Overview
TGI Solar Power Group, Inc. (“TGI”
or the “Company”) is a publicly held corporation formed under the laws of the State of Delaware as Liberty Leasing
Co. Inc. in 1967. The Company changed its name to LIBCO Corporation on June 29, 1973, RDIS Corporation on January 11, 1993 and
TenthGate International, Inc. on February 20, 2007, before adopting its current name in June 2008. Tenth Gate International, Inc.
acquired TenthGate Incorporated, a Delaware corporation, by merger of TGI’s subsidiary, TenthGate Merger Sub, Inc., a Utah
corporation, with and into TenthGate Incorporated in April 2007. Thereafter, TenthGate International, Inc. became a development
stage company which owned various subsidiaries with licenses and patents held by those subsidiaries. On July 25, 2008, Tenth Gate
International, Inc., as a result of a merger acquired from Solar 18 Corporation, a Florida corporation, (“Solar 18”),
Solar 18’s license to manufacture, sell, market and distribute Solar 18’s patented thin-film solar panel technology
which the Company believed to be viable in commercial and residential applications, especially in the field of green energy. Thereafter,
the Company changed its name to TGI Solar Power Group, Inc. TGI Solar Power Group, Inc. discontinued operations of its other subsidiaries
(of the former TenthGate International, Inc.) to pursue the energy technology products and services the Company licensed from Solar
18. However, due to the severe reduction in price of solar panels after the acquisition, the Company was unable to effectively
pursue manufacturing solar panels at a competitive price.
TGI Solar Power Group, Inc. is primarily engaged
in the business of providing potential alternative energy solutions to residential and business customers. The Company markets
alternative energy solutions on its website and directly to potential customers and attempts to create a Present Value solution
that details price, tax benefits or cost support and the potential energy savings that might be realized from customers installing
an alternative energy solution to support their energy needs.
On June 26, 2016, the Company sold 137,500
shares of its Series C Convertible Preferred Stock (the “Series C Stock”) each to Ensure HR, LLC, a New Jersey limited
liability company (“Ensure”) and Meros HR, LLC, a New Jersey limited liability company (“Meros”). The Series
C Stock is convertible into a number of shares of the Company’s common stock, par value $0.001 per share (the “Common
Stock”) at the conversion price of $0.0000161240 per share and votes on an as converted basis, multiplied by 1.9. As a result,
the sale of the Series C Stock resulted in a change of control of the Company.
Accordingly, TGI intends to launch new
business initiatives intended to provide clients with management, tools and resources to deliver interactive, real-time, on demand
staffing for full time and project based personnel. The Company is exploring the possibility of entering into a business
to provide staffing for contract projects in solar or alternative energy, as well as potentially in other businesses. The Company
intends these business initiatives will result in infrastructure which supports qualifying, investigating and on-boarding of viable
project management candidates. This process includes automated reporting of hours, benefits and insurance and obtaining insurance
and building expertise that may drive continued support of this model. The model may include three offerings to companies: permanent,
temporary and contract-based staffing in five established vertical markets: information technology, engineering, light industrial,
financial services and medical.
The Company is also exploring launching a job
board technology, smart phone application and a broker network. With this technology, the Company hopes it can leverage its historical
connections and management’s potential customer base. The staffing and support industry for sourced labor and human capital
and resource management is over $400 billion dollars worldwide according to the Staffing Industry Analysts, a leading trade association.
TGI Solar has been involved in planning
and gathering resources for solar and alternative energy projects over the past eight years. TGI Solar has had discussion
with a number of third parties to provide consulting and staffing services within the period of this report, however, these
discussions did not lead to revenues for the Company. In various projects examined over the past years in the solar and
alternative energy industry, governmental legislation, reporting, benefit and compliance hurdles have become burdensome fixed
costs for many growing mid-size to larger companies, and the Company believes that it may be able to successfully launch a
business initiative in this arena.
While the Company has not generated revenues
from its business activities for the periods reported in this Annual Report, it has since been retained to provide strategic consulting
services.
Market Overview
Alternative Energy
Solar energy is a growing form of renewable
energy with numerous economic and tax incentives, as well as environmental benefits that make it an attractive complement to, and/or
substitute for, traditional forms of electricity generation. In recent years, the price of Photo Voltaic (“PV”) systems,
and accordingly the cost of producing electricity from PV solar, has dropped to levels that are in some markets and applications
close to (or even below) the retail price of electricity. Solar markets worldwide continue to develop, both at the module and system
level, which make solar power more affordable to new markets.
