FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K and the documents incorporated by reference
into the Annual Report on Form 10-K include forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements can be
identified by the use of forward-looking terminology, including the words
"believes," "estimates," "anticipates," "expects," "intends," "plans," "may,"
"will," "potential," "continue," or "should," or, in each case, their negative
or other variations or comparable terminology. Such statements include, but are
not limited to, any statements relating to our ability to consummate any
acquisition or other business combination and any other statements that are not
statements of current or historical facts. These statements are based on
management's current expectations, but actual results may differ materially due
to various factors, including, but not limited to, our being a development stage
company with no operating history; our lack of funding; the inexperience of our
management with respect to our business plan; our potential inability to
consummate a business combination with an operating company that is generating
revenues; the possibility that our company may never generate revenues; unknown
risks that may attend to a business with which we consummate a business
combination; our personnel allocating their time to other businesses and
potentially having conflicts of interest with our business; the ownership of our
securities being concentrated, and those other risks and uncertainties detailed
herein and in the Company's filings with the Securities and Exchange Commission.
By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. We caution you that forward-looking statements are not
guarantees of future performance and that our actual results of operations,
financial condition and liquidity, and developments in the industry in which we
operate may differ materially from those made in or suggested by the
forward-looking statements contained in this Annual Report on Form 10-K. In
addition, even if our results of operations, financial condition and liquidity,
and developments in the industry in which we operate are consistent with the
forward-looking statements contained in this Annual Report on Form 10-K, those
results or developments may not be indicative of results or developments in
subsequent periods.
These forward-looking statements are subject to numerous risks,
uncertainties and assumptions about us described in "Risk Factors." The
forward-looking events we discuss in this Annual Report on Form 10-K speak only
as of the date of such statement and might not occur in light of these risks,
uncertainties and assumptions. Except as required by applicable law, we
undertake no obligation and disclaim any obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
1
PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
International Energy Holdings, Corp. ("we", "us", the "Company" or like
terms) was incorporated in the State of Nevada on November 2, 2007. We are a
developmental stage company and have not generated any revenues to date. We were
organized to serve as a vehicle for a business combination through a capital
stock exchange, merger, reverse acquisition, asset acquisition or other similar
business combination (a "Business Combination") with an operating or development
stage business (the "Target Business") which desires to utilize our status as a
reporting company under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Since inception, we have engaged in only limited business
operations relating to our organization, registering our class of common stock
under the Security Exchange Act of 1934 (Exchange Act) and engaging in
preliminary discussions with and conducting due diligence investigations of
potential Target Businesses with which to enter into a Business Combination. We
have no full-time employees and do not own or lease any property.
Given that our current assets consist only of cash, we have no current
operations and our proposed business contemplates entering into a Business
Combination with an operating company, we are a "shell company," which is
defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act"), as a company which has (i) no or nominal operations; and (ii)
either (x) no or nominal assets; (y) assets consisting solely of cash and cash
equivalents; or (z) assets consisting of any amount of cash and cash equivalents
and nominal other assets.
We are not presently engaged in, and will not engage in, any substantive
commercial business until we consummate a Business Combination, if ever. We are
currently in the process of identifying and evaluating targets for a Business
Combination but we do not have any specific Business Combination under
consideration. Our efforts to identify a prospective Target Business will not be
limited to a particular industry or geographic location. In the case of all
possible acquisitions, we intend to seek to consummate the acquisition which is
most attractive and provides the greatest opportunity for creating
securityholder value. The determination of which entity is the most attractive
would be based on our analysis of a variety of factors, including whether such
acquisition would be in the best interests of our securityholders, the terms of
the acquisition and the perceived quality of the business of the Target
Business, among other factors described below. We believe that the owners of
potential Target Businesses may find an acquisition by us to be an easier and
less dilutive means to achieve liquidity than an initial public offering or
other financing transactions. We cannot assure you that we will be able to
locate a target or that we will be able to engage in a transaction on favorable
terms or at all.
AFFECTING A BUSINESS COMBINATION
GENERAL.
A Business Combination may involve the acquisition of (which may be
referred to as a "reverse acquisition"), or merger with, a company that desires
to have a class of securities registered under the Exchange Act, while avoiding
what it may deem to be adverse consequences of undertaking a public offering
itself. These include time delays, significant expense, possible loss of voting
control through dilution of their ownership position and compliance with various
federal and state securities laws. As more fully described below under the
heading "FORM OF ACQUISITION; OPPORTUNITY FOR STOCKHOLDER APPROVAL," the
proposed structure of a Business Combination may not require that we seek
stockholder approval for the transaction and holders of our common stock may not
have the opportunity to vote upon a proposed Business Combination.
2
SEARCH FOR A TARGET.
We are currently in the process of identifying and evaluating targets for a
Business Combination. As described below in more detail, we have virtually
unrestricted flexibility in identifying and selecting prospective acquisition
candidates. To the extent we affect a Business Combination, we may be impacted
by numerous risks inherent in the business and operations of the Target
Business. The risks attendant to the Target Business may include risks typical
of a financially unstable company or an entity in its early stage of development
or growth, including entities without established records of sales or earnings.
Although our management will endeavor to evaluate the risks inherent in a
particular target, we cannot assure you that we will properly ascertain or
assess all significant risk factors.
SOURCES OF TARGET BUSINESSES.
We intend to source our target opportunities from various internal and
external sources. Target candidates have been, and we anticipate will continue
to be, brought to our attention from affiliated and various unaffiliated
sources. We believe that we will be able to identify target opportunities from
internal sources primarily resulting from personal contacts and relationships
that our officers and directors and their affiliates have developed and maintain
with various professionals, including accountants, consultants, bankers,
attorneys and other investors, as a result of formal or informal inquiries or
discussions they may have, as well as attending trade shows or conventions.
Target Business candidates may be brought to our attention by unaffiliated
sources as a result of being solicited by us through calls or mailings. These
sources may also introduce us to Target Businesses candidates in which they
believe we may have an interest on an unsolicited basis. In addition, we may
retain the services of agents or other representatives to identify or locate
suitable targets on our behalf, though we have not engaged any such persons, to
date.
In no event will any of our existing management or stockholders, or any
entity with which they are affiliated, be paid any finder's fee, consulting fee
or other compensation prior to, or for any services they render in order to
effectuate, the consummation of a Business Combination. In the event that we
retain the services of professional firms or other individuals that specialize
in business acquisitions, we may pay a finder's fee, consulting fee or other
compensation to be determined in an arm's length negotiation based on the terms
of the transaction. We have not adopted any policies with respect to utilizing
the services of consultants or advisors to assist in the identification of a
Target Business, the criteria to be used in selecting such consultants or
advisors, the services to be provided, the term of service, or regarding the
total amount of fees that may be paid. However, because of our limited cash
resources, it is likely that any such fee we agree to pay would be paid in
shares of our common stock.
3
SELECTION CRITERIA OF A TARGET BUSINESS.
Our management will have virtually unrestricted flexibility in identifying
and selecting a prospective Target Business. We have not established any
specific attributes or criteria (financial or otherwise) for prospective Target
Businesses. In evaluating a prospective Target Business, our management will
consider, among other factors, the following:
o financial condition and results of operation;
o growth potential;
o experience and skill of management and availability of additional
personnel;
o capital requirements;
o competitive position;
o barriers to entry in the industry;
o stage of development of the products, processes or services;
o degree of current or potential market acceptance of the products,
processes or services;
o proprietary features and degree of intellectual property or other
protection of the products, processes or services;
o regulatory environment of the industry; and
o costs associated with effecting the Business Combination.
These criteria are not intended to be exhaustive or to in any way limit the
board of director's unrestricted discretion to enter into a Business Combination
with any Target Business. Any evaluation relating to the merits of a particular
Business Combination will be based, to the extent relevant, on the above factors
as well as other considerations deemed relevant by our management. In evaluating
a prospective Target Business, we will conduct as extensive a due diligence
review of potential targets as possible given the lack of information that may
be available regarding private companies, our limited personnel and financial
resources and the inexperience of our management with respect to such
activities. We expect that our due diligence may include, among other things,
meetings with the Target Business's incumbent management and inspection of its
facilities, as well as a review of financial and other information that is made
available to us. This due diligence review will be conducted either by our
management or by unaffiliated third parties we may engage. Our limited funds and
the lack of full-time management will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a Target Business
candidate before we consummate a Business Combination. Management decisions,
therefore, will likely be made without detailed feasibility studies, independent
analysis, market surveys and the like which, if we had more funds available to
us, would be desirable. We will be particularly dependent in making decisions
upon information provided by the promoters, owners, sponsors or others
associated with the business opportunity seeking our participation.
Where possible, we will attempt to structure a Business Combination to
achieve the most favorable tax treatment to us, the Target Business and both
companies' stockholders, taking into account other terms of the transaction.
