Apollo Solar Energy Inc (fka ASOE)

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os: 44,555,131 as of 11-12-2008

shs decreased by 1 for 8 split
Pay Date: Feb 12, 2008

Effective at close of business on February 1, 2008, the Company, which had been a Colorado corporation, reincorporated in the State of Nevada by merging into its subsidiary, a Nevada corporation. As a result of this change in domicile, the Company is now governed by Nevada law, and the articles of incorporation and bylaws of the Nevada corporation became the Company’s governing instruments. The change in domicile had no effect on the Company’s financial condition or its business.

In connection with the reincorporation merger, one new share of the Nevada corporation was exchanged for every eight shares of the Colorado corporation that had been outstanding, with any resulting fractional shares of the Nevada corporation being rounded up to one whole share. The effect of this exchange was a 1-for-8 reverse split of the Company?痵 common stock. In addition, the authorized common stock was increased from 75,000,000 shares to 100,000,000 shares.

Capital Stock

At September 30, 2008, the Company was authorized to issue 25,000,000 shares of $0.001 par value preferred stock and 100,000,000 shares of $0.001 par value common stock. As of September 30, 2008 there were no preferred shares issued and outstanding and there were 555,131 common shares issued and outstanding.

The holders of the Company's stock are entitled to receive dividends at such time and in such amounts as may be determined by the Company's Board of Directors. All shares of the Company's common stock have equal voting rights, each share being entitled to one vote per share for the election of directors and for all other purposes. All shares of the Company's preferred stock have a preference over the common stock in the event of liquidation or similar action. The Board of Directors of the Company is authorized to create a series of preferred shares designating the rights of the holders of the series. The preferred shares have no voting rights.


Results of Operations

We currently have no assets and no operations. During the three months that ended on September 30, 2008, we realized no revenue and incurred $14,606 in operating expenses. Our operating expenses consist of fees to lawyers and accountants necessary to maintain our standing as a fully-reporting public company and other administration expenses attendant to the trading of our common stock.


Our operating expenses in the three months ended September 30, 2007 were lower than in the three months ended September 30, 2008 because majority ownership and management of our Company changed during the 2007 period. This resulted in expenses for reporting and for implementation of new management systems. We do not expect the level of our operating expenses to change in the future until we commence business operations or acquire an operating business.

On August 18, 2008, we entered into a Merger Agreement dated August 8, 2008, as amended and restated on October 14, 2008, with Apollo Solar Energy, Inc., a Delaware corporation (“ASE”) and Apollo Solar Energy, Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Merger Sub”).


Pursuant to this Merger Agreement, on October 14, 2008, Merger Sub was merged with and into ASE. Each share of ASE common stock outstanding immediately prior to the closing of the Merger was converted into the right to receive Four Thousand (4,000) shares of our common stock. After the consummation of the Merger, and prior to any issuance of shares pursuant to the Entrusted Management Agreement, the former stockholders of ASE owned approximately 96.87% of our outstanding common stock. As a result of the completion of the Merger, ASE became a wholly owned subsidiary of the Company.

On October 20, 2008, we entered into an Entrusted Management Agreement with the Apollo Managers. Pursuant to the terms of the Entrusted Management Agreement, we will issue the Apollo Managers an aggregate of our 26.8 million newly issued shares of common stock with the result that the Apollo Managers will own approximately 60.15% of the our common stock, after giving effect to such issuance. A copy of the Entrusted Management Agreement can be found on our Current Report on Form 8-K, filed with the SEC on October 20, 2008.


Liquidity and Capital Resources

At September 30, 2008 we had a working capital deficit of ($33,582), due to the fact that we had no assets and owed $33,582. Our liabilities are owed primarily to our President, who has financed our ongoing operations. Our remaining liabilities, our accounts payable, are owed primarily to our professional advisors.


Our operations consumed no cash during the three months ended September 30, 2008, as our management paid our ongoing expenses, increasing our amounts due to related parties. In the future, as long as we remain a shell corporation, it is likely that we will continue to rely on loans and capital contributions to sustain our operations.


To date we have supplied our cash needs by making private placements of securities and obtaining loans from management and shareholders. We expect that our President will fund our operations until we have completed an acquisition of an operating company and that we will, therefore, have sufficient cash to maintain our existence as a shell company for the next twelve months, if necessary.


The acquisition of Apollo Solar Energy, Inc. mentioned above has resulted in a complete change to our capital structure. This change will be reflected in annual report for the year ended June 30, 2009. A Current Report on Form 8-K has been filed dated October 16, 2008 containing a discussion of the liquidity and capital resources of Apollo and its subsidiaries.

11-12-2008 10Q

http://sec.gov/cgi-bin/browse-edgar?company=APOLLO+SOLAR+ENERGY%20&action=getcompany