UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-Q
 
 x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For
the quarterly period ended June 30, 2010
 
  ̈
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
transition period from ____________ to ____________
 
 Commission
File Number:   333-103647
 
 Prime
Sun Power Inc.
 (Exact
Name of Registrant as Specified in its Charter)
 
 Nevada
              
              98-0393197(State
      or other jurisdiction of
              
              (IRS
      Employerincorporation
      or organization)
              
              Identification
      No.)
 
 100
Wall Street, 21st
Floor
 New York,
NY  10005
 (Address
of principal executive offices)
 
 (866)
523-5551
 (Registrant’s
Telephone Number, Including Area Code)
 
 N/A
 (Former
Name, Former Address and Former Fiscal Year,
 if
Changed Since Last Report)
 
 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 o No x
 
 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 (Sec.323.405 of this
chapter) during the preceding 12 months (or shorter period that the registrant
was required to submit and post such files).  Yes o   No o
 
 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. (Check one):
 
 Large
      Accelerated Filer
               ̈
              Accelerated
      Filer
               ̈Non-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 x No  ̈
 
 As of
August 20, 2010, the Issuer had 40,114,900 shares of its Common Stock
outstanding.
 
 
   TABLE
OF CONTENTS
 
 PART
      I: FINANCIAL INFORMATION
              
              
              4Item
      1: Financial Statements
              
              
              4Item
      2: Management’s Discussion and Analysis of Financial Condition and Results
      of Operation
              
              
              11Item
      3: Quantitative and Qualitative Disclosures about Market
    Risk
              
              
              19Item
      4: Controls and Procedures
              
              
              19PART
      II: OTHER INFORMATION
              
              
              20Item
      1: Legal Proceedings
              
              
              20Item
      1A: Risk Factors
              
              
              20Item
      2: Unregistered Sales of Equity Securities and Use of
    Proceeds
              
              
              20Item
      3: Defaults Upon Senior Securities
              
              
              20Item
      4: Reserved
              
              
              20Item
      5: Other Information
              
              
              20Item
      6: Exhibits
              
              
              21SIGNATURES
              
              
              22
  2
  
 SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
 The
following cautionary statements identify important factors that could cause our
actual results to differ materially from those projected in forward-looking
statements made in this Quarterly Report on Form 10-Q (this “Report”) and in
other reports and documents published by us from time to time. Any statements
about our beliefs, plans, objectives, expectations, assumptions, future events
or performance are not historical facts and may be forward-looking. These
statements are often, but not always, made through the use of words or phrases
such as “believes,” “will likely result,” “are expected to,” “will continue,”
“is anticipated,” “estimated,” “intend,” “plan,” “projection,” “outlook” and the
like, constitute “forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). However, as we issue
“penny stock,” as such term is defined in Rule 3a51-1 promulgated under the
Exchange Act, we are ineligible to rely on these safe harbor provisions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
our Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Given
these uncertainties, readers are cautioned to carefully read all “Risk Factors”
set forth under Item 1A and not to place undue reliance on any forward-looking
statements. We disclaim any obligation to update any such factors or to announce
publicly the results of any revisions of the forward-looking statements
contained or incorporated by reference herein to reflect future events or
developments, except as required by the Exchange Act. New factors emerge from
time to time, and it is not possible for us to predict which will arise or to
assess with any precision the impact of each factor on our business or the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking
statements.
 
 Unless
otherwise provided in this Report, references to the “Company,” the
“Registrant,” the “Issuer,” “we,” “us,” and “our” refer to Prime Sun Power Inc.
(formerly known as ATM Financial Corp.).
 
 3
  
 PART I
              FINANCIAL
      INFORMATION





Prime
      Sun Power Inc.(A
      development stage company)Balance
      Sheets(Unaudited)      June
      30,
                          
                          
                          December
      31,2010
                          
                          
                          2009ASSETSCurrent
      AssetsCash
                          
                          $
                          688
                          
                          
                          $
                          14,051Total
      Current Assets and Total Assets
                          
                          $
                          688
                          
                          
                          $
                          14,051LIABILITIES
      AND STOCKHOLDERS' DEFICIENCYCurrent
      LiabilitiesAccounts
      payable and accrued liabilities
                          
                          $
                          1,106,912
                          
                          
                          $
                          994,573Advanced
      deposit
                          
                          
                          242,921
                          
                          
                          
                          -Note
      payable - finance company
                          
                          
                          660,073
                          
                          
                          
                          414,626Accrued
      management services - related party
                          
                          
                          625,000
                          
                          
                          
                          416,667Accrued
      interest - related party
                          
                          
                          70,380
                          
                          
                          
                          57,550Accrued
      interest - bank note
                          
                          
                          21,519
                          
                          
                          
                          -Loan
      from shareholder
                          
                          
                          193,574
                          
                          
                          
                          591,001Total
      Current Liabilities and Total Liabilities
                          
                          
                          2,920,379
                          
                          
                          
                          2,474,417Stockholders'
      Deficiency:Common
      Stock, par value $.0001 per share100,000,000
      shares authorized,40,114,900
      shares issues and outstanding at
                          
                          
                          4,011
                          
                          
                          
                          4,011June
      30, 2010 and December 31, 2009Additional
      paid in capital
                          
                          
                          377,157
                          
                          
                          
                          376,526Deficit
      accumulated during development stage
                          
                          
                          (3,300,859
                          )
                          
                          
                          (2,840,903
                          )Total
      Stockholders' Deficiency
                          
                          
                          (2,919,691
                          )
                          
                          
                          (2,460,366
                          )Total
      Liabilities and Stockholders' Deficiency
                          
                          $
                          688
                          
                          
                          $
                          14,051








4




Prime
      Sun Power Inc.(A
      development stage company)(Unaudited)
      Statement of Operations     For
      the Three
                                                                          
                                                                          
                                                                          For
      the Six
                                                                          
                                                                          
                                                                          Accumulated
      fromMonths
      Ended
                                                                          
                                                                          
                                                                          Months
      Ended
                                                                          
                                                                          
                                                                          December
      18, 2002June
      30,
                                                                          
                                                                          
                                                                          June
      30,
                                                                          
                                                                          
                                                                          (Date
      of Inception)to
      June 30,2010
                                                                          
                                                                          
                                                                          2009
                                                                          
                                                                          
                                                                          2010
                                                                          
                                                                          
                                                                          2009
                                                                          
                                                                          
                                                                          2010Revenue
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -EXPENSES
      (INCOME)Consulting
      and director fees
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          57,939
                                                                          
                                                                          
                                                                          
                                                                          34,627
                                                                          
                                                                          
                                                                          
                                                                          75,939
                                                                          
                                                                          
                                                                          
                                                                          280,426Professional
      fees
                                                                          
                                                                          
                                                                          56,736
                                                                          
                                                                          
                                                                          
                                                                          95,266
                                                                          
                                                                          
                                                                          
                                                                          106,736
                                                                          
                                                                          
                                                                          
                                                                          286,535
                                                                          
                                                                          
                                                                          
                                                                          824,557Management
      services - related party
                                                                          
                                                                          
                                                                          104,167
                                                                          
                                                                          
                                                                          
                                                                          104,167
                                                                          
                                                                          
                                                                          
                                                                          208,333
                                                                          
                                                                          
                                                                          
                                                                          208,334
                                                                          
                                                                          
                                                                          
                                                                          625,000Personnel
      costs
                                                                          
                                                                          
                                                                          19,843
                                                                          
                                                                          
                                                                          
                                                                          125,490
                                                                          
                                                                          
                                                                          