TGI Solar Power Group Inc. has attempted to
build a business in solar and alternative energy in the United States that focuses on residential and small commercial installations
to reduce power costs, take advantage of tax incentives and to reduce electrical bills by moving power from the usage location
back onto the active electric grid (“back metering”). Large corporate, financial and governmental agencies provide
opportunities to capture management and oversight over larger scale PV projects and agents in the United States and in the Middle
East that will introduce the Company to mid to large scale projects with a design on providing end to end, or part of, overall
project installations in the regions where we have access to staff and support personnel to build a viable business model in solar
PV installation, support and service. Based upon the business opportunities in project management and the technology and expertise
that the Company has developed for solar projects and installation, we have made plans to establish consulting and personnel service
business units.
Staffing
US staffing industry revenue rose by 7% in
2015 and is anticipated to rise by approximately 6% in 2016 to bring total US revenue in the industry to a record $142.4 billion,
according to the new industry forecast by Staffing Industry Analysts. Revenue considered for the report includes commercial and
professional temporary staffing, direct hire, retained search, and temp to hire.
Higher bill rates because of the Affordable
Care Act are helping drive this increase along with rising pay rates for some high demand occupations, primarily in the professional
skill segments. Overall, U.S. businesses are expected to add about 7.2 million jobs through 2021 – a 4.6 percent increase.
Growth Strategy
Our growth strategy is to expand our consulting
service offerings, which may require investments in new hires, acquisitions of complementary businesses, possible expansion into
other geographic areas, and related capital expenditures.
Our business development and marketing activities
are aimed at cultivating relationships, driving demand for our consulting services, generating leads and attempting to increase
penetration and visibility with alternative energy providers. Currently, we have one existing client and we anticipate that any
new engagements would be generated through relationships with existing providers from our contacts in the industry. We actively
seek to identify new business opportunities. We hope to retain dedicated business development professionals who are focused exclusively
on developing client relationships and generating new business.
Competition
Consulting:
The consulting services
industry is extremely competitive, highly fragmented, and subject to rapid change. The industry includes a large number of participants
with a variety of skills and industry expertise, including other consulting firms, the consulting practices of major accounting
firms, technical and economic advisory firms, regional and specialty consulting firms, and the internal professional resources
of organizations. We compete with a large number of service and technology providers in all of our segments. Our competitors often
vary, depending on the particular practice area. We expect to continue to face competition from new entrants.
We believe the principal competitive factors
in our market include recognition, reputation, the ability to attract and retain top talent, and the capacity to manage engagements
effectively to drive high value to clients. There is also competition on price. Our competitors have a greater geographic footprint,
a broader international presence, and more resources than we do.
Solar:
The solar power industry is highly
competitive. Many competitors are well established with substantial expertise and have much greater assets and greater financial,
marketing, personnel, and other resources than we do. There can be no assurance that we will be able to compete effectively with
existing or potential competitors. Other factors that will affect our success in these markets include our continued ability to
attract additional experienced marketing, sales and management talent, and our ability to expand our support, training and field
service capabilities.
Customers
We intend to offer market available solar-based
products and services to distributors and original equipment manufacturers (OEMs) in various diverse industries as a reseller.
We will request our distributors to provide point of sales reporting, which enables us to gain knowledge of the breakdown of industries
into which any third party manufactured products we might resell are sold.
Government Regulation
We are not currently a “regulated utility”
in the United States under applicable national, state or other local regulatory regimes. In the United States, we would be required
to obtain federal and state regulatory exemptions by establishing “Qualifying Facility” status with the Federal Energy
Regulatory Commission for all of our qualifying solar energy projects. Also, we would likely be required to obtain interconnection
agreements from the applicable local primary electricity utility. Depending on the size of the solar energy system and local law
requirements, interconnection agreements are between the local utility and either us or our customer. In most cases, interconnection
agreements are standard form agreements that have been pre-approved by the local public utility commission or other regulatory
body with jurisdiction over interconnection agreements. As such, we believe no additional regulatory approvals would be required
once interconnection agreements were signed. We may be required to maintain a utility administration function, with primary responsibility
for engaging with utilities and ensuring our compliance with interconnection rules.
Solar power companies are subject to stringent
and complex federal, state and local laws and regulations governing the occupational health and safety of our employees, wage regulations
and environmental regulations. For example, solar power companies are subject to the requirements of the federal Occupational Safety
and Health Act, as amended, or OSHA, and comparable state laws that protect and regulate employee health and safety.