Depending on the circumstances of any acquisition, however, we may not be able
to structure a transaction in the most tax advantageous manner. Further, we
cannot assure you that the Internal Revenue Service or appropriate state tax
authorities will agree with our tax treatment of any transaction.
4
The time and costs required to select and evaluate a Target Business and to
structure and complete the Business Combination cannot presently be ascertained
with any degree of certainty. Any costs incurred with respect to the
identification and evaluation of a prospective Target Business with which a
Business Combination is not ultimately completed may result in a loss to us.
LACK OF DIVERSIFICATION.
We expect that we will be able to consummate a Business Combination with
only one candidate given that, among other considerations, we will not have the
resources to diversify our operations and the dilution of interest for present
and prospective stockholder, which is likely to occur as a result of our
management's plan to offer a controlling interest to a Target Business in order
to achieve a tax free reorganization, as described below, will render more than
one Business Combination unlikely. Therefore, at least initially, the prospects
for our success may be entirely dependent upon the future performance of a
single business and we will not benefit from the possible spreading of risks or
offsetting of losses. By consummating a Business Combination with a single
entity, our lack of diversification may:
o subject us to numerous economic, competitive and regulatory
developments, any or all of which may have a substantial adverse
impact upon the particular industry in which we may operate subsequent
to a Business Combination, and
o result in our dependency upon the development or market acceptance of
a single or limited number of products, processes or services.
LIMITED ABILITY TO EVALUATE THE TARGET BUSINESS.
Management's assessment of a Target Business will be based upon discussions
with management of the Target Business and a review of due diligence material
relating to the Target Business available to it during the evaluation period.
Any such assessment may not be accurate.
Although we intend to scrutinize the management of a prospective Target
Business when evaluating the desirability of effecting a Business Combination,
we cannot assure you that our assessment of the Target Business's management
will prove accurate. In addition, we cannot assure you that future management
will have the necessary skills, qualifications or abilities to manage a public
company. Furthermore, the future role of our management in the Target Business
following a Business Combination cannot presently be stated with any certainty,
though it is unlikely that any of such persons will continue to be associated
with a Target Business with which we consummate a Business Combination, other
than as stockholders.
Given our current resources, we will likely enter into a Business
Combination with a privately-held company. Generally, very little public
information exists about these companies and we will be required to rely on the
ability of our management to obtain adequate information to evaluate the
potential returns from entering into a Business Combination with such a company.
If we do not uncover all material information about a Target Business prior to a
Business Combination, we may not make a fully informed investment decision and
we may lose money on our investments.
5
FORM OF ACQUISITION; OPPORTUNITY FOR STOCKHOLDER APPROVAL.
The manner in which we participate in a Business Combination will depend
upon, among other things, the nature of the opportunity and the respective
requirements and desires of management of our Company and of the Target
Business. In addition, the structure of any Business Combination will be
dispositive as to whether stockholder approval of the Business Combination is
required.
Although the terms of any Business Combination cannot be predicted, it is
likely that we will seek to structure a Business Combination to qualify as a tax
free transaction under the Internal Revenue Code of 1986, as amended (the
"Code"). Tax free treatment of such a transaction can be accomplished, if
structured correctly, either through the acquisition of all of the outstanding
shares of capital stock of a Target Business, including by way of a reverse
acquisition, or through a merger (either directly or through a wholly owned
subsidiary of our Company) with a Target Business.
If the transaction is structured as an acquisition (or reverse
acquisition), we will acquire our participation in a Target Business through the
acquisition of all of the outstanding shares of its capital stock in exchange
for the issuance of our common stock or other securities to the security holders
of the Target Business. If the transaction is structured as a statutory merger
or consolidation, we would merge a Target Business with and into our Company.
Acquisition: Under Section 368(a)(1) of the Code, in order for a stock exchange
transaction to qualify as a "tax free" reorganization, the holders of the stock
of the target must receive a number of shares of our capital stock equal to 80%
or more of the voting stock of our Company. If a transaction were structured to
take advantage of these provisions rather than other "tax free" provisions
provided under the Code, our existing stockholders would, in such circumstances,
retain 20% or less of the total issued and outstanding shares of the surviving
entity. Depending upon the relative negotiating strength of the parties,
stockholders at the time of the Business Combination may retain substantially
less than 20% of the total issued and outstanding shares of our Company. This
would result in substantial additional dilution to the equity of those persons
who were stockholders of our Company prior to such Business Combination. As part
of such a transaction, all or a majority of the Company's then management at the
time may resign and new directors may be appointed without any vote by
stockholders. An acquisition (or reverse acquisition) of will not require the
vote or approval of stockholders and may be accomplished in the sole
determination of management.
Merger: In a merger transaction, we would merge a Target Business with and into
our Company or a direct wholly-owned subsidiary. Simultaneous with the merger,
we likely would affect a recapitalization in order to achieve a manageable float
of our outstanding capital stock. However, a proposed merger transaction would
require the approval of the holders of a majority of the outstanding shares of
our common stock and it may necessitate calling a stockholders' meeting to
obtain such approval. The necessity to obtain stockholder approval may result in
delay and additional expense in the consummation of any proposed transaction and
will also give rise to certain rights to dissenting stockholders who could
require that the Company purchase their shares at a price equal to the fair
market value in cash.
In light of the above, management likely will seek to structure a Business
Combination so as not to require stockholder approval.
It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require significant management time and
attention and substantial cost for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for a Business Combination, the
failure to consummate that transaction may result in the loss to the Company of
the related costs incurred.
6
COMPETITION
Our ability to consummate a Business Combination will be constrained by our
lack of financial resources to provide to the Target Business. We expect that in
the course of identifying, evaluating and selecting a Target Business, we may
encounter intense competition from other entities having a business objective
similar to ours. These include blank check companies that have raised
significant sums through sales of securities registered under federal securities
laws that have a business plan similar to ours and consequently possess a
significant competitive advantage over our Company both from a financial and
personnel perspective. Additionally, we may be subject to competition from other
entities having a business objective similar to ours, including venture capital
firms, leveraged buyout firms and operating businesses looking to expand their
operations through acquisitions. Many of these entities are well established,
possess significant capital and have extensive experience identifying and
affecting business combinations directly or through affiliates. Moreover, nearly
all of these competitors possess greater technical, human and other resources
than us. In addition, we will experience competition from other modestly
capitalized shell companies that are seeking to enter into business combinations
with targets similar to those we expect to pursue. One of our current officers
also serves as an officer and director and is a stockholder of a shell company
that is registering its class of common stock under the Exchange Act. This
officer's/director's affiliation with two shell companies raises the possibility
of conflicts of interest, in that both companies may seek to take advantage of
the same business opportunity. Neither our Company nor the other shell company
with which our officer/director is affiliated has adopted any policy with
respect to resolving any potential conflict of interest and it is possible that
any conflict or interest that arises between the two companies may not be
decided in our favor.
While we believe there may be numerous potential target candidates with
which we could affect a Business Combination, our ability to compete in
affecting a Business Combination with prime candidates will be limited by our
lack of financial resources. This inherent competitive limitation gives others
an advantage in pursuing the acquisition of the most attractive Target
Businesses.
If we succeed in affecting a Business Combination, there will be, in all
likelihood, intense competition from competitors of the Target Business. We
cannot apprise you of any of these risks nor can we assure you that, subsequent
to a Business Combination, we will have the resources or ability to compete
effectively.
EMPLOYEES
We have two executive officers both of whom have other business interests
and are not obligated to devote any specific number of hours to our matters.
They intend to devote only as much time as they deem necessary to our affairs.
The amount of time management will devote to our affairs in any time period will
vary based on whether a Target Business has been selected for the Business
Combination and the stage of the Business Combination process the Company is in.
Accordingly, as management identifies suitable Target Businesses, we expect that
our management will spend more time investigating such Target Business and will
devote additional time and effort negotiating and processing the Business
Combination as developments warrant. We do not intend to have any full time
employees prior to the consummation of a Business Combination.
7
Our management may engage in other business activities similar and
dissimilar to those we are engaged in without any limitations or restrictions
applicable to such activities. To the extent that our management engages in such
other activities, there will be possible conflicts of interest in diverting
opportunities which would be appropriate for our Company to this other company
or to other companies, entities or persons with which our management is or may
be associated or have an interest, rather than diverting such opportunities to
us. Since we have not established any policy for the resolution of such a
conflict, we could be adversely affected should our officers/directors choose to
place his/hers other business interests before ours. We cannot assure you that
such potential conflicts of interest will not result in the loss of potential
opportunities or that any conflict will be resolved in our favor.
Our officers and directors may actively negotiate for or otherwise consent
to the disposition of all or any portion of the shares of common stock they own,
as a condition to, or in connection, with a Business Combination. Therefore, it
is possible that the terms of any Business Combination will provide for the sale
of all or a portion of the shares of common stock they own which would raise
issues relating to a possible conflict of interest with our other security
holders.
ITEM 1A. RISK FACTORS.
