It is our intention to develop pilot manufacturing of metallic lithium and from such production, manufacture sufficient material to insure the quality, test the marketing and commence initial pilot sales.  We would lease manufacturing space at the facilities of RSI Silicon Products LLC in Easton, Pennsylvania.  It would be necessary to raise sufficient funds to commence such pilot manufacturing over the next six months and it would be the responsibility of management to initiate such financing.  We would hire technical and operational support personnel as necessary to reach appropriate staffing levels at such time.

Metallic lithium is distinguishable from other existing forms of battery technology in that it has a higher energy density than zinc or nickel compounds used in conventional batteries.  The market for metallic lithium is now in excess of $1.0 billion according to independent industry sources and, we believe, steadily increasing.  There are a number of much larger and more established firms in the business of manufacturing metallic lithium.  It is our belief that utilizing our new patent pending process we would have a significant advantage in manufacturing costs over the existing companies in the field, although no assurance can be given.  This process has only been proven in the laboratory and will have its initial pilot production later in 2009.

Results of Operations

Year ended December 31, 2009 Compared to Year Ended December 31, 2008

 

As described in this report, we had no active operations in either 2009 or 2008.

ITEM 9B.  Other Information

 

None.

 

13

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PART III

ITEM 10.  Directors, Executive Officers and Corporate Governance

 

The following table shows the positions held by our board of directors and executive officers, and their ages, as of March 26, 2010:

 

Name		Age		Position
Jerome I. Feldman		81		Chairman of the Board, Chief Financial Officer and Treasurer
Steven M. Payne		55		President and Director
George McKeegan		61		Vice President, Secretary, Treasurer and Director
Ogden Reid		84		Director

The principal occupations for the past five years (and, in some instances, for prior years) of each of our directors and executive officers are as follows:

 

Jerome I. Feldman became our Chairman of the Board on December 8, 2008 (he previously was the Vice Chairman) and has been a member of our board of directors and our Chief Financial Officer and Treasurer since September 2006. Mr. Feldman founded GP Strategies Corporation in 1959 and served as Chief Executive Officer from 1959 until April 2005, Chairman of the Board from 1999 until April 2005 and President from 1959 until 2001. He has been Chairman of the Board of Five Star from 1994 until June 2007, a director of GSE since 1994, Chairman of the Board of GSE since 1997 and Chairman of the Board and Chief Executive Officer of NPDC from 2004 until June 2007. He was a director of Valera from January 2005 until April 2007.  Mr. Feldman is also Chairman of the New England Colleges Fund and a Trustee of Northern Westchester Hospital Foundation. He has a B.A. degree from Indiana University and an LL.B degree from New York University. Mr. Feldman is a Class III Director.

 

Steven M. Payne has been our President and a member of our board of directors since May 2006. Since 1976, Mr. Payne has served as President and CEO of Quatro Foods Inc., a food service enterprise. He is a director and past Board President of Carbondale Main Street, Inc., a local downtown redevelopment corporation, and a director of the Southern Illinois Entrepreneurship and Business Development Center at Southern Illinois University in Carbondale, Illinois. Mr. Payne is also President of 13 West LLC, a developer and operator of Mini Storage facilities. He attended Southern Illinois University.  Mr. Payne is a Class I Director.

 

George McKeegan has been our Vice President, Secretary and a member of our board of directors since May 2006. Since 1986, Mr. McKeegan has led McKeegan & Shearer, P.C., a law firm engaged in the general practice of civil law, and specializing in litigation and corporate counseling.  Prior to that, he served as Vice President at Citibank, N.A. and as an Assistant District Attorney with the New York County District Attorney’s Office. He received a B.A. degree from Fordham College and a J.D. degree from the University of Michigan, Ann Arbor.  Mr. McKeegan is a Class III Director.

 

Ogden Reid became a member of our board of directors on December 8, 2008.  He previously served as a director and Chairman of the Audit Committee of GP Strategies Corporation, a New York Stock Exchange-listed company, from 2002 to 2006. His professional life included service as a six-term Congressman from Westchester, New York, as Ambassador to Israel and as Commissioner of the New York State Department of Conservation. Mr. Reid is a graduate of Yale University.  Mr. Reid is a Class II Director.

 

Effective February 9, 2009, Michael D. Feldman, our previous Chairman and Chief Executive Officer, resigned from our board of directors and as an executive officer to pursue other business interests.

