APOLLO SOLAR ENERGY, INC.

(FORMERLY KNOWN AS WINCROFT, INC)

 

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

AS OF SEPTEMBER 30, 2008

 

(UNAUDITED)

 

NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Interim Statements

 

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the audited financial statements and notes thereto included in the registrant's annual Form 10-KSB for the year ended March 31, 2008.

 

Organization

 

The Company was organized in May, 1980, as part of a quasi reorganization of Colspan Environmental Systems. On May 18, 1998, the Company amended the Articles of Incorporation to the Company's name to Wincroft, Inc., to effect a 100 for 1 forward stock split to increase the number of shares outstanding without effecting the stated value of the common shares, and to authorize a class of preferred shares.

 

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

 

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

 

Capital Stock

 

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

 

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

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APOLLO SOLAR ENERGY, INC.

(FORMERLY KNOWN AS WINCROFT, INC)

 

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

AS OF SEPTEMBER 30, 2008

 

(UNAUDITED)

 

NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amount of assets and liabilities and disclosure 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 differ from the estimates.

Reclassifications

 

Certain previously reported amounts have been reclassified to conform to classifications adopted in the quarter ended September 30, 2008.

 

Recently issued accounting pronouncements

 

In December 2007, the Financial Accounting Standards Board (“FASB”) revised Statement of Financial Accounting Standards ("SFAS”) No. 141, “Business Combinations” ("SFAS No. 141(R)"). SFAS No. 141(R) requires an acquirer to measure the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity at their fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired. SFAS No. 141(R) is effective as of the beginning of the Company’s first fiscal year beginning on or after December 15, 2008. The Company does not expect application of SFAS No. 141 (R) to have a material effect on its financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51” ("SFAS No. 160"). SFAS No. 160 clarifies that a noncontrolling interest in a subsidiary should be reported as equity in consolidated financial statements. The calculation of earnings per share will continue to be based on income amounts attributable to the parent. SFAS No. 160 is effective as of the beginning of the Company’s first fiscal year that begins on or after December 15, 2008. The Company does not expect application of SFAS No. 160 to have a material effect on its financial statements.

 

In February of 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—including an amendment of FASB Statement No. 115” ("SFAS 159"). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The fair value option established by SFAS 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. This requirement is effective for the fiscal year ended March 31, 2009. The Company is currently reviewing this pronouncement, but believes it will not have a material impact on the financial statements.

 

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