An investment in our securities involves a high degree of risk. You should
consider carefully all of the risks described below, together with the other
information contained in this Annual Report on Form 10-K before making a
decision to invest in our securities. If any of the following risks occur, our
business, financial condition and results of operations may be materially
adversely affected.
NEITHER OF OUR OFFICERS HAS EVER BEEN A PRINCIPAL OF, OR HAS EVER BEEN
AFFILIATED WITH, A COMPANY FORMED WITH A BUSINESS PURPOSE SIMILAR TO OURS THAT
HAS CONSUMMATED A BUSINESS COMBINATION.
Neither of our officers has ever served as an officer or director of a
development stage public company that has completed a business combination such
as described in this report. Accordingly, you may not be able to adequately
evaluate their ability to consummate successfully a Business Combination.
WE ARE A DEVELOPMENT STAGE COMPANY WITH NO OPERATING HISTORY AND, ACCORDINGLY,
YOU WILL NOT HAVE ANY BASIS ON WHICH TO EVALUATE OUR ABILITY TO ACHIEVE OUR
BUSINESS OBJECTIVE.
We are a development stage company and have not engaged in any revenue
generating activities to date. Since we do not have any operating history, you
will have no basis upon which to evaluate our ability to achieve our business
objective. We are currently in the process of evaluating and identifying targets
for a Business Combination. We are not presently engaged in, and will not engage
in, any substantive commercial business or generate any revenue until we
consummate a such a transaction, if ever. We cannot assure you as to when or if
a Business Combination will occur.
OUR FUTURE SUCCESS IS DEPENDENT ON THE ABILITY OF MANAGEMENT TO COMPLETE A
BUSINESS COMBINATION WITH A TARGET BUSINESS THAT OPERATES PROFITABLY.
The future success of our plan of operation will depend entirely on the
operations, financial condition and management of the Target Business with which
we may enter into a Business Combination. While management intends to seek to
enter into a Business Combination with an entity having an established,
profitable operating history, we cannot assure you that we will be successful in
consummating a Business Combination with a candidate that meets that criterion.
In the event we complete a Business Combination, the success of our operations
will be dependent upon management of the Target Business and numerous other
factors beyond our control.
8
WE HAVE NO EXISTING AGREEMENT FOR A BUSINESS COMBINATION OR OTHER TRANSACTION.
We presently have no written arrangement or agreement with respect to
engaging in a Business Combination. We cannot assure you that we will
successfully identify and evaluate suitable business opportunities or that we
will enter into a Business Combination. Management has not identified any
particular industry or specific business within an industry for evaluation. We
cannot guarantee that we will be able to negotiate a Business Combination on
favorable terms.
WE MAY HAVE INSUFFICIENT RESOURCES TO COVER OUR OPERATING EXPENSES AND THE COSTS
AND EXPENSES OF CONSUMMATING A BUSINESS COMBINATION.
At December 31, 2008, we had cash on hand of $122. We do not expect that
these funds will be sufficient to cover our operating costs and expenses,
including those we will incur in connection with satisfying our reporting
obligations under the Securities Exchange Act of 1934 and consummating a
Business Combination. If our financial resources are inadequate to cover our
costs and expenses, we will require additional financing and we cannot be
certain that such financing will be available to us on acceptable terms, if at
all. Our failure to secure funds necessary to cover our costs and expenses would
have an adverse affect on our operations and ability to achieve our objective.
THE TIME AND COST OF PREPARING A PRIVATE COMPANY TO BECOME A PUBLIC REPORTING
COMPANY MAY PRECLUDE US FROM ENTERING INTO A BUSINESS COMBINATION WITH THE MOST
ATTRACTIVE PRIVATE COMPANIES.
Target companies that we may investigate that fail to comply with SEC
reporting requirements, financial and otherwise, may delay or preclude a
Business Combination. Sections 13 and 15(d) of the Exchange Act require
reporting companies to provide certain information about significant
acquisitions, including audited financial statements for the company acquired.
The time and additional costs that may be incurred by some target entities to
prepare these statements may significantly delay or essentially preclude
consummation of an acquisition. Otherwise suitable acquisition prospects that do
not have or are unable to obtain the required audited statements may be
inappropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.
IF WE AFFECT A BUSINESS COMBINATION WITH A FINANCIALLY UNSTABLE COMPANY OR AN
ENTITY IN THE EARLY STAGE OF DEVELOPMENT OR GROWTH, WE WILL BE SUBJECT TO
GREATER RISKS THAN IF WE WERE TO AFFECT A BUSINESS COMBINATION WITH A MORE
ESTABLISHED COMPANY WITH A PROVEN RECORD OF EARNINGS AND GROWTH.
Given our financial and personnel resources compared to those of our
competitors, we may be limited to consummating a Business Combination with a
company that is financially unstable or is in the early stage of development or
growth, including an entity without established records of sales or earnings. To
the extent we affect a Business Combination with a financially unstable or early
stage or emerging growth company, we may be impacted by numerous risks inherent
in the business and operations of such company that we would not be subject to
if we were to affect a Business Combination with a more seasoned company with a
proven record of earnings and growth.
9
WE LIKELY WILL COMPLETE ONLY ONE BUSINESS COMBINATION, WHICH WILL CAUSE US TO BE
DEPENDENT SOLELY ON A SINGLE BUSINESS AND A LIMITED NUMBER OF PRODUCTS, SERVICES
OR ASSETS.
Given our limited financial resources and other considerations, it is
likely we will complete a Business Combination with only one Target Business.
Accordingly, the prospects for our success may be solely dependent upon the
performance of a single business and dependent upon the development or market
acceptance of a single or limited number of products, processes or services. In
this case, we will not be able to diversify our operations or benefit from the
possible spreading of risks or offsetting of losses, unlike other entities which
may have the resources to complete several Business Combinations or asset
acquisitions in different industries or different areas of a single industry so
as to diversify risks and offset losses.
GIVEN OUR LIMITED RESOURCES AND THE SIGNIFICANT COMPETITION FOR TARGET
BUSINESSES, WE MAY NOT BE ABLE TO CONSUMMATE AN ATTRACTIVE BUSINESS COMBINATION.
We will encounter intense competition from other entities having a business
objective similar to ours, including blank check companies, finance companies,
banks, venture capital funds, leveraged buyout funds, operating businesses and
other financial buyers competing for acquisitions. Many of these entities are
well established and have extensive experience in identifying and affecting
Business Combinations directly or through affiliates. Nearly all of these
competitors possess greater financial, technical, human and other resources than
we do and our financial resources will be negligible when contrasted with those
of many of these competitors. In addition, we will experience direct competition
from other modestly capitalized shell companies that are seeking to enter into
business combinations with targets similar to those we expect to pursue,
including a shell company that has registered its class of common stock under
the Exchange Act of which one of our officers serves as a director and officer
and in which company his family owns common stock.
IT IS LIKELY THAT WE WILL CONSUMMATE A BUSINESS COMBINATION WITH A PRIVATE
COMPANY FOR WHICH LIMITED INFORMATION WILL BE AVAILABLE TO CONDUCT DUE
DILIGENCE.
We likely will enter into a Business Combination with a privately-held
company. Generally, very little public information exists about these companies
or their management and we will be required to rely on the ability of our
management to obtain adequate information to evaluate the potential success of
entering into a transaction with such a company. In addition, our management
will only devote limited time to the business of the Company and will have
available to it extremely limited financial resources with which to conduct due
diligence. If our assessment of the Target Business's operations and management
is inaccurate or we are unable to uncover all material information about these
companies, then we may not make a fully informed investment decision, and we may
lose money on our investments.
IF WE CONSUMMATE A BUSINESS COMBINATION BY WAY OF AN ACQUISITION, STOCKHOLDERS
MAY NOT HAVE AN OPPORTUNITY TO VOTE ON THE TRANSACTION.
If we consummate a Business Combination by way of an acquisition of the
capital stock or assets of the Target Business, the transaction may be
accomplished in the sole determination of management without any vote or
approval by securityholders. Accordingly, holders of our securities at the time
of any Business Combination may not have an opportunity to evaluate the Target
Business or its management and will have to rely on the judgment of management
in assessing the future profitability and viability of the Target Business.
10
A BUSINESS COMBINATION WITH A FOREIGN COMPANY MAY SUBJECT US TO ADDITIONAL
RISKS.
If we enter into a Business Combination with a foreign entity, we will be
subject to all of the risks inherent in business operations outside of the
United States. These risks include:
o unexpected changes in, or impositions of, legislative or regulatory
requirements;
o foreign currency exchange rate fluctuations;
o potential hostilities and changes in diplomatic and trade
relationships;
o changes in duties and tariffs, taxes, trade restrictions, license
obligations and other non-tariff barriers to trade;
o burdens of complying with a wide variety of foreign laws and
regulations;
o longer payment cycles and difficulties collecting receivables through
foreign legal systems;
o difficulties in enforcing or defending agreements and intellectual
property rights;
o reduced protection for intellectual property rights in some countries;
o potentially adverse tax consequences; and
o political and economic instability.