Federal and/or state prevailing wage requirements,
which generally apply to any “public works” construction project that receives public funds, may apply if potential
installations of our solar energy systems were on government facilities. The prevailing wage is the basic hourly rate paid on public
works projects to a majority of workers engaged in a particular craft, classification or type of work within a particular area.
Prevailing wage requirements are established and enforced by regulatory agencies.
Employees
As of November 14, 2016, the Company had one
employee, its Chief Executive Officer
,
Henry Val. Mr. Val does not have an employment agreement and is not covered by a
collective bargaining agreement.
Risks Related to our Business
An investment in our stock involves a high
degree of risk. You should carefully consider the following information, together with the other information in this Form 10-K,
before buying shares of our stock. If any of the following risks or uncertainties occur, our business, financial condition, and
results of operations could be materially and adversely affected and the trading price of our stock could decline.
We are at a very early operational stage
and our success is subject to the substantial risks inherent in the establishment of a new business venture.
The implementation of our business strategy
is still in development. Our business and operations should be considered to be in a very early stage. Accordingly, the intended
business and operations may not prove to be successful in the near future, if at all. Any future success that we might enjoy will
depend upon many factors, several of which may be beyond our control, or which cannot be predicted at this time, and which could
have a material adverse effect upon our financial condition, business prospects and operations and the value of an investment in
the Company.
We have suffered operating losses since
inception and we may not be able to achieve profitability.
We had an accumulated consolidated deficit
of $14,550,323 as of April 30, 2016 and we expect to continue to incur significant set up expenses in the foreseeable future. As
a result, we are sustaining substantial operating and net losses, and it is possible that we will never be able to sustain or develop
the revenue levels necessary to attain profitability.
Our independent registered public accounting
firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going
concern.”
As of July 31, 2016, we had
$129,568 in cash and working capital of $132,308. Further, we have incurred and expect to continue to incur
significant costs in pursuit of our plans. Any plans to raise capital and to consummate our business operations may not be
successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The
financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our
inability to consummate this offering or our inability to continue as a going concern.
Competition at the systems level can
be intense, thereby potentially exerting downward pressure on systems level profit margins industry-wide, which could make our
efforts to establish customers and project management opportunities impossible and adversely affect our results of operations.
While we believe our plans, offerings and experience
are positively different in many cases from that of our competitors, we may fail to correctly identify our competitive position,
we may be unable to develop or maintain a sufficient magnitude of new systems projects worldwide at economically attractive rates
of return, and we may not otherwise be able to achieve meaningful profitability.
Depending on the market opportunity, we may
be at a disadvantage compared to potential competitors. For example, certain of our competitors may have a stronger and/or more
established localized business presence in a particular geographic region. Certain of our competitors may be larger entities that
have greater financial resources and greater overall brand name recognition than we do and, as a result, may be better positioned
to impact customer behavior or adapt to changes in the industry or the economy as a whole. Certain competitors may also have direct
or indirect access to sovereign capital and/or other incentives, which could enable such competitors to operate at minimal or negative
operating margins for sustained periods of time.
Our future success depends on our ability
to retain our key associates and to successfully integrate them into our management team.
We are dependent on the services of our Chief
Executive Officer. The loss of our Chief Executive Officer could have a material adverse effect on us. We may not be able to retain
or replace our Chief Executive Officer, and we may not have adequate succession plans in place.
If we are unable to attract, train, and
retain key personnel, our business may be materially and adversely affected.
Our future success depends, to a significant
extent, on our ability to attract, train, and retain management, operations, sales, training and technical personnel, including
in foreign jurisdictions as we continue to execute on our long term strategic plan. Recruiting and retaining capable personnel,
particularly those with expertise in the PV industry across a variety of technologies, are vital to our success. There is substantial
competition for qualified technical personnel and there can be no assurances that we will be able to attract and retain our technical
personnel. If we are unable to attract and retain qualified associates, or otherwise experience unexpected labor disruptions within
our business, we may be materially and adversely affected.
Our largest stockholders have significant
influence over us and their interests may conflict with or differ from interests of other stockholders.
Our largest stockholders, consisting collectively
of Henry Val and his wholly-owned corporation Netter Capital, Inc., Meros HR, LLC and Ensure HR, LLC (collectively, the “Significant
Stockholders”), owned approximately 93% of our outstanding voting, capital stock at September 2016, on an as-converted basis.
