I
tem 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
| | Caution Regarding Forward-Looking Information |
Certain statements contained in this quarterly filing, including, without limitation, statements containing the words "believes", "anticipates", "expects" and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
Renewable Energy Acquisition Corp. (the “Company”) was incorporated on June 21, 2007 under the laws of the State of Nevada.
The Company was formed to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business in either the renewable energy or the environmental industry and their related infrastructures. To date, our efforts have been limited to organizational activities and the investigation of various potential business transactions, none of which has yet led to a definitive agreement.
The Company had no revenue for the three-month periods ended March 31, 2025 and 2024, respectively.
Operating income(loss) of $(9,014), and $604 for the three-month periods ended March 31, 2025 and 2024, respectively. The operating income were mainly related to standstill fees received during the periods. The Company recorded $5,100 and $13,400 in standstill fees from FIP during the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, FIP is not in arrears in the payment of standstill fees due under the standstill agreement, and neither party has terminated the agreement.
Other expenses of $2,748 and $1,679 for the three-month periods ended March 31, 2025 and 2024, respectively, were due to interest expenses on related party note payables and short-term advances.
The Company does not expect to generate any meaningful revenue or incur operating expenses for purposes other than fulfilling the obligations of a reporting company under the Securities Exchange Act of 1934 unless and until such time that the Company acquires or participates in a business with revenue producing activities.
Income per share for the three-month periods ended March 31, 2025 and 2024 were $(0.02) and $(0.002), respectively, based on the weighted-average shares issued and outstanding at the end of each such period.
The Company had no revenue for the three-month period ended March 31, 2025 and 2024, respectively.
We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the advantages of being a publicly held corporation. We file reports with the Securities and Exchange Commission as a result of registering our common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). After the consummation of a business transaction with an operating company, the surviving company resulting from the transaction will continue to be subject to the reporting requirements of the Exchange Act. Although an operating company may choose to effectuate a business combination with a company that is trading on the OTC Bulletin Board in order to become public, the terms of such a transaction to the operating company may not be as favorable as those available from us as a non-trading reporting company. Therefore, we believe that we may be attractive to a private operating company seeking to become public.
We were formed as a vehicle to pursue a merger, capital stock exchange, asset acquisition or other similar business transaction with an operating business in either the renewable energy or the environmental industries and their related infrastructures. Nevertheless, we are not restricted from pursuing an opportunity in any industry at the discretion of the board of directors. The renewable energy industry and its related infrastructure generally includes the production, generation, transmission and distribution of electricity, heat, fuel and other consumable forms of energy through the utilization of renewable fuel sources such as, but not limited to, geothermal, biofuels, synfuels, wind, ocean waves, "clean coal," and waste stream pyrolysis; and the infrastructure needed to maintain and operate the facilities, services and installations used in the foregoing areas.
Although we may consider a target business in any segment of any industry, we currently intend to concentrate our search for an acquisition candidate on companies in the following segments:
| | Wind electric generation, distribution and transmission; |
| | Synthetic gas production, distribution and transmission; |
| | Energy efficiency and energy conservation related products and services; |
| | Alternative transportation technologies; |
| | Steam generation and distribution; |
| | Alternative transportation technologies; |
| | Energy storage technologies; |
| | Other alternative and renewable energy technologies; and |
| | The development, installation, financing, or manufacturing of any of the above. |
Based on our proposed business activities, we are a "blank check" company. The U.S. Securities and Exchange Commission (the "SEC") defines "blank check" companies as, any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.
We also qualify as a "shell company," as defined under Rule 12b-2 adopted by the SEC pursuant to the Exchange Act, because we have no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of blank check companies in their respective jurisdictions.
Management does not intend to undertake any effort to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements. We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the advantages of being a reporting company. After the consummation of a business combination with an operating company, the surviving company will continue to be subject to the reporting requirements of the Exchange Act, which may be advantageous when establishing a public market. Furthermore, being a reporting company is required in order to seek a listing on a national exchange.
We have a nominal amount of capital and will depend on our directors to provide us with the necessary funds to implement our business plan. We intend to seek opportunities demonstrating the potential of long-term growth as opposed to short-term earnings. However, at the present time, we have not identified any business opportunity that we plan to pursue, nor have we reached any agreement or definitive understanding with any person concerning an acquisition or merger. The analysis of new business opportunities will be undertaken by or under the supervision of our officers and directors. Our officers and directors will collectively devote approximately five hours per week to searching for a target company until an acquisition candidate is identified and a transaction closed.
