Filed Pursuant to Rule 424(b)(3)
File Number 333-153899
PROSPECTUS SUPPLEMENT NO. 1
to Prospectus declared
effective on October 20, 2008
(Registration No. 333-153899)
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
768,000 Shares of Common Stock.
This Prospectus Supplement No. 1 supplements our Prospectus dated October 20, 2008. You should read this Prospectus Supplement No. 1 together with the Prospectus.
Selling shareholders are offering up to 768,000 shares of common stock. The selling shareholders will offer their shares at $.05 per share until our shares are quoted on the OTC Bulletin Board and, assuming we secure this qualification, thereafter at prevailing market prices or privately negotiated prices. We will not receive proceeds from the sale of shares from the selling shareholders.
This Prospectus Supplement includes our Current Report on Form 10-QSB filed by us with the Securities and Exchange Commission on February 3, 2009.
Prior to this offering, there has been no market for our securities. Our common stock is not now listed on any national securities exchange, the NASDAQ stock market, or the OTC Bulletin Board. There is no guarantee that our securities will ever trade on the OTC Bulletin Board or other exchange.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is February 5, 2009
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the quarterly period ended: November 30, 2008 |
¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT: For the transition period from to |
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(Name of small business issuer in its charter)
NEVADA | 32-0237237 |
(State or other jurisdiction | (I.R.S. employer |
of incorporation or organization) | identification number) |
1701 E. Woodfield Rd. Suite 915, Schaumburg, IL 60173
(Address of principal executive offices and zip code)
800-884-1189
Issuer's telephone number:
SEC File Number: 333-153899
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 35,490,000 shares of common stock outstanding as of November 30, 2008.
INDEX
PART I-FINANCIAL INFORMATION | 3 |
Item 1. Financial Statements | 3 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 |
Item 3. Quantitative and Qualitative Disclosure about Market Risk | 19 |
Item 4. Controls and Procedures | 19 |
PART II - OTHER INFORMATION | 20 |
Item 1. Legal Proceedings | 20 |
Item 1A: Risk Factors | 20 |
Item 2. Changes in Securities | 20 |
Item 3. Defaults upon Senior Securities. | 21 |
Item 4. Submission of Matters to a Vote of Security Holders. | 21 |
Item 5. Other Information. | 21 |
Item 6. Exhibits | 21 |
2
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO CONDENSED FINANCIAL STATEMENTS
Condensed Balance Sheets as of November 30, 2008 (unaudited) and February 29, 2008 | 4 |
Condensed Statements of Operations for the nine and three months ended November 30, 2008 and period February 28, 2008 (inception) through November 30, 2008 (unaudited) | 5 |
Condensed Statement of Changes in Stockholders’ Equity (Deficit) for the periods from February 28, 2008 (inception) to February 29, 2008 and the nine months ended November 30, 2008 (unaudited) | 6 |
Condensed Statements of Cash Flows for the nine months ended August 31, 2008 and period February 28, 2008 (inception) through November 30, 2008 (unaudited) | 7 |
Notes to Condensed Financial Statements (unaudited) | 8 |
3
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
NOVEMBER 30, 2008 (UNAUDITED) AND FEBRUARY 29, 2008
UNAUDITED | ||||||||
NOVEMBER 30, | FEBRUARY 29, | |||||||
2008 | 2008 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 3,308 | $ | - | ||||
Prepaid expenses | - | 3,000 | ||||||
Total Current Assets | 3,308 | 3,000 | ||||||
Property and equipment, net of depreciation | 3,616 | - | ||||||
OTHER ASSETS | ||||||||
Deferred offering costs, net of amortization | - | 17,199 | ||||||
Deposits | 6,400 | - | ||||||
Total Other Assets | 6,400 | 17,199 | ||||||
TOTAL ASSETS | $ | 13,324 | $ | 20,199 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
LIABILITIES | ||||||||
Current Liabilities: | ||||||||
Due to officer | $ | 40,228 | $ | - | ||||
Deferred revenue | 7,730 | - | ||||||
Accrued compensation | 51,875 | - | ||||||
Accounts payable | 32,912 | - | ||||||
Total Current Liabilities | 132,745 | - | ||||||
Total Liabilities | 132,745 | - | ||||||
Commitments | - | - | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
Preferred stock, $.001 Par Value; 25,000,000 shares authorized | ||||||||
and no shares issued and outstanding, respectively | - | - | ||||||
Common stock, $.001 Par Value; 100,000,000 shares authorized | ||||||||
and 35,490,000 and 52,000,000 shares issued and outstanding, respectively | 35,490 | 52,000 | ||||||
Additional paid-in capital | 247,260 | - | ||||||
Subscriptions receivable | - | (25,267 | ) | |||||
Deficits accumulated during the development stage | (402,171 | ) | (6,534 | ) | ||||
Total Stockholders' Equity (Deficit) | (119,421 | ) | 20,199 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 13,324 | $ | 20,199 |
The accompanying notes are an integral part of these financial statements.
4
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
FOR THE NINE AND THREE MONTHS ENDED NOVEMBER 30, 2008
WITH CUMULATIVE TOTALS SINCE FEBRUARY 28, 2008 (INCEPTION) (UNAUDITED)
NINE MONTHS | THREE MONTHS | CUMULATIVE TOTALS SINCE | ||||||||||
ENDED | ENDED | INCEPTION | ||||||||||
NOVEMBER 30, 2008 | NOVEMBER 30, 2009 | FEBRUARY 28, 2008 | ||||||||||
OPERATING REVENUES | ||||||||||||
Sales | $ | - | $ | - | $ | - | ||||||
COST OF SALES | 19,614 | 19,614 | 19,614 | |||||||||
GROSS PROFIT (LOSS) | (19,614 | ) | (19,614 | ) | (19,614 | ) | ||||||
OPERATING EXPENSES | ||||||||||||
Research and development | - | - | - | |||||||||
Professional, consulting and marketing fees | 325,273 | 52,295 | 325,273 | |||||||||
Other general and administrative expenses | 50,850 | 19,340 | 57,384 | |||||||||
Total Operating Expenses | 376,123 | 71,635 | 382,657 | |||||||||
LOSS BEFORE OTHER INCOME | (395,737 | ) | (91,249 | ) | (402,271 | ) | ||||||
OTHER INCOME | ||||||||||||
Interest income | 100 | - | 100 | |||||||||
Total Other Income | 100 | - | 100 | |||||||||
NET LOSS BEFORE PROVISION FOR INCOME TAXES | (395,637 | ) | (91,249 | ) | (402,171 | ) | ||||||
Provision for Income Taxes | - | - | - | |||||||||
NET LOSS APPLICABLE TO COMMON SHARES | $ | (395,637 | ) | $ | (91,249 | ) | $ | (402,171 | ) | |||
NET LOSS PER BASIC AND DILUTED SHARES | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | |||
WEIGHTED AVERAGE NUMBER OF COMMON | ||||||||||||
SHARES OUTSTANDING | 45,848,524 | 35,490,000 | 45,892,939 |
The accompanying notes are an integral part of these financial statements.
5
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE NINE MONTHS ENDED NOVEMBER 30, 2008 AND PERIOD FEBRUARY 28, 2008 (INCEPTION) THROUGH NOVEMBER 30, 2008
Deficits | ||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-in | Subscriptions | During the Development | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Receivable | Stage | Total | |||||||||||||||||||||||||
Balance - February 28, 2008 | - | $ | - | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
Shares issued to founder for cash and subscriptions receivable | - | - | 50,000,000 | 50,000 | - | (25,267 | ) | - | 24,733 | |||||||||||||||||||||||
Shares iissued for services rendered | - | - | 2,000,000 | 2,000 | - | - | - | 2,000 | ||||||||||||||||||||||||
Net loss for the period February 28, 2008 through February 29, 2008 | - | - | - | - | - | - | (6,534 | ) | (6,534 | ) | ||||||||||||||||||||||
Balance February 29, 2008 | - | - | 52,000,000 | 52,000 | - | (25,267 | ) | (6,534 | ) | 20,199 | ||||||||||||||||||||||
Shares iissued for cash | - | - | 150,000 | 150 | 7,350 | - | - | 7,500 | ||||||||||||||||||||||||
Shares iissued for services rendered | - | - | 3,340,000 | 3,340 | 163,660 | - | - | 167,000 | ||||||||||||||||||||||||
Payment of subscriptions receivable | - | - | - | - | - | 25,267 | - | 25,267 | ||||||||||||||||||||||||
Cancelation of shares by founder for no consideration | - | - | (20,000,000 | ) | (20,000 | ) | 20,000 | - | - | - | ||||||||||||||||||||||
Contributed capital | - | - | - | - | 56,250 | - | - | 56,250 | ||||||||||||||||||||||||
Net loss for the nine months ended November 30, 2008 | - | - | - | - | - | - | (395,637 | ) | (395,637 | ) | ||||||||||||||||||||||
Balance November 30, 2008 | - | $ | - | 35,490,000 | $ | 35,490 | $ | 247,260 | $ | - | $ | (402,171 | ) | $ | (119,421 | ) |
The accompanying notes are an integral part of these financial statements.
6
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED NOVEMBER 30, 2008
WITH CUMULATIVE TOTALS SINCE FEBRUARY 28, 2008 (INCEPTION) (UNAUDITED)
CUMULATIVE | ||||||||
NINE MONTHS | TOTALS SINCE | |||||||
ENDED | INCEPTION | |||||||
NOVEMBER 30, 2008 | FEBRUARY 28, 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (395,637 | ) | $ | (402,171 | ) | ||
Adjustments to reconcile net loss to net cash | ||||||||
used in operating activities: | ||||||||
Depreciation | 797 | 797 | ||||||
Write-off of offering costs | 20,199 | - | ||||||
Shares issued for services | 167,000 | 169,000 | ||||||
Contributed capital by founder | 56,250 | 56,250 | ||||||
Changes in assets and liabilities | ||||||||
(Increase) in deposits | (6,400 | ) | (6,400 | ) | ||||
Increase in deferred revenue | 7,730 | 7,730 | ||||||
Increase in accounts payable | 32,912 | 32,912 | ||||||
Increase in accrued compensation | 51,875 | 51,875 | ||||||
Total adjustments | 330,363 | 312,164 | ||||||
Net cash (used in) operating activities | (65,274 | ) | (90,007 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITES | ||||||||
Acquisition of property and equipment | (4,413 | ) | (4,413 | ) | ||||
Net cash (used in) investting activities | (4,413 | ) | (4,413 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITES | ||||||||
Proceeds from issuance of common stock and collection | ||||||||
of subscriptions receivable | 32,767 | 57,500 | ||||||
Proceeds of officer loans | 40,228 | 40,228 | ||||||
Net cash provided by financing activities | 72,995 | 97,728 | ||||||
NET INCREASE (DECREASE) IN | ||||||||
CASH AND CASH EQUIVALENTS | 3,308 | 3,308 | ||||||
CASH AND CASH EQUIVALENTS - | ||||||||
BEGINNING OF PERIOD | - | - | ||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 3,308 | $ | 3,308 | ||||
CASH PAID DURING THE PERIOD FOR: | ||||||||
Interest expense | $ | - | $ | - | ||||
Income taxes | $ | - | $ | - |
The accompanying notes are an integral part of these financial statements.
7
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 1- | ORGANIZATION AND BASIS OF PRESENTATION |
International Development and Environmental Holdings (the “Company”), is a Nevada corporation with its principal corporate offices in Chicago, Illinois. The Company is in the process of organizing itself and developing its main line of business which is environmental geological site assessment and remediation. The Company has registered and may operate under the following assumed corporate names: (1) Global Environmental Company (NV); (2) Global Environment Company (IL); (3) Global Architecture & Engineering Company (NV); (4) Global Development & Construction Company (NV); and (5) Global Real Estate & Finance Company (NV).
