CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management, any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
CERTAIN TERMS USED IN THIS REPORT
When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Alternative Energy & Environmental Solutions, Inc. “SEC” refers to the Securities and Exchange Commission.
Except as otherwise indicated, the information presented in this 10-K reflects our 3-for-1 forward stock split, which became effective as of August 22, 2012.
Item 1.
Business.
Our Company
Alternative Energy & Environmental Solutions, Inc. (the “Company”), a Nevada Corporation, was incorporated on June 10, 2010 to market an innovative new biotechnology that utilizes nutrient stimulants organic microbes to extract coalbed methane more efficiently in high-production, as well as from low-producing, depleted and abandoned coalmines in the U.S. Coalbed methane is a clean-burning natural gas used for heating in homes and is used to generate electricity.
Nutrient stimulation for coalbed methane production is considered by the U.S. Geological Survey to be an environmentally sound and inexpensive method to increase yields. As the U.S. shifts to cleaner and more environmentally friendly fuel sources for heating and electricity, coalbed methane is becoming more valuable. Innovative methods for cost-effectively and efficiently extracting more of this natural gas are now in demand.
The Company plans to apply for patents on its biotechnology solution based on in-situ biogenic nutrient-circulation methods and the nutritional amendments used in the biogenic process successfully piloted both in the lab and in the field during the last two years.
The Company plans to license this patent-pending biotechnology to owners and operators of coalmines in the Power River Basin, which spans parts of Montana and Wyoming. This area has the potential to yield nearly 22 trillion cubic feet (Tcf) of coalbed methane during the next 20 years. The overall market potential for coalbed methane from the Power River Basin is estimated to reach $10 billion in the next decade. Because coalbed methane is a clean-burning natural gas, companies developing greater reserves contribute in a major way to the U.S.’s drive for higher reliance on renewable and cleaner energy sources, and can possibly qualify for significant tax incentives to help fund operations.
The Company began operations in June 2010, and is currently a development-stage company with no operations or revenues.
The Company’s principal executive office location and mailing address is 100 Europa Drive, Suite 455, Chapel Hill, NC 27517 and its telephone number is 919-933-2720.
History
The Company was incorporated on June 10, 2010 in the State of Nevada. We began operations in June 2010, and are currently a development-stage company with no operations or revenues.
On July 8, 2011, we entered into an agreement (the "Merger Agreement") with U.S. EcoFuels, Inc., a Florida corporation ("ECO"), National Invest & Trade, Ltd., a Nevada corporation ("NIT") and Allen N. Sharpe the sole owner of NIT pursuant to which ECO would merge into a subsidiary to be formed by the Company (the “Merger”). Currently, NIT is ECO's sole shareholder, but we anticipated that ECO would issue shares to settle outstanding obligations before the merger closed. The target date in the Merger Agreement for closing the merger was September 30, 2011, which was not met because ECO failed to deliver audited financial statements and meet other closing conditions on time. On March 1, 2012, the Company terminated the Merger Agreement for breach by the other parties in connection with their failure to fulfill the conditions to closing by the date specified in the Merger Agreement.
1
On May 22, 2012, the Company, Scott Williams and David Callan (the “Sellers”) and Peter Coker (the “Purchaser”) entered into and closed a stock purchase agreement (the “Stock Purchase Agreement”), whereby the Purchaser purchased from the Sellers 14,700,000 shares of common stock of the Company, par value $0.0001 per share (the “Shares”), representing approximately 81.3% of the issued and outstanding shares of the Company, for an aggregate purchase price of $490 (the “Purchase Price”).
In connection with the closing of the Stock Purchase Agreement on May 22, 2012, Scott Williams, Dave Callan and John Tilger each submitted to the Company a resignation letter pursuant to which they resigned from their respective positions as directors of the Company. In addition, Scott Williams resigned from his position as President and Chief Executive Officer of the Company and Dave Callan resigned from his position as Chief Financial Officer and Secretary of the Company. The resignations of Mr. Williams, Mr. Callan and Mr. Tilger were not a result of any disagreements relating to the Company’s operations, policies or practices.
On May 22, 2012, by a consent to action without meeting by unanimous consent of the board of directors of the Company (the “Board”), the Board accepted the resignations of Mr. Williams, Mr. Callan and Mr. Tilger and appointed Peter Coker serve as the President, Chief Executive Officer, Chief Financial Officer and sole director of the Company.
Industry
According to the U.S Geological Survey (USGS) the Powder River Basin has the potential to produce 22 Tcf of natural gas in the next 20 years. More than half of the 22,000 natural gas wells in the Powder River Basin are considered low producing, depleted or abandoned. The Company’s proprietary biotech solution can become a cost-effective method for revitalizing the yields from these low-producing mines as well as valuable solution for helping to maintain yields in high-producing mines.
Growth Strategies
There are approximately 100 companies with mines in the Power River Basin that may be interested in cost-effective ways to develop additional reserves of this natural gas energy source. The Company plans to engage these companies in discussions geared toward developing licensing agreements, providing the Company’s biotech solution to aid these companies’ efforts to develop high yielding coalbed methane reserves.
Sales and Marketing
The Company’s initial marketing efforts will be focused on engaging with the 100 or so companies with coal mines and natural gas efforts in the Powder River basin of Montana and Wyoming. Company officials have developed relationships with a number of these companies and the goal is to field three new in-situ pilots with three of these companies as proof points for the participating companies and the industry.
Once the three pilots are complete, AEES plans to offer its biotechnology solution on a renewable, annual license agreement to those operators who seek to increase their coalbed methane yields over the next few years.
Competition
There are several other biotechnologies being piloted for extraction of natural gas using microbial stimulation. The first-mover position in this case is critical to long-term market success.
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Employees
We presently have no employees apart from our management. Our officers and directors devote to our business approximately ten (10) hours per week.
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.