If we are not successful managing these risks among others that we may not
identify at the time of a Business Combination, our business may be negatively
impacted.
SINCE WE HAVE NOT YET SELECTED A PARTICULAR INDUSTRY OR TARGET BUSINESS WITH
WHICH TO COMPLETE A BUSINESS COMBINATION, WE ARE UNABLE TO ASCERTAIN THE MERITS
OR RISKS OF THE INDUSTRY OR BUSINESS IN WHICH WE MAY ULTIMATELY OPERATE AT THIS
TIME.
We are currently in the process of evaluating and identifying targets for a
Business Combination. However, our plan of operation permits our board of
directors to consummate a Business Combination with a company in any industry it
chooses and is not limited to any particular industry or type of business.
Accordingly, there is no current basis to evaluate the possible merits or risks
of the particular industry in which we may ultimately operate or the Target
Business which we may ultimately acquire. To the extent we complete a Business
Combination with a company that does not have a stable history of earnings and
growth or an entity in a relatively early stage of its development, we may be
affected by numerous risks inherent in the business operations of those
entities. If we complete a Business Combination with an entity in an industry
characterized by a high level of risk, we may be affected by the currently
unascertainable risks of that industry. Such risks, among other things, could
preclude the Company's ability to secure financing for operations after a
Business Combination, should it be required. Although our management will
endeavor to evaluate the risks inherent in a particular industry or Target
Business, we cannot assure you that we will properly ascertain or assess all of
the significant risk factors. Even if we properly assess those risks, some of
them may be outside of our control.
OUR LONG-TERM SUCCESS WILL BE DEPENDENT IN LARGE PART UPON THE MANAGEMENT TEAM
OF THE TARGET BUSINESS, WHICH MAY BE DIFFICULT TO FULLY EVALUATE.
After a Business Combination, our long-term success we will be dependent
upon the management team of the Target Business. Although we intend to
scrutinize the management team of a prospective Target Business as closely as
possible in connection with evaluating the desirability of affecting a Business
Combination, we cannot assure you that our assessment of the management team
will prove to be correct. These individuals may be unfamiliar with the complex
disclosure and financial reporting requirements imposed on U.S. public companies
and other requirements of operating a public company, which could divert their
attention from their core business to the determent of the operating results of
the Target Business.
11
IF WE ARE UNABLE TO STRUCTURE THE BUSINESS COMBINATION AS A "TAX FREE"
TRANSACTION, POTENTIAL TARGET BUSINESSES COULD BE DETERRED FROM ENTERING INTO
SUCH A TRANSACTION WITH OUR COMPANY.
We may not be able to structure our acquisition to result in tax-free
treatment for the companies or their stockholders, which could deter third
parties from entering into certain Business Combinations with us. Currently, a
transaction may be structured so as to result in tax-free treatment to both
companies, as prescribed by various federal and state tax provisions. We intend
to structure any Business Combination so as to minimize the federal and state
tax consequences to both us and the target entity and the respective
stockholders of each company; however, we cannot guarantee that the Business
Combination will meet the statutory requirements of a tax-free reorganization or
that the parties will obtain the intended tax-free treatment upon a transfer of
stock or assets. A non-qualifying reorganization could result in the imposition
of both federal and state taxes that may have an adverse affect on all parties
to the transaction.
WE EXPECT TO ISSUE A SIGNIFICANT NUMBER OF NEW SHARES OF CAPITAL STOCK IN A
BUSINESS COMBINATION, WHICH WILL RESULT IN SUBSTANTIAL DILUTION AND A CHANGE IN
CONTROL OF OWNERSHIP OF THE COMPANY.
Our articles of incorporation authorizes the issuance of 400,000,000 shares
of common stock and 100,000,000 shares of preferred stock. Any Business
Combination affected by us may result in the issuance of additional securities
without stockholder approval and may result in substantial dilution in the
percentage of our common stock held by our then existing stockholders. Moreover,
the common stock issued in any such transaction may be valued on an arbitrary or
non-arm's-length basis by our management, resulting in an additional reduction
in the percentage of common stock held by our then existing stockholders. Our
board of directors has the power to issue any or all of such authorized but
unissued shares without stockholder approval. To the extent that additional
shares of common stock or preferred stock are issued in connection with a
Business Combination or otherwise, dilution to the interests of our stockholders
will occur and the rights of the holders of common stock might be materially
adversely affected
WE HAVE NOT CONDUCTED ANY MARKET RESEARCH CONCERNING PROSPECTIVE BUSINESS
OPPORTUNITIES, WHICH MAY AFFECT OUR ABILITY TO IDENTIFY A TARGET BUSINESS.
We have neither conducted nor have others made available to us results of
market research concerning prospective business opportunities. Therefore, we
have no assurances that market demand exists for a Business Combination as
contemplated by us. There is no assurance that we will be able to enter into a
Business Combination on terms favorable to us. Decisions as to which business
opportunity to participate in will be unilaterally made by our management,
which, in many cases, may act without the consent, vote or approval of our
stockholders.
OUR OFFICERS AND DIRECTORS WILL APPORTION THEIR TIME TO OTHER BUSINESSES WHICH
MAY CAUSE CONFLICTS OF INTEREST IN THEIR DETERMINATION AS TO HOW MUCH TIME TO
DEVOTE TO OUR AFFAIRS. THIS CONFLICT OF INTEREST COULD HAVE A NEGATIVE IMPACT ON
OUR ABILITY TO CONSUMMATE A BUSINESS COMBINATION.
Our officers and director engage in other businesses and are not required
to devote their full time or any specific number of hours to our affairs, which
could create a conflict of interest when allocating their time between our
operations and their other commitments. We do not have and do not expect to have
any full time employees prior to the consummation of a Business Combination. If
our management's other business affairs requires them to devote more substantial
amounts of time to such affairs, it could limit their ability to devote time to
our affairs and could have a negative impact on our ability to consummate a
Business Combination. We cannot assure you that these conflicts will be resolved
in our favor.
12
LIMITATIONS ON LIABILITY AND INDEMNIFICATION MATTERS.
As permitted by the corporate laws of the State of Nevada, we have included
in our articles of incorporation a provision to eliminate the personal liability
of its directors for monetary damages for breach or alleged breach of their
fiduciary duties as directors, subject to certain exceptions. In addition, our
bylaws provide that we are required to indemnify our officers and directors
under certain circumstances, including those circumstances in which
indemnification would otherwise be discretionary, and we will be required to
advance expenses to our officers and directors as incurred in connection with
proceedings against them for which they may be indemnified.
THERE ARE SIGNIFICANT RESTRICTIONS ON THE TRANSFERABILITY OF THE SHARES.
None of the outstanding shares of our common stock have been registered
under the Securities Act of 1933 ("Securities Act") or the securities laws of
any state and may not be resold, transferred, pledged as collateral or otherwise
disposed of unless such transaction is registered under the Securities Act or an
exemption from registration is available. In connection with any transfer of
shares of our common stock other than pursuant to an effective registration
statement under the Securities Act, the Company may require the holder to
provide to the Company an opinion of counsel to the effect that such transfer
does not require registration of such transferred shares under the Securities
Act. Rule 144 under the Exchange Act will not be available for the resale of our
securities unless and until (i) we cease to be a shell company, (ii) at the time
of the sale we are reporting under the Exchange Act, (iii) we have filed all
Exchange Act reports and material required to be filed during the preceding 12
months, and (iv) at least one year has elapsed from the time that we file the
disclosure required by the SEC reflecting the fact that we are no longer a shell
company. These restrictions will limit the ability of our stockholders to
liquidate their investment.
HOLDERS MAY NOT BE ABLE TO DISPOSE OF THEIR COMMON STOCK DUE TO THE ABSENCE OF
AN ESTABLISHED TRADING MARKET.
There is currently no public trading market for any of our securities. The
Company will not seek to list any of our shares of common stock or other
securities on any exchange or have them quoted on NASDAQ or any over-the-counter
market. Any such decision will be in the discretion of management of a Target
Company with which we consummate a Business Combination. Accordingly, the
Company does not anticipate that a market in any of our securities will develop
during the foreseeable future, if ever. Because holders may not be able to sell
their securities, subscribers should consider their liquidity needs with respect
to the securities and should be prepared to hold the securities for an
indefinite period.
13
WE CANNOT ASSURE YOU THAT FOLLOWING A BUSINESS COMBINATION WITH AN OPERATING
BUSINESS, OUR COMMON STOCK WILL BE LISTED OR ADMITTED TO QUOTATION ON ANY
SECURITIES EXCHANGE OR OTHER TRADING MEDIUM.
