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 September 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
November 19, 2010, the Issuer had 40,114,900 shares of its Common Stock
outstanding.









TABLE
OF CONTENTS





PART
      I: FINANCIAL INFORMATIONItem
      1: Financial Statements
              
              
              4Item
      2: Management’s Discussion and Analysis of Financial Condition and Results
      of Operation
              
              
              12Item
      3: Quantitative and Qualitative Disclosures about Market
    Risk
              
              
              21Item
      4: Controls and Procedures
              
              
              21PART
      II: OTHER INFORMATIONItem
      1: Legal Proceedings
              
              
              23Item
      1A: Risk Factors
              
              
              23Item
      2: Unregistered Sales of Equity Securities and Use of
    Proceeds
              
              
              23Item
      3: Defaults Upon Senior Securities
              
              
              23Item
      4: Reserved
              
              
              23Item
      5: Other Information
              
              
              23Item
      6: Exhibits
              
              
              23SIGNATURES
              
              
              25




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.).





SPECIAL
NOTE REGARDING VOLUNTARY FILER STATUS





The
Company is a “voluntary filer” with the U.S. Securities and Exchange Commission.
This means that the Company is not required to file Current and Periodic Reports
with the U.S. Securities and Exchange Commission. The Company is not a fully
reporting company that is subject to review under Section 408 of the
Sarbanes-Oxley Act of 2002. Furthermore, the Company is not subject to the going
private rules and certain tender offer regulations, and the beneficial holders
of the Company’s securities do not need to report on acquisitions or depositions
of the Company’s securities or their plans regarding their influence and control
over the Company. Therefore the Company’s status a voluntary filer reduces
investors’ rights to access significant information regarding the Company and
its controlling shareholders.





The
Company’s voluntary filer status may lead to its removal from the over the
counter bulletin board, as Rule 6530 of the Financial Industry Regulatory
Authority provides that issuers must be required to file reports pursuant to
Section 13 or 15(d) of the Securities and Exchange Act of 1934 in order to
remain listed.




3




PART I      
    FINANCIAL
INFORMATION




Prime
      Sun Power Inc.(A
      development stage company)Balance
      Sheets(Unaudited)September
      30,
              
              
              December
      31,2010
              
              
              2009ASSETSCurrent
      AssetsCash
              
              $
              250
              
              
              $
              14,051Total
      Current Assets and Total Assets
              
              $
              250
              
              
              $
              14,051LIABILITIES
      AND STOCKHOLDERS' DEFICIENCYCurrent
      LiabilitiesAccounts
      payable and accrued liabilities
              
              $
              1,165,484
              
              
              $
              994,573Advanced
      deposit
              
              
              242,921
              
              
              
              -Note
      payable - finance company
              
              
              660,073
              
              
              
              414,626Accrued
      management services - related party
              
              
              729,167
              
              
              
              416,667Accrued
      interest - related party
              
              
              74,322
              
              
              
              57,550Accrued
      interest - bank note
              
              
              33,861
              
              
              
              -Loan
      from shareholder
              
              
              196,074
              
              
              
              591,001Total
      Current Liabilities and Total Liabilities
              
              
              3,101,902
              
              
              
              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
              
              
              
              4,011September
      30, 2010 and December 31, 2009Additional
      paid in capital
              
              
              377,157
              
              
              
              376,526Deficit
      accumulated during development stage
              
              
              (3,482,820
              )
              
              
              (2,840,903
              )Total
      Stockholders' Deficiency
              
              
              (3,101,652
              )
              
              
              (2,460,366
              )Total
      Liabilities and Stockholders' Deficiency
              
              $
              250
              
              
              $
              14,051
  See Notes
to Financial Statements
  4
 
  Prime
      Sun Power Inc.(A
      development stage company)(Unaudited)
      Statement of OperationsFor
      the Three
                    
                    
                    For
      the Nine
                    
                    
                    Accumulated
      fromMonths
      Ended
                    
                    
                    Months
      Ended
                    
                    
                    December
      18, 2002September
      30,
                    
                    
                    September
      30,
                    
                    
                    (Date
      of Inception)to
      September 30,2010
                    
                    
                    2009
                    
                    
                    2010
                    
                    
                    2009
                    
                    
                    2010Revenue
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -EXPENSES
      (INCOME)Consulting
      and director fees
                    