Our directors are divided into three classes. At each annual meeting of stockholders, directors are elected to succeed those directors whose terms expire and are elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election. Under our bylaws, the number of directors constituting the entire board of directors shall be fixed, from time to time, by the directors then in office, who may decrease or increase the number of directors by majority action without soliciting stockholder approval. We do not currently pay compensation to directors for service in that capacity.

 

14

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Committees of the Board

 

We have not established an audit committee, compensation committee or nominations and governance committee, and we are not required to do so since our shares are not listed on a national securities exchange.

 

Indebtedness of Directors and Executive Officers

 

None of our directors or executive officers or their respective associates or affiliates is indebted to us.

 

Family Relationships

 

There are no family relationships among our current directors and executive officers.

 

Legal Proceedings

 

No officer, director, persons nominated for such positions, promoter or significant employee has been involved in the last ten years in any of the following:

 

·

Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

·

Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

·

Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

 

·

Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated;

 

·

Being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or state securities or commodities law or regulation, (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; and

 

·

Being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Code of Ethics

In December 2007, we adopted a Code of Ethics and Business Conduct that applies to all of our executive officers, directors and employees.  The Code of Ethics and Business Conduct codifies the business and ethical principles that govern all aspects of our business.  Our Code of Ethics and Business Conduct is available without charge to any stockholder who makes a written request for a copy.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Rules adopted by the SEC under Section 16(a) of the Exchange Act, require our officers and directors, and persons who own more than 10% of the issued and outstanding shares of our equity securities, to file reports of their ownership, and changes in ownership, of such securities with the SEC on Forms 3, 4 or 5, as appropriate. Such persons are required by the regulations of the SEC to furnish us with copies of all forms they file pursuant to Section 16(a).

 

15

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We believe that all of the officers, directors, and owners of more than ten percent of the outstanding shares of our common stock complied with Section 16(a) of the Exchange Act for the year ended December 31, 2009.

ITEM 11.  Executive Compensation

Summary Compensation Table

 

The following table sets forth, for the most recent fiscal year and prior fiscal year, all cash compensation paid, distributed or accrued, including salary and bonus amounts, for services rendered to us by our Chief Executive Officer, Chief Financial Officer and two other executive officers in such year who received or are entitled to receive remuneration in excess of $100,000 during the stated period and any individuals for whom disclosure would have been made in this table but for the fact that the individual was not serving as an executive officer as at December 31, 2009:

 

Name and Principal Position		Year				Salary ($)				Bonus ($)				Stock Awards ($)				Option Awards ($)				Non-Equity Incentive Plan Compen- sation (4)				Nonqualified Deferred Compen-sation Earnings ($)				All Other Compen-sation ($)				Total ($)
(a)		(b)				(c)				(d)				(e)				(f)				(g)				(h)				(i)				(j)
Michael D. Feldman, Former Chief Executive Officer and Chairman			2009 2008				— —				— —				— —				— —				— —				— —				— —				— —
Jerome I. Feldman, Chief Financial Officer, Treasurer and Chairman			2009 2008				— —				— —				— —				— —				— —				— —				— —				— —
Steven M. Payne, President			2009 2008				— —				— —				— —				— —				— —				— —				— —				— —

 

16

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Outstanding Equity Awards at Fiscal Year-End

The following table summarizes equity awards outstanding at December 31, 2009, for each of the executive officers named in the Summary Compensation Table above:

 

Option Awards

Stock Awards

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)

Option Expiration Date

Number of Shares or Units of Stock That Have Not Vested (#)

Market Value of Shares or Units of Stock That Have Not Vested ($)

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Michael D. Feldman, Former Chief Executive Officer and Chairman

—

—

—

—

—

—

—

—

—

Jerome I. Feldman, Chief Financial Officer, Treasurer and Chairman

—

—

—

—

—

—

—

—

—

Steven M. Payne, President

—

—

—

—

—

—

—

—

—

Employment Agreements

As of December 31, 2009, and through the date of this report, we have no employment agreements in place with any person.

Director Compensation

Directors currently receive no compensation for serving on our board of directors, other than reimbursement of all reasonable expenses for attendance at board meetings.

 

17

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Director Compensation

 

Name

Fees Earned or Paid in Cash ($)

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive Plan Compen- sation ($)

Nonqualified Deferred Compen-sation Earnings ($)

All Other Compen-sation ($)

Total ($)

(a)

(b)

(e)

(f)

(g)

(h)

(i)

(j)

Michael D. Feldman

—

—

—

—

—

—

—

Jerome I. Feldman

—

—

—

—

—

—

—

Steven M. Payne

—

—

—

—

—

—

—

George McKeegan

—

—

—

—

—

—

—

Ogden Reid

—

—

—

—

—

—

—

ITEM 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The table below sets forth the beneficial ownership of our common stock, as of March 26, 2010, by:

·

all of our directors and executive officers, individually,

·

all of our directors and executive officers, as a group, and

·

all persons who beneficially owned more than 5% of our outstanding common stock.

