Commission File No. 000-52848
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K/A (Amendment No. 2)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal Year Ended: December 31, 2008
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Transition Period From __ to __
PALMDALE EXECUTIVE HOMES CORP.
_________________________________________________________________
(Exact Name of Small Business Issuer as Specified in its Charter)
Nevada 26-1125521
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6767 W. Tropicana Ave., Suite 207
Las Vegas, NV 89103
________________________________________ __________
(Address of principal executive offices) (Zip code)
Issuer's telephone number: (406) 270-4158
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
$.001 Common Stock
__________________
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
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 definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
________________________________________________________________________________
Non-accelerated filer Smaller
Large accelerated (Do not check if a smaller reporting
filer Accelerated filer reporting company) company
[ ] [ ] [ ] [X]
________________________________________________________________________________
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [X] No [ ]
The aggregate market value of the Registrant's Common Stock held by
non-affiliates of the Registrant (without admitting that any person whose shares
are not included in such calculation is an affiliate) computed by reference to
the price at which the common stock was last sold as of the last business day of
the Registrant's then most recently completed fiscal quarter was $156,000.
As of April 6, 2009 (as as of the date hereof), the Registrant had 3,400,000
shares of Common Stock, $.001 par value, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None
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TABLE OF CONTENTS
PAGE
PART I
Item 1. Business 4
Item 1A. Risk Factors 5
Item 1B. Unresolved Staff Comments 10
Item 2. Properties 10
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 10
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 10
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 12
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 14
Item 8. Financial Statements and Supplementary Data 15
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure 27
Item 9A. Controls and Procedures 27
Item 9B. Other Information 28
PART III
Item 10. Directors, Executive Officers and Corporate Governance 28
Item 11. Executive Compensation 30
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 30
Item 13. Certain Relationships and Related Transactions, and Director
Independence 31
Item 14. Principal Accountant Fees and Services 31
PART IV
Item 15. Exhibits and Financial Statement Schedules 31
Signatures 32
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PART I
ITEM 1. BUSINESS.
Palmdale Executive Homes, Corp. (sometimes the "Company") was incorporated
on January 14, 2000 under the laws of the state of Nevada. We intended to
purchase either so-called "troubled" property in the area of Palmdale,
California or acquire deeds of trust in default held by lenders in the area. As
an alternative, we contemplated constructing modular-prefabricated homes in the
area. We believed that for little or no money applicable to a down payment, we
could acquire the ownership of one or more homes and, in addition, acquire deeds
of trust in default on properties.
Durango Project
On or about January 14, 2000, we acquired by quit claim deed an interest in
real property located in Palmdale, California subject to encumbrances. On or
about January 28, 2000, we requested Chase Manhattan Mortgage Corporation and
California Housing Finance Agency to permit the assumption of the obligations.
On February 1, 2000, Chase Manhattan Mortgage Corporation, on behalf of the
California Housing Finance Agency, refused to permit the assumption in that we
did not meet any of the investor's requirements for the assumption of the loan.
The assumption requirements required the purchaser to occupy the property as its
principal residence. Attempts to negotiate assumption failed. Sales efforts to
find a purchaser who could use the property as a residence also failed. On or
about April 25, 2000, the trustee under the deed of trust recorded a notice of
default and election to sell under the deed of trust. On August 21, 2000, we
lost our equity in the property.
Trust Deed Investment
We also contemplated acquiring deeds of trust in default that secured
promissory notes. A deed of trust (similar to a mortgage) is a tripartite
contract between a debtor ("trustor"), his creditor ("beneficiary") and an
intermediary ("trustee") pursuant to which the trustor technically conveys title
to its real estate to the trustee as security for his obligation to the
beneficiary. The obligation security is usually for a monetary debt contained in
a promissory note. As distinguished from a mortgage which is bipartite contract
between the debtor ("mortgagor") and his creditor ("mortgagee"), the traditional
mortgage did not contain a power of sale and could only be foreclosed by
judicial action. With the then defaults on the real property located in the
Palmdale, California, the purchase of these obligations with a resulting sale
under the power of sale contained therein, would vest us with legal title. We
were unable to negotiate any transactions with conventional lenders; however, we
had negotiated to enter into a proposed transaction with a private vendor. Said
proposed transaction to acquire the deed of trust under this method did not
close.
Modular Homes
We had also contemplated developing, on vacant land to be acquired, certain
modular homes. In summary, the design goal was to create a very contemporary
modern home with affordability. With the loss of the Durango property, we did
not pursue this developmental plan.
Current Status
As of the date hereof, we can be defined as a "shell" company, an entity
which is generally described as having no or nominal operations and with no or
nominal assets or assets consisting solely of cash and cash equivalents. As a
shell company, our sole purpose at this time is to locate and consummate a
merger or acquisition with a private entity.
Also, as of the date hereof, based upon our proposed future business
activities, we may also be deemed a "blank check" company. The Securities and
Exchange Commission definition of such a company as a development stage company
that has no specific business plan or purpose, or has indicated that its
business plan is to engage in a merger or acquisition with an unidentified
company or companies, or other entity or person and is issuing "penny stock."
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A "penny stock" security is any equity security other than a security (i)
that is a reported security (ii) that is issued by an investment company (iii)
that is a put or call issued by the Option Clearing Corporation (iv) that has a
price of $5.00 or more (except for purposes of Rule 419 of the Securities Act of
1933, as amended) (v) that is registered on a national securities exchange (vi)
that is authorized for quotation on the Nasdaq Stock Market, unless other
provisions of the defining rule are not satisfied, or (vii) that is issued by an
issuer with (a) net tangible assets in excess of $2,000,000, if in continuous
operation for more than three years or $5,000,000 if in operation for less than
three years or (b) average revenue of at least $6,000,000 for the last three
years.
We have elected to become a reporting company on a voluntary basis because
the primary attraction of the Company as a merger partner or acquisition vehicle
will be because of our status as a public company. In addition, we became a
reporting company to enhance investor protection and to provide information if a
trading market commences. Only those companies that report their current
financial information to the Securities and Exchange Commission, banking, or
insurance regulators are permitted to be quoted in the OTC Bulletin Board
System.
We have been assigned the trading symbol of PMDX for the OTC Bulletin Board
System.
ITEM 1A. RISK FACTORS.