The unaudited condensed financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the annual financial statements presented in the Company’s registration statement on Form S-1 for the period February 28, 2008 (inception) through February 29, 2008. While management believes the procedures followed in preparing these condensed financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.
These condensed unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.
8
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 1- | ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED) |
Going Concern
As shown in the accompanying financial statements which have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern, the Company has incurred operating losses of $395,637 and $402,171 in the nine months ended November 30, 2008 and period February 28, 2008 (inception) through November 30, 2008, respectively. The Company has not recorded any revenues and is considered to be a development stage company.
The Company is currently in the development stage and their activities consist solely of corporate formation, raising capital, and attempting to secure environmental remediation contracts.
There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations and carry out its business plan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
Management’s plan in this regards, include seeking environmental remediation contracts from potential clients and raising additional funds through a private placement offering of the Company’s common stock. In fiscal 2009, the Company has raised an additional $7,500 through November 30, 2008. Management believes that the Company’s business development and capital raising activities will provide them with the ability to continue as a going concern.
The financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.
NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Development Stage Company
The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by Development Stage Enterprises”. The Company has devoted substantially all of its efforts to the corporate formation, the raising of capital and attempting to secure environmental remediation contracts.
9
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates, including, but not limited to, the valuation of common stock issued for services, valuation of non-cash contributed services, bad debts, income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments and other short-term investments with an initial maturity of three months or less to be cash equivalents. The Company as of November 30, 2008 has no cash equivalents.
Fair Value of Financial Instruments
The carrying amounts reported in the condensed balance sheet for cash and cash equivalents, and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments.
Research and Development
The Company incurs costs on activities that relate to the securing of environmental remediation contracts. Research and development costs are expensed as incurred. The Company has expensed its payments in connection with research and development costs.
Deferred Offering Costs
The Company has deferred external costs associated with its planned initial public offering in fiscal 2009, at which time the costs will be charged against the capital raised or upon effectiveness of the offering. Should the offering be terminated, the costs will be immediately charged to operations.
10
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
Revenue Recognition
The Company commenced receipt of receipts for services yet to be provided. The Company has recorded these as deferred revenue on the balance sheet. The Company will be commencing recognition of revenues in the fourth fiscal quarter of 2009. The Company will recognize revenue from the contracts they enter into for environmental remediation. The Company will recognize revenue in accordance with the terms of those contracts.
Accounts Receivable
The Company when it will conduct business will extend credit based on an evaluation of the customers’ financial condition, generally without requiring collateral. Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer. The Company will monitor exposure to credit losses and maintain allowances for anticipated losses considered necessary under the circumstances. The Company has not recorded any receivables, and therefore no allowance for doubtful accounts at November 30, 2008 and February 29, 2008, respectively.
Accounts receivable will generally be due within 30 days and collateral is not required.
Income Taxes
The Company follows SFAS No. 109, “Accounting for Income Taxes”. Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance has been provided for the Company’s net deferred tax asset, due to the uncertainly of the realization of the net operating losses.
Segment Information
The Company operates in one segment. |
Accounting Basis
The Company uses the accrual basis of accounting for financial statement reporting. Accordingly, expenses are realized when the obligation is incurred. |
11
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
Property and Equipment
Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to income as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized at cost. The cost and accumulated depreciation related to assets sold or retired are removed from the accounts and any gain or loss is credited or charged to income in the period of disposal. For financial reporting purposes, depreciation is provided on the straight-line method over the useful lives of the depreciable assets. |
(Loss) Per Share of Common Stock
The Company complies with the requirements of SFAS No. 128, “Earnings Per Share”. Basic net (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share includes additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. The Company has no common stock equivalents. Additionally, when the Company reports a net loss common stock equivalents would not be included in the calculation of diluted earnings per share because to do so this would be antidilutive for the periods presented.
Stock-Based Compensation
On December 16, 2004, the Financial Accounting Standards Board (“FASB”) published Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (“SFAS 123R”). SFAS 123R requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of SFAS 123R include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans. The provisions of SFAS 123R, as amended, are effective for small business issuers beginning as of the next interim period after December 15, 2005.
The Company has elected to use the modified–prospective approach method. Stock-based compensation expense for all awards granted is based on the grant-date fair values estimated in accordance with the provisions of FAS 123R. The Company recognizes these compensation costs, net of an estimated forfeiture rate, on a pro rata basis over the requisite service period of each vesting tranche of each award. The Company considers voluntary termination behavior as well as trends of actual option forfeitures when estimating the forfeiture rate.
12
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
Stock-Based Compensation (Continued)
The Company measures compensation expense for its non-employee stock-based compensation under the Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) Issue No. 96-18, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital.
Recent Accounting Pronouncements
In September 2006, the FASB issued SFAS 157, “Fair Value Measurements.” This standard defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure about fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. Early adoption is encouraged. The adoption of SFAS 157 is not expected to have a material impact on the financial statements.
In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115”, (“FAS 159”) which permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. A business entity is required to report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. This statement is expected to expand the use of fair value measurement. FAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, changes in a parent’s ownership of a noncontrolling interest, calculation and disclosure of the consolidated net income attributable to the parent and the noncontrolling interest, changes in a parent’s ownership interest while the parent retains its controlling financial interest and fair value measurement of any retained noncontrolling equity investment.
SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. Management is determining the impact that the adoption of SFAS No. 160 will have on the Company’s financial position, results of operations or cash flows.
13
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
Recent Accounting Pronouncements (Continued)
In December 2007, the FASB issued SFAS 141R, Business Combinations (“SFAS 141R”), which replaces FASB SFAS 141, Business Combinations. This Statement retains the fundamental requirements in SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R will require an entity to record separately from the business combination the direct costs, where previously these costs were included in the total allocated cost of the acquisition. SFAS 141R will require an entity to recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, at their fair values as of that date. This compares to the cost allocation method previously required by SFAS No. 141. SFAS 141R will require an entity to recognize as an asset or liability at fair value for certain contingencies, either contractual or non-contractual, if certain criteria are met.
Finally, SFAS 141R will require an entity to recognize contingent consideration at the date of acquisition, based on the fair value at that date. This Statement will be effective for business combinations completed on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption of this standard is not permitted and the standards are to be applied prospectively only. Upon adoption of this standard, there would be no impact to the Company’s results of operations and financial condition for acquisitions previously completed. The adoption of SFAS No. 141R is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.
In December 2007, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 110, “Use of a Simplified Method in Developing Expected Term of Share Options” (“SAB 110”). SAB 110 expenses the current view of the staff that it will accept a company’s election to use the simplified method discussed in Staff Accounting Bulletin No. 107, “Share Based Payment”, (“SAB 107”), for estimating the expected term of “plain vanilla” share options regardless of whether the company has sufficient information to make more refined estimates. SAB 110 became effective for the Company on January 1, 2008. The adoption of SAB 110 is not expected to have a material impact on the Company’s financial position.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date and are not expected to have a material impact on the financial statements upon adoption.
14
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 3- | STOCKHOLDERS’ EQUITY |
Common Stock
As of November 30, 2008, the Company had 100,000,000 shares of common stock authorized with a par value of $.001. The Company has 35,490,000 common shares issued and outstanding at November 30, 2008.
The Company was originally incorporated with 200,000,000 shares of common stock and on March 20, 2008, the Company amended their articles of incorporation to increase this to 900,000,000 shares. Finally, on May 12, 2008, the Company again amended their articles of incorporation to reduce the number of authorized common shares to 100,000,000 shares and increase the par value to $.001.
All references in the accompanying condensed financial statements to common shares, par values and per share amounts have been retroactively adjusted to reflect these amendments.
During the period February 28, 2008 (inception) through November 30, 2008, the Company issued 50,000,000 shares of common stock to its founder at $.001 per share or $50,000 in initial capital to fund the Company’s development efforts.
Additionally on February 28, 2008, the Company issued 2,000,000 shares of common stock for services rendered which were valued at $2,000 based on the $.001 value the shares for cash were issued at.
During the period March 1, 2008 through November 30, 2008, the Company issued an additional 150,000 shares of common stock at $.05 per share in a private placement raising an aggregate of $7,500, and issued 3,340,000 shares of stock during this nine month period at the $.05 value for services rendered at a value of $167,000.
The Company’s founder returned 20,000,000 shares of common stock to the Company for cancelation for no consideration on August 14, 2008.
Preferred Stock
As of November 30, 2008, the Company had 25,000,000 shares of preferred stock authorized with a par value of $.001. The Company has not issued any preferred shares as of November 30, 2008.
The Company was originally incorporated with 20,000,000 shares of preferred stock and on March 20, 2008, the Company amended their articles of incorporation to increase this to 600,000,000 shares. Finally, on May 12, 2008, the Company again amended their articles of incorporation to reduce the number of authorized common shares to 25,000,000 shares and increase the par value to $.001.
15
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 3- | STOCKHOLDERS’ EQUITY (CONTINUED) |
Contributed Capital
For the nine months ended November 30, 2008, the Company’s President and founding shareholder has provided services to the Company without the expectation of receiving any compensating payment. The value of these services was estimated at $56,250, based upon the value of another executive officer of the Company presently under contract. Accordingly, the Company has recorded the value of these services as a charge to operations and a corresponding credit to additional paid in capital in the accompanying financial statements.
NOTE 4- | PROVISION FOR INCOME TAXES |
Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.
At November 30, 2008 deferred tax assets consist of the following:
Net operating losses | $ | 136,738 | ||
Valuation allowance | (136,738 | ) | ||
$ | - |
At November 30, 2008, the Company had a net operating loss carryforward in the amount of $402,171 available to offset future taxable income through 2028. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods. A reconciliation of the Company’s effective tax rate as a percentage of income before taxes and federal statutory rate for the nine months ended November 30, 2008 is summarized as follows:
2008 | ||||
Federal statutory rate | (34.0 | )% | ||
State income taxes, net of federal benefits | (6.2 | ) | ||
Change in federal tax rate apportionment | 19.0 | |||
Valuation allowance | 21.2 | |||
0 | % |
16
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2008 (UNAUDITED)
NOTE 5- | COMMITMENT – OPERATING LEASES |
The Company entered into three leases for its corporate offices under terms of non-cancelable operating leases. The first lease term is from June 1, 2008 through November 30, 2008 and requires a $3,458 monthly lease payment. The second lease consists of a sublease of office space from a related party, which is a business affiliated with the Company’s founding shareholder, officer and director. The sublease term runs from August 1, 2008 through January 31, 2010 and requires a $1,464 monthly lease payment. The third lease consists of a sublease of office space. The sublease term runs from September 1, 2008 through August 31, 2009 and required the issuance of 10,000 shares of Company common stock as consideration for the entire lease term. The value of the common stock was at $.05 per share or $500.
Future minimum lease payments for the first two leases are as follows for the period ending November 30:
2009 | $ | 59,439 | ||
2010 | 2,928 | |||
Total | $ | 62,367 |
NOTE 6- | PROPERTY AND EQUIPMENT |
A summary of property and equipment as of November 30, 2008 is as follows:
Software | $ | 4,413 | ||
Accumulated depreciation | ( 797 | ) | ||
Total, net | $ | 3,616 |
Depreciation expense for the nine months ended November 30, 2008 was $797.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, the Financial Statements of the Company and Notes thereto included elsewhere in this Report. Historical results and percentage relationships among any amounts in these financial statements are not necessarily indicative of trends in operating results for any future period. The statements, which are not historical facts contained in this Report, including this Plan of Operations, and Notes to the Financial Statements, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information, and are subject to various risks and uncertainties. Future events and the Company's actual results may differ materially from the results reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, dependence on existing and future key strategic and strategic end-user customers, limited ability to establish new strategic relationships, ability to sustain and manage growth, variability of operating results, the Company's expansion and development of new service lines, marketing and other business development initiatives, the commencement of new engagements, competition in the industry, general economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the service requirements of its clients, the potential liability with respect to actions taken by its existing and past employees, risks associated with international sales, and other risks described herein and in the Company's other SEC filings.