                    
                    -
                    
                    
                    
                    14,000
                    
                    
                    
                    34,627
                    
                    
                    
                    89,939
                    
                    
                    
                    280,426Professional
      fees
                    
                    
                    52,000
                    
                    
                    
                    22,859
                    
                    
                    
                    158,736
                    
                    
                    
                    309,395
                    
                    
                    
                    876,557Management
      services - related party
                    
                    
                    104,167
                    
                    
                    
                    104,167
                    
                    
                    
                    312,500
                    
                    
                    
                    312,500
                    
                    
                    
                    729,167Personnel
      costs
                    
                    
                    7,500
                    
                    
                    
                    46,859
                    
                    
                    
                    47,187
                    
                    
                    
                    295,824
                    
                    
                    
                    634,396General
      & administrative
                    
                    
                    2,010
                    
                    
                    
                    3,854
                    
                    
                    
                    37,603
                    
                    
                    
                    50,876
                    
                    
                    
                    230,563Land
      licensing and development fees
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    428,980Interest
      expense
                    
                    
                    16,284
                    
                    
                    
                    15,584
                    
                    
                    
                    50,633
                    
                    
                    
                    29,982
                    
                    
                    
                    109,209Gain
      on debt settlement
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (14,176
                    )Non-cash
      compensation
                    
                    
                    -
                    
                    
                    
                    48,114
                    
                    
                    
                    631
                    
                    
                    
                    150,479
                    
                    
                    
                    207,698Total
      Expenses (Income)
                    
                    
                    181,961
                    
                    
                    
                    255,437
                    
                    
                    
                    641,917
                    
                    
                    
                    1,238,995
                    
                    
                    
                    3,482,820Net
      Loss
                    
                    $
                    (181,961
                    )
                    
                    $
                    (255,437
                    )
                    
                    $
                    (641,917
                    )
                    
                    $
                    (1,238,995
                    )
                    
                    $
                    (3,482,820
                    )Basic
      and Diluted Loss Per Share
                    
                    $
                    (0.00
                    )
                    
                    $
                    (0.01
                    )
                    
                    $
                    (0.02
                    )
                    
                    $
                    (0.03
                    )Weighted
      Average Shares Outstanding
                    
                    
                    40,114,900
                    
                    
                    
                    40,114,900
                    
                    
                    
                    40,114,900
                    
                    
                    
                    40,114,900Share
      data has been adjusted to reflect the stock dividend effective February 4,
      2008
  See Notes
to Financial Statements
  5
 
  Prime
      Sun Power Inc.(A
      development stage company)Statement
      of Stockholders' DeficiencyFor
      the Period from December 18, 2002 (Date of Inception) to September 30,
      2010
                    
                    
                    
                    
                    
                    Deficit(Unaudited)
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    AccumulatedDuring
      theCommon
      Stock
                    
                    
                    Additional
                    
                    
                    DevelopmentShares
                    
                    
                    Par
                    
                    
                    Paid-in
      Capital
                    
                    
                    Stage
                    
                    
                    TotalBalance
      - December 18, 2002
                    
                    
                    #
                    
                    
                    Value
      ($)
                    
                    
                    ($)
                    
                    
                    ($)
                    
                    
                    ($)(Unaudited)Common
      stock issued for cash at$0.0001
      per share
                    
                    
                    28,000,000
                    
                    
                    
                    2,800
                    
                    
                    
                    (2,400
                    )
                    
                    
                    
                    
                    
                    400Net
      loss for the period
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (21,990
                    )
                    
                    
                    (21,990
                    )Balance
      - December 31, 2002
                    
                    
                    28,000,000
                    
                    
                    
                    2,800
                    
                    
                    
                    (2,400
                    )
                    
                    
                    (21,990
                    )
                    
                    
                    (21,590
                    )Net
      loss for the Year
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (24,216
                    )
                    
                    
                    (24,216
                    )Balance
      - December 31, 2003
                    
                    
                    28,000,000
                    
                    
                    
                    2,800
                    
                    
                    
                    (2,400
                    )
                    
                    
                    (46,206
                    )
                    
                    
                    (45,806
                    )Net
      loss for the Year
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (13,398
                    )
                    
                    
                    (13,398
                    )Balance
      - December 31, 2004
                    
                    
                    28,000,000
                    
                    
                    