 

The beneficial ownership of each person was calculated based on 25,821,030 shares of our common stock outstanding as of March 26, 2010, according to the record ownership listings as of that date and the verifications we solicited and received from each director and executive officer. The SEC has defined “beneficial ownership” to mean more than ownership in the usual sense. For example, a person has beneficial ownership of a share not only if he owns it in the usual sense, but also if he has the power to vote, sell or otherwise dispose of the share. Beneficial ownership also includes the number of shares that a person has the right to acquire within 60 days of March 26, 2010, pursuant to the exercise of options or warrants or the conversion of notes, debentures or other indebtedness, but excludes stock appreciation rights. Two or more persons might count as beneficial owners of the same share. Unless otherwise noted, the address of the following persons listed below is c/o alpha-En Corporation, 120 White Plains Road, Tarrytown, New York 10591.

 

18

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Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

 

Name		Position		Shares of Common Stock Beneficially Owned				Percent of Common Stock Beneficially Owned
5% Stockholder:
Michael D. Feldman		Former Chairman and Chief Executive Officer			3,765,000				14.6	%
Directors and Executive Officers:
Steven M. Payne		President and Director			4,667,900				18.1	%
Jerome I. Feldman		Chairman of the Board, Chief Financial Officer and Treasurer			7,320,000				28.3	%
George McKeegan		Vice President, Secretary and Director			750,000				2.9	%
Ogden Reid		Director			100,000				*
All directors and executive officers as a group (4 persons)					12,837,900				49.7	%

---

*      Less than 1% of outstanding shares.

 

Change in Control

 

There are no arrangements currently in effect which may result in our “change in control,” as that term is defined by the provisions of Item 403(c) of Regulation S-K.

 

Equity Compensation Plan Information

 

Under our Stock Option and Long Term Incentive Compensation Plan (the Plan), as amended, there are 2,750,000 shares reserved for issuance under the Plan to key employees, directors and consultants. Grants may be stock options, SAR’s, restricted stock or stock bonuses. Only employees may receive incentive awards. Exercise prices of incentive stock option grants shall not be less than the fair market value of our common stock on the date of the grant.  Stock options may be exercised  subject to continued employment and certain other conditions.  We can determine all other terms of an award under the Plan, including vesting and term, provided, however, that the terms of a stock option grant under the Plan may not be for more than ten years from the date of grant. As of March 26, 2010, all 2,750,000 stock options are available for issuance under the Plan and, as of that date, there were no outstanding grants under the Plan.

 

The following table provides information as of December 31, 2009, with respect to the shares of common stock that may have been issued under our existing equity compensation plan.

 

19

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Equity Compensation Plan Information

Plan category		Number of shares of common stock to be issued upon exercise of outstanding options, warrants and rights (a)				Weighted-average exercise price of outstanding options, warrants and rights (b)				Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders			—				—				2,750,000
Equity compensation plans not approved by security holders			—				—				—
Total			—				—				2,750,000

ITEM 13.  Certain Relationships and Related Transactions, and Director Independence

Related Party Transactions

 

In September 2007, we issued to Jerome I. Feldman, our Chairman, Chief Financial Officer and Treasurer, and Steven Payne, our President and a director, 945,728 shares and 315,242 shares of our common stock, respectively, for an aggregate purchase price of $25,000.

 

As of December 31, 2009, loan payable-officer was $137,401 was payable on demand, with interest at 5%, per annum.  For the years ended December 31, 2009 and 2008, interest expense on the loan payable-officer was $3,637 and $6,266, respectively.

 

Director Independence

Ogden Reid is an “independent” director, as that term is defined in Rule 10A-3(b)(1) under the Exchange Act.  Our other three directors are not “independent” as they are also executive officers of our company.

 

20

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PART IV

ITEM 14.  Principal Accountant Fees and Services

 

Most & Company, LLP served as our independent auditors for the period from July 28, 2009 to December 31, 2009 and Raich Ende Malter & Co. LLP served as our independent auditors for the period from January 1, 2009 to July 28, 2009 and for the year ended December 31, 2008.

