stock.
On May 4, 2011, debt to Blue Diamond and its assignees in the amount of $4,321,358 was converted into 20,007,309 shares of the Companys common stock.
On April 26, 2012, debt to Li-ion Motors was assigned to Frontline Asset Management (Frontline) and Windsor Capital (Windsor) in the amount of $112,500 which was converted into 3,750,000 shares of the Companys common stock.
On June 11, 2012, accrued interest to Blue Diamond was assigned to various corporations in the amount of $1,360,341. Those assignees converted the debt into 75,000,000 shares of the Companys common Stock.
All common stock references have been restated to reflect the stock splits. See Note 6 Common Stock, for further discussion.
The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).
No definition available.