Following a Business Combination, then management may seek to develop a
public market for our common stock. However, we cannot assure you that following
such a transaction, we will be able to meet the initial listing standards of any
stock exchange or that our common stock will be admitted for quotation on the
over the counter bulletin board or admitted to trading on any other medium. If
our common stock does not trade publicly, holders may not be able to sell common
stock. Moreover, our common stock may be deemed to be a "penny stock" and
subject to the SEC's penny stock rule which provides that, if our common stock
failed to meet the criteria set forth in such rule, brokers would be subject to
various practice requirements which would limit the sale of our stock only to
persons who were established customers and accredited investors. Consequently,
such rule may deter broker-dealers from recommending or selling our common
stock, which may further affect its liquidity. This would also make it more
difficult for us to raise additional capital following a Business Combination.
WE HAVE NEVER PAID DIVIDENDS ON OUR COMMON STOCK.
We have never paid dividends on our common stock and do not presently
intend to pay any dividends in the foreseeable future. In the unlikely event we
generated profits prior to a Business Combination, we expect to retain such
earnings and re-invest them into the Company to further its business strategy.
AUTHORIZATION OF PREFERRED STOCK.
Our Articles of Incorporation authorize the issuance of up to 10,000,000
shares of preferred stock with such designations, rights and preferences that
may be determined from time to time by the board of directors. Accordingly, our
board of directors is empowered, without stockholder approval, to issue
preferred stock with dividend, liquidation, conversion, voting, or other rights
which could adversely affect the voting power or other rights of the holders of
the common stock. In the event of issuance, the preferred stock could be
utilized, under certain circumstances, as a method of discouraging, delaying or
preventing a change in control of the Company. Although we have no present
intention to issue any shares of preferred stock, we cannot assure you that we
will not do so in the future.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not Applicable.
ITEM 2. PROPERTIES.
The Company neither rents nor owns any properties. The Company currently has no
policy with respect to investments or interests in real estate, real estate
mortgages or securities of, or interests in, persons primarily engaged in real
estate activities.
ITEM 3. LEGAL PROCEEDINGS.
The Company presently is not a party to, nor is management aware of, any
pending, legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during the fiscal
year ended December 31, 2008.
14
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
MARKET INFORMATION
As of March 25, 2009, there were forty two holders of record of 50,000,000
outstanding shares of our common stock.
Our common stock does not trade, nor is it admitted to quotation, on any
stock exchange or other trading facility. Management has no present plan,
proposal, arrangement or understanding with any person with regard to the
development of a trading market in any of our securities. We cannot assure you
that a trading market for our common stock will ever develop. We have not
registered our class of common stock for resale under the blue sky laws of any
state and current management does not anticipate doing so. The holders of shares
of common stock, and persons who may desire to purchase shares of our common
stock in any trading market that might develop in the future, should be aware
that, in addition to transfer restrictions imposed by federal securities laws,
significant state blue sky law restrictions may exist which could limit the
ability of stockholders to sell their shares and limit potential purchasers from
acquiring our common stock.
We are not obligated by contract or otherwise to issue any securities and
there are not outstanding any securities that are convertible into or
exchangeable for shares of our common stock.
SHARES AVAILABLE FOR FUTURE SALE
All outstanding shares of our common stock are "restricted securities," as
that term is defined under Rule 144 promulgated under the Securities Act of 1933
(Securities Act), because they were issued in a private transaction not
involving a public offering. Accordingly, none of the outstanding shares of our
common stock may be resold, transferred, pledged as collateral or otherwise
disposed of unless such transaction is registered under the Securities Act or an
exemption from registration is available. In connection with any transfer of
shares of our common stock other than pursuant to an effective registration
statement under the Securities Act, the Company may require the holder to
provide to the Company an opinion of counsel to the effect that such transfer
does not require registration of such transferred shares under the Securities
Act.
Rule 144 is not available for the resale of securities initially issued by
companies that are, or previously were, shell companies, like us, unless the
following conditions are met:
o the issuer of the securities that was formerly a shell company has
ceased to be a shell company;
o the issuer of the securities is subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934;
o the issuer of the securities has filed all Exchange Act reports and
material required to be filed, as applicable, during the preceding 12
months (or such shorter period that the issuer was required to file
such reports and materials), other than Current Reports on Form 8-K;
and
o at least one year has elapsed from the time that the issuer filed
current comprehensive disclosure with the SEC reflecting its status as
an entity that is not a shell company.
15
Neither the Company nor its officers and director have any present plan,
proposal, arrangement, understanding or intention of selling any unissued or
outstanding shares of common stock in the public market subsequent to a Business
Combination. Nevertheless, in the event that a substantial number of shares of
our common stock were to be sold in any public market that may develop for our
securities subsequent to a Business Combination, such sales may adversely affect
the price for the sale of the Company's common stock securities in any such
trading market. We cannot predict what effect, if any, market sales of currently
restricted shares of common stock or the availability of such shares for sale
will have on the market prices prevailing from time to time, if any.
DIVIDENDS.
We have not paid any dividends on our common stock to date and do not
presently intend to pay cash dividends prior to the consummation of a Business
Combination.
The payment of any dividends subsequent to a Business Combination will be
within the discretion of our then seated board of directors. Current management
cannot predict the factors which any future board of directors would consider
when determining whether or when to pay dividends.
RECENT SALES OF UNREGISTERED SECURITIES.
Since inception, the Company has issued and sold the following securities
without the benefit of registration under the Securities Act:
Issuances Pursuant to Section 4(2) of the Securities Act:
On November 2, 2007, the Company sold and issued 50,000,000 shares of
common stock to the persons named in the table below at a price equal to the par
value per share pursuant to the exemption from the registration provisions under
the Securities Act afforded by Section 4(2) thereof:
NAME OF SUBSCRIBER NUMBER OF SHARES TOTAL PURCHASE PRICE
- ------------------ ---------------- --------------------
International Capital Partners, LLC 50,000,000 $ 500.00
ITEM 6. SELECTED FINANCIAL DATA.
The information to be furnished under this Item 6 is not required of small
reporting issuers.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
GENERAL.
We were formed to serve as a vehicle to acquire, through a capital stock
exchange, merger, reverse acquisition, asset acquisition or other similar
business combination, an operating or development stage business which desires
to utilize our status as a reporting corporation under the Securities Exchange
Act of 1934. We have neither engaged in any operations nor generated any
revenues during the twelve-month period ended December 31, 2008.
16
We are currently in the process of evaluating and identifying targets for a
Business Combination. We are not presently engaged in, and will not engage in,
any substantive commercial business until we consummate a Business Combination.
Our management will have broad discretion in identifying and selecting a
prospective Target Business. We have not established any specific attributes or
criteria (financial or otherwise) for prospective Target Businesses. Our
officers and director have never served in any capacity with a development stage
public company that has identified and entered into a Business Combinations with
a Target Business and they may not be successful in their efforts. To the extent
we affect a Business Combination with a financially unstable company or an
entity in its early stage of development or growth, including entities without
established records of sales or earnings, we may be affected by numerous risks
inherent in the business and operations of financially unstable and early stage
or potential emerging growth companies. If we consummate a Business Combination
with a foreign entity, we will be subject to all of the risks attendant to
foreign operations. Although our management will endeavor to evaluate the risks
inherent in a particular Target Business, we cannot assure you that we will
properly ascertain or assess all significant risk factors.
We expect that in connection with any Business Combination, we will issue a
significant number of shares of our common stock (equal to at least 80% of the
total number of shares outstanding after giving effect to the transaction, in
order to ensure that Business Combination qualifies as a "tax free" transaction
under federal tax laws). The issuance of additional shares of our capital stock:
o will significantly reduce the equity interest of our stockholders; and
o will cause a change in likely result in the resignation or removal of
current management.
Our management anticipates that the Company likely will be able to affect
only one Business Combination, due primarily to our financial resources and the
dilution of interest for present and prospective stockholders, which is likely
to occur as a result of our management's plan to offer a controlling interest to
a Target Business in order to achieve a tax free reorganization. This lack of
diversification should be considered a substantial risk in investing in us,
because it will not permit us to offset potential losses from one venture
against potential gains from another.
LIQUIDITY AND CAPITAL RESOURCES.
As of December 31, 2008, we had negligible assets, consisting exclusively
of cash on hand of $122. We do not expect that our current cash reserve will be
sufficient to cover our anticipated costs and expenses, which includes
satisfying our reporting obligations under the Exchange Act and completing the
identification and due diligence analysis of a Target Business and consummating
a Business Combination. In the event we require additional cash for any
purposes, we will rely on management to identify sources of or provide capital
to cover such additional costs and expenses. If we are unable to identify
sources of cash, we may have to discontinue our operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information to be furnished under this Item 7A is not required of small
reporting issuers.
17
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
AUDITED FINANCIAL STATEMENTS
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
DECEMBER 31, 2008
CONTENTS
INDEPENDENT AUDITOR'S REPORT..........................................F - 1
BALANCE SHEET.........................................................F - 2
STATEMENT OF OPERATIONS...............................................F - 3
STATEMENT OF STOCKHOLDERS' DEFICIT....................................F - 4
STATEMENT OF CASH FLOWS...............................................F - 5
NOTES TO FINANCIAL STATEMENTS.....................................F - 6 - F - 18
18
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board Members
International Energy Holdings Corp.