                    2,800
                    
                    
                    
                    (2,400
                    )
                    
                    
                    (59,604
                    )
                    
                    
                    (59,204
                    )February
      14, 2005 - sharesissued
      for cash at $0.10 per share
                    
                    
                    12,114,900
                    
                    
                    
                    1,211
                    
                    
                    
                    171,859
                    
                    
                    
                    
                    
                    
                    
                    173,070Net
      loss for the Year
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (18,609
                    )
                    
                    
                    (18,609
                    )Balance
      - December 31, 2005
                    
                    
                    40,114,900
                    
                    
                    
                    4,011
                    
                    
                    
                    169,459
                    
                    
                    
                    (78,213
                    )
                    
                    
                    95,257Net
      loss for the Year
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (16,167
                    )
                    
                    
                    (16,167
                    )Balance
      - December 31, 2006
                    
                    
                    40,114,900
                    
                    
                    
                    4,011
                    
                    
                    
                    169,459
                    
                    
                    
                    (94,380
                    )
                    
                    
                    79,090Net
      loss for the Year
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (56,129
                    )
                    
                    
                    (56,129
                    )Balance
      - December 31, 2007
                    
                    
                    40,114,900
                    
                    
                    
                    4,011
                    
                    
                    
                    169,459
                    
                    
                    
                    (150,509
                    )
                    
                    
                    22,961Non-cash
      compensation
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    52,959
                    
                    
                    
                    
                    
                    
                    
                    52,959Net
      loss for the Year
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (697,924
                    )
                    
                    
                    (697,924
                    )Balance
      - December 31, 2008
                    
                    
                    40,114,900
                    
                    
                    
                    4,011
                    
                    
                    
                    222,418
                    
                    
                    
                    (848,433
                    )
                    
                    
                    (622,004
                    )Non-cash
      compensation
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    154,108
                    
                    
                    
                    
                    
                    
                    
                    154,108Net
      loss for the year
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (1,992,470
                    )
                    
                    
                    (1,992,470
                    )Balance
      - December 31, 2009
                    
                    
                    40,114,900
                    
                    
                    
                    4,011
                    
                    
                    
                    376,526
                    
                    
                    
                    (2,840,903
                    )
                    
                    
                    (2,460,366
                    )Non-cash
      compensation
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    631
                    
                    
                    
                    
                    
                    
                    
                    631Net
      loss for the period
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (641,917
                    )
                    
                    
                    (641,917
                    )Balance
      - September 30, 2010
                    
                    
                    40,114,900
                    
                    
                    $
                    4,011
                    
                    
                    $
                    377,157
                    
                    
                    $
                    (3,482,820
                    )
                    
                    $
                    (3,101,652
                    )
  See Notes
to Financial Statements
  6
 
  Prime
      Sun Power Inc.(A
      development stage company)Statement
      of Cash Flow(Unaudited)Accumulated
      fromFor
      Nine Months Ended
                    
                    
                    December
      18, 2002September
      30,
                    
                    
                    (Date
      of Inception)2010
                    
                    
                    2009
                    
                    
                    to
      September 30, 2010Operating
      ActivitiesNet
      loss
                    
                    $
                    (641,917
                    )
                    
                    $
                    (1,238,995
                    )
                    
                    $
                    (3,482,820
                    )Adjustments
      to reconcile net loss to net cashprovided
      by (used) in operations:Non-cash
      compensation
                    
                    
                    631
                    
                    
                    
                    150,479
                    
                    
                    
                    207,698Interest
      accrued to related party
                    
                    
                    16,772
                    
                    
                    
                    29,982
                    
                    
                    
                    74,322Interest
      accrued on bank note
                    
                    
                    33,861
                    
                    
                    
                    -
                    
                    
                    
                    33,861Gain
      in debt settlement
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    14,176Accrued
      management services - related party
                    
                    
                    312,500
                    
                    
                    
                    312,500
                    
                    
                    
                    729,167Land
      licensing and development fees
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    428,980Change
      in operating assets and liabilities
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Prepaid
      expense
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Advanced
      deposits
                    
                    
                    242,921
                    
                    
                    
                    -
                    
                    
                    
                    242,921Accounts
      payable and accrued liabilities
                    
                    
                    170,912
                    
                    
                    
                    484,092
                    
                    
                    