The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock. As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under the Reform Act are unavailable to us.
PLAN OF OPERATIONS
We engage primarily in environmental remediation activities.
Although we have the four gas station remediation contracts, we have generated no revenues to date. These gas stations have had site evaluations completed and are awaiting for funding to remove the tanks and begin early action remediation, of which we hope to begin in the next 90 days. We have 52 other remediation contracts. We have commenced corrective action activity and are filing reports to the IEPA on two and the other 50 are awaiting evaluation and the procurement of financing to begin.
Development Stage Expenditures
Development stage expenditures during the period from inception on February 28, 2008 to November 30, 2008 were $382,657, which consisted primarily of selling, general and administrative expenses related to our formation and legal, accounting and other fees related to our formation and this offering.
Financial Condition, Liquidity and Capital Resources
Our principal capital resources have been acquired through the sale of shares of our common stock and loans from our president.
At November 30, 2008, we had total assets of $13,324 consisting of cash, property and equipment and deposits.
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At November 30, 2008, our total liabilities were $132,745, consisting of amounts due Mr. Huseyinof of $40,228 and accrued compensation to Mr. Huseyinof of $51,875 as well as accounts payable.
Cash Requirements
We intend to provide funding for our activities, if any, through a combination of the private placement of our equity securities, the public sales of equity securities and borrowing from commercial lenders or our president. Our president has orally agreed to provide us necessary funding to maintain minimal operations and fund the cost of our becoming a public company at interest of 5%, payable upon demand. At November 30, 2008, the amount advanced was $40,228. He is not obligated to do make any further advances. We have no agreement, commitment or understanding to secure any such funding from any other source.
We have no cash and are continuing operations by minimizing expenditures to the maximum extent possible and through the forbearance of our creditors. We are also focusing on short term Phase I, Phase II and tank inspections that reimburse in a shorter period of time.
Our independent auditors have indicated that there is substantial doubt about our ability to continue, as a going concern, over the next twelve months. There is uncertainty regarding our ability commence operations of our remediation business plan without additional financing. We have a history of operating losses, limited funds and no agreements, commitments or understandings to secure additional financing except as set forth above. Our future success is dependent upon our ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that we will be able to generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds. Our inability to obtain additional cash could have a material adverse affect on our financial position, results of operations and our ability to continue in existence.
Item 3. Quantitative and Qualitative Disclosure about Market Risk
Not Applicable
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of November 30, 2008, under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures as of November 30, 2008 and concluded that our disclosure controls and procedures were ineffective as of November 31, 2008 due to the following: We did not maintain effective controls to ensure appropriate segregation of duties as the same employees were responsible for the initiating and recording of transactions, thereby creating segregation of duties weaknesses. The material weakness relates to the lack of segregation of duties in that our CEO and CFO are the same person. In the preparation of financial statements, footnotes and financial data all of our financial reporting is carried out by our Chief Financial Officer, and we do not have an audit committee or independent CEO to monitor or review the work performed. We are, in fact, a small, relatively simple operation from a financial point of view. The lack of segregation of duties results from lack of a separate Chief Financial Officer with accounting technical expertise necessary for an effective system of internal control. In order to mitigate this material weakness to the fullest extent possible, as soon as our finances allow, we will hire an independent Chief Financial Officer.
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There were no changes in our internal control over financial reporting during the fiscal quarter ended August 31, 2008, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 1A: Risk Factors
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Changes in Securities
From March 2008 through August 2008, we issued 3,340,000 shares to six service providers at a price of $.05 per share or $162,000 in the aggregate based upon contemporaneous cash sales.
During the period from March 1, 2008 to September 19, 2008, we sold 150,000 shares of our common stock to 20 individuals at a price of $.05 per share for aggregate cash consideration of $7,500.
We relied upon Section 4(2) of the Securities Act of 1933, as amended for the above issuances.
We believed that Section 4(2) of the Securities Act of 1933 was available because:
· | None of these issuances involved underwriters, underwriting discounts or commissions. |
· | Restrictive legends were and will be placed on all certificates issued as described above. |
· | The distribution did not involve general solicitation or advertising. |
· | The distributions were made only to investors who were sophisticated enough to evaluate the risks of the investment. |
In connection with the above transactions, although some of the investors may have also been accredited, we provided the following to all investors:
· | Access to all our books and records. |
· | Access to all material contracts and documents relating to our operations. |
· | The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investors were given access. |
Prospective investors were invited to review at our offices at any reasonable hour, after reasonable advance notice, any materials available to us concerning our business. Prospective Investors were also invited to visit our offices.
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Item 3. Defaults upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits
Exhibit # | Name and/or Identification of Exhibit | |
31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
SIGNATURES
In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS | |||
February 3, 2009 | By: | /s/ PHILIP J. HUSEYINOF | |
PHILIP J. HUSEYINOF Chairman and CEO |
21
PROSPECTUS
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
768,000 Shares of Common Stock
Selling shareholders are offering up to 768,000 shares of common stock. The selling shareholders will offer their shares at $.05 per share until our shares are quoted on the OTC Bulletin Board and, assuming we secure this qualification, thereafter at prevailing market prices or privately negotiated prices. We will not receive proceeds from the sale of shares from the selling shareholders.
There are no underwriting commissions involved in this offering. We have agreed to pay all the costs of this offering. Selling shareholders will pay no offering expenses.
Prior to this offering, there has been no market for our securities. Our common stock is not now listed on any national securities exchange, the NASDAQ stock market, or the OTC Bulletin Board. There is no guarantee that our securities will ever trade on the OTC Bulletin Board or other exchange.
This offering is highly speculative and these securities involve a high degree of risk and should be considered only by persons who can afford the loss of their entire investment. See “Risk Factors” beginning on page 10.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
The date of this Prospectus is October 20, 2008.
1
SUMMARY INFORMATION AND RISK FACTORS | 3 |
Risk Factors | 5 |
Special Information Regarding Forward Looking Statements | 8 |
USE OF PROCEEDS | 9 |
DETERMINATION OF OFFERING PRICE | 9 |
DILUTION | 9 |
SELLING SHAREHOLDERS | 9 |
PLAN OF DISTRIBUTION | 10 |
LEGAL PROCEEDINGS | 12 |
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS | 12 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 13 |
DESCRIPTION OF SECURITIES | 14 |
EXPERTS | 14 |
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES LIABILITIES | 15 |
DESCRIPTION OF BUSINESS | 15 |
PLAN OF OPERATIONS | 18 |
DESCRIPTION OF PROPERTY | 19 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 19 |
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS | 19 |
EXECUTIVE COMPENSATION | 21 |
2
You should carefully read all information in the Prospectus, including the financial statements and their explanatory notes, under the Financial Statements prior to making an investment decision.
Organization
Our address is: 1701 E. Woodfield Rd Suite 915 Schaumburg, IL. 60173. Our telephone number is: 800.884.1189.
Business
We engage primarily in environmental remediation activities, as follows:
· | We will prepare for ourselves and third parties property risk assessment and due diligence reports as Phase I Environmental Site Assessment Process. |
· | We perform site subsurface geological investigation (soil and water) as Phase II Environmental Site Assessment Process. |
· | We will undertake site remediation. We offer the traditional “dig and haul” remediation in which contaminated soil is dug up and hauled away to be disposed. We are also able to offer a remediation technique in soil and groundwater known as bioremediation, utilizing enzymes and colloid solutions. Other types of remediate services are microbiological fungus (mold), asbestos contained materials (ACM), Polychlorinated Biphenyls (PCBs), and lead base paint (LBP). |
Our independent auditors have indicated that there is substantial doubt about our ability to continue, as a going concern, over the next twelve months.
We have developed a website at www.ideholdings.com. Nothing on that website is part of this Prospectus.
As of the date of this Prospectus, we had 35,490,000 shares of common stock outstanding.
The selling shareholders are offering up to 768,000 shares of common stock. The selling stockholders may offer their shares through public or private transactions, on or off OTCBB, at prevailing market prices, or at privately negotiated prices. We will pay all expenses of registering the securities, estimated at approximately $76,000. We will not receive any proceeds of the sale of these securities.
3
Financial Summary
Because this is only a financial summary, it does not contain all the financial information that may be important to you. Therefore, you should carefully read all the information in this Prospectus, including the financial statements and their explanatory notes before making an investment decision.
Statements of Operations Data
From | ||||||||
February 28, | ||||||||
Three Months | 2008 (inception) | |||||||
Ended | to | |||||||
May 31, 2008 | February 29, | |||||||
(unaudited) | 2008 | |||||||
Revenues | $ | - | $ | - | ||||
Operating expenses | 52,361 | 6,534 | ||||||
Loss from operations | (52,361 | ) | (6,534 | ) | ||||
Interest income | 100 | - | ||||||
Net loss | $ | (52,261 | ) | $ | (6,534 | ) | ||
Basic and diluted net loss per share | $ | - | $ | - | ||||
Basic and diluted weighted average number of common shares outstanding | 52,096,739 | 52,000,000 |
Balance Sheet Data
May 31, | ||||
2008 | ||||
Current Assets | $ | 10,086 | ||
Total Assets | $ | 41,037 | ||
Current Liabilities | $ | (23,782 | ) | |
Total Liabilities | $ | (23,782 | ) | |
Accumulated Deficit | $ | (58,795 | ) | |
Total Shareholders’ Equity (Deficit) | $ | 17,255 | ||
Working Capital Deficit | $ | (13,696 | ) |
4
In addition to the other information provided in this Prospectus, you should carefully consider the following risk factors in evaluating our business before purchasing any of our common stock.
Our lack of operating history makes it difficult for us to evaluate our future business prospects and make decisions in implementing our business plan. You are unable to determine whether we will ever become profitable, which increases your investment risk.
We did not begin operations until February 28, 2008. We have no operating history. Our business plan is speculative and unproven. There is no assurance that we will be successful in executing our business plan or that, even if we successfully implement our business plan, we will ever generate revenues or profits, which makes it difficult to evaluate our business. As a consequence, it is difficult, if not impossible, to forecast our future results based upon our historical data. Because of the uncertainties related to our lack of historical operations, we may be hindered in our ability to anticipate and timely adapt to increases or decreases in sales, revenues, or expenses. If we make poor operational decisions in implementing our business plan, we may never generate revenues or become profitable or incur losses, which may result in a decline in our stock price.
There is substantial doubt about our ability to continue, as a going concern, as a result of our lack of revenues and financial resources, and if we are unable to generate significant revenue or secure financing, we may be required to cease or curtail our operations.
Our lack of operating history and financial resources raise substantial doubt about our ability to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty, and if we are unable to generate significant revenue or secure financing, we may be required to cease or curtail our operations. If we do not or commence our remediation, real estate, financing, and related activities or if we do not secure funding to implement our business plan, we estimate current available financial resources will sustain our operations only through the next few months, and then only if funded by management.
Because we will need additional capital to implement our business plan and may not be able to obtain sufficient capital, we may be forced to limit the scope of our operations, and our revenues may be reduced.