Our business is subject to numerous risk factors, including the following:
1. We have had no operating history nor any revenues or earnings from
operations and we are insolvent.
We have no assets or financial resources. We will, in all likelihood,
sustain operating expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in us incurring a net
operating loss that will increase continuously until we can consummate a
business combination with a profitable business opportunity. There is no
assurance that we can identify such a business opportunity and consummate such a
business combination.
Our auditor's going concern opinion and the notation in the financial
statements indicate that we do not have significant cash or other material
assets and that we are relying on advances from stockholders, officers and
directors to meet our limited operating expenses. We are insolvent in that we
are unable to pay our debts in the ordinary course of business as they become
due.
2. Our proposed plan of operation is speculative.
The success of our proposed plan of operation will depend to a great extent
on the operations, financial condition and management of the identified business
opportunity. While management intends to seek business combination(s) with
entities having established operating histories, there can be no assurance that
we will be successful in locating candidates meeting such criteria. In the event
we complete a business combination, of which there can be no assurance, the
success of our operations may be dependent upon management of the successor firm
or venture partner firm and numerous other factors beyond our control.
3. We face intense competition for business opportunities and combinations.
We are and will continue to be an insignificant participant in the business
of seeking mergers with, joint ventures with and acquisitions of small private
and public entities. A large number of established and well-financed entities,
including venture capital and hedge fund firms, are active in mergers and
acquisitions of companies that may be our desirable target candidates. Nearly
all such entities have significantly greater financial resources, technical
expertise and managerial capabilities than we have and, consequently, we will be
at a competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination. Moreover, we will also compete
in seeking merger or acquisition candidates with numerous other small public
companies.
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4. We have no agreements for a business combination or other transaction and
have established no standards for a business combination.
We have no arrangement, agreement or understanding with respect to engaging
in a merger with, joint venture with or acquisition of, a private or public
entity. There can be no assurance that we will be successful in identifying and
evaluating suitable business opportunities or in concluding a business
combination. Management has not identified any particular industry or specific
business within an industry for our evaluation. There is no assurance that we
will be able to negotiate a business combination on terms favorable to us. We
have not established a specific length of operating history or a specified level
of earnings, assets, net worth or other criteria which it will require a target
business opportunity to have achieved, and without which we would not consider a
business combination in any form with such business opportunity. Accordingly, we
may enter into a business combination with a business opportunity having no
significant operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative characteristics.
5. Our success is dependent on management that has other full time employment,
has limited experience and will only devote limited part time working for
the Company that makes our future even more uncertain.
We have not entered into a written employment agreement with our officers
and directors and none is expected in the foreseeable future. We have not
obtained key man life insurance of our officers or directors. Notwithstanding
the combined limited experience and time commitment of management, the loss of
the services of Suzette M. Major and Tricia A. Nickson, or either, would
adversely affect development of our business and our likelihood of continuing
operations.
6. The reporting requirements under federal securities law may delay or
prevent us from making certain acquisitions.
Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended,
(the "1934 Act"), require companies subject thereto to provide certain
information about significant acquisitions, including certified financial
statements for the company acquired, covering one, two, or three years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by some target entities to prepare such statements may
significantly delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company. Acquisition prospects that do not have or
are unable to obtain the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the 1934 Act are
applicable.
In addition to the audited financial statements, in the filing of the Form
8-K that we file to report an event that causes us to cease being a shell
company, we will be required to include that information that is normally
reported by a company in a Form 10. The time and additional costs that may be
incurred by some target entities to prepare and disclose such information may
significantly delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company.
7. The Investment Company Act of 1940 creates a situation wherein we would be
required to register and could be required to incur substantial additional
costs and expenses.
Although we will be subject to regulation under the 1934 Act, management
believes the Company will not be subject to regulation under the Investment
Company Act of 1940, insofar as we will not be engaged in the business of
investing or trading in securities. In the event we engage in business
combination that result in us holding passive investment interests in a number
of entities, we could be subject to regulation under the Investment Company Act
of 1940. In such event, we would be required to register as an investment
company and could be expected to incur significant registration and compliance
costs. We have obtained no formal determination from the Securities and Exchange
Commission as to the status of our Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject us to material
adverse consequences.
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8. Our present management most likely will not remain after we complete a
business combination.
A business combination involving the issuance of our Common Stock will, in
all likelihood, result in the shareholders of a private company obtaining a
controlling interest in us. Any such business combination may require our
management to sell or transfer all or a portion of the Company's Common Stock
held and/or resign as a member of the Board of Directors. The resulting change
in our control could result in removal of one or more present officers and
directors and a corresponding reduction in or elimination of any participation
in our future affairs.
9. At the time we do any business combination, each shareholder will most
likely hold a substantially lesser percentage ownership in the Company.
Our current primary plan of operation is based upon a business combination
with a private concern that, in all likelihood, would result in the Company
issuing securities to shareholders of any such private company. The issuance of
our previously authorized and unissued Common Stock would result in reduction in
percentage of shares owned by our present and prospective shareholders and may
result in a change in our control or in our management.
10. As a shell company, we face substantial additional adverse business and
legal consequences.
We may enter into a business combination with an entity that desires to
establish a public trading market for its shares. A business opportunity may
attempt to avoid what it deems to be adverse consequences of undertaking its own
public offering by seeking a business combination with us. Such consequences may
include, but are not limited to, time delays of the registration process,
significant expenses to be incurred in such an offering, loss of voting control
to public shareholders and the inability or unwillingness to comply with various
federal and state laws enacted for the protection of investors.
On June 29, 2005, the Securities and Exchange Commission adopted final
rules amending the Form S-8 and the Form 8-K for shell companies like us. The
amendments expand the definition of a shell company to be broader than a company
with no or nominal operations/assets or assets consisting of cash and cash
equivalents, the amendments prohibit the use of a From S-8 (a form used by a
corporation to register securities issued to an employee, directors, officer,
consultant or advisor), under certain circumstances, and revise the Form 8-K to
require a shell company to include current Form 10 information, including
audited financial statements, in the filing on Form 8-K that the shell company
files to report the acquisition of the business opportunity. This initial filing
is within four days of the acquisition. The Form 8-K filing may be reviewed by
the Securities and Exchange Commission and the prospects of certain disclosures
or review or the lack of the ability to issue securities using a Form S-8 may
delay the consummation of a business combination because of the target entities
inability to comply with various federal and state laws enacted for the
protection of investors or the unwillingness to assume the significant costs of
compliance.