                                                                          39,687
                                                                          
                                                                          
                                                                          
                                                                          248,965
                                                                          
                                                                          
                                                                          
                                                                          626,896General
      & administrative
                                                                          
                                                                          
                                                                          16,595
                                                                          
                                                                          
                                                                          
                                                                          26,803
                                                                          
                                                                          
                                                                          
                                                                          35,593
                                                                          
                                                                          
                                                                          
                                                                          47,022
                                                                          
                                                                          
                                                                          
                                                                          228,553Land
      licensing and development fees
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          428,980Interest
      expense
                                                                          
                                                                          
                                                                          16,059
                                                                          
                                                                          
                                                                          
                                                                          8,881
                                                                          
                                                                          
                                                                          
                                                                          34,349
                                                                          
                                                                          
                                                                          
                                                                          14,398
                                                                          
                                                                          
                                                                          
                                                                          92,925Gain
      on debt settlement
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          (14,176
                                                                          )Non-cash
      compensation
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          51,783
                                                                          
                                                                          
                                                                          
                                                                          631
                                                                          
                                                                          
                                                                          
                                                                          102,365
                                                                          
                                                                          
                                                                          
                                                                          207,698Total
      Expenses (Income)
                                                                          
                                                                          
                                                                          213,400
                                                                          
                                                                          
                                                                          
                                                                          470,329
                                                                          
                                                                          
                                                                          
                                                                          459,956
                                                                          
                                                                          
                                                                          
                                                                          983,558
                                                                          
                                                                          
                                                                          
                                                                          3,300,859Net
      Loss
                                                                          
                                                                          $
                                                                          (213,400
                                                                          )
                                                                          
                                                                          $
                                                                          (470,329
                                                                          )
                                                                          
                                                                          $
                                                                          (459,956
                                                                          )
                                                                          
                                                                          $
                                                                          (983,558
                                                                          )
                                                                          
                                                                          $
                                                                          (3,300,859
                                                                          )Basic
      and Diluted Loss Per Share
                                                                          
                                                                          $
                                                                          (0.01
                                                                          )
                                                                          
                                                                          $
                                                                          (0.01
                                                                          )
                                                                          
                                                                          $
                                                                          (0.01
                                                                          )
                                                                          
                                                                          $
                                                                          (0.02
                                                                          )Weighted
      Average Shares Outstanding
                                                                          
                                                                          
                                                                          40,114,900
                                                                          
                                                                          
                                                                          
                                                                          40,114,900
                                                                          
                                                                          
                                                                          
                                                                          40,114,900
                                                                          
                                                                          
                                                                          
                                                                          40,114,900
  Share
data has been adjusted to reflect the stock dividend effective February 4,
2008









5




Prime
      Sun Power Inc.(A
      development stage company)Statement
      of Cash Flow(Unaudited)      Accumulated
      fromFor
      the Six Months Ended
                            
                            
                            December
      18, 2002June
      30,
                            
                            
                            (Date
      of Inception)2010
                            
                            
                            2009
                            
                            
                            to
      June 30, 2010Operating
      ActivitiesNet
      loss
                            
                            $
                            (459,956
                            )
                            
                            $
                            (983,558
                            )
                            
                            $
                            (3,300,859
                            )Adjustments
      to reconcile net loss to net cashprovided
      by (used) in operations:Non-cash
      compensation
                            
                            
                            631
                            
                            
                            
                            102,365
                            
                            
                            
                            207,698Interest
      accrued to related party
                            
                            
                            12,830
                            
                            
                            
                            14,398
                            
                            
                            
                            70,380Interest
      accrued on bank note
                            
                            
                            21,519
                            
                            
                            
                            
                            
                            
                            
                            21,519Gain
      in debt settlement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            14,176Accrued
      management services - related party
                            
                            
                            208,333
                            
                            
                            
                            208,334
                            
                            
                            
                            625,000Land
      licensing and development fees
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            428,980Change
      in operating assets and liabilities
                            
                            
                            
                            
                            
                            
                            -Prepaid
      expense
                            
                            
                            
                            
                            
                            
                            -Advanced
      deposits
                            
                            
                            242,921
                            
                            
                            
                            
                            
                            
                            
                            242,921Accounts
      payable and accrued liabilities
                            
                            
                            112,340
                            
                            
                            
                            437,540
                            
                            
                            
                            1,092,181Net
      cash provided by (used) in operating activities
                            
                            
                            138,618
                            
                            
                            
                            (220,921
                            )
                            
                            
                            (598,004
                            )Investing
      ActivitiesLand
      licensing & development fees
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (428,980
                            )Net
      cash used in investing activities
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (428,980
                            )Financing
      ActivitiesProceeds
      and repayment of loans from Shareholder
                            
                            
                            (397,427
                            )
                            
                            
                            214,400
                            
                            
                            
                            208,305Proceeds
      of finance company
                            
                            
                            245,446
                            
                            
                            
                            
                            
                            
                            
                            660,073Gain
      in debt settlement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (14,176
                            )Common
      stock issued
                            
                            
                            
                            
                            
                            
                            -
                            
                            
                            
                            173,470Net
      cash provided by (used in) financing activities
                            
                            
                            (151,981
                            )
                            
                            
                            214,400
                            
                            
                            
                            1,027,672Increase
      (decrease) in Cash
                            
                            
                            (13,363
                            )
                            
                            
                            (6,521
                            )
                            
                            
                            688Cash
      - beginning of period
                            
                            
                            14,051
                            
                            
                            
                            6,629
                            
                            
                            
                            -Cash
      - end of period
                            
                            $
                            688
                            
                            
                            $
                            108
                            
                            
                            $
                            688










6




PRIME SUN POWER INC.
 (A
Development Stage Company)
 
 NOTES TO
FINANCIAL STATEMENTS
 
 JUNE 30,
2010
 
 1. 
            
BUSINESS DESCRIPTION
 
 Organization
and Business Description
 
 On
January 10, 2008, a change of control of the Company occurred and Rudana
Investment Group AG, (“Rudana”) a corporation formed under the laws of
Switzerland, became the new majority shareholder of the Company, controlling
approximately 70% of the issued and outstanding shares of the Company’s common
stock. The Company plans to pursue a business model producing solar generated
electrical power and other alternative renewable energies.
 
 Going
Concern
 
 The
Company has been in the development stage since its inception and has not yet
realized any revenues from its planned operations. As shown in the accompanying
financial statements, the Company has incurred a net loss of
$­­3,300,859 for the period from inception (December 18, 2002) to June
30, 2010 and has a working capital deficiency of $2,919,691 at June 30, 2010.
The ability of the Company to continue as a going concern and to emerge from the
development stage is dependent upon, among other things, its successful
execution of its plan of operations and ability to raise additional financing or
capital. There is no guarantee that the Company will be able to raise additional
financing capital or sell any of services or products at a profit. These
factors, among others, raise substantial doubt regarding the Company’s ability
to continue as a going concern. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
 2.NOTE
PAYABLE – FINANCE COMPANY
 
 On March
2, 2010, the Company entered into a Financing Agreement (the “Financing
Agreement”) with CRG Finance AG (“CRG Finance”).  Pursuant to the
Financing Agreement, CRG Finance loaned the Company a total of 470,000 Euros
($660,073 as of June 30, 2010).  In further consideration for the
making of this loan, the Company shall transfer 20% of the Company’s rights to
its net profits to be made in the sale of PSP Italian S.r.l. to GPR (the “Net
Profit Rights”).
 