                    1,165,484Net
      cash provided by (used) in operating activities
                    
                    
                    135,680
                    
                    
                    
                    (261,942
                    )
                    
                    
                    (586,211
                    )Investing
      ActivitiesLand
      licensing & development fees
                    
                    
                    -
                    
                    
                    
                    (283,080
                    )
                    
                    
                    (428,980
                    )Net
      cash used in investing activities
                    
                    
                    -
                    
                    
                    
                    (283,080
                    )
                    
                    
                    (428,980
                    )Financing
      ActivitiesProceeds
      of loans from Shareholder
                    
                    
                    (394,927
                    )
                    
                    
                    538,399
                    
                    
                    
                    196,074Proceeds
      of bank loan
                    
                    
                    245,446
                    
                    
                    
                    -
                    
                    
                    
                    660,073Gain
      in debt settlement
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (14,176
                    )Common
      stock issued
                    
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    173,470Net
      cash provided by (used in) financing activities
                    
                    
                    (149,481
                    )
                    
                    
                    538,399
                    
                    
                    
                    1,015,441Increase
      (decrease) in Cash
                    
                    
                    (13,801
                    )
                    
                    
                    (6,623
                    )
                    
                    
                    250Cash
      - beginning of period
                    
                    
                    14,051
                    
                    
                    
                    6,629
                    
                    
                    
                    -Cash
      - end of period
                    
                    $
                    250
                    
                    
                    $
                    6
                    
                    
                    $
                    250
  See Notes
to Financial Statements
  7


PRIME SUN POWER INC.
 (A
Development Stage Company)
  NOTES TO
FINANCIAL STATEMENTS
  SEPTEMBER
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 $3,482,820 for the
period from inception (December 18, 2002) to September 30, 2010 and has a
working capital deficiency of $3,101,652 at September 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 September 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 AG is not affiliated with the Company other than as
a third party lender.
 
 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 September 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.
  8
 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.
 
 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.  Should the Company fail to complete its
obligation to develop this power plant, the Company will be obligated to return
the purchase price.  Thus, the purchase price received by the Company
pursuant to this transaction has been recorded on the Company’s balance sheet as
a deposit, and not as revenue.
 
 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.
  9
  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 $8.21 per share at September 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.
 
 10
 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.
  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 first quarter of
2011.
 
 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.




11





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.





12


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 expects to 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 each date on which the Company shall connect five mega watts of
the solar power plant to the Italian National Grid as enumerated in the
Acquisition Agreement. Thus, payment shall be due to the Company in five equal
tranches; for each five mega watts connected, a payment of 20.25 million Euros
shall be due and payable to the Company. GPR shall make each tranche of payments
within ninety days of the date on which the Company shall connect five mega
watts of power to the 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 Company and GPR will not finalize these annexes until such time as
GPR delivers the Bank Standby Letter described below.  The Acquisition
Agreement will not be fully enforceable until the annexes are fully completed
and signed by the parties.





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 (4.05 million Euros).





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.





Once
construction commences, the Company estimates that it will take approximately
three to four months to complete the 25 mega watt solar power plant. The Company
currently estimates that the costs of production per mega watt will be 3.6
million Euros.





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).




13


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.





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.





14


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.





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 September 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 September 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.  The locations the Company has
identified are in Southern Italy in the Puglia Region, including the provinces
of Lecce, Foggia, Taranto and Brindisi. The rights to utilize these lands have
been secured by the Company’s local partners through land options. The relevant
local authorities are currently reviewing the grant of permits for these
properties. When permits are granted by such authorities (which is expected by
the end of 2010), the Company will be permitted to commence the development of
these locations once the necessary funds are raised. The process of developing
these locations will take approximately three to four months.





15


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.





Sale
of Project Rights





During
the first quarter of 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.  Should the Company fail to complete its
obligation to develop this power plant, the Company will be obligated to return
the purchase price.  Thus, the purchase price received by the Company
pursuant to this transaction has been recorded on the Company’s balance sheet as
a deposit, and not as revenue.





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.





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.





16


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.





Master
Acquisition Agreement with DFD Select Group Ltd. and Enway SAS





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%).