11. The requirement of audited financial statements may disqualify business
opportunities.
Our management believes that any potential business opportunity must
provide audited financial statements for review, for the protection of all
parties to the business combination. One or more attractive business
opportunities may choose to forego the possibility of a business combination
with us, rather than incur the expenses associated with preparing audited
financial statements.
12. Our officers and directors are the principal shareholders and will be able
to approve all corporate actions without shareholder consent and will
control our Company.
Our principal shareholder, Tricia A. Nickson, currently own approximately
69% of our Common Stock. She will have significant influence over all matters
requiring approval by our shareholders, but not requiring the approval of the
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minority shareholders. In addition, she will be able to elect all of the members
of our board of directors, allowing them to exercise significant control of our
affairs and management. In addition, she may transact most corporate matters
requiring shareholder approval by written consent, without a duly-noticed and
duly-held meeting of shareholders.
13. There is no active trading market for our Common Stock and you may have no
ability to sell the shares.
There is no established public trading market for our shares of Common
Stock. There can be no assurance that a market for our Common Stock will be
established or that, if established, a market will be sustained. Therefore, if
you purchase our Common Stock you may be unable to sell them. Accordingly, you
should be able to bear the financial risk of losing your entire investment.
The OTC Bulletin Board is a market maker or dealer-driven system offering
quotation and trading reporting capabilities - a regulated quotation service -
that displays real-time quotes, last-sale prices, and volume information in OTC
equity securities. The OTC Bulletin Board securities are not listed and traded
on the floor of an organized national or regional stock exchanges. Instead, OTC
Bulletin Board securities transactions are conducted through a telephone and
computer network connecting market makers or dealers in stocks.
14. Our shareholders may face significant restrictions on the resale of our
Common Stock due to state "blue sky" laws or if we are determined to be a
"blank check" company.
If our Common Stock does not meet blue sky resale requirements, certain
shareholders may be unable to resell our Common Stock. The resale of Common
Stock must meet the blue sky resale requirements in the states in which the
proposed purchasers reside. If we are unable to qualify the Common Stock and
there is no exemption from qualification in certain states, the holders of the
Common Stock or the purchasers of the Common Stock may be unable to sell them.
There are state regulations that may adversely affect the transferability
of our Common Stock. We have not registered our Common Stock for resale under
the securities or "blue sky" laws of any state. We may seek qualification or
advise our shareholders of the availability of an exemption. We are under no
obligation to register or qualify our Common Stock in any state or to advise the
shareholders of any exemptions.
Current shareholders, and person who desire to purchase the Common Stock in
any trading market that may develop in the future, should be aware that there
might be significant state restrictions upon the ability of new investors to
purchase the Common Stock.
Blue sky laws, regulations, orders, or interpretations place limitations on
offerings or sales of securities by "blank check" companies or in "blind-pool"
offerings, or if such securities represent "cheap stock" previously issued to
promoters or others. Our initial shareholders, because they originally paid $.10
8
for each share, may be deemed to hold "cheap stock." These limitations typically
provide, in the form of one or more of the following limitations, that such
securities are:
(a) Not eligible for sale under exemption provisions permitting sales
without registration to accredited investors or qualified purchasers;
(b) Not eligible for the transaction exemption from registration for
non-issuer transactions by a registered broker-dealer;
(c) Not eligible for registration under the simplified small corporate
offering registration (SCOR) form available in many states;
(d) Not eligible for the "solicitations of interest" exception to
securities registration requirements available in many states;
(e) Not permitted to be registered or exempted from registration, and thus
not permitted to be sold in the state under any circumstances.
Virtually all 50 states have adopted one or more of these limitations, or
other limitations or restrictions affecting the sale or resale of stock of blank
check companies or securities sold in "blind pool" offerings or "cheap stock"
issued to promoters or others.
Any secondary trading market which may develop, may only be conducted in
those jurisdictions where an applicable exemption is available or where the
shares have been registered.
We do not have any legal opinions as it relates to whether were a blind
pool or blank-check company. The Securities and Exchange Commission have adopted
a rule (Rule 419) which defines a blank-check company as (i) a development stage
company, that is (ii) offering penny stock, as defined by Rule 3a51-1, and (iii)
that has no specific business plan or purpose or has indicated that its business
plan is engage in a merger or acquisition with an unidentified company or
companies. Certain jurisdictions may have definitions that are more restrictive
than Rule 419. We have been informed that the Securities and Exchange Commission
has cautioned that "it will scrutinize registered offerings for attempts to
create the appearance that the registrant... has a specific business plan, in an
effort to avoid the applicable of Rule 419." Provisions of Rule 419 apply to
every registration statement filed under the Securities Act of 1933, as amended,
relating to an offering by a blank-check company. We have never filed a
registration statement under the Securities Act of 1933, as amended.
The provisions of Rule 144 for shares subsequently issued by a shell
company may further restrict the sale of newly issued shares of Common Stock.
The Company's officers, directors and majority shareholders have expressed
their intention not to engage in any transactions with respect to the Company's
Common Stock except in connection with or following a business combination
resulting in us no longer being defined as a blank check issuer.
15. Our Common Stock may be subject to significant restriction on resale due to
federal penny stock restrictions.
The Securities and Exchange Commission has adopted rules that regulate
broker or dealer practices in connection with transactions in penny stocks.
Penny stocks generally are equity securities with a price of less than $5.00
(other than securities registered on certain national securities exchanges or
quoted on the Nasdaq system, provided that current price and volume information
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with respect to transactions in such securities is provided by the exchange
system). The penny stock rules require a broker or dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the Securities and Exchange
Commission that provides information about penny stocks and the nature and level
of risks in the penny stock market. The broker or dealer also must provide the
customer with bid and offer quotations for the penny stock, the compensation of
the broker or dealer, and its salesperson in the transaction, and monthly
account statements showing the market value of each penny stock held in the
customer's account. The penny stock rules also require that prior to a
transaction in a penny stock not otherwise exempt from such rules, the broker or
dealer must make a special written determination that a penny stock is a
suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in any secondary market for our stock that becomes subject to
the penny stock rules, and accordingly, shareholders of our Common Stock may
find it difficult to sell their securities, if at all.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
We have no unresolved comments from the Staff of the Securities and
Exchange Commission.