I have audited the accompanying balance sheet of International Energy Holdings
Corp. (A Development Stage Company), as of December 31, 2008 and the related
statements of operation, stockholders' deficit and loss, and cash flows for the
years ended December 31, 2008 and 2007.
These financial statements are the responsibility of the company's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. 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. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of International Energy Holdings Corp.
(A Development Stage Company) as of December 31, 2008, and the results of its
operations and its cash flows for the years ended December 31, 2008 and 2007 in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note H to the financial
statements, the Company is in the development stage, has suffered a loss, has a
net capital deficiency and has yet to generate an internal cash flow. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note E. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Traci J. Anderson, CPA
Huntersville, NC
March 12, 2009
F - 1
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF
DECEMBER 31, DECEMBER 31,
2008 2007
-------- --------
ASSETS
CURRENT ASSETS:
Cash $ 122 $ 17,500
-------- --------
TOTAL CURRENT ASSETS 122 17,500
======== ========
TOTAL ASSETS $ 122 $ 17,500
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Note Payable - current $ 20,650 $ 17,000
Accounts Payable - 12,173
Accrued Interest 1,113 2,500
-------- --------
TOTAL CURRENT LIABILITIES 21,763 31,673
-------- --------
TOTAL LIABILITIES 21,763 31,673
-------- --------
Preferred stock ($0.00001 par value; 100,000,000 shares authorized; no shares
issued and outstanding at December 31, 2008) - -
Common stock ($0.00001 par value; 400,000,000 shares authorized:
50,000,000 issued and outstanding at December 31, 2008) 500 500
Paid in Capital 5,000 5,000
Retained Deficit (27,141) (19,673)
-------- --------
TOTAL STOCKHOLDERS' DEFICIT (21,641) (14,173)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 122 $ 17,500
======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
F - 2
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
CUMULATIVE
FOR THE YEARS ENDED TOTALS
DECEMBER 31, DECEMBER 31, SINCE
2008 2007 INCEPTION
------------ ------------ ------------
REVENUES:
Income $ - $ - $ -
------------ ------------ ------------
Total Revenue - - -
------------ ------------ ------------
EXPENSES:
Professional Fees 6,355 19,673 26,028
------------ ------------ ------------
Total Expenses 6,355 19,673 26,028
------------ ------------ ------------
Loss from operations (6,355) (19,673) (26,028)
OTHER INCOME/(EXPENSE)
Interest Expense (1,113) - (1,113)
------------ ------------ ------------
Total Other Income/(Expense) (1,113) - (1,113)
------------ ------------ ------------
NET LOSS $ (7,468) $ (19,673) $ (27,141)
============ ============ ============
Basic and fully diluted net loss per common share: $ (0.00) $ (0.00) $ (0.00)
============ ============ ============
Weighted average common shares outstanding 50,000,000 50,000,000 50,000,000
============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
F - 3
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
Common Stock Preferred stock Additional
-------------------------- ----------------------- Paid-in Deficit
Shares Amount Shares Amount Capital Accumulated
----------- ----------- ----------- ----------- ----------- -----------
Balances, November 2, 2007
(inception) $ - $ - $ - $ - $ - $ -
Net loss - - - - - (19,673)
Capital Contributions - - - - 5,000 -
Issuance of common shares 50,000,000 500 - - - -
----------- ----------- ----------- ----------- ----------- -----------
Balances, December 31, 2007 50,000,000 $ 500 - $ - $ 5,000 $ (19,673)
Net loss - - - - - (7,468)
Capital Contributions - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Balances, December 31, 2008 50,000,000 $ 500 - $ - $ 5,000 $ (27,141)
=========== =========== =========== =========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
F - 4
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
CUMULATIVE
FOR THE YEARS ENDED TOTALS
DECEMBER 31, DECEMBER 31, SINCE
2008 2007 INCEPTION
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (7,468) $(19,673) $(27,141)
Adjustments to reconcile net (loss) to net cash used in operations:
Changes in Assets and Liabilities:
Increase/(decrease) in Accounts Payable (12,173) 12,173 -
Increase/(decrease) in Accrued Expenses (1,387) 2,500 1,113
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (21,028) (5,000) (26,028)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Note Payable 3,650 17,000 20,650
Capital Contributions - 5,000 5,000
Capital Stock purchase - 500 500
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 3,650 22,500 26,150
-------- -------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (17,378) 17,500 122
CASH AND CASH EQUIVALENTS,
BEGINNING OF THE PERIOD 17,500 - -
-------- -------- --------
END OF THE PERIOD $ 122 $ 17,500 $ 122
======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
F - 5
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITY - International Energy Holdings Corp. ("The Company") was
organized under the laws of the State of Nevada on November 2, 2007 as a
corporation. The Company's objective is to acquire or merge with a target
business or company in a business combination.
BASIS OF PRESENTATION - The financial statements included herein were prepared
under the accrual basis of accounting.
CASH AND CASH EQUIVALENTS - For purposes of the Statement of Cash Flows, the
Company considers liquid investments with an original maturity of three months
or less to be cash equivalents.
MANAGEMENT'S USE OF ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. The financial statements above reflect all of the costs of
doing business.
REVENUE RECOGNITION - The Company's policy is to recognize income when it is
earned.
COMPREHENSIVE INCOME (LOSS) - The Company adopted Financial Accounting Standards
Board Statement of Financial Accounting Standards (SFAS) No. 130, "REPORTING
COMPREHENSIVE INCOME", which establishes standards for the reporting and display
of comprehensive income and its components in the financial statements. There
were no items of comprehensive income (loss) applicable to the Company during
the period covered in the financial statements.
NET INCOME PER COMMON SHARE - Statement of Financial Accounting Standard (SFAS)
No. 128 requires dual presentation of basic and diluted earnings per share (EPS)
with a reconciliation of the numerator and denominator of the EPS computations.
Basic earnings per share amounts are based on the weighted average shares of
common stock outstanding. If applicable, diluted earnings per share would assume
the conversion, exercise or issuance of all potential common stock instruments
such as options, warrants and convertible securities, unless the effect is to
reduce a loss or increase earnings per share. Accordingly, this presentation has
been adopted for the period presented. There were no adjustments required to net
income for the period presented in the computation of diluted earnings per
share.
DEFERRED TAXES
Income taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS No. 109), "ACCOUNTING FOR INCOME TAXES." A deferred tax
asset or liability is recorded for all temporary differences between financial
and tax reporting and net operating loss-carry forwards.
F - 6
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that, some portion or all of the deferred
tax asset will not be realized. 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 - The carrying amounts reported in the
balance sheet for cash, accounts receivable and payable approximate fair value
based on the short-term maturity of these instruments.
ACCOUNTS RECEIVABLE - Accounts deemed uncollectible are written off in the year
they become uncollectible. As of December 31, 2008 the balance in Accounts
Receivable was $0.
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
IMPAIRMENT OF LONG-LIVED ASSETS - The Company evaluates the recoverability of
its fixed assets and other assets in accordance with Statement of Financial
Accounting Standards No. 144, "ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF
LONG-LIVED ASSETS" ("SFAS 144'). SFAS 144 requires recognition of impairment of
long-lived assets in the event the net book value of such assets exceeds its
expected cash flows, it is considered to be impaired and is written down to fair
value, which is determined based on either discounted future cash flows or
appraised values. The Company adopted the statement on inception. No impairments
of these types of assets were recognized during the year ended December 31,
2008.
STOCK-BASED COMPENSATION - The Company accounts for stock-based compensation
using the fair value method of Financial Accounting Standard No. 123R. This
Statement requires a public entity to measure the cost of employee services
received in exchange for an award of equity instruments based on the grant-date
fair value of the award (with limited exceptions). That cost will be recognized
over the period during which an employee is required to provide service in
exchange for the award - the requisite service period (usually the vesting
period). No compensation cost is recognized for equity instruments for which
employees do not render the requisite service.
RECENT ACCOUNTING PRONOUNCEMENTS - In February 2007, the FASB issued Statement
of Financial Accounting Standards No. 159, "The Fair Value for Financial Assets
and Financial Liabilities - including an amendment of FASB Statement No. 115".
This statement permits entities to choose to measure many financial instruments
and certain other items at value. The objective is to improve financial
reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. This Statement is
expected to expand the use of fair value measurement, which is consistent with
the Board's long-term measurement objectives for accounting for financial
instruments. Effective as of the beginning of an entity's first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the beginning
of a fiscal year that begins on or before November 15, 2007, provided the entity
also elects to apply the provisions of FASB Statement No. 157, FAIR VALUE
MEASUREMENTS. No entity is permitted to apply the Statement retrospectively to
fiscal years preceding the effective date unless the entity chooses early
adoption. The choice to adopt early should be made after issuance of the
Statement but within 120 days of the beginning of the fiscal year of adoption,
provided the entity has not yet issued financial statements, including required
notes to those financial statements, for any interim period of the fiscal year
of adoption. Adoption of this standard is not expected to have a material effect
on the Company's results of operations or its financial position.