At the
present time, the Company believes that the costs for developing these
photovoltaic plants will average approximately 3.5 Million Euros per mega
watt.  The costs for this project will be paid by the French Special
Purpose Vehicle (SPV) that will be created for the photovoltaic plants. The
costs will then be shared according to the ownership of each SPV.  To date,
DFD Select Group Ltd. and Enway SAS have incurred costs in connection with the
development of this project; the Company has not incurred significant
costs.  To date, neither party has paid any consideration to the other, for
entering into the Master Acquisition Agreement or otherwise.





Master
Acquisition Agreement with Superserve Ltd.





On August
20, 2010, the Company entered into a Master Acquisition Agreement (the
“Superserve Agreement”) with Superserve Ltd. (“Superserve”) for the acquisition
of special purpose vehicles owning the licenses to build photovoltaic plants in
Greece which collectively will have a capacity of up to 25 Mega Watts. 
Pursuant to the Superserve Agreement, Superserve will sell the Company up to ten
projects for which Superserve is presently obtaining all of the necessary
authorizations for the construction and operation of, including the permits
necessary for grid connection.  Prior to closing, Superserve will have
completed the acquisition of the licenses and the Company shall have performed
due diligence concerning the projects.  The plants will be constructed
according to certain conditions to be mutually determined by the parties to the
Superserve Agreement and third party contractors.  This transaction will be
contingent on the Company’s ability to raise adequate financing.





At the
present time, the Company believes that the costs for developing these
photovoltaic plants will average approximately 3.5 Million Euros per mega
watt.  The costs for this project will be paid by the Greek Special Purpose
Vehicle (SPV) that will be created for the photovoltaic plants. In addition to
paying construction costs, if the project proceeds, the Company will pay
Superserve 30,000 Euros for each of the ten projects, plus 30,000 Euros for each
500 kilowatts that are connected to the grid.  To date, neither party has
paid any consideration to the other, for entering into the Superserve Agreement
or otherwise.





17


Revenues





During
the three and nine month periods ended September 30, 2010 and September 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 nine months
ended September 30, 2010 were $641,917, as compared to $1,238,995 for the nine
months ended September 30, 2009.  Expenses for the three months ended
September 30, 2010 were $181,961, as compared to $255,437 for the three months
ended September 30, 2009.  The three and nine month periods ended September
30, 2010 experienced declines in consulting and director fees, personnel costs,
general and administrative costs, and non-cash compensation costs. The Company’s
total expenses from inception through September 30, 2010 were $3,482,820. 
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 nine month period ended September
30, 2010 were $34,627, as compared to $89,939 for the nine month period ended
September 30, 2009.  The Company’s consulting and director fees for the
three month period ended September 30, 2010 were $0, as compared to $14,000 for
the three month period ended September 30, 2009.  The Company’s total
consulting and director fees from inception through September 30, 2010 were
$280,426.





The
Company’s professional fees for the nine month period ended September 30, 2010
were $158,736, as compared to $309,395 for the nine month period ended September
30, 2009.  The Company’s professional fees for the three month period ended
September 30, 2010 were $52,000, as compared to $22,859 for the three month
period ended September 30, 2009.  The Company’s total professional fees
from inception through September 30, 2010 were $876,557.





The
Company’s fees for management services for the nine month periods ended
September 30, 2010 and September 30, 2009 were both $312,5000.  The
Company’s fees for management services for the three month periods ended
September 30, 2010 and September 30, 2009 were both $104,167.  The
Company’s fees for management services from inception through September 30, 2010
were $729,167.





The
Company’s personnel costs for the nine month period ended September 30, 2010
were $47,187, as compared to $295,824 for the nine month period ended September
30, 2009.  The Company’s personnel costs for the three month period ended
September 30, 2010 were $7,500, as compared to $46,859 for the three month
period ended September 30, 2009.  The Company’s total personnel costs from
inception through September 30, 2010 were $634,396.





The
Company’s general and administrative costs for the nine month period ended
September 30, 2010 were $37,603, as compared to $50,876 for the nine month
period ended September 30, 2009.  The Company’s general and administrative
costs for the three month period ended September 30, 2010 were $2,010, as
compared to $3,854 for the three month period ended September 30, 2009. 
The Company’s total general and administrative costs from inception through
September 30, 2010 were $230,563.





The
Company has not incurred any fees for land licensing and development in either
the three or nine months ended September 30, 2010 or 2009.  The Company’s
total fees for land licensing and development from inception through September
30, 2010 were $428,980.