ITEM 2. PROPERTIES.
We were located at 59 Tennis Club Drive, Rancho Mirage, California 92270
and now we utilize the executive offices of our registered agent at 6767
Tropicana Avenue, Suite 207, Las Vegas, Nevada 89103. This space is provided to
the Company by our resident agent on a rent free basis, and it is anticipated
that this arrangement will remain until such time as the Company successfully
consummates a merger or acquisition. We believe that this arrangement will meet
our needs for the foreseeable future.
ITEM 3. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.
There have been no matters submitted to the Company's security holders.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
(a) Market Price.
There is no active trading market for our Common Stock at present.
We have been assigned the trading symbol of PMDX. The shares of common
stock currently have a quote published in the OTC Bulletin Board System.
There is no assurance that a trading market will ever develop or, if such a
market does develop, that it will continue.
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
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transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
For the initial listing in the Nasdaq SmallCap market, a company must have
net tangible assets of $4 million or market capitalization of $50 million or a
net income (in the latest fiscal year or two of the last fiscal years) of
$750,000, a public float of 1,000,000 shares with a market value of $5 million.
The minimum bid price must be $4.00 and there must be 3 market makers. In
addition, there must be 300 shareholders holding 100 shares or more, and the
company must have an operating history of at least one year or a market
capitalization of $50 million.
For continued listing in the Nasdaq SmallCap market, a company must have
net tangible assets of $2 million or market capitalization of $35 million or a
net income (in the latest fiscal year or two of the last fiscal years) of
$500,000, a public float of 500,000 shares with a market value of $1 million.
The minimum bid price must be $1.00 and there must be 2 market makers. In
addition, there must be 300 shareholders holding 100 shares or more.
We intend to strongly consider undertaking a transaction with any merger or
acquisition candidate that will allow the Company's securities to be traded
without the aforesaid limitations. However, there can be no assurances that,
upon a successful merger or acquisition, the Company will qualify its securities
for listing on Nasdaq or some other national exchange, or be able to maintain
the maintenance criteria necessary to insure continued listing. The failure of
the Company to qualify its securities or to meet the relevant maintenance
criteria after such qualification in the future may result in the discontinuance
of the inclusion of the Company's securities on a national exchange. In such
events, trading, if any, in the Company's securities may then continue in the
non-Nasdaq over-the-counter market. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to the market value
of, the Company's securities.
(b) Holders.
There are twenty-four (24) holders of the Company's Common Stock. In
January 2000, we issued 3,400,000 of our Common Shares for cash. All of the
issued and outstanding shares of the Company's Common Stock were issued pursuant
to an exemption from registration afforded by Section 4(2) of the Securities Act
of 1933, as amended.
Currently, all of our issued and outstanding shares of Common Stock
held by non-affiliates are eligible for sale under Rule 144 promulgated under
the Securities Act of 1933, as amended, subject to certain limitations included
in said Rule. In general, under Rule 144, a person (or persons whose shares are
aggregated), who has satisfied a six month holding period, under certain
circumstances, has unlimited public resales under said Rule.
Rule 144 dos not prohibit the resale of securities under said Rule that
were not initially issued by a reporting or non-reporting shell company or an
issuer that has been previously such a company, even though we may be a shell at
the time of sale. At the time of the original issuance, we were not a shell
issuer.
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(c) Dividends.
The Company has not paid any cash dividends to date and has no plans to do
so in the immediate future.
(d) Securities Authorized for Issuance under an Equity Compensation Plan.
We have not authorized the issuance of any of our securities in connection
with any form of equity compensation plan.
(e) Recent Sale of Unregistered Securities
During the year ended December 31, 2008, we did not have any sales of any
of our securities.
ITEM 6. SELECTED FINANCIAL DATA.
Not applicable to smaller reporting companies.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues in exchange for its
securities. The Company and our officers and directors have not enter into any
negotiations or preliminary discussions regarding the possibility of an
acquisition or merger between the Company and such other company as of the date
hereof.
General Business Plan
Our purpose is to seek, investigate and, if such investigation warrants,
acquire an interest in business opportunities presented to it by persons or
firms who or which desire to seek the advantages of a company who has complied
with the 1934 Act. We will not restrict its search to any specific business,
industry, or geographical location and we may participate in a business venture
of virtually any kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of our virtually
unlimited discretion to search for and enter into potential business
opportunities. Management anticipates that it may be able to participate in only
one potential business venture because we have nominal assets and limited
financial resources. This lack of diversification should be considered a
substantial risk to our shareholders because it will not permit us to offset
potential losses from one venture against gains from another.
We may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes.
We anticipate that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the benefits of an issuer who has complied with the 1934 Act. Such
benefits may include facilitating or improving the terms on which additional
equity financing may be sought, providing liquidity for incentive stock options
or similar benefits to key employees, providing liquidity (subject to
restrictions of applicable statutes), for all shareholders.
We have made no determination as to whether we will continue to file
periodic reports since our obligation to file such reports is not required under
the 1934 Act. Tricia A. Nickson, our majority shareholder, has agreed to provide
the necessary funds, without interest, for the Company to comply with the 1934
Act reporting requirements, provided that she is an officer and director of the
Company when the obligation is incurred. It is our present intent to continue to
comply with all of the reporting requirements under the 1934 Act.
12
It is anticipated that we will incur nominal expenses in the implementation
of our business plan described herein. Because we have no capital with which to
pay these anticipated expenses, present management of the Company will pay these
charges with their personal funds, as interest free loans to the Company or as
capital contributions. However, if loans, the only opportunity which management
has to have these loans repaid will be from a prospective merger or acquisition
candidate.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present management and shareholders of the Company will
no longer be in control of the Company. In addition, our directors may, as part
of the terms of the acquisition transaction, resign and be replaced by new
directors without a vote of our shareholders or may sell her stock in the
Company.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. It is anticipated that it will also be a
method of taking a private company public known as a "back door" 1934 Act
registration procedure. While the actual terms of a transaction to which the
Company may be a party cannot be predicted, it may be expected that the parties
to the business transaction will find it desirable to avoid the creation of a
taxable event and thereby structure the acquisition in a so-called "tax-free"
reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code.