F - 7
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008
In December 2007, the FASB revised Statement of Financial Accounting Standards
No. 141, "Business Combinations". The objective of this Statement is to improve
the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial reports about a
business combination and its effects. The Statement establishes principles and
requirements for how the acquirer:
a. Recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree.
b. Recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase.
c. Determines what information to disclose to enable users of the
financial statements to evaluate the nature and financial effects of
the business combination.
This Statement is effective for business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008. The adoption of this standard is not expected to
have a material effect on the Company's results of operations or financial
position.
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
RECENT ACCOUNTING PRONOUNCEMENTS (CONT'D)
In December 2007, the FASB issued Statement of Financial Accounting Standards
No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an
amendment of ARB No. 51". The objective of this Statement is to improve the
relevance, comparability, and transparency of the financial information that a
reporting entity provides in its consolidated financial statements by
establishing accounting and reporting standards that require:
>> The ownership interests in subsidiaries held by parties other than the
parent be clearly identified, labeled, and presented in the
consolidated statement of financial position within equity, but
separate from the parent's equity.
>> The amount of consolidated net income attributable to the parent and
to the noncontrolling interest be clearly identified and presented on
the face of the consolidated statement of income.
F - 8
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008
>> Changes in a parent's ownership interest while the parent retains its
controlling financial interest in its subsidiary are accounted for
consistently.
>> The gain or loss on the deconsolidation of the subsidiary is measured
using the fair value of any noncontroling equity investment rather
than the carrying amount of that retained investment.
>> Entities provide sufficient disclosures that clearly identify and
distinguish between the interests of the parent and the interests of
the noncontrolling owners.
This statement is effective for annual periods beginning after December 15,
2008. The adoption of this standard is not expected to have a material effect on
the Company's results of operations or financial position.
In March 2008, the FASB issued Statement of Financial Accounting Standards No.
161, "Disclosures about Derivative Instruments and Hedging Activities - an
amendment of FASB Statement No. 133". This statement requires enhanced
disclosures about an entity's derivative and hedging activities and thereby
improves the transparency of financial reporting. This Statement changes the
disclosure requirements for derivative instruments and hedging activities.
Entities are required to provide enhanced disclosures about (a) how and why an
entity uses derivative instruments, (b) how derivative instruments and related
hedged items are accounted for under Statement 133 and its related
interpretations, and (c) how derivative instruments and related hedged items
affect an entity's financial position, financial performance, and cash flows.
This Statement is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. This Statement encourages, but does not require, comparative
disclosures for earlier periods at initial adoption. The adoption of this
standard is not expected to have a material effect on the Company's results of
operations or financial position.
NOTE B - SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the year ended December
31, 2008 is summarized as follows:
Cash paid during the period ended December 31, 2008 for interest and income
taxes:
Income Taxes $ -
Interest $ -
NOTE C - SEGMENT REPORTING
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "DISCLOSURES ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION." This statement requires companies to report
information about operating segments in interim and annual financial statements.
It also requires segment disclosures about products and services, geographic
areas and major customers. The Company determined that it did not have any
separately reportable operating segments as of December 31, 2008.
F - 9
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008
NOTE D - INCOME TAXES
Due to the operating loss and the inability to recognize an income tax benefit,
there is no provision for current or deferred federal or state income taxes as
of December 31, 2008.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amount used for federal and state income tax purposes.
The Company's total deferred tax asset, calculated using federal and state
effective tax rates, as of December 31, 2008 is as follows:
Total Deferred Tax Asset $(9,200)
Valuation Allowance 9,200
-------
Net Deferred Tax Asset $ -
=======
The reconciliation of income taxes computed at the federal statutory income tax
rate to total income taxes for the period from inception through December 31,
2008 is as follows:
Income tax computed at the federal statutory rate 34.0%
State income tax, net of federal tax benefit 0.0%
-------
Total 34.0%
Valuation allowance (34.0)%
-------
Total deferred tax asset 0.0%
=======
Because of the Company's lack of earnings history, the deferred tax asset has
been fully offset by a valuation allowance. The valuation allowance increased
(decreased) by approximately $7,468 during the four months ended December 31,
2008 and $19,673 for the period from inception (November 2, 2007) through
December 31, 2007.
As of December 31, 2008, the Company had a federal and state net operating loss
carry forward in the amount of approximately $27,141 which expires in the year
2028.
F - 10
INTERNATIONAL ENERGY HOLDINGS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008
NOTE E - GOING CONCERN
As shown in the accompanying audited financial statements, the Company has
suffered a loss from operations to date. It has experienced a loss of $27,141
since inception and has a negative working of capital. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to this matter are to raise equity capital and seek
strategic relationships and alliances in order to increase sales in an effort to
generate positive cash flow. Additionally, the Company must continue to rely
upon equity infusions from investors in order to improve liquidity and sustain
operations. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE F - COMMITMENTS
As of December 31, 2008, the Company had no commitments.
NOTE G - CAPITAL STOCK
The Company is authorized to issue 400,000,000 common shares at $.00001 par
value per share.
During the period from inception (November 2, 2007) through December 31, 2008,
the Company issued 50,000,000 to the following:
International Capital Partners, LLC 50,000,000
The Company is authorized to issue 100,000,000 preferred shares at $.00001 par
value per share. During the period from inception (November 2, 2007) through
December 31, 2008, the Company issued no preferred shares.
NOTE H - DEVELOPMENT STAGE COMPANY
The Company is in the development stage as of December 31, 2008 and to date has
had no significant operations. Recovery of the Company's assets is dependent on
future events, the outcome of which is indeterminable. In addition, successful
completion of the Company's development program and its transition, ultimately,
to attaining profitable operations is dependent upon obtaining adequate
financing to fulfill its development activities and achieving a level of sales
adequate to support the Company's cost structure.
NOTE I - NOTE PAYABLE
The Note Payable outstanding is listed as follows:
Note payable, 7% interest, due on demand $ 20,650
F - 11
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There are not and have not been any disagreements between the Company and
our independent accountants on any matter of accounting principles, practices or
financial statement disclosure.
ITEM 9A. CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the year covered by this Annual Report, management
performed, with the participation of our Principal Executive and Financial
Officer, or PEO, an evaluation of the effectiveness of our disclosure controls
and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.
Our disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports we file or submit under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to our management, including our PEO, to allow timely decisions
regarding required disclosures. Based on this evaluation, our PEO has concluded
that the Company's disclosure controls and procedures were effective as of
December 31, 2008.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate
internal control over financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. Internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements in accordance
with generally accepted accounting principles in the United States, or GAAP. A
company's internal control over financial reporting includes those policies and
procedures that: (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and the board of directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's assets that could
have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projection of any
evaluation of effectiveness to future periods is subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Our management, with the participation of our PEO, assessed the
effectiveness of our internal control over financial reporting as of December
31, 2008. Management concluded that, as of December 31, 2008, the Company's
internal control over financial reporting was effective.
This annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this annual report
19
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting
during the quarter ended December 31, 2008 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The table sets forth information as of the date of this report with respect
to our management:
NAME AGE TITLE
- ------------------------- -------------- ---------------------------------------
J. Ram Ajjarapu 40 President and Director
Aruna Raj Ajjarapu 34 Vice President, Treasurer and Director
J. RAM AJJARAPU. has been a board member and Chief Executive Officer since
November 2, 2007 (date of Inception) Mr. Ajjarapu has been President and Chief
Executive Officer of NexGen Biofuels, Inc. since August 2006and Nexgen Biofuels,
Ltd. Since December 31, 2007. Prior to joining NexGen Bio, Mr. Ajjarapu served
as President and a director of American Ethanol until he left the company in
July 2006. In 2004, he co-founded Wahoo Ethanol, LLC and Sutton Ethanol, LLC and
served as Managing Member until both were sold to American Ethanol in January
2006. While at Wahoo and Sutton, Mr.Ajjarapu negotiated EPC (Engineering
Procurement and Construction) agreements, as well as procurement and off-take
agreements. Mr. Ajjarapu was also instrumental in obtaining Tax Increment
Financing (TIF) of $10 million for each company, as well as sales tax refunds
and community grants. In 1995, he co-founded and served as President and
Director for 10-years of Global Information Technology, Inc, an IT outsourcing
and system design company. He co-founded and also served as Managing Director
for an Indian outsourcing company from 1997 to 2004. He received a Bachelors
degree in Electronics and Communication Engineering from The Institute of
Engineer (India) and a Masters in Business Administration from University of
South Florida.