 CRG
Finance has agreed that upon receipt of its Net Profit Rights, CRG Finance will
reinvest at least 50% of such Net Profit Rights into either new projects of the
Company or shares of the Company, at a purchase price to be mutually agreed
upon.  The Company has issued a senior promissory note to CRG Finance
in the amount of 470,000 Euros ($660,073 as of June 30, 2010).  The
principal of the note, along with interest at an annual rate of seven and one
half percent, is due within thirty days of demand.
 
 The
Company has utilized these 470,000 Euros in the identification of potential
locations for the development of solar facilities.  The Company has
identified locations which the Company believes are commercially viable for the
operation of solar power projects.
 
 3.            DEVELOPMENT
FEES
 
 Project
Acquisition by GPR Global Power Resources Ltd.
 
 On March
2, 2010, the Company entered into a project acquisition agreement (the
“Acquisition Agreement”) with GPR Global Power Resources Ltd., a Company formed
in Switzerland (“GPR,” and together with the Company, the “Parties”). Pursuant
to the Acquisition Agreement, the Company has agreed to sell to GPR all of the
shares of a wholly-owned Italian subsidiary of the Company called PSP Italia
S.r.l. This subsidiary will develop a turnkey alternative energy power plant,
utilizing solar power. The purchase price for the shares of PSP Italia S.r.l.
shall be a minimum of 4.05 million Euros per mega watt of power produced by the
solar power plant.
  7
  The
purchase price for this transaction shall be released by GPR to the Company
incrementally on the achievement of certain milestones, with respect to
connection of the solar power plant to the Italian National Grid as enumerated
in the Acquisition Agreement. Payment shall be due to the Company in five equal
tranches. GPR shall make each tranche of payments within ninety days of that
date when the Company shall accomplish its milestones under the Acquisition
Agreement, including such time as when the solar power plant connects five mega
watts of power to the regional electrical grid. GPR shall have the right to
withhold 10% of the purchase price due to the Company for up to six months as a
security for the fulfillment of the Company’s obligations.  The purchase
price that GPR shall be required to pay may be reduced by the amount of certain
cost savings that GPR may assist the Company in making or as a result of certain
taxes GPR may be required to pay, in each case as set forth in the Acquisition
Agreement.  Furthermore, the Parties have agreed that certain
specifications concerning this project to be included in the annexes to the
Acquisition Agreement have not yet been set, and will be mutually agreed upon by
the Parties in the immediate future.
 
 The
Acquisition Agreement requires the Company to facilitate and arrange for
long-term debt financing of at least 80% of the purchase price to be paid by
GPR.  The terms of the Acquisition Agreement are subject to review and
approval by the relevant third party financing institution.  The
Acquisition Agreement requires GPR to finance the remainder of the purchase
price, and to deliver a Bank Standby Letter of Credit in an amount equal to 20%
of the first payment tranche that will be due.
 
 The
Company shall be responsible for all construction costs for the solar power
plant, including costs for sub contractors.  At the present time, the
Company is in discussions with the EPC contractors and module suppliers to
obtain the final binding offers.  The Company intends to commence
construction of the solar power plant in June 2010.
 
 Sale
of Project Rights
 
 During
the first quarter 2010, the Company sold rights of ownership in a one-megawatt
photovoltaic power plant from the Company's photovoltaic projects planned for
development in Italy.  Under the terms for the transfer of such
ownership, the Company will establish a special purpose company in Italy under
which the holders of such rights will obtain ownership in the one-megawatt power
plant. The Company has granted the right of ownership in the one-megawatt
power plant in consideration for an aggregate purchase price of 350,000 Euros
(approximately $486,000), of which the Company received 175,000 Euros
(approximately $243,000) in cash during the three months ended March 31,
2010.  During the three months ended June 30, 2010, the purchaser of
the rights of ownership in this one-megawatt photovoltaic power plant provided
business introduction services to the Company valued at 175,000 Euros in lieu of
making an additional cash payment.
 
 Strategic
Investment Agreement with Bangkok Solar Power Co., Ltd.
 
 On May
21, 2010, the Company entered into a Strategic Investment Agreement (the
“Agreement”) with Bangkok Solar Power Co., Ltd. (“BSP”), a leading manufacturer
of PV solar modules and engineering, procurement, construction, and installation
(“EPCI”) contractor to acquire up to 6,639,063 shares of the Company’s Common
Stock from the Company.  All shares issued to BSP will be subject to a
lock-up period until December 31, 2013.
 
 The
Company and BSP have agreed to work together in a strategic alliance whereby BSP
shall be appointed as the General Contractor to perform the EPCI contract for
the Company’s solar power plants for at least 50 megawatts peak per annum until
2013.  BSP and the Company have agreed that BSP will perform the
turnkey contract for the engineering, procurement and construction and
installation of the Company’s solar power plants, as will be set forth in a
separate ECPI agreement.
  8
 BSP will
purchase the Company’s shares in increments of €400,000 upon activation of each
megawatt of peak solar power to be covered by the EPCI service
agreement.  The incremental share purchase will only be payable if the
EPCI includes a price of at least €3,000,000 per megawatt.  BSP has
agreed to purchase a total of 5,176,416 shares of the Company’s common stock
(the “Initial Shares”) at a price of €7.73 per share for an aggregate purchase
price of €40,000,000.  For the incremental purchase of the Initial
Shares, the Company shall issue to BSP an aggregate amount of 1,462,947 shares
(the “Bonus Shares”), with each issuance of Bonus Shares proportional to the
respective incremental purchase of the Initial Shares.
 
 If all of
the strategic alliance shares are acquired, BSP will own 6,639,063 shares of the
Company’s common stock, or 14.2% of the Company’s issued and outstanding shares
of common stock.  Giving effect to the Bonus Shares together with the
purchase price of the Initial Shares, the blended purchase price per share of
the 6,639,063 shares of the Company’s common stock to be acquired by BSP
consisting of both the Initial Shares and the Bonus Shares will be equal to
approximately €6.02 per share (approximately $7.36 per share at June 30,
2010).
 
 In
addition to the Initial Shares and the Bonus Shares, BSP shall, with respect to
all EPCI relationships between BSP and the Company under which BSP thin film
modules are engineered, procured, constructed or installed in the Company’s
solar power plants, be permitted to purchase from the Company additional shares
of common stock at a purchase price calculated in the same manner as the Initial
Shares and Bonus Shares (these shares are described as the “Thin Film
Shares”).  BSP shall have the option to purchase the Thin Film Shares
provided the purchase price per megawatt for the modules is acceptable for both
parties.
 
 The
Company has also agreed that any and all management fees allocated from the BSP
strategic investment will be capped at six percent (6%) of the proceeds received
from the strategic investment by BSP in the Company’s shares.
 
 4.           LAND
LICENSING
 
 Project
San Paolo and Project Puglia
  On April
15, 2009, the Company entered into four agreements to obtain licenses and land
lease call option rights for the development of certain photovoltaic power plant
projects in Italy.  These agreements included two Transfer Agreements:
one for a project located in San Paolo, Italy (referred to herein as Project San
Paolo) and one for a project located in Foggia/Apricena, Italy (referred to
herein as Project Puglia and together with Project San Paolo, the
Projects).  Both of the Projects were located in the Puglia region of
Italy.
  Pursuant
to the Transfer Agreements for the Projects, the Company planned to acquire
option contracts from another party (referred to herein as the Transferor), as
acquired from various landlords. The Company intended to acquire or lease
certain land at specified prices for the purpose of constructing and installing
photovoltaic plants.  The Transferor was expected to assist the
Company to apply for certain key licenses.  The Company agreed to pay
the Transferor certain transaction fees upon the performance of certain
conditions by the Transferor.
  Project
San Paolo and Project Puglia have terminated as the Company was unable
to obtain the necessary licenses to proceed with the Projects. All of the
applicable agreements pertaining to the Projects have terminated in accordance
with their terms.  Prior to the cancellation of the
Projects, that Company’s largest shareholder, Rudana Investment Group AG,
advanced 150,000 Euros towards each of the two payments required under the
Transfer Agreements related to Project San Paolo and Project Puglia, for a total
of 300,000 Euros ($428,980).   The advance of these payments on
behalf of the Company by Rudana Investment Group AG has been recorded as
loan.  The aggregate amounts of 300,000 Euros ($428,980) paid in
respect of the Transfer Agreement have been charged to expense during the year
ended December 31, 2009.
 