In connection with implementing our business plans, we will experience increased capital needs and accordingly, we may not have sufficient capital to fund our future operations without additional capital investments. Our capital needs will depend on numerous factors, including the following:
our profitability; | |
our ability to secure contracts; | |
the effectiveness of our remediation processes; and | |
the amount of our capital expenditures, including real estate development projects. |
We cannot assure you that we will be able to obtain capital in the future to meet our needs. We have no sources of financing identified. If we cannot obtain additional funding, we may be required to:
limit our ability to implement our business plan; | |
limit our marketing efforts; and | |
decrease or eliminate capital expenditures. |
Even if we do find a source of additional capital, we may not be able to negotiate terms and conditions for receiving the additional capital that are acceptable to us. Any future capital investments could dilute or otherwise adversely affect the holdings or rights of our existing shareholders. In addition, new equity or convertible debt securities issued by us to obtain financing could have rights, preferences, and privileges senior to our Common Stock. Any additional financing may not be available to us, or if available, may not be on terms favorable to us.
We are in part dependent on the environmental remediation industry, which has experienced volatility in capital spending.
5
Our business will be significantly dependent upon our services to the environmental remediation industry as well as our real estate activities, with respect to environmentally impaired properties. Procurement of our services and our real estate development activities may be deferred as a result of many factors, including regulatory decisions, weather conditions, rising interest rates, clean-up specific financial situations, and general economic downturns. In the future, we may experience variability in operating results, on both an annual and a quarterly basis, as a result of these factors.
We face competitive pressures from a variety of companies in the markets we serve, which may reduce our revenues.
We are a small company in a highly competitive market. Some of our present and potential competitors have, or may have, substantially greater financial, marketing, technical, or manufacturing resources, and in some cases, greater name recognition and experience than we have. Some competitors may enter markets we serve and sell products at low prices in order to obtain market share. Our competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements. They may also be able to devote greater resources to the development, promotion, and sale of their products and services than we can. Current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our prospective customers. It is possible that new competitors or alliances, among current and new competitors, may emerge and rapidly gain significant market share. Other companies may also produce products that are equal or superior to our products, which could reduce our market share, reduce our overall sales, and require us to invest additional funds in new technology development. Our technology is new and we have no customers. We may face competition from other environmental remediation firms, with alternative technologies, that will be less costly to the client and result in our inability to secure projects or result in our inability to secure such projects at acceptable profit margins. If we cannot compete successfully against current or future competitors our revenues will be reduced.
If we cannot develop a market for and find customers to contract for our environmental remediation services from us on acceptable terms, we will not be able to establish this aspect of our business.
Our remediation process competes with more traditional environmental remediation processes, such as dig and haul. Acceptance of remediation, using our technology, depends upon a number of factors including:
· | the reliability of our technology solutions, |
· | potential users perception regarding our technology, and |
· | costs involved in adopting and integrating our technology. |
Our growth is dependent on, among other things, the size and pace at which the markets for our remediation services develop. If the markets do not grow as we anticipate, our growth plans will not be realized. Continued growth may be hindered, for many reasons, including whether our environmental remediation services will gain widespread acceptance in any commercial markets; whether demand will be sufficient to create a market large enough to produce any or significant revenue or earnings; products deemed to be superior to ours that are offered by our competitors; experiencing technical difficulty in utilizing our products; or our customers achieving their objectives by using alternative solutions.
The products we use in remediation projects entail an inherent risk of product liability claims; which, if they occur, could reduce our revenues or otherwise harm our financial condition.
Our business may be subject to product liability claims in the event that products we use in our business cause, or are alleged to result, in bodily injury, property damage, or other damages. We may not have adequate resources in the event of a successful claim against us. We have no insurance. In the event that we are held liable for a claim, which we are not insured, or for damages, such claim could reduce our cash flow or reduce our assets.
Our lack of an established brand name and relative lack of resources could negatively impact our ability to effectively compete in the market for applications used in our remediation , which could reduce the value of your investment.
6
We do not have an established brand name or reputation in the business of remediation, construction, or development. We also have a relative lack of resources to conduct our business operations. Thus, we may have difficulty effectively competing with companies that have greater name recognition and resources than we do. Our inability to promote and/or protect our brand name may have an adverse effect on our ability to compete effectively in the market.
Because insiders control our activities, they may cause us to act in a manner that is most beneficial to them and not to outside shareholders, which could cause us not to take actions that outside investors might view favorably.
Our executive officers, directors, and holders of 5% or more of our outstanding Common Stock beneficially own approximately 84% of our outstanding Common Stock. As a result, they effectively control all matters requiring director and stockholder approval; including the election of directors and the approval of significant corporate transactions, such as mergers and related party transactions. These insiders also have the ability to delay or perhaps even block, by their ownership of our stock, an unsolicited tender offer. This concentration of ownership could have the effect of delaying, deterring or preventing a change in control of our company that you might view favorably.
The success of our business is dependent upon the expertise of our CEO Philip Huseyinof. Because he is essential to our operations, you must rely on their management decisions. He will continue to control our business affairs after this filing. We have no written employment agreement with him. We have not obtained any key man life insurance relating to him. If we lose his services, we may not be able to hire and retain another CEO with comparable experience. As a result, the loss of Mr. Huseyinof’s services could reduce our revenues. We have no written employment agreement or covenant not to compete with Mr. Huseyinof.
We lack a public market for shares of our common stock, which may make it difficult for investors to sell their shares.
There is no public market for shares of our common stock and an active public market may not develop or be sustained. Therefore, investors may not be able to find purchasers for their shares of our common stock. Further, the stock market has experienced extreme volatility that has particularly affected the market prices of stock of many companies, particularly start-up companies like ours.
If our common stock is quoted on the OTC Bulletin Board which may have an unfavorable impact on our stock price and liquidity.
We anticipate that our common stock will be quoted on the OTC Bulletin Board. The OTC Bulletin Board is a significantly more limited market than the New York Stock Exchange or NASDAQ system. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.
We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.
The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. If our common stock becomes a “penny stock”, we may become subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule”. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.
7
For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.
There can be no assurance that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.
Because we do not have an audit or compensation committee, shareholders will have to rely on the board of directors, which is not independent, to perform these functions.
Our management has limited experience in managing the day to day operations of a public company and, as a result, we may incur additional expenses associated with the management of our company.
CEO Philip Huseyinof is responsible for our operations and SEC reporting. The requirements of operating as a small public company are new to the management team and the employees as a whole. This may require us to obtain outside assistance from legal, accounting, investor relations, or other professionals that could be more costly than planned. We may also be required to hire additional staff to comply with additional SEC reporting requirements and compliance under the Sarbanes-Oxley Act of 2002. Our failure to comply with reporting requirements and other provisions of securities laws could negatively affect our stock price and adversely affect our results of operations, cash flow and financial condition.
Although we believe that we currently have adequate internal control over financial reporting, we are exposed to risks from recent legislation requiring companies to evaluate internal control over financial reporting.
Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404") requires our management to report on the operating effectiveness of the Company's Internal Controls over financial reporting for the year ended February 28, 2010. Salberg & Company, P.A., our independent registered public accounting firm, will be required to attest to the effectiveness of our internal control over financial reporting beginning with the year ended February 28, 2010. We must establish an ongoing program to perform the system and process evaluation and testing necessary to comply with these requirements. We expect that the cost of this program will require us to incur expenses and to devote resources to Section 404 compliance on an ongoing basis.
It is difficult for us to predict how long it will take to complete Management's assessment of the effectiveness of our internal control over financial reporting for each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may not be able to complete the assessment and process on a timely basis. In the event that our Chief Executive Officer, Chief Financial Officer or independent registered public accounting firm determine that our internal control over financial reporting is not effective as defined under Section 404, we cannot predict how regulators will react or how the market prices of our shares will be affected.
Some of the statements in this Prospectus are “forward-looking statements.” These forward-looking statements involve certain known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among others, the factors set forth above under “Risk Factors.” The words “believe,” “expect,” “anticipate,” “intend,” “plan,” and similar expressions identify forward-looking statements. We caution you not to place undue reliance on these forward-looking statements. We undertake no obligation to update and revise any forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements in this document to reflect any future or developments. However, the Private Securities Litigation Reform Act of 1995 is not available to us as a penny stock issuer and thus we may not rely on the statutory safe harbor from liability for forward-looking statements. Further, Section 27A(b)(2)(D) of the Securities Act and Section 21E(b)(2)(D) of the Securities Exchange Act expressly state that the safe harbor for forward looking statements does not apply to statements made in connection with this offering.
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Not applicable. We will not receive any proceeds from the sale of shares offered by the selling shareholders.
Not applicable. The selling stockholders may offer their shares through public or private transactions, on or off OTCBB, at prevailing market prices, or at privately negotiated prices.
Not applicable. We are not offering any shares in this registration statement. All shares are being registered on behalf of our selling shareholders.
SELLING SHAREHOLDERS
The selling shareholders named below are selling the securities. The table assumes that all of the securities will be sold in this offering. However, any or all of the securities listed below may be retained by any of the selling shareholders, and therefore, no accurate forecast can be made as to the number of securities that will be held by the selling shareholders upon termination of this offering. These selling shareholders acquired their shares by purchase in a single private placement exempt from registration under section 4(2) any of the Securities Act of 1933. We believe that the selling shareholders listed in the table have sole voting and investment powers with respect to the securities indicated. We will not receive any proceeds from the sale of the securities by the selling shareholders. No selling shareholders are broker-dealers or affiliates of broker-dealers. To the extent that any successor(s) to the named selling shareholders wish to sell under this Prospectus, we must file a Prospectus supplement identifying such successors as selling shareholders.
Selling Shareholder | Shares to be offered by the Selling Stockholders | Percentage owned before Offering | Amount owned after the offering, assuming all shares sold | Percentage owned after the offering, assuming all shares sold | Relation- ship to us | |||||||
Michael T. Williams | 100,000 | .28 | % | 1,670,000 | 4.7 | % | Attorney | |||||
M. Brandon Williams | 100,000 | .28 | % | 80,000 | 0 | % | Attorney’s Affiliate | |||||
Maggie Ensley | 50,000 | .28 | % | 0 | 0 | % | Attorney’s Affiliate | |||||
Ronald Hardesty | 100,000 | .28 | % | 1,200,000 | 3.37 | % | Employee | |||||
Kevin L. Warmuth | 6,000 | .02 | % | 0 | 0 | % | Independent Contractor | |||||
Eric B. Andresen | 10,000 | .03 | % | 0 | 0 | % | ||||||
Allen M. Villanueva | 6,000 | .02 | % | 0 | 0 | % | ||||||
Savinder Singh | 10,000 | .03 | % | 0 | 0 | % | Employee | |||||
Michael Hathaway | 10,000 | .03 | % | 0 | 0 | % | ||||||
Chun Park | 10,000 | .03 | % | 0 | 0 | % | ||||||
Ryan and Sarah Cole | 10,000 | .03 | % | 0 | 0 | % |
Pivo Associates/Richard Oravec, Principal | 100,000 | .28 | % | 1,670,000 | 0 | % | Public Relations Consultant | |||||
Donna Lentol | 50,000 | 180,000 | ||||||||||
Timothy J. Bachara | 10,000 | .03 | % | 0 | 0 | % | ||||||
Jerry Villanueva | 6,000 | .02 | % | 0 | 0 | % | ||||||
John Gotschall | 6,000 | .02 | % | 0 | 0 | % | ||||||
Scott K. Walters | 6,000 | .02 | % | 0 | 0 | % | ||||||
Patrick E. Pieroni | 6,000 | .02 | % | 0 | 0 | % | ||||||
Caroline H. Warmuth | 12,000 | .033 | % | 0 | ||||||||
Richard N. Viken and Carmella Viken (Jointly) and Carmella Viken (Ind.) | 6,000 | .02 | % | 0 |
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Benedict J. and Erin M. Bruno (Jointly) | 6,000(Jointly) | .02 | % | 0 | % | 0 | % | |||
Benedict J. Bruno (Individual) | 50,000(Individual) | .15 | % | 0 | ||||||
Dominick J. Divenere | 10,000 | .03 | % | 0 | ||||||
Jason Ehret | 6,000 | .02 | % | 0 | ||||||
Anthony Anish | 10,000 | .03 | % | 0 | Leessor (CA.office | |||||
George Colin | 10,000 | .03 | % | 0 | Shareholder | |||||
David Tuzzolino | 10,000 | .03 | % | 0 | Independent Consultant | |||||
Roseann Huseyinof | 10,000 | .03 | % | 0 | Family | |||||
Johnny Huseyinof | 10,000 | .03 | % | 0 | Family | |||||
Barbara Kowalewska | 10,000 | .03 | % | 0 | Family | |||||
Frank J. Bruno | 10,000 | .03 | % | 0 | Family | |||||
Ronald S. Slager | 6,000 | .02 | % | 0 | ||||||
Troy J. Heishman | 6,000 | .02 | % | 0 | ||||||
TOTAL | 768,000 | 2.16 | % | Family |
Blue Sky
Thirty-eight states and the District of Columbia have what is commonly referred to as a “manual exemption” for secondary trading of securities such as those to be resold by Selling Stockholders under this registration statement. In these states, so long as we obtain and maintain a listing in Standard and Poor’s Corporate Manual, secondary trading can occur without any filing, review or approval by state regulatory authorities in these states. These states are: Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, Washington, West Virginia and Wyoming. We cannot secure this listing, and thus this qualification, until after this registration statement is declared effective. Once we secure this listing, secondary trading can occur in these states without further action.