 

Audit Fees

 

Audit fees are those fees billed for professional services rendered for the audit of the annual financial statements and reviews of the financial statements included in Forms 10-Q. For the period from July 28, 2009 to December 31, 2009, $42,450 in audit fees were billed by Most & Co related to the audit and reviews of our financial statements.  For the period from January 1, 2009 to July 28, 2009 and for the year ended December 31, 2008, $9,114 and $57,022 in audit fees were billed by Raich Ende related to the audit and reviews of our financial statements in those periods.

 

Audit-related Fees

 

Audit-related fees are fees billed for professional services other than the audit of our financial statements.  For the period from July 28, 2009 to December 31, 2009, there were no audit-related fees billed by Most & Co.  For the period from January 1, 2009 to July 28, 2009 and for the year ended December 31, 2008, $0 and $1,500 in audit-related fees were billed by Raich Ende, respectively.

 

Tax Fees

 

Tax fees are those fees billed for professional services rendered for tax compliance, including preparation of corporate federal and state income tax returns, tax advice and tax planning.  For the period from July 28, 2009 to December 31, 2009, $300 in tax fees were billed by Most & Co.  For the period from January 1, 2009 to July 28, 2009 and for the year ended December 31, 2008, $0 and $750 in tax fees were billed by Raich Ende, respectively.

 

All Other Fees

 

No other fees were billed by our independent auditors in 2009 and 2008.

 

Audit Committee

 

We have not established an audit committee. Our board of directors approved the services rendered and fees charged by our independent auditors. Our board of directors has reviewed and discussed our audited financial statements for the year ended December 31, 2009, with our management. In addition, our board of directors has discussed with Raich Ende, our independent registered public accountants, the matters required to be discussed by Statement of Auditing Standards No. 61 (Communications with Audit Committee). Our board of directors also has received the written disclosures and the letter from as required by the Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and our board of directors has discussed the independence of Raiche Ende with that firm.

 

Based on our board of directors’ review of the matters noted above and its discussions with our independent auditors and our management, our board of directors approved that the audited financial statements be included in our annual report on Form 10-K for the year ended December 31, 2009.

 

Policy for Pre-Approval of Audit and Non-Audit Services

Our board of directors’ policy is to pre-approve all audit services and all non-audit services that our independent auditor is permitted to perform for us under applicable federal securities regulations. As permitted by the applicable regulations, our board of directors’ policy utilizes a combination of specific pre-approval on a case-by-case basis of individual engagements of the independent auditor and general pre-approval of certain categories of engagements up to predetermined dollar thresholds that are reviewed annually by our board of directors. Specific pre-approval is mandatory for the annual financial statement audit engagement, among others.

 

21

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The pre-approval policy was implemented effective as of 2001. All engagements of the independent auditor to perform any audit services and non-audit services since that date have been pre-approved by our board of directors in accordance with the pre-approval policy. The policy has not been waived in any instance. All engagements of the independent auditor to perform any audit services and non-audit services prior to the date the pre-approval policy was implemented were approved by our board of directors in accordance its normal functions.

ITEM 15.  Exhibits and Financial Statement Schedules

(a)  Exhibits

Exhibit No.		Description
21.1		Subsidiaries of alpha-En Corporation.
31.1		Certification of Chief Executive Officer required by Rule 13(a)-14(a).
31.2		Certification of Chief Financial Officer required by Rule 13(a)-14(a).
32.1		Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

22

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	ALPHA-EN CORPORATION
Dated:  March 31, 2010	By:	/s/ Steven M. Payne
		Steven M. Payne
		President
		(principal executive officer)
	By:	/s/ Jerome I. Feldman
		Jerome I. Feldman
		Chairman, Chief Financial Officer and Treasurer
		(principal financial and accounting officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

 

Signature		Title		Date
/s/ Steven M. Payne		President and Director		March 31, 2010
Steven M. Payne		(principal executive officer)
/s/ Jerome I. Feldman		Chairman, Chief Financial Officer and		March 31, 2010
Jerome I. Feldman		Treasurer
		(principal financial and accounting officer)
/s/ George McKeegan		Vice President, Secretary and Director		March 31, 2010
George McKeegan
/s/ Ogden Reid		Director		March 31, 2010
Ogden Reid

 

23

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alpha-En Corporation and Subsidiaries

 

Index to Consolidated Financial Statements

 

		Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheet as of December 31, 2009 and 2008		F-3
Consolidated Statement of Operations for the years ended December 31, 2009 and 2008		F-4
Consolidated Statement of Stockholders’ Equity (Deficit) for the years ended December 31, 2009 and 2008		F-5
Consolidated Statement of Cash Flows for the years ended December 31, 2009 and 2008		F-6
Notes to Consolidated Financial Statements		F-7