 The
Project San Paolo and Project Puglia which previously were deemed to have been
terminated as of the end of 2009 were provided with possibility of revival in
respect of proceedings by the Italian Constitutional Court.  On the
basis of the decision of the Constitutional Court the Company believes the
Projects can be revived if the Italian regional licensing and authorization
procedures are revised to comport with newly stated requirements constitutional
applicable Italian federal laws or if the applications for the Projects are
resubmitted under the long form procedures of Italian federal
law.  The period in which the Projects could possibly be revived is
uncertain as of the date of this Report.  The Company was not a party
to the federal or regional Italian Constitutional Court lawsuit.
  9
 5.            LEGAL
PROCEEDINGS
 
 On
February 25, 2010, the Company received notification from Sunpower Corporation,
a Delaware corporation (“SunCorp”), demanding that Prime Sun Power, Inc. cease
and desist from using the words “Sun Power” in its name. SunCorp identified
several U.S. and International trademark registrations of its “Sunpower” mark.
The Company subsequently received a cease and desist letter from SunCorp legal
counsel on April 1, 2010 threatening litigation against the Company for
continued use of the words “Sun Power” in its name.  The Company has
determined that it will be economically more rational to change the Company’s
name rather than engage in protracted litigation with SunCorp.  The
Company plans to accomplish the name change during the course of the third
quarter of 2010.
 
 6.           INCOME
TAXES
 
 The
Company has available approximately $2,991,000 of net operating loss carry
forwards to offset future taxable income, if any.  The carry forwards
expire as follows:
 
 2022
                      
                      $
                      22,0002023
                      
                      $
                      24,0002024
                      
                      $
                      13,0002025
                      
                      $
                      19,0002026
                      
                      $
                      16,0002027
                      
                      $
                      56,0002028
                      
                      $
                      695,0002029
      and after
                      
                      $
                      2,146,000
 
 The
Company has a deferred tax asset of approximately $1,047,000 relating to
available net operating loss carry forwards for which 100% valuation allowance
has been provided.
  10
 
 ITEM 2.
                MANAGEMENT'S DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 The
Company's Operations
 
 The
following discussion of the financial condition and results of operations of
Prime Sun Power Inc. should be read in conjunction with the financial statements
and the related notes thereto included elsewhere in this Report. This Report
contains certain forward-looking statements and the Company's future operating
results could differ materially from those discussed herein. Certain statements
contained in this Report, including, without limitation, statements containing
the words “believes”, “anticipates,” “expects” and the like, constitute
“forward-looking statements” within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). However, as the Company intends to issue “penny
stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange
Act, the Company is ineligible to rely on these safe harbor provisions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Given
these uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. The Company disclaims any obligation to update any
such factors or to announce publicly the results of any revisions of the
forward-looking statements contained or incorporated by reference herein to
reflect future events or developments, except as required by the Exchange
Act.
 
 We were
incorporated in the State of Nevada on December 18, 2002, as ATM Financial
Corp.  On April 1, 2008, we changed our name from “ATM Financial
Corp.” to “Prime Sun Power Inc.”  On April 15, 2008, the Company
changed its stock symbol from “AFIC” to “PSPW.” The Company’s common stock is
traded on the National Association of Securities Dealers Inc.’s over-the-counter
bulletin board.
 
 The
Company address is 100 Wall Street, 21st Floor,
New York, NY 10005.  The Company’s telephone number is
866-523-5551.
 
 Plan
of Operation
 
 The
Company is a development stage business planning to develop and sell solar
photovoltaic power and other renewable energies.  Although our Company
has a new business purpose, we have not commenced any revenue generating
operations under the new business model. We anticipate that we will do business
mainly in Europe, and that our Company will operate photovoltaic energy
production parks in which solar electrical power is produced for sale to the
local electrical grid. We intend to enter into strategic alliances with other
companies and organizations engaged in the manufacture and/or assembly of solar
modules.
 
 The
Company presently faces a number of challenges, including raising capital,
indentifying commercially viable photovoltaic power plant locations, obtaining
rights and licenses for development, interacting with local governments,
indentifying and entering into agreements with appropriate subcontractors for
the development and operation of solar parks, and hiring and retaining qualified
staff.
  The
continuing development of our plans are subject to many uncertainties that
present material risks to investors.  In addition, because we have not
yet commenced any revenue generating operations, our most recent financial
statements will not provide sufficient information to assess our future
prospects.  Our likelihood of success must be considered in light of
all of the relevant risks. Shareholders of the Company and prospective investors
are directed to the Risk Factors discussed in our most recent Annual Report on
Form 10-K as filed with the U.S. Securities & Exchange Commission which is
publicly available at www.sec.gov.
 
 11
 Project Acquisition by GPR Global Power Resources
Ltd.
 
 On March
2, 2010, the Company entered into a project acquisition agreement (the
“Acquisition Agreement”) with GPR Global Power Resources Ltd., a Company formed
in Switzerland (“GPR,” and together with the Company, the
“Parties”).  Pursuant to the Acquisition Agreement, the Company has
agreed to sell to GPR all of the shares of a wholly-owned Italian subsidiary of
the Company called PSP Italia S.r.l.  This subsidiary will develop a
turnkey alternative energy power plant, utilizing solar power.  The
purchase price for the shares of PSP Italia S.r.l. shall be a minimum of 4.05
million Euros per mega watt of power produced by the solar power
plant.  The Acquisition Agreement shall cover up to a total of twenty
five mega watts of power, for a total potential sales price of 101.25 million
Euros.
 
 The
purchase price for this transaction shall be released by GPR to the Company
incrementally on the achievement of certain milestones, with respect to
connection of the solar power plant to the Italian National Grid as enumerated
in the Acquisition Agreement.  Payment shall be due to the Company in
five equal tranches.  GPR shall make each tranche of payments within
ninety days of that date when the Company shall accomplish its milestones under
the Acquisition Agreement, including such time as when the solar power plant
connects five mega watts of power to the regional electrical
grid.  GPR shall have the right to withhold 10% of the purchase price
due to the Company for up to six months as a security for the fulfillment of the
Company’s obligations.  The purchase price that GPR shall be required
to pay may be reduced by the amount of certain cost savings that GPR may assist
the Company in making or as a result of certain taxes GPR may be required to
pay, in each case as set forth in the Acquisition Agreement. Furthermore, the
Parties have agreed that certain specifications concerning this project to be
included in the annexes to the Acquisition Agreement have not yet been set, and
will be mutually agreed upon by the Parties in the immediate
future.
 