All our shareholders currently reside in New York, Illinois and California or the states listed above. We will make the appropriate filings in, and have complied with all secondary trading exemptions in such states, to permit sales of the securities registered in this offering.
Our common stock is not currently quoted on the OTCBB. No market may ever develop for our stock. The selling stockholders may sell any of its common shares offered under this Prospectus from time to time. Sales may be made directly or through brokers or dealers in connection with trades by the selling stockholders through the OTCBB or otherwise. To the extent required by applicable law, a supplement to the Prospectus relating to the common shares being offered will set forth the terms of the offering of the common shares, including the name or names of any underwriters, dealers or agents, the purchase price of the common shares and the proceeds to the selling stockholders from such sale, any delayed delivery arrangements, any underwriting discounts and other items constituting underwriters' compensation, the initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers.
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If dealers are used in the sale of common shares with respect to which this Prospectus is delivered or with respect to any block trades, the selling shareholder will sell such common shares to the dealers as principals. The dealers may then sell such common shares to the public at varying prices to be determined by such dealers at the time of resale. The name of the dealers and the terms of the transaction will be set forth in the Prospectus supplement relating to the extent required by law.
Upon our being notified by a selling stockholders of any change in the identity of the selling stockholders or that any material arrangement has been entered into with a broker or dealer for the sale of any common shares through a secondary distribution, or a purchase by a broker or dealer, a Prospectus supplement will be filed, if required, pursuant to Rule 424(b) under the Securities Act of 1933, disclosing: (i) the names of such brokers or dealers, the number of common shares to be sold; (ii) the price at which such common shares are being sold; (iii) the commissions paid or the discounts or concessions allowed to such brokers or dealers; (iv) where applicable, that such broker or dealer did not conduct any investigation to verify the information set out or incorporated by reference in this Prospectus, as supplemented or amended; (v) any change in the identity of the selling stockholders; and other facts material to the transaction.
Agents and dealers may be indemnified under agreements entered into with the selling shareholder against civil liabilities, including liabilities under the Securities Act of 1933, or to contribution with respect to payments that such agents, dealers, or underwriters may be required to make with respect thereto. Agents and dealers may be customers of, engage in transactions with, or perform services for the selling shareholder in the ordinary course of business.
OTC Bulletin Board Considerations
The OTC Bulletin Board is separate and distinct from the NASDAQ stock market. NASDAQ has no business relationship with issuers of securities quoted on the OTC Bulletin Board. The SEC’s order handling rules, which apply to NASDAQ-listed securities, do not apply to securities quoted on the OTC Bulletin Board.
Although the NASDAQ stock market has rigorous listing standards to ensure the high quality of its issuers, and can delist issuers for not meeting those standards, the OTC Bulletin Board has no listing standards. Rather, it is the market maker who chooses to quote a security on the system, files the application, and is obligated to comply with keeping information about the issuer in its files. The NASD cannot deny an application by a market maker to quote the stock of a company. The only requirement for inclusion in the bulletin board is that the issuer be current in its reporting requirements with the SEC.
Although we anticipate listing on the OTC Bulletin board will increase liquidity for our stock, investors may have greater difficulty in getting orders filled because it is anticipated that if our stock trades on a public market, it initially will trade on the OTC Bulletin Board rather than on NASDAQ. Investors’ orders may be filled at a price much different than expected when an order is placed. Trading activity in general is not conducted as efficiently and effectively as with NASDAQ-listed securities.
Investors must contact a broker-dealer to trade OTC Bulletin Board securities. Investors do not have direct access to the bulletin board service. For bulletin board securities, there only has to be one market maker.
Bulletin board transactions are conducted almost entirely manually. Because there are no automated systems for negotiating trades on the bulletin board, they are conducted via telephone. In times of heavy market volume, the limitations of this process may result in a significant increase in the time it takes to execute investor orders. Therefore, when investors place market orders - an order to buy or sell a specific number of shares at the current market price - it is possible for the price of a stock to go up or down significantly during the lapse of time between placing a market order and getting execution.
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Because bulletin board stocks are usually not followed by analysts, there may be lower trading volume than for NASDAQ-listed securities.
There are no pending or threatened lawsuits against us.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The Board of Directors elects our executive officers annually. A majority vote of the directors who are in office is required to fill vacancies. Each director shall be elected for the term of one year and until his successor is elected and qualified or until his earlier resignation or removal. Our directors and executive officers are as follows:
Name | Age | Position | ||
Dr. Philip J. Huseyinof | 36 | President & CEO, Director |
Dr. Philip J. Huseyinof has been our President, CEO, and Director since inception. Since March 2007, he has been a Partner - National Holdings, LLC, a Residential development company. Since March 2006, he has been Co-Founder and Partner - Commercial Funding & Development Group, LLC./ SMG Title, a commercial development and lending company where he founded and managed a title agency. From December 2006 to date, he has been Branch Manager - Open Mortgage (Schaumburg Branch), a mortgage lending company. From October 2004 to May 2007, he was Co-Founder & Member - Superior Management Group, LLC., a restaurant management company. From January 2004 to December 2006, he was Co-Founder and Vice-President - Elite Mortgage Company, a mortgage lending company. From December 2000 to December 2003, he was Senior Loan Officer/Division Manager - Mortgage Works, Inc., a mortgage lending company.
Education | D.Sc. - Environmental Science, Rochville University Doctor of Science, Combo Program. Awarded in Environmental Science M.S. - Awarded in Environmental Safety Management Kennedy Western University/Rochville University Thesis/Dissertation-- Emissions Trading B.S. - Accounting, minor in Finance, College of Commerce, DePaul University | 01/2007- 03/2008 11/2005- 01/2007 06/1998- 06/2000 |
PROFESSIONAL LICENSES & CERTIFICATIONS | ASTM Property Condition Assessment Certification. ASTM PSA Phase I Certification. Certificate of Distinction - Terrestrial Surface Systems. Award of Excellence in Environmental Science. IL. Dept. of Financial and Professional Regulation, Division of Banking Loan Originator’s License. IL. DFPR, Division of Banking, Branch/Branch Manager Mortgagee License. Certificate of Registration under the Title Insurance Act by The Division of Financial Institutions. 20+ Certificates of Completion for Continuing Education from the Mortgage Education Foundation. Certified Environmental Professional |
Family Relationships
There are no family relationships among our officers or directors.
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Legal Proceedings
No officer, director, or persons nominated for such positions, promoter or significant employee has been involved in the last five years in any of the following:
· | Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
· | Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
· | Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and |
· | Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. |
The following tables set forth the ownership, as of the date of this Prospectus, of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown. The business address for all persons is 1701 E. Woodfield Rd. Suite 915, Schaumburg, IL. 60173.
# of Shares | Percentage | |||||
Philip J. Huseyinof | 29,900,000 | 84 | % | |||
All directors and executive officers as a group [1 person] | 29,900,000 | 84 | % |
This table is based upon information derived from our stock records. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based upon 35,490,000 shares of common stock outstanding as of September 15, 2008.
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The following description as a summary of the material terms of the provisions of our Articles of Incorporation and Bylaws as they relate to our capital structure. The Articles of Incorporation and Bylaws have been filed as exhibits to the registration statement of which this Prospectus is a part.
Common Stock
We have 100,000,000 authorized shares of common stock with $.001 par value. As of September 15, 2008, there were 35,490,000 shares of our common stock issued and outstanding. All shares are equal to each other with respect to liquidation and dividend rights. Holders of voting shares are entitled to one vote for each share that they own at any shareholders' meeting. Holders of our shares of common stock do not have cumulative voting rights.
Each share of common stock entitles the holder to one vote, either in person or by proxy, at meetings of shareholders. The holders are not permitted to vote their shares cumulatively. Accordingly, the shareholders of our common stock who hold, in the aggregate, more than fifty percent of the total voting rights can elect all of our directors and, in such event, the holders of the remaining minority shares will not be able to elect any of the such directors. The vote of the holders of a majority of the issued and outstanding shares of common stock entitled to vote thereon is sufficient to authorize, affirm, ratify or consent to such act or action, except as otherwise provided by law.
Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available. We have not paid any dividends since our inception, and we presently anticipate that all earnings, if any, will be retained for development of our business. Any future disposition of dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, operating and financial condition, capital requirements, and other factors.
Holders of our common stock have no preemptive rights or other subscription rights, conversion rights, redemption or sinking fund provisions. Upon our liquidation, dissolution or winding up, the holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to shareholders after the payment of all of our debts and other liabilities. There are not any provisions in our Articles of Incorporation or our Bylaws that would prevent or delay change in our control. There are no conversion, preemptive or other subscription rights or privileges with respect to any shares.
Preferred Stock
The Company is authorized to issue 25,000,000 shares of preferred stock in series as fixed by the Directors with a par value of $0.001 per share. As of the date of this registration statement, there are no preferred shares outstanding.
Preferred stock may be issued in series with preferences and designations as the Board of Directors may from time to time determine. The board may, without shareholders approval, issue preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength of our common shareholders and may assist management in impeding an unfriendly takeover or attempted changes in control. There are no restrictions on our ability to repurchase or reclaim our preferred shares while there is any arrearage in the payment of dividends on our preferred stock.
The balance sheet as of February 29, 2008, and the related statements of operations, changes in stockholders’ equity and cash flows for the period from February 28, 2008 (Inception) through February 29, 2008 included in this Prospectus have been audited by Salberg & Company, P.A., an independent registered public accounting firm, to the extent set forth in its report and are incorporated herein in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.
The legality of the shares offered under this registration statement is being passed upon by Williams Law Group, P.A., Tampa, Florida. Michael T. Williams, principal of Williams Law Group, P.A., has agreements to own 1,770,000 shares of our common stock.
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Our Bylaws, subject to the provisions of Nevada Law, contain provisions which allow the corporation to indemnify any person against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with service to us if it is determined that person acted in good faith and in a manner which he reasonably believed was in the best interest of the corporation. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.