We will participate in a business opportunity only after the negotiation
and execution of appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require some
specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
Our present intent is that we will not acquire or merge with any entity
which cannot provide independent audited financial statements at the time of
closing of the proposed transaction and supply other information that is
normally disclosed in filings with the Securities and Exchange Commission. We
are subject to all of the reporting requirements included in the 1934 Act. These
rules are intended to protect investors by detering fraud and abuse in the
securities markets through the use of shell companies. Included in these
requirements is the affirmative duty of the Company to file independent audited
financial statements as part of its Form 8-K to be filed with the Securities and
Exchange Commission upon consummation of a merger or acquisition, as well as the
Company's audited financial statements included in its annual report on Form
10-KSB. In addition, in the filing of the Form 8-K that we file to report an
event that causes us to cease being a shell company, we are required to include
that information that is normally reported by a company in its original Form 10
or Form 10-SB.
Accounting for a Business Combination
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards "SFAS" No. 141, "Business Combinations" and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method of accounting, and broadens the criteria for recording
intangible assets separate from goodwill. Recorded goodwill and intangibles will
be evaluated against these new criteria and may result in certain intangibles
being subsumed into goodwill, or alternatively, amounts initially recorded as
goodwill may be separately identified an recognized apart from goodwill. SFAS
No. 142 requires the use of a non-amortization approach to account for purchased
goodwill and certain intangibles. Under a non-amortization
13
approach, goodwill and certain intangibles is more than its fair value. Goodwill
is the excess of the acquisition costs of the acquired entity over the fair
value of the identifiable net assets acquired. The Company is required to test
goodwill and intangible assets that are determined to have an indefinite life
for impairments at least annually. The provisions of SFAS No. 142 require the
completion of an annual impairment test with any impairment recognized in
current earnings. The provisions of SFAS No. 141 and SFAS No. 142 may be
applicable to any business combination that we may enter into in the future.
We have also been informed that most business combinations will be
accounted for as a reverse acquisition with us being the surviving registrant.
As a result of any business combination, if the acquired entity's shareholders
will exercise control over us, the transaction will be deemed to be a capital
transaction where we are treated as a non-business entity. Therefore, the
accounting for the business combination is identical to that resulting from a
reverse merger, except no goodwill or other intangible assets will be recorded.
For accounting purposes, the acquired entity will be treated as the accounting
acquirer and, accordingly, will be presented as the continuing entity.
Financial Condition.
Our auditor's going concern opinion for the prior year ended and the
notation in the financial statements indicate that we do not have significant
cash or other material assets and that we are relying on advances from
stockholders, officers and directors to meet limited operating expenses. We do
not have sufficient cash or other material assets or do we have sufficient
operations or an established source of revenue to cover our operational costs
that would allow us to continue as a going concern. We are insolvent in that we
are unable to pay our debts in the ordinary course of business as they become
due.
Liquidity and Operational Results.
The Company has no current operating history and does not have any revenues
or earnings from operations. The Company has no assets or financial resources.
We will, in all likelihood, sustain operating expenses without corresponding
revenues, at least until the consummation of a business combination. This may
result in the Company incurring a net operating loss that will increase
continuously until the Company can consummate a business combination with a
profitable business opportunity. There is no assurance that the Company can
identify such a business opportunity and consummate such a business combination.
We are dependent upon our officers to meet any de minimis costs that may
Occur, Tricia A. Nickerson, an officer and director of the Company, has agreed
to provide the necessary funds, without interest, for the Company to comply with
the 1934 Act; provided that she is an officer and director of the Company when
the obligation is incurred. All advances are interest-free.
Liquidity.
As of December 31, 2008, we had no assets and total liabilities of $12,185
and we had a negative net worth of $12,185. As of December 31, 2007, we had
total liabilities of $7,613 and a negative net worth of $7,613.
We have had no revenues from inception through December 31, 2007 and
December 31, 2008. We have a loss from inception through December 31, 2007 of
$41,613 and a loss from inception through December 31, 2008 of $46,185.
We have officer's advances of $5,813 from inception to December 31, 2007
and $12,185 from inception to December 31, 2008.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable to smaller reporting companies.
14
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
PALMDALE EXECUTIVE HOMES, CORP.
(A Development Stage Enterprise)
DECEMBER 31, 2008
DECEMBER 31, 2007
15
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Palmdale Executive Homes, Corp.
Las Vegas, Nevada
We have audited the accompanying balance sheets of Palmdale Executive Homes,
Corp. (A Development Stage Enterprise) as of December 31, 2008 and 2007 the
related statements of operations, stockholder's deficit, and cash flows for the
years then ended and the period January 14, 2000 (inception) through December
31, 2008. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Palmdale Executive Homes, Corp.
(A Development Stage Enterprise) as of December 31, 2008 and 2007 and the
results of its operations and cash flows for years then ended and the period
January 14, 2000 (inception) through December 31, 2008, in conformity with U.S.
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has limited operations and has no established
source of revenue. This raises substantial doubt about its ability to continue
as a going concern. Management's plan in regard to these matters is also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Kyle L. Tingle, CPA, LLC
February 4, 2009
Las Vegas, Nevada
17
PALMDALE EXECUTIVE HOMES CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
December 31, December 31,
2008 2007
_____________ ____________
ASSETS
CURRENT ASSETS
Cash $ 0 $ 0
_____________ ____________
Total current assets $ 0 $ 0
_____________ ____________
Total assets $ 0 $ 0
============= ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 0 1,800
Officers advances 12,185 5,813
_____________ ____________
Total current liabilities $ 12,185 $ 7,613
_____________ ____________
STOCKHOLDERS' DEFICIT
Common stock: $.001 par value;
authorized 25,000,000 shares; issued
and outstanding: 3,400,000 shares at
December 31, 2008 and December 31, 2007 3,400 3,400
Additional paid-in capital 30,600 30,600
Accumulated deficit during development stage (46,185) (41,613)
_____________ ____________
Total stockholders' deficit $ 12,185) $ (7,613)
_____________ ____________
Total liabilities and
stockholders' deficit $ 0 $ 0
============= ============
See Accompanying Notes to Financial Statements.