 The
Acquisition Agreement requires the Company to facilitate and arrange for
long-term debt financing of at least 80% of the purchase price to be paid by
GPR.   The terms of the Acquisition Agreement are subject to review
and approval by the relevant third party financing institution.  The
Acquisition Agreement requires GPR to finance the remainder of the purchase
price, and to deliver a Bank Standby Letter of Credit in an amount equal to 20%
of the first payment tranche that will be due.
 
 The
Company shall be responsible for all construction costs for the solar power
plant, including costs for sub contractors.  At the present time, the
Company is in discussions with the EPC contractors and module suppliers to
obtain the final binding offers.  The Company intends to commence
construction of the solar power plant in the fourth quarter of 2010 upon
completion of the required fund raising.
 
 Throughout
the construction process, the Company shall be required to provide GPR with
regular progress reports and rights to inspect the facility.  The
Company shall inform GPR without delay about all present and expected legal,
political and economic facts relating to PSP Italia S.r.l. and/or the solar
power plant which may negatively affect the acquisition of PSP Italia S.r.l.,
the future operation of the solar power plant, the expected core data or key
values of the solar power plant and/or the business expectations of
GPR.  In addition, the Company shall be required to maintain liability
insurance in the amount of 5 million Euros per liability event, and, at the
request of GPR, the Company shall be obliged to ensure that all losses and
damages caused by sub-contractors are sufficiently covered by the corresponding
insurance of the sub-contractors.
 
 The
Company will represent that its subsidiary PSP Italia S.r.l. has good and
marketable title to all of its properties and assets, including the solar power
plant, free and clear of any liens.  The Company will also represent
that PSP Italia S.r.l. will hold all licenses, consents, permits, approvals and
authorizations required for the operation of the solar power plant and its
connection to the electrical grid, and that PSP Italia S.r.l. will hold such
authorizations for a period of at least 20 years.  The Company will
also represent that PSP Italia S.r.l. will hold all necessary guarantees and has
no obligations (other than related to the right to operate the solar power
plant).
  The solar
power plant shall be required to meet certain standards for electrical
production capacity enumerated in the Acquisition Agreement.  The
Company shall be obliged to construct the solar power plant in accordance with
the specifications agreed to in the Acquisition Agreement and in conformity with
any applicable regulation of whatever nature.  The Company has
acknowledged and agreed that GPR shall be entitled to give binding instructions
and directives with regard to the construction of the solar power plant to the
extent that: (i) such instruction and directive does not lead to an increase of
the construction costs, unless the Parties have otherwise agreed; and (ii) it
does not negatively affect the achievement of connection to the electrical
grid.  The Company must advise GPR of any substantial deviations from
agreed specifications.
 
 12
 The
Company shall represent and warrant that the construction of the solar power
plant has been performed in accordance with all applicable laws and regulations
and in accordance with the generally accepted rules of building and
construction.  The Company shall furthermore represent and warrant
that the solar power plant has been completed in accordance with all licenses
and guarantees, and that the solar power plant, and all applicable licenses and
guarantees shall be validly transferred upon the connection of the solar power
plant to the electrical grid.  The Company shall avoid performance in
any manner that could lead to the revocation of any licenses, consents, permits,
approvals, authorizations or other reasons attributable to the
Company.  At the time of connection to the electrical grid, the solar
power plant shall have all necessary approvals and acceptance.
 
 The
Company shall also represent and warrant that the structure of the solar power
plant shall remain in viable, suitable and useable condition for a time period
of at least 20 years from the date of connection to the electrical grid, and
that the solar power plant will produce electric power at the agreed capacity
for a time period of at least 20 years.  The Company shall be liable
for any defect and damage to the solar power plant or drop in power production.
The Company is also representing and warranting that spare parts for the solar
power plant will be available for a period of 20 years, and that all relevant
licenses relating to the solar power plant will be valid for a period of 20
years.  The Company intends to satisfy these liabilities,
representations and warranties by obtaining back-to-back representations and
warranties regarding the same matters from established and reputable
subcontractors who will engineer and construct the power plant.
 
 The
Company shall indemnify and hold harmless GPR and its affiliates, as well as
their directors, officers and employees, from and against any and all losses
arising out of any breach by the Company of any representation, warranty,
agreement or covenant in the Acquisition Agreement, of which GPR gives notice to
the Company within 20 years after the closing of this transaction, except for
indemnifications related to taxes, which shall survive for 10 years after
closing.  GPR shall indemnify and hold harmless the Company and its
directors, officers and employees from and against any and all losses arising
out of any breach by GPR, which the Company gives GPR notice of within two years
of the closing.
 
 The
Acquisition Agreement also contains standard representations regarding the
capital structure and ownership of PSP Italia S.r.l., its articles of
association, corporate organization, books and records, compliance with law,
qualification to do business, consents and approvals and lack of pending legal
proceedings.  Both Parties to the Acquisition Agreement have agreed
not to disclose confidential information.
  Neither
Party may assign the Acquisition Agreement.  The Acquisition Agreement
is governed by Swiss Law, and the jurisdiction of any dispute shall be
Zurich.  Disputes shall be settled by arbitration in accordance with
the Swiss Rules of International Arbitration of the Swiss Chambers of
Commerce.
 
 The
Acquisition Agreement was initiated and executed pursuant to the terms of a
frame Agreement for PV-Plant Acquisitions (the “Frame Agreement”) entered into
by the Parties on November 18, 2009.  Pursuant to the Frame Agreement,
the Parties established a general outline and framework under which the Company
would develop a series of solar power plants (“PV Plants”) in
Italy.  The Parties agreed in the Frame Agreement that the Company
would have a goal of developing 100 mega watts of power in 2010.  The
Parties agreed that as each project was finalized by the Company, the Company
would offer such solar power plant to GPR for purchase.  The purchase
price, as set forth in the Frame Agreement, would not exceed: (i) 4.1 million
Euros per mega watt for PV Plants grid connected in 2010 in the event that the
Company delivers long-term debt funding of 85% or more; or (ii) 4.05 million
Euros per mega watt for PV Plants grid connected in 2010 in the event that the
Company delivers long-term debt funding of 80% or more.  Under the
terms of the Frame Agreement, the parties determined that upon definitive
agreement regarding the terms and conditions for acquisition of the solar PV
Plants, the Parties would enter into a separate binding acquisition agreement
for each such PV Plant.  Under the Frame Agreement, the Parties agreed
that if they could not reach definitive agreement on all parameters relating to
the acquisition, the Company would be free to offer that particular PV Plant to
any third party investor.  The Parties agreed that GPR would undertake
to deliver at signing of the first specific acquisition agreement a rollover
Bank Standby Letter of Credit in the amount of 100% of the equity portion of the
purchase price for the first 5 mega watts, which shall be carried forward for
the next tranches of 5 mega watts each.  This letter of credit would be
subject to the condition of the prior occurrence of the (i) grid connection of
the solar power plant as defined in such acquisition agreement and the closing
of such acquisition agreement; and (ii) the provision of long-term debt
funding at a debt-equity ratio of 80:20 or at a higher debt rate and overall
terms acceptable to GPR.  The form of the Standby Letter of Credit
will be subject to the approval and acceptance of the bank providing the long
term debt.  The Parties agreed the acquisition agreements will be
subject to the delivery of long-term debt funding by the Company of at least 80%
under terms and conditions acceptable for GPR.  The Parties further
agreed that the Company would deliver specified due diligence
documentation.  The Frame Agreement is to remain in effect until
December 31, 2010.  Neither Party may assign the Frame
Agreement.  The Frame Agreement is governed by Swiss Law, and the
jurisdiction of any dispute is Zurich, Switzerland.  On March 2, 2010,
the Parties entered into the first of the acquisition agreement as contemplated
under the Frame Agreement for the sale to GPR of a 25 megawatt power plant, as
described above.
 