Organization
We were incorporated as Global Enterprise Holdings, Inc. in Nevada on February 28, 2008 and changed our name to International Development and Environmental Holdings on June 16, 2008. We also do business under the name Global Environment Company.
We are:
· a development stage; |
· that has limited operating history; and |
· has earned no revenues. |
Since our inception, we have devoted our activities to the following:
· Developing our business plan |
· Determining the market for our services |
· Developing a marketing plan |
· Securing contracts |
We have not sold any products or commenced any activities in real estate acquisition, remediation, and development, and have generated no revenues to date. However, we have the following remediation contracts.
· | Gas station remediation | ||
o | Client – M Line Properties | ||
o | Location – Hoopeston, IL. | ||
o | Contract Price – Based on Budget approved by the IL. EPA. This is determined in the intermediary phase of remediation. |
· | Gas station remediation | ||
o | Client – M Line Properties | ||
o | Location – Danville, IL. | ||
o | Contract Price – Based on Budget approved by the IL. EPA. This is determined in the intermediary phase of remediation. |
· | Gas station remediation | ||
o | Client – M Line Properties | ||
o | Location – Warsaw, IL. | ||
o | Contract Price – Based on Budget approved by the IL. EPA. This is determined in the intermediary phase of remediation. |
· | Gas station remediation | ||
o | Client – M Line Properties | ||
o | Location – Vandalia, IL. | ||
o | Contract Price – Based on Budget approved by the IL. EPA. This is determined in the intermediary phase of remediation. |
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We have generated no revenues since inception. There is substantial doubt about our ability to continue, as a going concern, over the next twelve months.
Business
We engage primarily in environmental remediation activities, as follows:
· | We will prepare for ourselves and third parties property risk assessment and due diligence reports as Phase I Environmental Site Assessment Process. |
· | We perform site subsurface geological investigation (soil and water) as Phase II Environmental Site Assessment Process. |
· | We will undertake site remediation. We offer the traditional “dig and haul” remediation in which contaminated soil is dug up and hauled away to be disposed. We are also able to offer a remediation technique in soil and groundwater known as bioremediation, utilizing enzymes and colloid solutions. Other types of remediate services are microbiological fungus (mold), asbestos contained materials (ACM), Polychlorinated Biphenyls (PCBs), and lead base paint (LBP). |
A. Reports
i. Phase I Environmental Site Assessments
Because real estate transactions and loans are subject to increasing scrutiny regarding potential liabilities, related to the presence of hazardous substances, we perform Phase I assessments regarding potential liabilities related to the presence of hazardous substances on real properties.
Typically, Phase I assessments include the following tasks:
· | Review of pertinent geologic and hydrologic literature and maps. | |
· | Review of historical aerial photographs and archival land use maps. |
· | Review of federal, state, county, and municipal records of known and suspected hazardous waste release sites at the subject property and/or within the immediate surrounding areas. | |
· | Reconnaissance of the subject property and the immediate surrounding areas. The site reconnaissance includes conducting interviews with past and present property owners and managers to assess past and present operations and maintenance procedures. |
· | Contact of local regulatory agencies regarding past site use, notices of violation, suspected problems, and noncompliance issues. | |
· | Preparation of a summary report including our investigative methods, findings, photographs, conclusions, and, if warranted, recommendations for additional work. |
In addition, we may also provide title searches and asbestos testing, PCB identification, and lead-based paint surveys as part of the Phase I assessment.
ii. Phase II Subsurface Environmental Investigations
Phase II Investigations involve subsurface investigation and testing. The primary objective of conducting subsurface environmental investigations for real property is to:
· | document the presence or absence of unauthorized hazardous substances/waste releases, | |
· | delineate the extent of past and present contaminant migration and concentrations in soil and groundwater, and |
· | determine site-specific hydrogeologic data for assessing risk and potential remedial action alternatives. |
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We conduct a subsurface investigation of the property and obtain, preserve, and forward samples for laboratory analysis.
iii. Brownfield Revitalization Analyses
We also prepare Brownfield Revitalization analyses, determining the best use for the property after it is remediated. For example, depending upon the intended use of the property, we may choose different remediation programs. Some uses, such as those not involving food or child care, do not require the level of remediation as others
B. Site Remediation
We remediate to correct issues identified in the Phase I and Phase II analysis, as follows:
· | Soil contamination. | |
· | Surface and groundwater contamination. |
· | Recovery of liquid-phase hydrocarbons. | |
· | Groundwater, leaching, and gas migration studies. |
We also have the ability to remediate through the use of Bioremediation. Bioremediation is the use of microorganisms or microbial processes to detoxify and degrade environmental contaminants. Most of our remediation will be done through the traditional dig and haul method.
Marketing
We currently market through our officers and our employees, and their personal contacts. Marketing has commenced based on current networks and relationships. Also, we intend to hire a full time marketing officer when sufficient funds become available.
Competitive Business Conditions
The remediation market is composed of a substantial number of companies. We believe that only a select few represent a large portion of the gross remediation revenues. Most top remediation companies are large construction management firms that mainly provide low-technology solutions that move soils to treatment centers or landfills. We believe the trend is toward smaller high-tech companies.
Several mid-sized, full-service remediation companies are poised to compete with the larger remediation firms by using innovative technology as a differentiator. One such company has also branded a calcium peroxide-based, slow-oxygen-release product as a key technology. This technology may compete with our company on specific sites.
There are several smaller remediation companies that would have a similar client base to our company. However, the quality of many smaller-sized implementers’ work has become an issue amongst industry and regulatory agencies because of a lack of focus. Their range of services and their implementation of “one remedy fits all” are in line with the larger remediation market, where excavation and removal is the clear choice.
Several other smaller remediation companies provide a menu of new technologies, including chemical oxidation methods. Generally, they are regional companies with one office and limited capabilities.
The trend in environmental remediation is moving toward more sophisticated cleanup operations that emphasize risk and liability management. The trend is moving away from specialization reflecting that a team should be able to solve more than one problem or use one technology. This trend benefits smaller firms that can provide niche services to the larger remediation companies that dominate the market.
We plan to compete by:
· | Focusing our competitive efforts on more complex issues where simple solutions, such as excavation, are not effective. |
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· | Promoting the advantages of our remediation efforts. |
· | Having a diverse company that’s not dependant on only one revenue stream. |
Intellectual Property
We have no intellectual property except our trade names.
Research and Development
We have not incurred any research or development expenses.
Employees
We have two full-time employees, both involved in management.
We engage primarily in environmental remediation activities.
Although we have the four gas station remediation contracts, we have generated no revenues to date.
Development stage expenditures during the period from inception on February 28, 2008 to May 31, 2008 were $58,895, which consisted primarily of selling, general and administrative expenses related to our formation and legal, accounting and other fees related to our formation and this offering.
Financial Condition, Liquidity and Capital Resources
Our principal capital resources have been acquired through the sale of shares of our common stock.
At May 31, 2008, we had total assets of $41,037 consisting of cash, property and equipment, deferred offering costs and deposits.
At May 31, 2008, our total liabilities were $23,782, consisting of amounts due Mr. Huseyinof and accrued compensation to Mr. Huseyinof.
Plan of Operations
Cash Requirements
We intend to provide funding for our activities, if any, through a combination of the private placement of its equity securities, the public sales of equity securities and borrowing from commercial lenders or our president. Our president has orally agreed to provide us necessary funding to maintain minimal operations and fund the cost of our becoming a public company at interest of 5%, payable upon demand. At May 31, 2008, the amount advanced was $9,407. He is not obligated to do make any further advances. We have no agreement, commitment or understanding to secure any such funding from any other source.
As of the date of this Prospectus, we have sufficient funds to maintain minimal operations.
Our independent auditors have indicated that there is substantial doubt about our ability to continue, as a going concern, over the next twelve months. There is uncertainty regarding our ability commence operations of our remediation business plan without additional financing. We have a history of operating losses, limited funds and no agreements, commitments or understandings to secure additional financing except as set forth above. Our future success is dependent upon our ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that we will be able to generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds. Our inability to obtain additional cash could have a material adverse affect on our financial position, results of operations and our ability to continue in existence.
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Off-Balance Sheet Arrangements
We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Our office is located at 1701 E. Woodfield Rd. Suite 915 Schaumburg, IL. 60173 The monthly rent is $1,463.79 and the lease is with an affiliate of our president. The term of the lease is 8/01/2008 to 01/31/2010.
We have a short-term lease with Regus, for our prior office 30 S. Wacker, Chicago IL. The lease payment is $3,458 per month. This lease expires on November 30, 2008. We have an additional lease for a CA office., located at 2183 Fairview, Costa Mesa, CA. 09/07/2008 to 08/31/2009 at an annual rent of $500, which we paid by issuing the landlord 10,000 shares of common stock.
We believe this space is adequate for our current needs.
At the present time, we do not intend to renovate, improve, or develop properties. We are not subject to competitive conditions for property and currently have no property to insure. We have no policy with respect to investments in real estate or interests in real estate and no policy with respect to investments in real estate mortgages. Further, we have no policy with respect to investments in securities of or interests in persons primarily engaged in real estate activities
Upon formation, Dr. Philip J. Huseyinof, our founder and president acquired 50,000,000 shares for a price of $.001 or $50,000 aggregate based upon the par value of our stock upon formation. On August 14, 2008, Mr. Huseyinof returned 20,000,000 of these shares to us for no consideration.
Our office is located at 1701 E. Woodfield Rd. Suite 915 Schaumburg, IL. 60173 The monthly rent is $1,463.79 and the lease is with an affiliate of our president. The term of the lease is 8/01/2008 to 01/31/2010.
Except as set forth above, we have not entered into any material transactions with any director, executive officer, promoter, beneficial owner of five percent or more of our shares, or family members of such persons since our inception.
Market Information
There is no established public trading market for our securities and a regular trading market may not develop, or if developed, may not be sustained. A shareholder in all likelihood, therefore, will not be able to resell his or her securities should he or she desire to do so when eligible for public resales. Furthermore, it is unlikely that a lending institution will accept our securities as pledged collateral for loans unless a regular trading market develops. We have no plans, proposals, arrangements, or understandings with any person with regard to the development of a trading market in any of our securities.
19
Penny Stock Considerations
Our shares will be "penny stocks" as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price of less than $5.00. Our shares thus will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.
Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser's written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000, or annual income exceeding $100,000 individually or $400,340 together with his or her spouse, is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:
| Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commissions relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt; |
| Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities; |
| Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer's account, the account's value and information regarding the limited market in penny stocks; and |
| Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction, prior to conducting any penny stock transaction in the customer's account. |
Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if our securities become publicly traded. In addition, the liquidity for our securities may be decreased, with a corresponding decrease in the price of our securities. Our shares in all probability will be subject to such penny stock rules and our shareholders will, in all likelihood, find it difficult to sell their securities.
OTC Bulletin Board Qualification for Quotation
To have our shares of common stock on the OTC Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. We have engaged in preliminary discussions with an NASD Market Maker to file our application on Form 211 with the NASD, but as of the date of this Prospectus, no filing has been made. Based upon our counsel's prior experience, we anticipate that after this registration statement is declared effective, it will take approximately 2 - 8 weeks for the NASD to issue a trading symbol and allow sales of our common stock under Rule 144.