As a result, the Significant Stockholders have substantial influence over all matters requiring stockholder approval, including
the election of our directors and the approval of significant corporate transactions such as mergers, tender offers, and the sale
of all or substantially all of our assets. The interests of the Significant Stockholders could conflict with or differ from interests
of other stockholders. For example, the concentration of ownership held by the Significant Stockholders could delay, defer or prevent
a change of control of our Company or impede a merger, takeover, or other business combination that a majority of stockholders
may view favorably.
Unanticipated changes in our tax provisions,
the adoption of a new U.S. tax legislation, or exposure to additional income tax liabilities could affect our profitability.
We are subject to income taxes in the United
States and the foreign jurisdictions in which we may someday operate. Our tax liabilities are affected by the amounts we charge
for inventory, services, licenses, funding, and other items in inter-company transactions that may occur in the future. We are
subject to potential tax examinations in these various jurisdictions. Tax authorities may disagree with our inter-company charges
if we had any or other tax positions and assess additional taxes. We regularly assess the likely outcomes of these examinations
in order to determine the appropriateness of our tax provision. However, there can be no assurance that we will accurately predict
the outcomes of these potential examinations, and the amounts ultimately paid upon resolution of examinations could be materially
different from the amounts previously included in our income tax expense and therefore, could have a material impact on our tax
provision, net income, and cash flows. In addition, our future effective tax rate could be adversely affected by changes to our
operating structure, changes in the mix of earnings in jurisdictions with differing statutory tax rates, changes in the valuation
of deferred tax assets and liabilities, changes in tax laws, and the discovery of new information in the course of our tax return
preparation process. A number of proposals for broad reform of the corporate tax system in the U.S. are under evaluation by various
legislative and administrative bodies, but it is not possible to determine accurately the overall impact of such proposals on our
effective tax rate at this time.
Risk Related to Our Securities
Risks Related to Our Securities
There is a substantial lack of liquidity
of our common stock and volatility risks.
Our common stock is quoted under the symbol
“TSPG” On the OTC Pink Sheets. The liquidity of our common stock may be very limited and affected by our limited trading
market. The OTC Pink Sheets quotation platform is an inter-dealer market much less regulated than the major exchanges, and is subject
to abuses, volatilities and shorting. There is currently no broadly followed and established trading market for our common stock.
An established trading market may never develop or be maintained. Active trading markets generally result in lower price volatility
and more efficient execution of buy and sell orders. Absence of an active trading market reduces the liquidity of the shares traded.
The trading volume of our common stock may
be limited and sporadic. This situation is attributable to a number of factors, including the fact that we are a small company
which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that
generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and
would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time
as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in
our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity
that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a
broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels
will be sustained. As a result of such trading activity, the quoted price for our common stock on the OTC Pink Sheets may not necessarily
be a reliable indicator of our fair market value. In addition, if our shares of common stock cease to be quoted, holders would
find it more difficult to dispose of, or to obtain accurate quotation as to the market value of, our common stock and as a result,
the market value of our common stock likely would decline.
The market price for our stock may be volatile
and subject to fluctuations in response to factors, including the following:
●
|
the increased concentration of the ownership of our shares by a limited number of affiliated stockholders following the sale of our Series C Preferred Shares may limit interest in our securities;
|
|
|
●
|
variations in quarterly operating results from the expectations of securities analysts or investors;
|
|
|
●
|
revisions in securities analysts’ estimates or reductions in security analysts’ coverage;
|
|
|
●
|
announcements of new products or services by us or our competitors;
|
|
|
●
|
reductions in the market share of our products;
|
|
|
●
|
announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
|
|
|
●
|
general technological, market or economic trends;
|
|
|
●
|
investor perception of our industry or prospects;
|
|
|
●
|
insider selling or buying;
|
|
|
●
|
investors entering into short sale contracts;
|
|
|
●
|
regulatory developments affecting our industry; and
|
|
|
●
|
additions or departures of key personnel.
|
Many of these factors are beyond our control
and may decrease the market price of our common stock, regardless of our operating performance. We cannot make any predictions
or projections as to what the prevailing market price for our common stock will be at any time, including as to whether our common
stock will sustain current market prices, or as to what effect that the sale of shares or the availability of common stock for
sale at any time will have on the prevailing market price.
Our common stock may never be listed
on a major stock exchange.