We believe that business opportunities may come to our attention from various sources, including, professional advisors such as attorneys, and accountants, securities broker-dealers, venture capitalists, members of the financial community and others who may present unsolicited proposals. We have no plan, understanding, agreements, or commitments with any individual for such person to act as a finder of opportunities for us. We can give no assurances that we will be successful in finding or acquiring a desirable business opportunity, given the limited funds that are expected to be available to us for implementation of our business plan. Furthermore, we can give no assurances that any acquisition, if it occurs, will be on terms that are favorable to us or our current stockholders. Discussions have been held from time to time with potential business combination candidates, and the Company has been paid standstill fees in connection with Letters of Intent that were entered into regarding potential business combinations. However, as of this date, no Letter of Intent has resulted in any definitive agreement being entered into with any party. We have flexibility in seeking, analyzing and participating in potential business opportunities. In our effort to analyze potential acquisition targets, we will consider the following kinds of factors:
| | Potential for growth, indicated by new technology, anticipated market expansion or new products; |
| | Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole; |
| | Strength and diversity of management, either in place or scheduled for recruitment; |
| | Capital requirements and anticipated availability of required funds, to be provided from operations, through the sale of additional securities, through joint ventures or similar arrangements, or from other sources; |
| | The cost of participation by us as compared to the perceived tangible and intangible values and potentials; |
| | The extent to which the business opportunity can be advanced; |
| | The accessibility of required management expertise, personnel, raw materials, services, professional assistance, and other required items; and |
In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which may make the task of comparative investigation and analysis of such business opportunities difficult and complex. Due to our limited capital available for investigation, we may not discover or be able to fully investigate potential adverse factors concerning the opportunity to be acquired.
The manner in which we participate in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of us and the promoters of the opportunity, and the relative negotiating strength of us and such promoters. It is likely that we will acquire our participation in a business opportunity through the issuance of our common stock or other securities. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called "tax free" reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other tax free transaction provisions under the Code, all prior stockholders would retain 20% or less of the total issued and outstanding shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who are stockholders prior to the acquisition. Our present stockholders will likely not have control of our majority voting securities following an acquisition transaction. However, our present stockholders will benefit from such a transaction by retaining an equity interest in the surviving company, a cash payment in exchange for outstanding shares, or a combination of both cash and equity. As part of such a transaction, our present directors or officers may resign and one or more new directors or officers may be appointed in connection with the transaction.
In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving us, it will likely be necessary to call a stockholders' meeting and obtain the approval of the holders of a majority of the outstanding securities. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval. It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation might not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to us of the related costs incurred.
| | Liquidity and Capital Resources |
Our cash provided by operating activities for three months ended March 31, 2025 was $903, which primarily reflects our net loss of 11,762, an decrease in other receivable of 1,700 and an increase o accrued expense of $9,789 and interest payable of $1,177 compared
to
our cash provided in operating activities for three months ended March 31, 2024 was $10,259, which primarily reflects our net loss of $1,075, an decrease in other receivable of 1,700 and an increase in accounts payable of $8,457 and interest payable of $1,177.
No cash provided by Financing activity and no cash spent investment activity for three months ended March 31, 2025 and 2024 respectively.
At March 31, 2025 and December 31, 2024, the Company had working capital deficits of $213,333 and $202,368 respectively, including notes payable to stockholders of $83,819 and $83,819, respectively in each respective period.
It is the belief of management and significant stockholders that they will provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Further, the Company is at the mercy of future economic trends and business operations for the Company’s majority stockholder to have the resources available to support the Company. Should this pledge fail to provide financing, the Company has not identified any alternative sources. Consequently, there is substantial doubt about the Company's ability to continue as a going concern. The Company estimates it cash requirement for the next 12 months to be approximately $30,000.
The Company's need for working capital may change dramatically as a result of any business acquisition or combination transaction. There can be no assurance that the Company will identify any such business, product, technology or company suitable for acquisition in the future. Further, there can be no assurance that the Company would be successful in consummating any acquisition on favorable terms or that it will be able to profitably manage the business, product, technology or company it acquires.
The Company has no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the location of a merger or acquisition candidate. Accordingly, there can be no assurance that sufficient funds will be available to the Company to allow it to cover the expenses related to such activities.
| | Critical Accounting Policies |
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note D of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.
I
tem 3 - Quantitative and Qualitative Disclosures About Market Risk
Not required of a smaller reporting company.
I
tem 4 - Controls and Procedures
| | Evaluation of Disclosure Controls and Procedures |
Our management, under the supervision and with the participation of our Chief Executive and Financial Officer (Certifying Officer), has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 promulgated under the Exchange Act as of the end of the period covered by this Quarterly Report. Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Certifying Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, our Certifying Officer concluded that as of such date, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in our reports is recorded, processed, summarized and reported within the time periods specified by the SEC due to an inherent weakness in our internal controls over financial reporting due to our status as a shell corporation and having a sole supervising officer. However, our Certifying Officer believes that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the respective periods presented.
| | Changes in Internal Controls |
There were no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the quarter ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
P
art II - Other Information
I
tem 1. Legal Proceedings
We are not a party to any material pending legal proceedings.
We are a smaller reporting company as defined by Reg. 240.12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
I
tem 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2025, we had no unregistered sales of equity securities.
I
tem 3. Defaults Upon Senior Securities
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tem 4. Mine Safety Disclosures
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tem 5. Other Information
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| Interactive data files pursuant to Rule 405 of Regulation S-T. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | Renewable Energy Acquisition Corp. |
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| | | President, Chief Executive Officer |
| | | and Chief Financial Officer (Principal Executive and Financial Officer) |