UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009

o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission File No. 333-140637

PREMIER POWER RENEWABLE ENERGY, INC.
(Exact name of registrant as specified in it charter)

Delaware
  
13-4343369
(State or other jurisdiction of incorporation or organization)
  
(IRS Employer Identification No.)

4961 Windplay Drive, Suite 100
El Dorado Hills, CA 95762
(Address of principal executive offices)

(916) 939-0400
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes x       No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period than the registrant was required to submit and post such files).  Yes ¨     No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ¨
Non-Accelerated Filer ¨
Accelerated Filer ¨
Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each issuer's classes of common stock, as of the latest practicable date:  29,050,250 issued and outstanding as of November 16, 2009.

 
 
 

PREMIER POWER RENEWABLE ENERGY, INC.
TABLE OF CONTENTS
TO QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2009
 
   
Page
PART I   
FINANCIAL INFORMATION  
  
Item 1.
Financial Statements
3
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
4
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
10
Item 4.
Controls and Procedures
10
   
10
PART II
OTHER INFORMATION
  
Item 1.
Legal Proceedings
10
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
10
Item 3.
Defaults Upon Senior Securities
10
Item 4.
Submission of Matters to a Vote of Security Holders
10
Item 5.
Other Information
10
Item 6.
Exhibits
11
   
Signatures
13
 
2
 
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

Our financial statements start on the following page, beginning with page F-1.
 
3
PREMIER POWER RENEWABLE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2009 AND DECEMBER 31, 2008
 
   
September 30,
    
December 31,
  
   
2009
    
2008
  
   
(unaudited)
    
(audited)
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 3,666,219     $ 5,770,536  
Accounts receivable, net of allowance for doubtful accounts of
$18,000 at September 30, 2009 and December 31, 2008
     3,215,761       4,767,653  
Inventory
     2,089,883       1,424,910  
Project assets
     3,108,372       -  
Prepaid expenses and other current assets
     284,201       259,328  
Costs and estimated earnings in excess of billings
on uncompleted contracts
     1,136,653       235,929  
Sales tax receivable
     161,918       93,775  
Deferred tax assets
     262,709       228,835  
Total current assets
     13,925,716       12,780,966  
                 
Property and equipment, net
     512,489       474,905  
Intangible assets
     962,852       1,048,420  
Goodwill
     12,465,857       483,496  
Deferred tax assets, long-term
     1,427,421       24,867  
Total assets
   $ 29,294,335     $ 14,812,654  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
Current liabilities:
                
Accounts payable
   $ 4,280,346     $ 3,707,141  
Accrued liablilities
     893,597       1,368,018  
Billings in excess of costs and estimated earnings
          
on uncompleted contracts
     753,498       1,206,403  
Taxes payable
     410,385       184,470  
Borrowings, current
     144,500       38,311  
Total current liabilities
     6,482,326       6,504,343  
                 
Borrowings, non-current
     2,136,589       92,407  
Contingent consideration liability
     12,026,400       -  
Defered tax liabilities, long-term
     343,279       343,279  
Total liabilities
     20,988,594       6,940,029  
                 
Shareholders' equity:
                
 
                
Series A convertible preferred stock, par value $.0001 per share: 5,000,000 shares
designated out of 20,000,000 shares of preferred stock authorized; 3,500,000
shares issued and outstanding at September 30, 2009 and December 31, 2008
     350       350  
Series B convertible preferred stock, par value $.0001 per share: 2,800,000 shares
designated out of 20,000,000 shares of preferred stock authorized; 2,800,000
and 0 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively
     280       -  
Common stock, par value $.0001 per share; 500,000,000 shares authorized;
29,050,250 and 26,048,750 shares issued and outstanding at
September 30, 2009 and December 31, 2008, respectively
     2,605       2,605  
Additional paid-in-capital
     17,598,750       7,542,064  
(Accumulated deficit) retained earnings
     (9,480,855 )     369,296  
Accumulated other comprehensive income (loss)
     11,155       (41,690 )
Total Premier Power Renewable Energy, Inc., shareholders' equity
     8,132,285       7,872,625  
Noncontrolling interest
     173,456       -  
Total shareholders' equity
     8,305,741       7,872,625  
Total liabilities and shareholders' equity
   $ 29,294,335     $ 14,812,654  
 
The accompanying notes are an integral part of these financial statements.
 
F-1
 
 
 PREMIER POWER RENEWABLE ENERGY, INC.
  
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008
 
                         
   
For Three Months ended September 30,
    
For Nine Months ended September 30,
  
   
2009
    
2008
    
2009
    
2008
  
   
(unaudited)
    
(unaudited)
    
(unaudited)
    
(unaudited)
  
                         
Net sales
   $ 6,284,590     $ 9,236,108     $ 15,192,289     $ 27,224,925  
Cost of sales
     (4,901,252 )     (8,233,171 )     (12,901,906 )     (23,502,924 )
Gross profit
     1,383,338       1,002,937       2,290,383       3,722,001  
                                 
Operating expenses:
                                
Sales and marketing
     601,281       576,451       1,973,585       1,571,826  
General and administrative
     1,842,370       515,163       4,245,111       1,427,653  
Total operating expenses
     2,443,651       1,091,614       6,218,696       2,999,479  
                                 
Operating (loss) income
     (1,060,313 )     (88,677 )     (3,928,313 )     722,522  
                                 
Other income (expense):
                                
Interest expense
     (29,687 )     (16,912 )     (37,857 )     (55,957 )
Change in fair value of financial instruments
     -       -       2,183,498       -  
Interest income
     2,091       50       30,529       21,867  
Total other income (expense), net
     (27,596 )     (16,862 )     2,176,170       (34,090 )
                                 
(Loss) income before income taxes
     (1,087,909 )     (105,539 )     (1,752,143 )     688,432  
                                 
Income tax benefit     91,502       352,762       1,217,989       148,428  
                                 
Net (loss) income
     (996,407 )     247,223       (534,154 )     836,860  
                                 
Less:  Net (income) loss attributable to noncontrolling interest
     8,589       90,728       8,589       (224,315 ) 
                                 
Net (loss) income attributable to Premier Power Renewable Energy, Inc.
   $ (987,818 )   $ 337,951     $ (525,565 )   $ 612,545  
                                 
Earnings Per Share attributable to Premier Power Renewable Energy, Inc:
                                
                                 
Basic
   $ (0.04 )   $ 0.02     $ (0.02 )   $ 0.03  
Diluted
   $ (0.04 )   $ 0.01     $ (0.02 )   $ 0.03  
                                 
Weighted Average Shares Outstanding:
                                
                                 
Basic
     26,049,294