We currently do not satisfy the initial listing
standards and cannot ensure that we will be able to satisfy such listing standards or that our common stock will be accepted for
listing on any such major stock exchange. Should we fail to satisfy the initial listing standards of such exchanges, or our common
stock is otherwise rejected for listing, the trading price of our common stock could suffer, the trading market for our common
stock may be less liquid, and our common stock price may be subject to increased volatility.
A decline in the price of our common
stock could affect our ability to raise working capital and adversely impact our ability to continue operations.
A prolonged decline in the price of our common
stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. A decline
in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force
us to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations,
including our ability to develop new services and continue our current operations. If our common stock price declines, we can offer
no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations.
If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.
Concentrated ownership of our common
stock creates a risk of sudden changes in our common stock price.
The sale by any shareholder of a significant
portion of their holdings could have a material adverse effect on the market price of our common stock.
Sales of our currently issued and outstanding
stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares and have a depressive effect on
the price of the shares of our common stock.
A number of the outstanding shares of common
stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the
“Securities Act”) (“Rule 144”). As restricted shares, these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities
Act and as required under applicable state securities laws. Rule 144 provides in essence that a non-affiliate who has held restricted
securities for a period of at least six months may sell their shares of common stock. Under Rule 144, affiliates who have held
restricted securities for a period of at least six months may, under certain conditions, sell every three months, in brokerage
transactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock
or the average weekly trading volume during the four calendar weeks prior to the sale (the four calendar week rule does not apply
to companies quoted on the OTC Pink Platform). A sale under Rule 144 or under any other exemption from the Securities Act, if available,
or pursuant to subsequent registrations of our shares of common stock, may have a depressive effect upon the price of our shares
of common stock in any active market that may develop.
If we issue additional shares or derivative
securities in the future, it will result in the dilution of our existing stockholders
.
Our Articles of Incorporation authorizes the
issuance of up to 2,400,000,000 shares of common stock, $0.001 par value per share, and 100,000,000 shares are designated as “blank
check” preferred stock, par value $0.001 per share (the “Preferred Stock”). Our board of directors may choose
to issue some or all of such shares, or derivative securities to purchase some or all of such shares, to provide additional financing
in the future.
We do not plan to declare or pay any
dividends to our stockholders in the near future.
We have not declared any dividends in the past,
and we do not intend to distribute dividends in the near future. The declaration, payment and amount of any future dividends will
be made at the discretion of the board of directors and will depend upon, among other things, the results of operations, cash flows
and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant. There
is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount
of any such dividend.
The requirements of being a public company
may strain our resources and distract management.
As a result of filing this registration statement,
we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). These requirements are extensive. The Exchange Act requires
that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act
requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting.
We may incur significant costs associated with
our public company reporting requirements and costs associated with applicable corporate governance requirements. We expect all
of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities
more time consuming and costly. This may divert management’s attention from other business concerns, which could have a material
adverse effect on our business, financial condition and results of operations. We also expect that these applicable rules and regulations
may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required
to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result,
it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive
officers. We are currently evaluating and monitoring developments with respect to these rules, and we cannot predict or estimate
the amount of additional costs we may incur or the timing of such costs.
Persons associated with securities offerings, including consultants,
may be deemed to be broker dealers.
In the event that any of our securities are
offered without engaging a registered broker-dealer, we may face claims for rescission and other remedies. If any claims or actions
were to be brought against us relating to our lack of compliance with the broker-dealer requirements, we could be subject to penalties,
required to pay fines, make damages payments or settlement payments, or repurchase such securities. In addition, any claims or
actions could force us to expend significant financial resources to defend our company, could divert the attention of our management
from our core business and could harm our reputation.
Future changes in financial accounting
standards or practices may cause adverse unexpected financial reporting fluctuations and affect reported results of operations.
A change in accounting standards or practices
can have a significant effect on our reported results and may even affect our reporting of transactions completed before the change
is effective. New accounting pronouncements and varying interpretations of accounting pronouncements have occurred and may occur
in the future. Changes to existing rules or the questioning of current practices may adversely affect our reported financial results
or the way we conduct business.
“Penny Stock” rules may make
buying or selling our common stock difficult.
Trading in our common stock is subject to the
“penny stock” rules. The SEC has adopted regulations that generally define a penny stock to be any equity security
that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer
that recommends our common stock to persons other than prior customers and accredited investors, must, prior to the sale, make
a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the
transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny
stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market.
In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current
quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage
broker-dealers from effecting transactions in our common stock, which could severely limit the market price and liquidity of our
common stock.