18
PALMDALE EXECUTIVE HOMES CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
Jan. 14, 2000
Year Ended Year Ended (inception) to
December 31, December 31, December 31,
2008 2007 2008
____________ _____________ ____________
Revenues $ 0 $ 0 $ 0
Cost of revenue 0 0 0
____________ _____________ ____________
Gross profit $ 0 $ 0 $ 0
General, selling and
administrative expenses 4,572 4,703 46,185
____________ _____________ ____________
Operating loss $ (4,572) $ 4,703) $ (46,185)
Nonoperating income (expense) 0 0 0
____________ _____________ ____________
Net loss $ (4,572) $ 4,703) $ (46,185)
============ ============= ============
Net loss per share, basic
and diluted $ (0.00) $ (0.00) $ (0.01)
============ ============= ============
Average number of shares
of common stock outstanding 3,400,000 3,400,000 3,400,000
============ ============= ============
See Accompanying Notes to Financial Statements.
19
PALMDALE EXECUTIVE HOMES CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
Jan. 14, 2000
Year Ended Year Ended (inception) to
December 31, December 31, December 31,
2008 2007 2008
_____________ ______________ ____________
Cash Flows From
Operating Activities
Net loss $ (4,572) $ (4,703) $ (46,185)
Adjustments to reconcile net loss
to cash used in operating activities:
Changes in assets and liabilities
Increase (decrease) in accounts payable (1,800) (110) 0
_____________ ______________ ____________
Net cash used in
operating activities $ (6,372) $ (4,813) $ (39,813)
_____________ ______________ ____________
Cash Flows From
Investing Activities $ 0 $ 0 $ 0
_____________ ______________ ____________
Cash Flows From
Financing Activities
Issuance of common stock $ 0 $ 0 $ 34,000
Increase in officer advances 6,372 4,813 12,185
_____________ ______________ ____________
Net cash provided by
financing activities $ 6,372 $ 4,813 $ 46,185
_____________ ______________ ____________
Net increase (decrease)
in cash $ 0 $ 0 $ 0
Cash, beginning of period 0 0 $ 0
_____________ ______________ ____________
Cash, end of period $ 0 $ 0 $ 0
============ ============= ============
Supplemental Information and Non-monetary Transactions:
Interest paid $ 0 $ 0 $ 0
============= ============= =============
Taxes paid $ 0 $ 0 $ 0
============= ============= =============
See Accompanying Notes to Financial Statements.
21
PALMDALE EXECUTIVE HOMES CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS:
Palmdale Executive Homes Corp. ("Company") was organized January 14, 2000 under
the laws of the State of Nevada. The Company currently has no operations and, in
accordance with Statement of Financial Accounting Standard (SFAS) No. 7,
"Accounting and Reporting by Development Stage Enterprises," is considered a
Development Stage Enterprise.
A SUMMARY OF THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES IS AS FOLLOWS:
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CASH
For the Statements of Cash Flows, all highly liquid investments with maturity of
three months or less are considered to be cash equivalents. There were no cash
equivalents as of December 31, 2008 and 2007.
INCOME TAXES
The Company accounts for its income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," and
clarified by FASB Interpretation Number ("FIN") 48, "Accounting for Uncertainty
in Income Taxes - an interpretation of FASB Statement No. 109". Under Statement
109, a liability method is used whereby deferred tax assets and liabilities are
determined based on temporary differences between basis used for financial
reporting and income tax reporting purposes. Income taxes are provided based on
tax rates in effect at the time such temporary differences are expected to
reverse. A valuation allowance is provided for certain deferred tax assets if it
is more likely than not, that the Company will not realize the tax assets
through future operations. Deferred tax assets and liabilities are adjusted for
the effect of changes in tax laws and rates on the date of enactment.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial accounting Standards Statement No. 107, "Disclosures about Fair Value
of Financial Instruments", requires the Company to disclose, when reasonably
attainable, the fair market values of its assets and liabilities which are
deemed to be financial instruments. The Company's financial instruments consist
primarily of cash and certain investments.
22
PALMDALE EXECUTIVE HOMES CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER SHARE INFORMATION
The Company computes per share information in accordance with SFAS No. 128,
"Earnings per Share" which requires presentation of both basic and diluted
earnings per share on the face of the statement of operations. Basic loss per
share is computed by dividing the net loss available to common shareholders by
the weighted average number of common shares outstanding during such period.
Diluted loss per share gives effect to all dilutive potential common shares
outstanding during the period. Dilutive loss per share excludes all potential
common shares if their effect is anti-dilutive.
SHARE BASED EXPENSES
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123R "Share Based Payment." This statement is a revision to SFAS 123 and
supersedes Accounting Principles Board (APB) Opinion No. 25, "Accounting for
Stock Issued to Employees," and amends FASB Statement No. 95, "Statement of Cash
Flows." This statement requires a public entity to expense the cost of employee
services received in exchange for an award of equity instruments. This statement
also provides guidance on valuing and expensing these awards, as well as
disclosure requirements of these equity arrangements. The Company adopted SFAS
No. 123R upon creation of the company and expenses share based costs in the
period incurred.
23
PALMDALE EXECUTIVE HOMES, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
GOING CONCERN
The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Currently, the Company does not have cash, nor material
assets, nor does it have operations or a source of revenue sufficient to cover
its operation costs and allow it to continue as a going concern. The Company
will be dependent upon the raising of additional capital through placement of
our common stock in order to implement its business plan, or merge with an
operating company. There can be no assurance that the Company will be successful
in either situation which raises substantial doubt about the Company's ability
to continue as a going concern. The officers and directors have committed to
advancing certain operating costs of the Company.
RECENT ACCOUNTING PRONOUNCEMENTS
In May, 2008, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 163, "Accounting for Financial Guarantee
Insurance Contracts--an interpretation of FASB Statement No. 60" (SFAS 163).
This Statement requires that an insurance enterprise recognize a claim liability
prior to an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Statement
also clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement to be used to account for
premium revenue and claim liabilities. Those clarifications will increase
comparability in financial reporting of financial guarantee insurance contracts
by insurance enterprises. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. This Statement is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and all
interim periods within those fiscal years, except for some disclosures about the
insurance enterprise's risk-management activities. This Statement requires that
disclosures about the risk-management activities of the insurance enterprise be
effective for the first period (including interim periods) beginning after
issuance of this Statement. Except for those disclosures, earlier application is
not permitted. The adoption of this statement will have no material effect on
the Company's financial condition or results of operations.