 13
 Subsequent
to the period covered by this Report, the Parties to the Frame Agreement reached
an understanding that they would extend the Frame Agreement through December 31,
2011.
 
 Financing
Agreement with CRG Finance AG
 
 On March
2, 2010, the Company entered into a Financing Agreement (the “Financing
Agreement”) with CRG Finance AG (“CRG Finance”).  Pursuant to the
Financing Agreement, CRG Finance loaned the Company a total of 470,000 Euros
($660,073 as of June 30, 2010).  In further consideration for the
making of this loan, the Company shall transfer 20% of the Company’s rights to
its net profits to be made in the sale of PSP Italian S.r.l. to GPR (the “Net
Profit Rights”).
 
 CRG
Finance has agreed that upon receipt of its Net Profit Rights, CRG Finance will
reinvest at least 50% of such Net Profit Rights into either new projects of the
Company or shares of the Company, at a purchase price to be mutually agreed
upon.  The Company has issued a senior promissory note to CRG Finance
in the amount of 470,000 Euros ($660,073 as of June 30, 2010).  The
principal of the note, along with interest at an annual rate of seven and one
half percent, is due within thirty days of demand.
 
 The
Company has utilized these 470,000 Euros in the identification of potential
locations for the development of solar facilities.  The Company has
identified locations which the Company believes are commercially viable for the
operation of solar power projects.
 
 Project
San Paolo and Project Puglia
 
 On April
15, 2009, the Company entered into four agreements to obtain licenses and land
lease call option rights for the development of certain photovoltaic power plant
projects in Italy.  These agreements included two Transfer Agreements:
one for a project located in San Paolo, Italy (referred to herein as “Project
San Paolo”) and one for a project located in Foggia/Apricena, Italy (referred to
herein as “Project Puglia” and together with Project San Paolo, the
“Projects”).  The Project San Paolo and Project Puglia which
previously were deemed to have been terminated as of the end of 2009 were
provided with possibility of revival in respect of proceedings by the
Italian Constitutional Court.  The Italian Constitutional Court
proceedings addressed the regional governmental procedures with respect to
authorization of photovoltaic (PV) plants through a simplified “start-of works”
declaration.  The Company had previously planned to acquire the two
Projects through the simplified regional procedures.  On March 26,
2010, the Italian Constitutional Court declared the simplified regional
procedures unconstitutional under Italian law.  On the basis of the
decision of the Constitutional Court the Company believes the Projects can be
revived if the Italian regional licensing and authorization procedures are
revised to comport with newly stated requirements constitutional applicable
Italian federal laws or if the applications for the Projects are resubmitted
under the long form procedures of Italian federal law.  The period in
which the Projects could possibly be revived is uncertain as of the date of this
Report.  The Company was not a party to the federal or regional
Italian Constitutional Court lawsuit.
 
 14
 Sale
of Project Rights
 
 During
the first quarter 2010, the Company sold rights of ownership in a one-megawatt
photovoltaic power plant from the Company's photovoltaic projects planned for
development in Italy.  Under the terms for the transfer of such
ownership, the Company will establish a special purpose company in Italy under
which the holders of such rights will obtain ownership in the one-megawatt power
plant.  The Company has granted the right of ownership in the
one-megawatt power plant in consideration for an aggregate purchase price of
350,000 Euros (approximately $486,000), of which the Company received 175,000
Euros (approximately $243,000) in cash during the three months ended March 31,
2010.  During the three months ended June 30, 2010, the purchaser of
the rights of ownership in this one-megawatt photovoltaic power plant provided
business introduction services to the Company valued at 175,000 Euros in lieu of
making an additional cash payment.
 
 Strategic
Investment Agreement with Bangkok Solar Power Co., Ltd.
 
 On May
21, 2010, the Company entered into a Strategic Investment Agreement (the
“Agreement”) with Bangkok Solar Power Co., Ltd. (“BSP”), a leading manufacturer
of PV solar modules and engineering, procurement, construction, and installation
(“EPCI”) contractor to acquire up to 6,639,063 shares of the Company’s Common
Stock.  All shares issued to BSP will be subject to a lock-up period
until December 31, 2013.
 
 The
Company and BSP have agreed to work together in a strategic alliance whereby BSP
shall be appointed as the General Contractor to perform the EPCI contract for
the Company’s solar power plants for at least 50 megawatts peak per annum until
2013.  BSP and the Company have agreed that BSP will perform the
turnkey contract for the engineering, procurement and construction and
installation of the Company’s solar power plants, as will be set forth in a
separate ECPI agreement.
 
 BSP will
purchase the Company’s shares in increments of €400,000 upon activation of each
megawatt of peak solar power to be covered by the EPCI service
agreement.  The incremental share purchase will only be payable if the
EPCI includes a price of at least €3,000,000 per megawatt.  BSP has
agreed to purchase a total of 5,176,416 shares of the Company’s common stock
(the “Initial Shares”) at a price of €7.73 per share for an aggregate purchase
price of €40,000,000.  For the incremental purchase of the Initial
Shares, the Company shall issue to BSP an aggregate amount of 1,462,947 shares
(the “Bonus Shares”), with each issuance of Bonus Shares proportional to the
respective incremental purchase of the Initial Shares.
 
 If all of
the strategic alliance shares are acquired, BSP will own 6,639,063 shares of the
Company’s common stock, or 14.2% of the Company’s issued and outstanding shares
of common stock.  Giving effect to the Bonus Shares together with the
purchase price of the Initial Shares, the blended purchase price per share of
the 6,639,063 shares of the Company’s common stock to be acquired by BSP
consisting of both the Initial Shares and the Bonus Shares will be equal to
approximately €6.02 per share.
 
 In
addition to the Initial Shares and the Bonus Shares, BSP shall, with respect to
all EPCI relationships between BSP and the Company under which BSP thin film
modules are engineered, procured, constructed or installed in the Company’s
solar power plants, be permitted to purchase from the Company additional shares
of common stock at a purchase price calculated in the same manner as the Initial
Shares and Bonus Shares (these shares are described as the “Thin Film
Shares”).  BSP shall have the option to purchase the Thin Film Shares
provided the purchase price per megawatt for the modules is acceptable for both
parties.
 
 The
Company has also agreed that any and all management fees allocated from the BSP
strategic investment will be capped at six percent (6%) of the proceeds received
from the strategic investment by BSP in the Company’s shares.
 
 The
Company will only be able to proceed with the transaction with BSP described in
the Agreement once the Company has raised adequate funds to commence
operations.
 
 15
 Revenues
 
 During
the six month periods ended June 30, 2010 and June 30, 2009, the Company had no
revenues from operations.
 
 Results
of Operations
 
 The
Company has incurred a significant decrease in expenses during this reporting
period from the last comparative period.  Expenses for the six months
ended June 30, 2010 were $459,956, as compared to $983,558 for the six months
ended June 30, 2009.  Expenses for the three months ended June 30,
2010 were $213,400, as compared to $470,329 for the three months ended June 30,
2009. The three and six month periods ended June 30, 2010 experienced declines
in consulting and director fees, professional fees, personnel costs, general and
administrative costs, and non-cash compensation costs. The Company’s total
expenses from inception through June 30, 2010 were $3,300,859.  The
Company’s net loss for each of the periods referenced above is equal to the
amount for expenses.
 