 

F-1

---

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Board of Directors and Stockholders

Alpha-en Corporation

 

We have audited the accompanying consolidated balance sheet of Alpha-en Corporation (Company) as of December 31, 2009 and 2008 and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Alpha-en Corporation as of December 31, 2009 and 2008 and the consolidated results of its operations and its consolidated cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has operating losses, negative working capital, no operating cash flow and future losses are anticipated. The Company’s plan of operations, even if successful, may not result in cash flow sufficient to finance and expand its business which raises substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Most & Company, LLP

 

Most & Company, LLP

 

New York, New York

March 31, 2010

 

F-2

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ALPHA-EN CORPORATION

CONSOLIDATED BALANCE SHEET

 

		December 31, 2009				December 31, 2008
ASSETS
Current assets
Cash		$	2,175			$	22,172
Prepaid expenses			3,069
Total current assets			5,244				22,172
Intangible assets			250,000
TOTAL ASSETS		$	255,244			$	22,172
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities		$	71,482			$	111,589
Loan payable - stockholder/officer			137,401				32,264
Note payable			1,607
Due to related party			4,713				8,803
TOTAL LIABILITIES			215,203				152,656
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value, 2,000,000 shares authorized; none issued
Class B common stock, no par value, 1,000,000 shares authorized; none issued
Common stock, $.01 par value, 35,000,000 shares
authorized; 25,821,030 and 22,821,030 shares issued
and outstanding as of December 31, 2009 and 2008,
respectively			258,210				228,210
Additional paid-in capital			7,578,103				7,358,103
Accumulated deficit			(7,726,889	)			(7,647,414	)
Treasury stock, at cost (798,918 shares of common stock)			(69,383	)			(69,383	)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)			40,041				(130,484	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)		$	255,244			$	22,172

 

See notes to consolidated financial statements

 

F-3

---

 

ALPHA-EN CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS

 

		Years Ended December 31,
		2009				2008
Revenues		$	4,091			$	9,619
General and administrative expenses			(141,088	)			(245,114	)
Forgiveness of accounts payable and
accrued liabilities			57,522
Net loss		$	(79,475	)		$	(235,495	)
Net loss per share - basic and diluted			*			$	(0.01	)
Weighted average common shares outstanding -
basic and diluted			25,360,756				16,151,766

 

---

* Less than $.01 per share

 

See notes to consolidated financial statements

 

F-4

---

 

ALPHA-EN CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

 

		Common Stock								Additional								Treasury Stock
		Number of								Paid-in				Accumulated				Number of
		Shares				Amount				Capital				Deficit				Shares				Amount				Total
Balance at December 31, 2007			11,582,000			$	115,820			$	7,245,713			$	(7,411,919	)		$	798,918			$	(69,383	)		$	(119,769	)
Sales of common stock			11,239,030				112,390				112,390																224,780
Net loss															(235,495	)											(235,495	)
Balance at December 31, 2008			22,821,030				228,210				7,358,103				(7,647,414	)			798,918				(69,383	)			(130,484	)
Acquisition of technology license for common stock			3,000,000				30,000				220,000																250,000
Net loss															(79,475	)											(79,475	)
Balance at December 31, 2009			25,821,030			$	258,210			$	7,578,103			$	(7,726,889	)		$	798,918			$	(69,383	)		$	40,041

 

See notes to consolidated financial statements

 

F-5

---

 

ALPHA-EN CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		Years Ended December 31,
		2009				2008
Cash Flows From Operations
Net loss		$	(79,475	)		$	(235,495	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Forgiveness of accounts payable and accrued liabilities			(57,522	)
Changes in operating assets and liabilities:
Prepaid expenses			(3,069	)			12,351
Accounts payable and accrued liabilities			17,415				75,108
Net cash used in operating activities			(122,651	)			(148,036	)
Cash Flows From Financing Activities
Increase in loan payable - stockholder/officer			105,137				96,265
Sales of common stock							60,000
Increase in note payable			15,440
Payments of note payable			(13,833	)
Decrease in due to related party			(4,090	)			(9,619	)
Net cash provided by financing activities			102,654				146,646
Increase (decrease) in cash			(19,997	)			(1,390	)
Cash - Beginning of period			22,172				23,562
Cash - End of period		$	2,175			$	22,172
Noncash Transactions:
Purchase of intangible assets in exchange for 3,000,000
shares of common stock		$	250,000
Common stock issued in exchange for
cancellation of loan-payable officer						$	164,780

 

See notes to consolidated financial statements.