In May, 2008, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 162, "The Hierarchy of Generally Accepted
Accounting Principles" (SFAS No. 162). This Statement identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). The sources of accounting principles1
that are generally accepted are categorized in descending order of authority as
follows:
a. FASB Statements of Financial Accounting Standards and Interpretations,
FASB Statement 133 Implementation Issues, FASB Staff Positions, and
American Institute of Certified Public Accountants (AICPA) Accounting
Research Bulletins and Accounting Principles Board Opinions that are
not superseded by actions of the FASB
b. FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry
Audit and Accounting Guides and Statements of Position
c. AICPA Accounting Standards Executive Committee Practice Bulletins that
have been cleared by the FASB, consensus positions of the FASB
Emerging Issues Task Force (EITF), and the Topics discussed in
Appendix D of EITF ABSTRACTS (EITF D-Topics)
d. Implementation guides (Q&As) published by the FASB staff, AICPA
Accounting Interpretations, AICPA Industry Audit and Accounting Guides
and Statements of Position not cleared by the FASB, and practices that
are widely recognized and prevalent either generally or in the
industry. The adoption of this statement will have no material effect
on the Company's financial condition or results of operations.
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities", an amendment of SFAS No. 133. SFAS 161
applies to all derivative instruments and nonderivative instruments that are
designated and qualify as hedging instruments pursuant to paragraphs 37 and 42
of SFAS 133 and related hedged items accounted for under SFAS 133. SFAS 161
requires entities to provide greater transparency through additional disclosures
about how and why an entity uses derivative instruments, how derivative
instruments and related hedged items are accounted for under SFAS 133 and its
related interpretations, and how derivative instruments and related hedged items
affect an entity's financial position, results of operations, and cash flows.
SFAS 161 is effective as of the beginning of an entity's first fiscal year that
begins after November 15, 2008. We do not expect that the adoption of SFAS 161
will have a material impact on our financial condition or results of operation.
24
PALMDALE EXECUTIVE HOMES, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 2. STOCKHOLDERS' EQUITY
COMMON STOCK
The authorized common stock of the Company consists of 25,000,000 shares with
par value of $0.001. On February 20, 2000 the Company authorized and issued
3,400,000 shares of its $.001 par value common stock in consideration of $34,000
in cash.
The Company has not authorized any preferred stock.
NET LOSS PER COMMON SHARE
Net loss per share is calculated in accordance with SFAS No. 128, "Earnings Per
Share." The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. Diluted loss per share is
computed using the weighted averaged number of shares and dilutive potential
common shares outstanding. Dilutive potential common shares are additional
common shares assumed to be exercised.
Basic net loss per common share is based on the weighted average number of
shares of common stock outstanding of 3,400,000 during 2008, 2007, and since
inception. As of December 31, 2008 and 2007 and since inception, the Company had
no dilutive potential common shares.
NOTE 3. INCOME TAXES
We did not provide any current or deferred U.S. federal income tax provision or
benefit for any of the periods presented because we have experienced operating
losses since inception. Per Statement of Accounting Standard No. 109 -
Accounting for Income Tax and FASB Interpretation No. 48 - Accounting for
Uncertainty in Income Taxes an interpretation of FASB Statement No.109, when it
is more likely than not that a tax asset cannot be realized through future
income the Company must allow for this future tax benefit. We provided a full
valuation allowance on the net deferred tax asset, consisting of net operating
loss carryforwards, because management has determined that it is more likely
than not that we will not earn income sufficient to realize the deferred tax
assets during the carryforward period.
The components of the Company's deferred tax asset as of December 31, 2008 and
December 31, 2007 are as follows:
2008 2007
______________ ______________
Net operating loss carryforward $ 16,165 $ 14,555
Valuation allowance (16,165) (14,555)
______________ ______________
Net deferred tax asset $ 0 $ 0
============== ==============
25
PALMDALE EXECUTIVE HOMES CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 3. INCOME TAXES (CONTINUED)
A reconciliation of income taxes computed at the statutory rate to the income
tax amount recorded is as follows:
2007 2006 Since Inception
______________ _____________ ______________
Tax at statutory rate (35%) $ 1,600 $ 1,646 $ 16,165
Increase in valuation allowance (1,600) (1,646) (16,165)
______________ _____________ ______________
Net deferred tax asset $ 0 $ 0 $ 0
============= ============= ==============
The net federal operating loss carry forward will expire between 2026 and 2028.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
NOTE 4. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An officer or
resident agency of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have not been
reflected therein. The officers and directors for the Company are involved in
other business activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity becomes available,
such persons may face a conflict in selecting between the Company and their
other business interest. The Company has not formulated a policy for the
resolution of such conflicts. As of December 31, 2008 and December 31, 2007, the
company owed officers $12,185 and $5,813 respectively.
NOTE 5. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of
common stock of the Company.
26
An evaluation as of the end of the period covered by this report was carried
out under the supervision and with the participation of management, including our
Chief Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 [the
"Exchange Act"]). Based upon that evaluation, the Chief Executive Officer and
Chief Financial Officer had initially concluded that those disclosure controls
and procedures were effective in providing reasonable assurance that information
required to be disclosed in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
period specified in the Commission's rules and form. The Company's disclosure
controls and procedures were not effective at December 31, 2008 due to the
Company's inadvertent failure to include in its Annual Report on Form 10-K or
10-K/A, management's assessment of disclosure controls and procedures.
Material Weaknesses
In January 2010, we made some changes in our disclosure controls and procedures
that addressed the material disclosure weakness which resulted in this Form
10K/A and the subsequent Form 10-Q's for the current quarters ended March 31,
2009, June 30, 2009 and September 30, 2009 omitting the proper disclosures of
management's assessment of disclosure controls and procedures. Also, we
initiated changes in our disclosure controls and procedures that addressed the
material weakness.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting(as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred
during the period covered by this report that have materially affected, or is
reasonably likely to materially affect, our internal controls over financial
reporting.
We conclude that our internal control over financial reporting was
effective to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.
27.
Changes in Internal Controls
There have been no changes in our internal controls over financial
reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act)
that occurred during the period covered by this report that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
The Company is not an "accelerated filer" for the 2008 fiscal year because
it is qualified as a "small business issuer". Hence, under current law, the
internal controls certification and attestation requirements of Section 404 of
the Sarbanes-Oxley act will not apply to the Company. This Annual report on Form
10-K does not include an attestation report of our registered public accounting
firm regarding internal control over financial reporting. Management's report
was not subject to attestation by our registered public accounting firm pursuant
to temporary rules of the Securities and Exchange Commission that permit us to
provide only management's report in this Annual Report on Form 10-K.