 The
Company’s consulting and director fees for the six month period ended June 30,
2010 were $34,627, as opposed to $75,939 for the six month period ended June 30,
2009.  The Company’s consulting and director fees for the three month
period ended June 30, 2010 were $0, as opposed to $57,939 for the three month
period ended June 30, 2009.  The Company’s total consulting and
director fees from inception through June 30, 2010 were $280,426.
 
 The
Company’s professional fees for the six month period ended June 30, 2010 were
$106,736, as opposed to $286,535 for the six month period ended June 30,
2009.  The Company’s professional fees for the three month period
ended June 30, 2010 were $56,736, as opposed to $95,266 for the three month
period ended June 30, 2009.  The Company’s total professional fees
from inception through June 30, 2010 were $824,557.
 
 The
Company’s fees for management services for the three and six month periods ended
June 30, 2010 were essentially unchanged from the three and six month periods
ended June 30, 2009 (approximately $104,167 for each three month period and
$208,333 for each six month period).  The Company’s fees for
management services from inception through June 30, 2010 were
$625,000.
 
 The
Company’s personnel costs for the six month period ended June 30, 2010 were
$39,687, as opposed to $248,965 for the six month period ended June 30,
2009.  The Company’s personnel costs for the three month period ended
June 30, 2010 were $19,843, as opposed to $125,490 for the three month period
ended June 30, 2009.  The Company’s total personnel costs from
inception through June 30, 2010 were $626,896.
 
 The
Company’s general and administrative costs for the six month period ended June
30, 2010 were $35,593, as opposed to $47,022 for the six month period ended June
30, 2009.  The Company’s general and administrative costs for the
three month period ended June 30, 2010 were $16,595, as opposed to $26,803 for
the three month period ended June 30, 2009.  The Company’s total
general and administrative costs from inception through June 30, 2010 were
$228,553.
 
 The
Company has not incurred any fees for land licensing and development in either
the three or six months ended June 30, 2010 or 2009.  The Company’s
total fees for land licensing and development from inception through June 30,
2010 were $428,980.
 
 The
Company’s interest expenses for the six month period ended June 30, 2010 were
$34,349, as opposed to $14,398 for the six month period ended June 30,
2009.  The Company’s interest expenses for the three month period
ended June 30, 2010 were $16,059, as opposed to $8,881 for the three month
period ended June 30, 2009.  The Company’s total interest expenses
from inception through June 30, 2010 were $92,925.
 
 The
Company’s non-cash compensation costs for the six month period ended June 30,
2010 were $631, as opposed to $102,365 for the six month period ended June 30,
2009.  The Company’s non-cash compensation costs for the three month
period ended June 30, 2010 were $0, as opposed to $51,783 for the three month
period ended June 30, 2009.  The Company’s total non-cash compensation
costs from inception through June 30, 2010 were $207,698.
 
 16
 Liquidity
and capital resources
 
 As of the
date of this Report, we have not yet generated any revenues from our business
operations.
 
 Our total
cash balance at June 30, 2010 was $688, which was a decline from a cash balance
of $14,051 as of December 31, 2009. As of June 30, 2010, our total assets
were also $688, which also declined from $14,051 as of December 31,
2009. Our total liabilities were $2,920,379 as of June 30, 2010, which was
an increase from $2,474,417 as of December 31, 2009.
 
 During
the six months ended June 30, 2010 and through the date of this Report, our
primary source of capital has been loans from Rudana Investment Group AG, the
majority shareholder of our Company. Our pre-operational activities to date
have consumed substantial amounts of cash. Our negative cash flow from
operations is expected to continue and to accelerate in the foreseeable future
as the Company invests in capital expenditures to commence
operations.
 
 To date,
the Company has received loans in aggregate of $193,574 from Rudana (the
“Shareholder Loans”). The Shareholder Loans include $313,064 loaned by Rudana
and $718,689 in Company invoices paid by Rudana, which amounts are offset by
reimbursements to Rudana of $823,448 and payments of $14,731 made by the Company
on behalf of Rudana. The Company has used the proceeds from the Shareholder
Loans for general corporate purposes. The Shareholder Loans have an interest
rate of seven and a half percent (7.5%) per annum, which together with the
principal amount shall be repayable thirty (30) days after demand by Rudana. In
connection with the Shareholder Loans, the Company intends to execute notes
setting forth the terms thereof.  In addition, the Company’s accrued
fees owed for management services received from Rudana from inception through
June 30, 2010 total $625,000.
 
 We will
need to raise additional capital to implement our new business plan and continue
operations for any length of time. We are seeking alternative sources of
financing, through private placement of securities and loans from our
shareholders in order for us to maintain our operations. We cannot
guarantee that we will be successful in raising additional cash resources for
our operations.  Rudana Investment Group AG, the majority shareholder of
our Company, has loaned the Company funds for operations in the past, and has
indicated that it will continue to loan funds as their financial circumstances
may permit. Rudana, however, is under no obligation to make additional
loans in the future.
 
 Our
future capital requirements will depend on a number of factors, including our
ability to grow our revenues and manage our business. Our growth will depend
upon our ability to raise additional capital, possibly through the issuance of
long-term or short-term indebtedness or the issuance of our equity securities in
private or public transactions. If we are successful in raising equity capital,
because of the number and variability of factors that will determine our use of
the capital, our ultimate use of the proceeds may vary substantially from our
current plans.  We expect that our management will use  the
equity proceeds to acquire assets in the form of equity participation into
PV-Plants projects in Italy, France and Greece. Current global financial
market conditions will be relevant to the Company’s ability to raise funds and
make sales in the particular markets in which we will be active. While the
Company believes that the opportunity exists to proceed in spite of these
factors, major market disruptions, recent adverse changes in global market
conditions, and the regulatory climate may affect our business.
 
 The
Company will require no less than $2,000,000 in additional funding in order to
conduct proposed operations for the next year. In order to commence
construction on all of the Company’s currently contemplated projects, the
Company would be required to raise 15,000,000 Euros (approximately $19,220,000)
to acquire definitive licenses to own and operate solar parks, and then organize
construction bridge loans to pay for the construction of the solar
parks.
 
 17
 Plant
and Equipment
 
 We expect
to start investing in the installation of solar parks in Italy during 2010.
There will be significant investments required to start these development
projects in Italy. These investments are expected to be financed through
additional equity capital as well as financing loans.
 
 Between
March 14, 2010 and March 25, 2010, the Company entered into a total of sixteen
Acquisition Agreements to acquire Turnkey Alternative Energy Plants producing a
total of 161.20 mega watts of power.  Fourteen of these Acquisition
Agreements were with Partner Capital Group Gmbh; the remaining two were with
GEO-Service KG/SAS.  The closing of each of these Acquisition
Agreements is contingent on the Company’s ability to secure financing, which the
Company is presently seeking.  The parties have agreed that the
Company will be provided with the necessary information to perform due diligence
on these plants prior to closing.
 
 The
Company is presently in negotiations with Partner Capital Group Gmbh and
GEO-Service KG/SAS to revise the Acquisition Agreements so that the acquisition
of control of these Turnkey Alternative Energy Plants would be accomplished by
license and not by sale.
 
 On March
29, 2010 the Company entered into a Frame Agreement (the “Hellenic Frame
Agreement”) with Hellenic Technologies Monoprosopi EPE, a company organized in
Greece (“Hellenic Technologies”).  Pursuant to the Hellenic Frame
Agreement, Hellenic Technologies shall supply the Company with certain materials
based on certain work orders delivered by the Company from time to time, in
accordance with the terms and conditions of the Hellenic Frame
Agreement.  The Hellenic Frame Agreement memorializes certain
understandings reached on February 1, 2010.  The Hellenic Frame
Agreement shall continue until February 1, 2011.  The Hellenic Frame
Agreement shall renew for additional one year terms until notice of non-renewal
is given.
 