There are 5,590,000 shares of our common stock held by non-affiliates and 29,900,000 shares of our common stock held by affiliates Rule 144 of the Securities Act of 1933 defines as restricted securities. 728,000 shares being held by non-affiliates are being registered under this registration statement and will be available for sale when the registration statement is declared effective. All of our shares held by affiliates and shares not being registered in this registration statement will be subject to the resale restrictions of Rule 144. In general, affiliates holding restricted securities, must hold their shares for a period of at least six months assuming we are current in our SEC reports or one year if we are not, may not sell more than one percent of the total issued and outstanding shares in any 90-day period, and must resell the shares in an unsolicited brokerage transaction at the market price. These restrictions do not apply to resales under Rule 144for non-affiliates holding unregistered shares for at least one year. The availability for sale of substantial amounts of common stock under Rule 144 could reduce prevailing market prices for our securities.
Once this registration statement is effective, the shares of our common stock being offered by our selling shareholders will be freely tradable without restrictions under the Securities Act of 1933.
20
In addition to the shares available for resale under this registration statement, as a result of the provisions of Rule 144, all of the restricted securities could be available for sale in a public market, if developed, beginning 90 days after the date of this Prospectus, assuming the volume and method of sale limitations in Rule 144 can be satisfied to the extent required. The volume limitations limit affiliate sales to no more than 1% of our total issued and outstanding securities every 90 days. The manner of sale limitations require sales through a broker on the market in an unsolicited transaction. The availability for sale of substantial amounts of common stock under Rule 144 could reduce prevailing market prices for our securities.
Holders
As of the date of this registration statement, we had approximately 32 shareholders of record of our common stock.
Dividends
Reports to Shareholders
As a result of this offering, we will become subject to the information and reporting requirements of the Securities Exchange Act of 1934 and will file periodic reports, proxy statements, and other information with the Securities and Exchange Commission through February 29, 2009 assuming this registration statement is declared effective before that date. We are not required under Section 12(g) or otherwise to become a mandatory 1934 Act filer unless we have more than 500 shareholders and total assets of more than $10 million on or after February 29, 2009. However, regardless of the amount of our assets or number of shareholders on or after February 29, 2009, we will file a registration statement on Form 8-A on or before February 29, 2009 and thereafter will be subject to the proxy statement and other information requirements of the 1934 Act. We will voluntarily send an annual report to shareholders containing audited financial statements.
We have filed with the Securities and Exchange Commission a registration statement on Form S-1. For further information about us and the shares of common stock to be sold in the offering, please refer to the registration statement and the exhibits and schedules thereto. The registration statement and exhibits may be inspected, without charge, and copies may be obtained at prescribed rates, at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The registration statement and other information filed with the SEC are also available at the web site maintained by the SEC at http://www.sec.gov.
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to our Principal Executive Officer, our two most highly compensated executive officers other than our PEO who occupied such position at the end of our latest fiscal year and up to two additional executive officers who would have been included in the table below except for the fact that they were not executive officers at the end of our latest fiscal year, by us, or by any third party where the purpose of a transaction was to furnish compensation, for all services rendered in all capacities to us for the latest fiscal year ended February 29, 2008.
21
Name | Title | Year | Salary | Bonus | Stock awards | Option awards | Non equity incentive plan compensation | Non qualified deferred compensation | All other compen- sation | Total | |||||||||||||||
Philip Huseyinof | CEO | 2008 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Compensation Agreements
We have entered into an oral employment arrangement with Mr. Huseyinof pursuant to which we will pay him an annual salary of $225,000 to be paid only if funds permit.
Members of our Board of Directors do not receive compensation for their services as Directors.
22
FINANCIAL STATEMENTS
International Development and Environmental Holdings
Financial Statements
For the Three Months Ended May 31, 2008 (unaudited)
TABLE OF CONTENTS
Page | |
Balance Sheet (unaudited) | 2 |
Statements of Operations (unaudited) | 3 |
Statement of Changes in Stockholders' Equity (unaudited) | 4 |
Statements of Cash Flows (unaudited) | 5 |
Condensed Notes to Financial Statements (unaudited) | 6 - 7 |
International Development and Environmental Holdings
(a development stage company)
Balance Sheets
May 31, | ||||||||
2008 | Feburary 29, | |||||||
(unaudited) | 2008 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 7,086 | $ | - | ||||
Stock subscription receivable - officer | - | 25,267 | ||||||
Prepaid expenses | 3,000 | 3,000 | ||||||
Total current assets | 10,086 | 28,267 | ||||||
Property and equipment, net | 4,352 | - | ||||||
Deferred offering costs | 20,199 | 17,199 | ||||||
Deposits | 6,400 | - | ||||||
Total assets | $ | 41,037 | $ | 45,466 | ||||
LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Due to officer | $ | 9,407 | $ | - | ||||
Accrued compensation | 14,375 | - | ||||||
Total current liabilities | 23,782 | - | ||||||
Commitments | - | - | ||||||
Stockholders' equity | ||||||||
Preferred stock, $.001 par value; 25,000,000 shares authorized; no shares issued and outstanding | - | - | ||||||
Common stock, $.001 par value; 100,000,000 shares authorized; 52,106,000 and 52,000,000 shares issued and outstanding at May 31, 2008 and February 29, 2008, respectively | 52,106 | 52,000 | ||||||
Additional paid in capital | 23,944 | - | ||||||
Deficit accumulated during the development stage | (58,795 | ) | (6,534 | ) | ||||
Total stockholders' equity | 17,255 | 45,466 | ||||||
Total liabilities and stockholders' equity | $ | 41,037 | $ | 45,466 |
See Accompanying Condensed Notes to Financial Statements
2
International Development and Environmental Holdings
(a development stage company)
Statements of Operations
From | ||||||||
February 28, | ||||||||
Three Months | 2008 (inception) | |||||||
Ended | to | |||||||
May 31, | May 31, | |||||||
2008 | 2008 | |||||||
(unaudited) | (unaudited) | |||||||
Revenues | $ | - | $ | - | ||||
Operating expenses | ||||||||
Administrative expenses | 52,361 | 58,895 | ||||||
Loss from operations | (52,361 | ) | (58,895 | ) | ||||
Interest Income | 100 | 100 | ||||||
Net loss | $ | (52,261 | ) | $ | (58,795 | ) | ||
Basic and diluted net loss per share | $ | - | $ | - | ||||
Basic and diluted weighted average common shares outstanding | 52,096,739 | 52,094,681 |
See Accompanying Condensed Notes to Financial Statements
3
International Development and Environmental Holdings
(a development stage company)
Statement of Changes in Stockholders' Equity
For the Periods from February 28, 2008 (inception) to February 29, 2008
and the Three Months Ended May 31, 2008
Deficit | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Additional | During | Total | ||||||||||||||||||
Common Stock | Paid In | Development | Stockholders' | |||||||||||||||||
# of Shares | Amount | Capital | Stage | Equity | ||||||||||||||||
Initial balances upon incorporation | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Issuance of common stock for cash and subscription receivable to founder on 02/28/08 | 50,000,000 | 50,000 | - | - | 50,000 | |||||||||||||||
Issuance of common stock for services rendered by vendor on 02/28/08 | 2,000,000 | 2,000 | - | - | 2,000 | |||||||||||||||
Net loss | - | - | - | (6,534 | ) | (6,534 | ) | |||||||||||||
Balances, February 29, 2008 | 52,000,000 | 52,000 | - | (6,534 | ) | 45,466 | ||||||||||||||
Issuance of common stock for services on 03/21/08 (unaudited) | 100,000 | 100 | 4,900 | - | 5,000 | |||||||||||||||
Issuance of common stock for cash on 05/29/08 (unaudited) | 6,000 | 6 | 294 | - | 300 | |||||||||||||||
Valuation of President's contributed services (unaudited) | - | - | 18,750 | - | 18,750 | |||||||||||||||
Net loss (unaudited) | - | - | - | (52,261 | ) | (52,261 | ) | |||||||||||||
Balances, May 31, 2008 (unaudited) | 52,106,000 | $ | 52,106 | $ | 23,944 | $ | (58,795 | ) | $ | 17,255 |
See Accompanying Condensed Notes to Financial Statements
4
International Development and Environmental Holdings
(a development stage company)
Statements of Cash Flows
From | |||||||
February 28, | |||||||
Three Months | 2008 (inception) | ||||||
Ended | to | ||||||
May 31, | May 31, | ||||||
2008 | 2008 | ||||||
(unaudited) | (unaudited) | ||||||
Operating activities | |||||||
Net loss | $ | (52,261 | ) | $ | (58,795 | ) | |
Adjustment to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation | 61 | 61 | |||||
Non-cash issuances of common stock | 5,000 | 7,000 | |||||
Non-cash issuances of President's contributed services | 18,750 | 18,750 | |||||
(Increase) decrease in assets: | |||||||
Prepaid expenses | - | (3,000 | ) | ||||
Deposits | (6,400 | ) | (6,400 | ) | |||
Increase (decrease) in liabilities: | |||||||
Accrued compensation | 14,375 | 14,375 | |||||
Net cash used in operating activities | (20,475 | ) | (28,009 | ) | |||
Investing activities | |||||||
Purchase of property | (4,413 | ) | (4,413 | ) | |||
Net cash used in investing activities | (4,413 | ) | (4,413 | ) | |||
Financing activities | |||||||
Proceeds from collection of stock subscription receivable - officer | 25,267 | 25,267 | |||||
Proceeds from officer loans | 9,407 | 9,407 | |||||
Proceeds from sale of common stock | 300 | 25,033 | |||||
Disbursement of deferred offering costs | (3,000 | ) | (20,199 | ) | |||
Net cash provided by financing activities | 31,974 | 39,508 | |||||
Net increase (decrease) in cash | 7,086 | 7,086 | |||||
Cash, beginning of period | - | - | |||||
Cash, end of period | $ | 7,086 | $ | 7,086 | |||
Supplemental disclosures of cash flow information | |||||||
Cash paid during the period for: | |||||||
Interest | $ | - | $ | - | |||
Income taxes | $ | - | $ | - | |||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Common stock issued pursuant to stock subscription receivable - officer | $ | - | $ | 25,267 |
See Accompanying Condensed Notes to Financial Statements
5
International Development and Environmental Holdings
(a development stage company)
Condensed Notes to Financial Statements
Three Months Ended May 31, 2008
Note 1 – Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
International Development and Environmental Holdings (the Company) is a Nevada corporation with its principal corporate offices in Chicago, Illinois. The Company is in the process of organizing itself and developing its main line of business: Environmental geological site assessment and remediation. The Company has registered and may operate under the following assumed corporate names: (1) Global Environmental Company (NV) (2) Global Environment Company (IL) (3) Global Architecture & Engineering Company (NV) (4) Global Development & Construction Company (NV) and (5) Global Real Estate & Finance Company (NV).
The Company is presented as in the development stage as of May 31, 2008. To-date, the Company’s business activities during its development stage consist solely of corporate formation, raising capital, and attempting to secure environmental remediation contracts.
Summary of Significant Accounting Policies
Basis of Presentation of Interim Financial Statements
The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position and results of operations. Accordingly, these interim financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report for the period from February 28, 2008 (Inception) to February 29, 2008.
It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments and certain non-recurring adjustments) have been made that are necessary for a fair financial statement presentation. The results for the three month period ended May 31, 2008 are not necessarily indicative of the results that may be expected for the year ending February 28, 2009.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accordingly, actual results could differ from those estimates used in the preparation of these financial statements. Significant estimates in the accompanying financial statements include the valuation of valuation of common stock issued for services, valuation of non-cash contributed services, and deferred income tax valuation allowance.
6
International Development and Environmental Holdings
(a development stage company)
Condensed Notes to Financial Statements
Three Months Ended May 31, 2008
Note 2 – Going Concern
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. For the period from March 1, 2008 (inception) to May 31, 2008 the Company had a net loss of $52,261 and net cash used in operations of $20,475. In addition, as of February 29, 2008 the Company was a development stage company with no revenues.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties.