 

F-6

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Alpha-en Corporation and Subsidiaries

 

Notes to Consolidated Financial Statements

 

1.      Organization and Operations

 

Alpha-En Corporation (formerly Avenue Entertainment Group, Inc.) (Company) was incorporated in Delaware on March 7, 1997 and had operated through its wholly-owned subsidiaries, Avenue Pictures, Inc. and its subsidiaries and Wombat Productions, Inc.

 

From May 2, 2006 through February 24, 2009, the Company had been inactive.

 

On February 25, 2009, the Company was granted a license for an exclusive, worldwide, transferable, perpetual license to use certain proprietary technology for the processing of lithium for use in batteries and other fields.

 

2.      Summary of Significant Accounting Policies

 

Consolidated Financial Statements

 

The Company's consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated.

 

Fair Value of Financial Instruments

 

The Company's carrying values of cash, accounts payable and accrued expenses, loan payable-stockholder/officer, note payable and due to related party approximate their fair values because of the short-term maturity of these instruments.

 

Revenue Recognition

 

Participation rights related to assets previously sold are recognized as earned and reported.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Intangible Assets

 

Intangible assets have been recorded at fair value and, as they have an indefinite life, will not be amortized.  The carrying value of the intangible assets will be evaluated by management for impairment at least annually or upon the occurrence of an event which may indicated that the carrying amount may be greater than its fair value.  If impaired, the Company will write down such impairment.  In addition, the useful life of the intangible assets will be evaluated by management at least annually or upon the occurrence of an event which may indicate that the useful life may be definitive and the Company will commence amortization over such useful life.

 

Effective January 1, 2009, the Company adopted FASB Staff Position 142-3, "Determination of the Useful Life of Intangible Assets" ("FSP 142-3").  FSP 142-3 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 No. 142, "Goodwill and Other Intangible Assets".  The adoption of FSP 142-3 did not have a material impact on the consolidated financial statements

 

F-7

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Loss per Common Share

 

Basic loss per share is calculated using the weighted-average number of shares outstanding during each period.  Diluted loss per share includes potentially diluted securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each period.

 

For the year ended December 31, 2009 and 2008, there were no significant potentially diluted securities.

 

Share-Based Compensation

 

The Company recognizes compensation expense for all share-based payment awards made to employees, directors and others based on the estimated fair values on the date of the grant.  Common stock equivalents are valued using the Black-Scholes Option-Pricing Model using the market price of our common stock on the date of valuation, an expected dividend yield of zero, the remaining period or maturity date of the common stock equivalent and the expected volatility of our common stock.

 

Income Taxes

 

The Company utilizes the liability method of accounting for income taxes.  Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting basis and tax basis of the assets and liabilities and are measured using enacted tax rates that will be in effect when the differences are expected to reverse.  A valuation allowance is provided when it is more likely than not, that such tax benefits will not be realized.

 

The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and tax related penalties as general and administrative expenses.

 

New Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

 

3.      Going Concern and Management’s Plans

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses, negative working capital and no operating cash flow and future losses are anticipated. The Company's plan of operations is to raise capital with equity financing, which even if successful, may not result in cash flow sufficient to develop its business plan and generate sales from the License (Note 10). These factors raise substantial doubt about the Company's ability to continue as a going concern. Realization of assets is dependent upon future operations of the Company, which in turn is dependent upon management's plans to meet its financing requirements and the success of its future operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

 

4.       Intangible Assets

 

On February 25, 2009, The Company was granted a license for an exclusive, worldwide, transferable, perpetual license to use certain proprietary technology for the processing of lithium for use in batteries and other fields.  A patent application relating to the licensed technology is pending.

 

The License fee shall consist of the following:

 

(1)

Issuance of 1,000,000 shares of common stock of the Company to the licensor;

 

F-8

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(2)

A royalty of $1.00, per kilogram, of lithium products manufactured and sold to the licensor, payable quarterly;

 

(3)

A royalty of $.01, per kilogram, of excess products manufactured and sold to the licensor, payable quarterly;

 

(4)

Issuance of an additional 2,000,000 shares of common stock of the Company to the licensor which are restricted and subject to forfeiture if there has not been at least $1,000,000 in total commercial sales of licensed products within three years (Threshold);

 

(5)

Grant of options to purchase up to a total of 19% (inclusive of previously issue shares) of the issued and outstanding shares of the Company upon the issuance of any additional shares after the date of the License.  These options are exercisable at the same prices as the shares sold or values received for five years from each grant date.  These grants are only issuable if the Threshold is met.