ARUNA RAJ AJJARAPU. She has 10+ experience in finance, administration and HR
activities. She has been working as HR Manager with Global Information
Technology in Florida and last 2 years with NexGen Biofuels Ltd. She is an
entrepreneur with investments in Real Estate, IT, Biofuels both in USA and
India. She did Bachelors in Commerce (B.Com) and graduated from Osmania
University , India.
The term of office of each director expires at the Company's annual meeting
of stockholders or until their successors are duly elected and qualified.
Directors are not compensated for serving as such. Officers serve at the
discretion of the Board of Directors.
20
The term of office of our director expires at the Company's annual meeting
of stockholders or until his successor is duly elected and qualified. Our
director is not compensated for serving as such. Officers serve at the
discretion of the board of directors.
Conflicts of Interest.
Our management may become involved in the future with other companies that
have a business purpose similar to our. In such case, potential investors should
be aware of the following potential conflicts of interest:
o Our officers and director are not required to nor will they commit his
full time to our affairs and, accordingly, he may have conflicts of
interest in allocating management time among various business
activities.
o Our officers and director may in the future engage in any business
activities without restriction, including other shell companies that
have a business purpose similar to our company's.
o In the course of their other business activities, our officers and
director may become aware of business opportunities that may be
appropriate for presentation to us as well as to the other businesses
with which they are affiliated.
In general, officers and directors of a corporation incorporated under the
laws of the State of Nevada are required to present business opportunities to a
corporation if:
o the corporation could financially undertake the opportunity;
o the opportunity is within the corporation's line of business; and
o it would not be fair to the corporation and its stockholders for the
opportunity not to be brought to the attention of the corporation.
Accordingly, as a result of multiple business affiliations, our officers
and director may have similar legal obligations with respect to presenting
business opportunities meeting the above-listed criteria to multiple entities.
In addition, conflicts of interest may arise when our board evaluates a
particular business opportunity with respect to the above-listed criteria. We
cannot assure you that any conflicts that may arise will be resolved in our
favor. Under Nevada law and our articles of incorporation, our board of
directors has the power to renounce in advance, our interest or expectancy in
specified business opportunities or specified classes or categories of business
opportunities that are presented to us or to any of our officers, directors or
stockholders and may from time to time do.
21
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires officers,
directors and persons who own more than 10% of a registered class of our equity
securities of a company that has a class of common stock registered under the
Securities Exchange Act of 1934 to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and to furnish us with
copies of all forms filed pursuant to Section 16(a).
Based solely on a review of the copies of such reports furnished to us and
written representations from our officers and director that no other reports
were required, to our knowledge, we believe that our officers, director and
stockholders complied with all of the Section 16(a) filing requirements
applicable to them with respect to 2008, except that the annual statements to
report changes in beneficial ownership were filed late.
CODE OF ETHICS.
The Company has not adopted a code of ethics. Given the nature of the
Company's business, its limited stockholder base and current composition of
management, the board of directors does not believe that the Company requires a
code of ethics at this time. The board of directors takes the position that
management of a Target Business will adopt a code of ethics that will be
suitable for its operations after the Company consummates a Business
Combination.
AUDIT COMMITTEE.
The board of directors has not established an audit committee nor adopted
an audit committee charter, rather, the entire board of directors serves the
functions of an audit committee. Given the nature of the Company's business, its
limited stockholder base and current composition of management, the board of
directors does not believe that the Company requires an audit committee at this
time. The board of directors takes the position that management of a Target
Business will make a determination as to whether establish an audit committee
and adopt an audit committee charter that will be suitable for its operations
after the Company consummates a Business Combination.
STOCKHOLDER COMMUNICATIONS.
The board of directors has not adopted a process for security holders to
send communications to the board of directors. Given the nature of the Company's
business, its limited stockholder base and current composition of management,
the board of directors does not believe that the Company requires a process for
security holders to send communications to the board of directors at this time.
The board of directors takes the position that management of a Target Business
will establish such a process that will be appropriate for its operations after
the Company consummates a Business Combination.
ITEM 11. EXECUTIVE COMPENSATION.
The Company has not paid any cash compensation to any person since
inception and will not pay any compensation until it affects a Business
Combination, at which time compensation shall be in the discretion of then
current management. Current management expects to devote only such time to the
affairs of the Company as required to affect the Company's business plan.
22
The Company has not adopted any retirement, pension, profit sharing, stock
option or insurance programs or other similar programs for the benefit of its
employees.
The Company does not have a compensation committee. Given the nature of the
Company's business, its limited stockholder base and the current composition of
management, the board of directors does not believe that the Company requires a
compensation committee at this time. The board of directors takes the position
that management of a Target Business will take such action to establish and seat
a compensation committee that will be suitable for its operations at such time
as the Company consummates a Business Combination, if ever.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The following table sets forth, as of March 25, 2009, certain information
regarding beneficial ownership of our common stock by each person who is known
by us to beneficially own more than 5% of our common stock. The table also
identifies the stock ownership of our director and executive officers. Except as
otherwise indicated, the stockholders listed in the table have sole voting and
investment powers with respect to the shares indicated.
The applicable percentage of ownership is based on 50,000,000 shares
outstanding as of March 25, 2009.
NAME OF AMOUNT OF PERCENT OF OUTSTANDING
BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP SHARES OF CLASS OWNED (2)
- ----------------------------------- ----------------------------- --------------------------------
International Capital Partners, LLC 50,000,000 100
(1) The address for each of the persons named in the table above is c/o the
Company.
(2) Aruna Raj Ajjarapu is the controlling shareholder of International Capital
Partners, LLC
COMPENSATION PLANS.
We have not adopted any compensation plans for the benefit of our
employees, representatives or consultants. The Company does not have outstanding
any options, warrants or other rights outstanding that entitle anyone to acquire
shares of capital stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
RELATED PARTY TRANSACTIONS.
On March 13, 2008, the Company executed a promissory note in favor of
International Capital Partners, LLC, a limited liability company of which Aruna
Raj Ajjarapu, our vice President, Treasurer and Director, is the controlling
shareholder, in the principal amount of $3,650 payable on demand with interest
calculated at the rate of 7% per annum, which evidences funds loaned to the
Company since inception. The proceeds from the loan were utilized by the Company
to cover the costs and expenses incurred and to be incurred in connection with
the organization of the Company, the preparation and filing of this Registration
Statement and the due diligence process. As of December 31, 2008, total interest
accrued o the loan aggregated $1.113.
23
DIRECTOR INDEPENDENCE.
The Company has not established its own definition for determining whether
its directors and nominees for directors are "independent" nor has it adopted
any other standard of independence employed by any national securities exchange
or inter-dealer quotation system.
Current management cannot predict whether incoming management of a Target
Business upon the consummation of a Business Combination, if such transaction
occurs, will adopt a definition of "independence" or establish any committees of
the board, such as an audit committee, a compensation committee or nominating
committee.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
AUDIT FEES. The aggregate fees billed for professional services rendered by
Traci J. Anderson, CPA for the audits of the Company's annual financial
statements for the fiscal year ending on December 31, 2008 for the fiscal year
were $2,500.
ALL OTHER FEES. The aggregate fees billed for services rendered to the Company
by Traci J. Anderson, CPA, other than the audit services, audit-related
services, and tax services, were $0 for the 2008 fiscal year.
PRE-APPROVAL POLICY. The Company has not established an audit committee nor
adopted an audit committee charter. Rather, it is the responsibility of the
entire board of directors to serve the functions of an audit committee and to
pre-approve all audit and permitted non-audit services to be performed by the
independent auditors, such approval to take place in advance of such services
when required by law, regulation, or rule, subject to the de minimis exceptions
for non-audit services described in Section 10A(i)(1)(B) of the Securities
Exchange Act of 1934 that are approved by the board prior to completion of the
audit.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) Financial Statements
The following financial statements are filed as part of this report:
The financial statements of International Energy Holdings Corp.and the
report of independent registered public accounting firm thereon are set
forth under Part II, Item 8 of this report.
Balance Sheet as of December 31, 2008.
Statement of Income for the period from inception through December 31,
2008.
Statement of Changes in Stockholders' Equity for the period from
inception through December 31, 2008.
Statement of Cash Flows for the period from inception through December
31, 2008.
Notes to Financial Statements.
24
(b) Exhibits.
The following are filed as exhibits to this report:
Exhibit No. Description
- ----------- ----------------------------------------------------------------
31.1 Certification of Principal Executive Officer and Principal
Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a),
promulgated under the Securities and Exchange Act of 1934,
as Amended.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
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 on March 30, 2009.
INTERNATIONAL ENERGY HOLDINGS CORP.
By: /s/ J. RAM AJJARAPU
-----------------------
J. Ram Ajjarapu
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 indicated on March 30, 2009.
SIGNATURE TITLE
/s/ J. RAM AJJARAPU President, and Director
- --------------------
J. Ram Ajjarapu
25