ITEM 9B. OTHER INFORMATION.
We have no information that we would have been required to disclose in a
report on Form 8-K during a fourth quarter of the year covered by this Form
10-K.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
Our directors and officers (and promoters, affiliates and control persons)
are as follows:
Name Age Position
________________________________________________________________________________
Suzette M. Major 41 President/Directors
Tricia A. Nickson 40 Secretary/Treasurer
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until there death, resignation, retirement,
removal, or disqualification, or until the successors have been duly elected and
qualified. Vacancies in the existing Board of Directors may be filled by
majority vote of the remaining Directors. Officers of the Company serve at the
will of the Board of Directors. There are no agreements or understandings for
any officer or directors to resign at the request of another person and no
officer or directors is acting on behalf of or will act at the direction of any
other person.
Resumes
Suzette M. Major
2005 - present
Controller
Sycamore Wood, LLC
2001-2005
Controller
Adia Kibur Accessories, Inc.
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1997-2001
Senior Associate
MZ Corporation
1997
Controller/Chief Financial Officer
Equities Development Corporation & EDC Management Co., Inc.
1996-1999
Controller (consulting basis after 1997)
Patrick Rains & Associates and PRA Records
1994-1995
Loan Officer/Underwriter/Packager
Industrial Bank, Small Business Administration Department
Tricia A. Nickson
March 2005 - Present
CIT Group Tempe, AZ
Account Executive
April 2004 - January 2005
ACJ Mortgage Group Denver, Co
Senior Loan Officer
October 2003 - April 2004
Wellington Financial Denver, Co
Senior Loan Officer
June 2003 - October 2003
US Lec Corporation Mclean, VA
Senior Customer Support Specialist
July 2002 - April 2003
Broadwing Communications Reston, Va
Senior Customer Support Specialist
Other Offerings
None of the present or prior directors, officers, promoters, control
persons and affiliates have been a director, officer, promoter, control person
or affiliate in any other blank check offering, blind pool offering or shell
company.
Conflicts of Interest
Suzette M. Major and Tricia A. Nickson are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in there acting as our officers and directors.
Insofar as the officers and directors are engaged in other business activities,
management anticipates they will devote only a minor amount of time to the
Company's affairs.
Our officers and directors are now and may in the future become
shareholders, officers or directors of other companies which may be engaged in
business activities similar to those conducted by the Company. Accordingly,
additional direct conflicts of interest may arise in the future with respect to
such individuals acting on behalf of the Company or other entities. Moreover,
additional conflicts of interest may arise with respect to opportunities which
come to the attention of such individuals in the performance of their duties or
otherwise. We do not currently have a right of first refusal pertaining to
opportunities that come to management's attention insofar as such opportunities
may relate to the Company's proposed business operations.
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The officers and directors are, so long as they are officers or directors
of the Company, subject to the restriction that all opportunities contemplated
by the Company's plan of operation which come to her attention, either in the
performance of her duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
she is affiliated with on an equal basis. A breach of this requirement will be a
breach of the fiduciary duties of the officer or director.
We have not adopted any other conflict of interest policy with respect to
such transactions.
ITEM 11. EXECUTIVE COMPENSATION.
Suzette M. Major and Tricia A. Nickson each have not received any
compensation for services rendered to the Company, nor has each received such
compensation in the past.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. Our officers and
directors will not receive any finders fee, either directly or indirectly, as a
result of their efforts to implement the Company's business plan.
We have no retirement, pension, profit sharing, stock option or insurance
programs or other similar programs for the benefit of its employees.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
(a) Security Ownership of Certain Beneficial Owners.
The following table sets forth the security and beneficial ownership for
each class of our equity securities for any person who is known to be the
beneficial owner of more than five (5%) percent of the Company.
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
______________________________________________________________________
Common Tricia A. Nickson 2,360,000 69%
1346 South 219th Drive
Buckeye, Arizona 85326
(b) Security Ownership of Management.
The following table sets forth the ownership for each class of equity
securities of the Company owned beneficially and of record by all of our
directors and officers.
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
______________________________________________________________________
Common Suzette M. Major 0 0
701 Atkins Drive
Glendale, California 91206
Common Tricia A. Nickson 2,360,000 69%
1346 South 219th Drive
Buckeye, Arizona 85326
Common All Officers and
Directors as a Group
(two [2] individuals)
30
(c) Other.
The total of the Company's outstanding Common Shares are held by 24
persons.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
There have been no related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
Tricia A. Nickson has agreed to provide the necessary funds, without
interest, for us to comply with the 1934 Act provided that she is an officer and
director of the Company when the obligation is incurred. All advances are
interest-free.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit and Non-Audit Fees
Fiscal Year Ended
December 31,
_______________________________________________
2007 2008
_______________________________________________
Audit Fees $1,650 $2,000
Audit Related Fees None None
Tax Fees 150 200
All Other Fees None None
Pre Approval of Services by the Independent Auditor
The Board of Directors has established policies and procedures for the
approval and pre approval of audit services and permitted non-audit services.
The Board has the responsibility to engage and terminate the Company's
independent registered public accountants, to pre-approve their performance of
audit services and permitted non-audit services and to review with the Company's
independent registered public accountants their fees and plans for all auditing
services. All services provided by and fees paid to Kyle A. Tingle in 2007 were
pre-approved by the Board of Directors.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
There are no reports on Form 8-K incorporated herein by reference.
The following documents are filed as part of this report:
31.1 Certification of Chief Executive Officer.
31.2 Certification of Chief Financial Officer.
32.1 Section 906 Certification.
32.2 Section 906 Certification.*
* Included in Exhibit 32.1
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Pursuant to the requirements of Section 13 or 15(d) 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.
Date: March 22, 2010
PALMDALE EXECUTIVE HOMES CORP.
By: /s/ SUZETTE M. MAJOR
_____________________________________________
Suzette M. Major
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 22, 2010
PALMDALE EXECUTIVE HOMES CORP.
By: /s/ SUZETTE M. MAJOR
_____________________________________________
Suzette M. Major
President and Director
By: /s/ TRICIA A. NICKSON
_____________________________________________
Tricia A. Nickson
Secretary/Treasurer and Director
32