 

Upon a transfer of the entire License, the Company shall pay the licensor a fee equal to 19% of all compensation received on the transfer.

 

The License has been recorded at its fair value of $250,000 based on management's projected net cash flows to be realized from sales of products under the License.

 

5.      Note Payable

 

On March 10, 2009, in connection with the purchase of directors and officers liability insurance, the Company borrowed $15,440, payable in ten equal monthly installments of $1,621, including interest of 10.85%, per annum, through January 2010.

 

6.      Related Party Transactions

 

As of December 31, 2009, loan payable-stockholder/officer was $137,401 payable on demand, with interest at 5%, per annum.  For the years ended December 31, 2009 and 2008, interest expense on the loan payable - stockholder/officer was $3,637 and $6,266, respectively.

 

In January 2010, the Company borrowed an additional $3,000 from the stockholder/officer.

 

An officer of the Company provides administrative space without rent.

 

7.      Common Stock

 

On June 13, 2008, the Board of Directors approved a private placement of up to 10,000,000 share of common stock of the Company at a purchase price of $.02, per share.  Under the private place, in July and August 2008, the Company sold an aggregate of 3,000,000 shares of common stock for $60,000. In addition, on July 15, 2008 and October 15, 2008, additional  1,475,000 shares and 3,025,000 shares of the Company’s common stock, respectively, were sold to the officer/director under the private placement by cancellation of the loan and payable-officer.

 

On July 3, 2008, subsequent to the increase in authorized shares of common stock, the Company issued 3,739,030 shares of the Company’s common stock to an officer/director, from the remainder of the subscription agreement dated September 27, 2007, in exchange for approximately $75,000 paid by the cancellation of the loan payable-officer.

 

As of December 31, 2009, the Company has reserved the following shares of common stock for future issue:

Stock Option Plan			2,750,000
Non-qualified options			756,500
			3,506,500

 

F-9

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8.      Stock Option Plan

 

The Alpha-en Corporation Stock Option and Long Term Incentive Compensation Plan (“Plan”), as amended, provides for the grants up to 2,750,000 shares of shares of common stock to key employees, directors and consultants. Grants may be options, SAR’s, restricted stock or stock bonuses. Only employees may receive incentive awards. Exercise prices of incentive grants shall not be less than the fair market value of the stock on the date of the grant.  Options may be exercised subject to continued employment and certain other conditions.  The Company may determine all other terms of an award, including vesting, term, etc. but not more than ten years from the date of grant. Awards that expired or were cancelled are available for future awards.

 

As of December 31, 2009, there were no options outstanding to purchase common stock under the Plan.

 

As of December 31, 2009, options not under the Plan to purchase 756,500 shares of the Company’s common stock were outstanding at a weighted average exercise price of $.50, per share, and a weighted average remaining life of .67 years for 700,000 options and 2.12 years for 56,500 options.

 

9.      Participation Rights

 

The Company was granted the right to receive future participation rights on certain revenues from certain film properties sold in prior years.

 

10.  Income Taxes

 

The Company filed consolidated tax returns through December 31, 2004 and anticipates filing consolidated returns for 2009, 2008, 2007, 2006 and 2005. The Company anticipates no significant income tax expense as a result of these filings.

 

Management has evaluated and concluded that there are no significant uncertain tax positions requiring recognition in the Company’s consolidated financial statements as of December 31, 2009.

 

As of December 31, 2009, the Company has net operating loss carryforwards of approximately $3,500,000 to reduce future Federal and state taxable income through 2028.

 

As of December 31, 2009, realization of the Company’s deferred tax assets of $1,457,000 was not considered more likely than not and, accordingly, a valuation allowance of $1,457,000 has been provided.

 

As of December 31, 2009 and 2008, components of deferred tax assets were as follows:

		2009				2008
Net operating loss		$	1,457,000			$	1,425,000
Share-based payments			-				6,000
Valuation allowance			(1,457,000	)			(1,431,000	)
		NONE				NONE

 

For the years ended December 31, 2009 and 2008, deferred income tax expense consisted of the following:

		2009				2008
Net operating loss		$	32,000			$	95,000
Share-based payments			(6,000	)			(6,000	)
Valuation allowance			(26,000	)			(89,000	)
		NONE				NONE

 

F-10

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11. Adoption of Accounting Policies

 

During the year ended December 31, 2009, the Company adopted the following accounting policies without a material effect on the consolidated financial statements.