 Employees
 
 As of
June 30, 2010, the Company had only one employee: Olivier de Vergnies, the
Company’s Acting Chief Executive Officer and Acting Chief Financial
Officer.  The Company has not yet determined its anticipated employee
and staff needs for the year ending December 31, 2010.
 
 On April
27, 2010, the Company announced that it has engaged a team of twelve engineers
to manage and supervise the Company’s photovoltaic power plant projects. 
These engineers are employed by Hellenic Technologies.  The team is
lead by Mr. Dimitris Kazantzis, Chief Executive Officer of Hellenic
Technologies.  The Company intends to appoint Mr. Kazantzis as its
Chief Operations Officer and will appoint him to the Company’s Board of
Directors.
  The
engagement of these engineers is governed by the terms of the Hellenic Frame
Agreement.  This team is expected to more than double in personnel over the
coming two years.  The team scope of work includes the following
activities:
  1.
                Preparation
      of requests for proposals for engineering, procurement and construction,
      operation and maintenance, engaging security contractors, and coordination
      of responses to requests for
proposals.
 2.
                The
      qualification and selection of contractors, and the negotiation and
      finalization of technical
contracts.
 3.
                Design
      of the overall command and control system of the photovoltaic power plants
      and coordination of the operation and maintenance
  planning.
 4.
                Project
      management on behalf of the Company, including, system design authority,
      supervision of engineering, procurement and construction contractors,
      reporting on projects, acceptance of projects from contractors, handling
      of technical claims and issues, supervision of maintenance/operation
      training, and the supervision of handover following grid
      connection.
  18
 
 Research and Development
 
 We have
not yet determined our anticipated spending on research and development
activities for the year ending December 31, 2010. Research and development
efforts are expected to be overseen by our former Chief Technology Officer,
Cesare Boffa, who now serves the Company as a consultant.
 
 Off
Balance Sheet Arrangements
 
 The
Company does not have any off balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company's financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.
 
 Subsequent
Events
 
 On July
2, 2010, the Company entered into a Master Acquisition Agreement (the “Master
Acquisition Agreement”) with DFD Select Group Ltd. and Enway SAS for the
acquisition of special purpose vehicles owning photovoltaic plants in France
which collectively will have a capacity of 100 Mega Watts.  Pursuant to the
Master Acquisition Agreement, Enway SAS will sell the Company certain projects
for which Enway SAS is presently obtaining all of the necessary authorizations
for the construction and operation of, including the permits necessary for grid
connection.  Prior to closing, the Company shall perform due diligence
concerning the projects.  The plants will be constructed according to
certain conditions to be mutually determined by the parties to the Master
Acquisition Agreement.  The parties to the Master Acquisition
Agreement have agreed that the Company will pay Enway SAS according to several
options to be determined.  The first option comprises of a payment
equal to fifty percent (50%) of the difference between the amount which the
project cost to complete and the price at which the Company can re-sell it
at.  The second option consists of a set mark-up above costs, in which
Enway SAS and DFD Select Group Ltd. may convert the price into either ownership
of up to forty-nine (49%) of the particular project that has been developed or
into shares of the Company’s common stock at a price per share equal to the
average common stock share closing price within the four (4) weeks of trading
before the transaction, discounted by twenty-five percent (25%).
  ITEM
      3.
                QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK
   Not
Applicable.
 
 ITEM
      4.
                CONTROLS
      AND PROCEDURES
 
 As of the
end of the period covered by this Report, an evaluation was carried out under
the supervision and with the participation of our management, including our
Acting Chief Executive Officer and Acting Chief Financial Officer, of the
effectiveness of our disclosure controls and procedures, as defined in Rule
13a-15(e) promulgated under the Securities and Exchange Act of 1934 (the
“Exchange Act”). In carrying out that evaluation, management identified a
material weakness (as defined in Public Company Accounting Oversight Board
Standard No. 2) in our disclosure controls and procedures regarding a lack of
adequate personnel and adequate segregation of duties.  Based on their
evaluation of our disclosure controls and procedures as of June 30, 2010, the
Company’s Acting Chief Executive Officer and Acting Chief Financial Officer have
concluded that, as of that date, the Company’s disclosure controls and
procedures were not effective for the purposes described above.
 
 The
material weakness identified by Management consisted of inadequate staffing and
supervision within the bookkeeping and accounting operations of the Company. The
relatively small number of employees who have bookkeeping and accounting
functions prevents us from segregating duties within the Company’s disclosure
control system. The inadequate segregation of duties is a weakness because it
could lead to the untimely identification and resolution of accounting and
disclosure matters or could lead to a failure to perform timely and effective
reviews. Accordingly, based on their evaluation of the Company’s disclosure
controls and procedures as of June 30, 2010, the Company’s Acting Chief
Executive Officer and its Acting Chief Financial Officer have concluded that, as
of that date, the Company’s disclosure controls and procedures were not
effective for the purposes described above. The Company intends to take steps to
remediate such procedures as soon as reasonably possible.
 
 There was
no change in the Company’s internal control over financial reporting (as defined
in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934)
during the quarter ended June 30, 2010 that has materially affected or is
reasonably likely to materially affect the Company’s internal control over
financial reporting.
 
 19
 PART
      II.
                OTHER
      INFORMATION
 
 ITEM
      1.
                LEGAL
      PROCEEDINGS
 
 On February 25, 2010, the Company received notification
from Sunpower Corporation, a Delaware corporation (“SunCorp”), demanding that
the Company cease and desist from using the words “Sun Power” in its name.
SunCorp identified several U.S. and International trademark registrations of its
“Sunpower” mark.  The Company subsequently received a cease and desist
letter from SunCorp legal counsel on April 1, 2010 asserting rights to the name
“Sun Power.”  The Company has determined that it will be economically
more rational to change the Company’s name rather than engage in protracted
litigation with SunCorp.  The Company plans to accomplish the name
change during the course of the third quarter of 2010.
 
 ITEM
      1A.
                RISK
      FACTORS
 
 Not
Applicable.
 
 ITEM
      2:
                UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
 
 On May
21, 2010, the Company entered into a Strategic Investment Agreement with Bangkok
Solar Power Co., Ltd. to sell up to 6,639,063 shares of the Company’s Common
Stock at price of €7.73 per share, as described in Item 2 of Part 1 above, which
is incorporated herein by reference thereto.
 
 The sale
of these 6,639,063 shares was made with a non-U.S. person and was undertaken by
the Company in reliance upon the exemption from securities registration of
Regulation S of the U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
 ITEM
    3:
                DEFAULTS UPON SENIOR
      SECURITIES
  Not
Applicable.
 
 ITEM
      4:
                RESERVED
 
 Not
Applicable.
 
 ITEM
      5:
                OTHER
      INFORMATION
 
 Not
Applicable.
 
 20
 
 ITEM
      6.
                EXHIBITS
  Exhibit
                
                Description31.1
                
                Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.32.1
                
                Certification
      of the Principal Executive Officer and Principal Financial Officer
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.
 
 21
  SIGNATURES
 
 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.
 
 PRIME
      SUN POWER INC.By:
                /s/
      Olivier de VergniesName:
                Olivier
      de VergniesTitle:
                Acting
      Chief Executive Officer,Acting
      Principal Financial Officer andActing
      Principal Accounting Officer
 
 Dated:
     August 20, 2010
  22