The
Company’s interest expenses for the nine month period ended September 30, 2010
were $50,633, as compared to $29,982 for the nine month period ended September
30, 2009.  The Company’s interest expenses for the three month period ended
September 30, 2010 were $16,284, as compared to $15,584 for the three month
period ended September 30, 2009.  The Company’s total interest expenses
from inception through September 30, 2010 were $109,209.





18


The
Company’s non-cash compensation costs for the nine month period ended September
30, 2010 were $631, as compared to $150,479 for the nine month period ended
September 30, 2009.  The Company’s non-cash compensation costs for the
three month period ended September 30, 2010 were $0, as compared to $48,114 for
the three month period ended September 30, 2009.  The Company’s total
non-cash compensation costs from inception through September 30, 2010 were
$207,698.





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 September 30, 2010 was $250, which was a decline from a cash
balance of $14,051 as of December 31, 2009.  As of September 30, 2010, our
total assets were also $250, which also declined from $14,051 as of December 31,
2009.  Our total liabilities were $3,101,902 as of September 30, 2010,
which was an increase from $2,474,417 as of December 31, 2009.





Through
the date of this Report, our primary source of capital has been continued use of
proceeds from loans made to the Company during the fourth quarter 2009 and first
quarter 2010 from CRG Finance AG in the amount of 470,000 Euros (US$660,073) and
proceeds from the sale of rights to a one-megawatt power plant in Italy during
the first quarter 2010 in the amount of 179,630 Euros (US$242,921). 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 $196,074 from Rudana (the
“Shareholder Loans”). The Shareholder Loans include $313,064 loaned by Rudana
and $721,189 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
September 30, 2010 total $729,167.





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.  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.





19


The
Company will require no less than $2,000,000 in additional funding in order to
conduct proposed operations for the next year.  Should the Company fail to
raise such funds, the Company will not be able to commence construction of the
solar power plants. 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.





The
Acquisition Agreement dated March 2, 2010 between the Company and GPR Global
Power Resources Ltd. 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
Global Power Resources Ltd. The terms of the Acquisition Agreement are subject
to review and approval by the relevant third party financing institution. The
Acquisition Agreement requires GPR Global Power Resources Ltd. 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 (4.05
million Euros).





The
Company has engaged in discussions with financial institutions to arrange the
long-term debt financing of 80% of the purchase price, however, the Company has
received no commitments for these funds, and will not be able to secure such a
commitment until GPR Global Power Resources Ltd. delivers a Bank Standby Letter
of Credit.  The Company anticipates that it will receive a definitive
response regarding GPR’s ability to deliver this Letter of Credit by the end of
the year.





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
September 30, 2010, the Company had only one employee: Olivier de Vergnies, the
Company’s Acting Chief Executive Officer and Acting Chief Financial
Officer.





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.




20




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.




Research and Development





The
Company anticipates that any future research and development efforts will be
overseen by its 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.





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 September 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
Company’s bookkeeping and accounting functions are overseen by a single
individual who serves as a consultant to the Company, which 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 September 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.





21


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 September 30, 2010 that has materially affected or is
reasonably likely to materially affect the Company’s internal control over
financial reporting.


22




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 fourth quarter of 2010.





ITEM
1A.         RISK FACTORS





Not
Applicable.





ITEM
2:           UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS





Not
Applicable.





ITEM 3:           DEFAULTS
UPON SENIOR SECURITIES





Not
Applicable.





ITEM
4:           RESERVED





Not
Applicable.





ITEM
5:           OTHER INFORMATION




Master
Acquisition Agreement with Superserve Ltd.





On August
20, 2010, the Company entered into a Master Acquisition Agreement with
Superserve Ltd.  This agreement is described in greater detail in Item 2 of
this Report, entitled Management’s Discussion and Analysis of Financial
Condition and Results of Operations, which is incorporated herein by reference
thereto.




23





ITEM
6.          EXHIBITS




Exhibit
            
            Description10.24
            
            Master
      Acquisition Agreement, by and between the Company, DFD Select Group Ltd.
      and Enway SAS, dated as of July 2, 2010.10.25
            
            Master
      Acquisition Agreement, by and between the Company and Superserve Ltd.,
      dated as of August 20, 2010.31.1
            
            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.





24




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:
     November 22, 2010





25