 

In September 2009, the FASB issued ASU No. 2009-08, "Earnings Per Share - Amendments to Section 260-10-S99". This Codification Update represents technical corrections to Topic 260-10-S99, "Earnings Per Share", based on EITF Topic D-53, "Computation of Earnings Per Share for a Period that Includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock" and EITF Topic D-42, "The Effect of the Calculation of Earnings Per Share For the Redemption or Induced Conversion of Preferred Stock". The Codification Update provides guidance regarding the definition of redemptions and conversions of equity-classified preferred stock instruments in relation to the calculation of earnings per share.

 

In August 2009, the FASB issued ASU No. 2009-05, "Measuring Liabilities at Fair Value". This ASU amends the "Fair Value Measurements and Disclosures" Topic of the Codification to provide further guidance on how to measure the fair value of a liability.

 

In June 2009, the FASB issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (“SFAS 168”). FAS168 establishes the FASB Accounting Standards Codification (“Codification”) as the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied to rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under federal securities laws as authoritative GAAP for SEC registrants.

 

 In April 2009, the FASB issued Staff Position No. 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1 and APB 28-1”), FSP FAS 107-1 and APB 28-1 amends SFAS 107, “Disclosures about Fair Value of Financial Instruments”, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, “Interim Financial Reporting”, to require those disclosures in summarized financial information at interim reporting periods. In periods after initial adoption, the FSP requires comparative disclosures only for periods ending after initial adoption.

 

In May 2009, the FASB issued Statement of Financial Accounting Standards No. 165 “Subsequent Events” (“SFAS 165”). The objective of SFAS 165 is to establish general standards of accounting for, and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 sets forth: (a) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; (b) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and (c) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date.

 

Statement of Financial Accounting Standards No. 141(R), “Business Combinations” (“SFAS 141”), which replaced SFAS No. 141, “Business Combinations”, establishes principles and requirements for determining how an enterprise recognizes and measures the fair value of certain assets and liabilities acquired in a business combination, including non-controlling interests, contingent consideration and certain acquired contingencies. SFAS 141(R) also requires acquisition-related transaction expenses and restructuring costs be expensed as incurred rather than capitalized as a component of the business combination.

 

F-11

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Financial Staff Position (“FSP”) 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies”, amended and clarified SFAS 141R to address application issues associated with initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination.

 

Statement of Financial Accounting Standards No. 160. “Non-controlling Interest in Consolidated Financial Statements – An Amendment of ARB No. 51” (“SFAS 160”), establishes accounting and reporting standards for the non-controlling interest in a subsidiary (previously referred to as minority interests). SFAS 160 also requires that a retained non-controlling interest upon the deconsolidation of a subsidiary be initially measured at its fair value. SFAS 160 also requires reporting any non-controlling interests as a separate component of stockholders’ equity and presenting any net income allocable to non-controlling interests and net income attributable to stockholders of the Company separately in its consolidated statements of income.

 

F-12

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EX-21.1 2 v179335_ex21-1.htm

Exhibit 21.1

Subsidiaries of alpha-En Corporation

 

Subsidiary		State of Incorporation		Owner		Percentage
Avenue Pictures, Inc.		Delaware		alpha-En Corporation		100%
Wombat Productions, Inc.		Delaware		alpha-En Corporation		100%

 

 

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EX-31.1 3 v179335_ex31-1.htm

Exhibit 31.1

 

CERTIFICATION OF C.E.O. PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned, in the capacity and date indicated below, hereby certifies that:

 

1.	I have reviewed this annual report on Form 10-K of alpha-En Corporation;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(d)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

March 31, 2010	/s/ Steven M. Payne
	Steven M. Payne
	President

 

 

 

 

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EX-31.2 4 v179335_ex31-2.htm

Exhibit 31.2

 

CERTIFICATION OF C.F.O. PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned, in the capacity and date indicated below, hereby certifies that:

 

1.	I have reviewed this annual report on Form 10-K of alpha-En Corporation;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(d)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

March 31, 2010	/s/ Jerome I. Feldman
	Jerome I. Feldman
	Chairman, Chief Financial Officer and Treasurer

 

 

 

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EX-32.1 5 v179335_ex32-1.htm

Exhibit 32.1

 

CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350, SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of alpha-En Corporation (the “Company”) on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission (the “Report”), we, Steven M. Payne, President, and Jerome I. Feldman, Chairman, Chief Financial Officer and Treasurer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

March 31, 2010

 

	/s/ Steven M. Payne
	Steven M. PaynePresident
	/s/ Jerome I. Feldman
	Jerome I. FeldmanChairman, Chief Financial Officer and Treasurer

 

 

 

 

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