In order to execute its business plan, the Company will need to raise additional working capital and generate revenues. There can be no assurance that the Company will be able to obtain the necessary working capital or generate revenues to execute its business plan.
Management’s plan in this regard, include seeking environmental remediation contracts from potential clients and raising additional funds through a private placement offering of Company common stock anticipated to commence within the second or third quarter of fiscal 2009. Subsequent to May 31, 2008, as discussed further in Note 4, the Company has raised an additional $7,200 of capital in private placements of its common stock through August 31, 2008
Management believes its business development and capital raising activities will provide the Company with the ability to continue as a going concern.
Note 3 – Contributed Capital
For the Three months ended May 31, 2008, the Company’s President and founding shareholder has provided services to the Company without the expectation of receiving any compensating payment. The value of these services was estimated at $18,750, based upon the value of another executive officer of the Company presently under contract. Accordingly, the Company has recorded the value of these services as a charge to operations and a corresponding credit to Paid in Capital in these accompanying financial statements.
Note 4 – Subsequent Events
During the period from June 1, 2008 through August 31, 2008, the Company issued an additional 144,000 shares of its common stock at $.05 per share in a private placement raising an aggregate of $7,200 and issued 3,240,000 shares of common stock for services rendered which were valued at $162,000 based on the $.05 contemporaneous cash sale price. On August 14, 2008, the Company’s founder returned 20,000,000 shares of common stock to the Company for cancelation for no consideration.
7
International Development and Environmental Holdings
Financial Statements
For the Period From February 28, 2008 (Inception) to February 29, 2008
TABLE OF CONTENTS
Page | ||
Report of Independent Registered Public Accounting Firm | 2 | |
Balance Sheet | 3 | |
Statement of Operations | 4 | |
Statement Changes in Stockholders' Equity | 5 | |
Statement of Cash Flows | 6 | |
Notes to Financial Statements | 7 - 13 |
1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of:
International Development and Environmental Holdings
We have audited the accompanying balance sheet of International Development and Environmental Holdings (A development stage company) as of February 29, 2008 and the related statements of operations, changes in stockholders' equity, and cash flows for the period from February 28, 2008 (inception) to February 29, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of International Development and Environmental Holdings as of February 29, 2008 and the results of its operations and its cash flows for the period from February 28, 2008 (inception) to February 29, 2008 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 2 to the financial statements, the Company reported a net loss of $6,534 and used cash for operating activities of $7,534 in the period from February 28, 2008 (inception) to February 29, 2008 and as of February 29, 2008 was a development stage company with no revenues. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans as to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
SALBERG & COMPANY, P.A.
Boca Raton, Florida
September 10, 2008
2
International Development and Environmental Holdings
(a development stage company)
Balance Sheet
February 29, 2008
ASSETS | ||||
Current assets | ||||
Stock subscription receivable - officer | $ | 25,267 | ||
Prepaid expenses | 3,000 | |||
Total current assets | 28,267 | |||
Deferred offering costs | 17,199 | |||
Total assets | $ | 45,466 | ||
LIABILITIES & STOCKHOLDERS' EQUITY | ||||
Liabilities | $ | - | ||
Commitments (Note 7) | - | |||
Stockholders' equity | ||||
Preferred stock, $.001 par value; 25,000,000 shares authorized; no shares issued and outstanding | - | |||
Common stock, $.001 par value; 100,000,000 shares authorized; 52,000,000 shares issued and outstanding | 52,000 | |||
Deficit accumulated during the development stage | (6,534 | ) | ||
Total stockholders' equity | 45,466 | |||
Total liabilities and stockholders' equity | $ | 45,466 |
See Accompanying Notes to Financial Statements
3
International Development and Environmental Holdings
(a development stage company)
Statement of Operations
From February 28, 2008 (inception) to February 29, 2008
Revenues | $ | - | ||
Operating expenses | ||||
Administrative expenses | 6,534 | |||
Net loss | $ | (6,534 | ) | |
Basic and diluted net loss per share | $ | - | ||
Basic and diluted weighted average common shares outstanding | 52,000,000 |
See Accompanying Notes to Financial Statements
4
International Development and Environmental Holdings
(a development stage company)
Statement of Changes in Stockholders' Equity
From February 28, 2008 (inception) to February 29, 2008
Deficit | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Additional | During | Total | ||||||||||||||||||
Common Stock | Paid In | Development | Stockholders' | |||||||||||||||||
# of Shares | Amount | Capital | Stage | Equity | ||||||||||||||||
Initial balances upon incorporation | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Issuance of common stock for cash and subscription receivable to founder on 2/28/08 | 50,000,000 | $ | 50,000 | - | - | 50,000 | ||||||||||||||
Issuance of common stock for services rendered by vendor on 02/28/08 | 2,000,000 | $ | 2,000 | - | - | 2,000 | ||||||||||||||
Net loss | - | - | - | (6,534 | ) | (6,534 | ) | |||||||||||||
Balances, February 29, 2008 | 52,000,000 | $ | 52,000 | $ | - | $ | (6,534 | ) | $ | 45,466 |
See Accompanying Notes to Financial Statements
5
International Development and Environmental Holdings
(a development stage company)
Statement of Cash Flows
From February 28, 2008 (inception) to February 29, 2008
Cash flows from operating activities: | ||||
Net loss | $ | (6,534 | ) | |
Adjustment to reconcile net loss to net cash used in operating activities: | ||||
Non-cash issuance of common stock | 2,000 | |||
(Increase) decrease in assets: | ||||
Prepaid expenses | (3,000 | ) | ||
Net cash used in operating activities | (7,534 | ) | ||
Cash flows from financing activities: | ||||
Proceeds from sale of common stock | 24,733 | |||
Disbursement of deferred offering costs | (17,199 | ) | ||
Net cash provided by financing activities | 7,534 | |||
Net increase (decrease) in cash | - | |||
Cash, beginning of period | - | |||
Cash, end of period | $ | - | ||
Supplemental disclosures of cash flow information | ||||
Cash paid during the period for: | ||||
Interest | $ | - | ||
Income taxes | $ | - | ||
Supplemental schedule of non-cash investing and financing activites: | ||||
Common stock issued pursuant to stock subscription receivable - officer | $ | 25,267 |
See Accompanying Notes to Financial Statements
6
International Development and Environmental Holdings
(a development stage company)
Notes to Financial Statements
February 29, 2008
Note 1 – Nature of Operations and Summary of Significant Accounting Policies |
Nature of Operations
International Development and Environmental Holdings (the Company) is a Nevada corporation with its principal corporate offices in Chicago, Illinois. The Company is in the process of organizing itself and developing its main line of business: Environmental geological site assessment and remediation. The Company has registered and may operate under the following assumed corporate names: (1) Global Environmental Company (NV) (2) Global Environment Company (IL) (3) Global Architecture & Engineering Company (NV) (4) Global Development & Construction Company (NV) and (5) Global Real Estate & Finance Company (NV).
Summary of Significant Accounting Policies
Basis of Presentation
The Company is presented as in the development stage of February 29, 2008. To-date, the Company’s business activities during its development stage consist solely of corporate formation, raising capital, and attempting to secure environmental remediation contracts.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accordingly, actual results could differ from those estimates used in the preparation of these financial statements. Significant estimates in 2008 include the valuation of common stock granted for services and the deferred income tax valuation allowance.
Cash and Cash Equivalents
The Company considers highly liquid investments with original maturities of 90 days or less to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. At February 29, 2008, the Company had no cash equivalents.
Property and Equipment
Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to income as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized at cost. The cost and accumulated depreciation related to assets sold or retired are removed from the accounts and any gain or loss is credited or charged to income in the period of disposal. For financial reporting purposes, depreciation is provided on the straight-line method over the estimated useful lives of the depreciable assets.
Deferred Offering Costs
The Company has deferred external costs associated with its planned initial public offering in fiscal 2009, at which time the costs will be charged against the capital raised. Should the offering be terminated, the costs will be immediately charged to operations.
7
International Development and Environmental Holdings
(a development stage company)
Notes to Financial Statements
February 29, 2008
Note 1 – Nature of Operations and Summary of Significant Accounting Policies (continued) |
Summary of Significant Accounting Policies (continued)
Fair Value of Financial Instruments
Due to the short-term nature of Stock subscription receivable, the carrying amount approximates the fair market value as of the balance sheet date.
Income Taxes
Income taxes are provided for tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes. Deferred taxes are recognized for differences between the bases of assets and liabilities for financial statement and income tax purposes. The differences in asset and liability bases relate primarily to organization and start-up costs (use of different methods and periods to calculate deduction). Deferred taxes are also recognized for operating losses and tax credits that are available to offset future income taxes. The deferred tax assets and/or liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. The components of the deferred tax asset and liability are classified as current and noncurrent based on their characteristics. Valuation allowances are provided for deferred tax assets based on management’s projection of the sufficiency of future taxable income to realize the assets.
Stock-based compensation
Effective February 28, 2008 (Inception), the Company adopted SFAS No. 123 (R), entitled Share-Based Payment. This revised Statement eliminates the alternative to use APB 25’s intrinsic value method of accounting that was provided in SFAS No. 123 as originally issued. Under APB 25, issuing stock options to employees generally resulted in recognition of no compensation cost if the exercise price equaled or exceeded the fair value of the stock on the measurement date. This Statement requires entities to recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards.
Net Loss per Share
Basic net loss per common share (Basic EPS) is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted net loss per common share (Diluted EPS) is computed by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding. At February 29, 2008, there are no potential common shares outstanding (sock options or warrants). Therefore, Diluted EPS is identical to Basic EPS.
Recent accounting pronouncements
The Financial Accounting Standards Board (“FASB”) has recently issued several new accounting pronouncements, which may apply, to the Company at present, or in the proceeding months as operations expand.
In 2006, the FASB issued Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109 Accounting for Income Taxes.” FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109. FIN 48 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 provides guidance on de-recognition,
8
International Development and Environmental Holdings
(a development stage company)
Notes to Financial Statements
February 29, 2008
Note 1 – Nature of Operations and Summary of Significant Accounting Policies (continued) |
Summary of Significant Accounting Policies (continued)
Recent accounting pronouncements (continued)
classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted FIN 48 as of February 28, 2008, as required.
The current Company policy classifies any interest recognized on an underpayment of income taxes as interest expense and classifies any statutory penalties recognized on a tax position taken as selling, general and administrative expense. There were no interest or selling, general and administrative expenses accrued or recognized related to income taxes for the year ended February 29, 2008. The Company has not taken a tax position that would have a material effect on the financial statements or the effective tax rate for the year ended February 29, 2008 under FIN 48. It is determined not to be reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease since the Company’s adoption of this policy.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS 157 defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 is applicable whenever another accounting pronouncement requires or permits assets and liabilities to be measured at fair value. SFAS 157 does not expand or require any new fair value measures; however the application of this statement may change current practice. The requirements of SFAS 157 are first effective for the Company’s fiscal year beginning March 1, 2008. However, in February 2008 the FASB decided that an entity need not apply this standard to nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis until the subsequent year. Accordingly, the Company’s adoption of this standard on March 1, 2008, is limited to financial assets and liabilities. The Company does not believe the initial adoption of SFAS 157 will have a material effect on its financial condition or results of operations. However, the Company is still in the process of evaluating this standard with respect to its effect on nonfinancial assets and liabilities and therefore has not yet determined the impact that it will have on the Company’s financial statements upon full adoption.
In December 2007, the SEC issued Staff Accounting Bulletin (“SAB”) 110 Share-Based Payment. SAB 110 amends and replaces Question 6 of Section D.2 of Topic 14, “Share-Based Payment,” of the Staff Accounting Bulletin series. Question 6 of Section D.2 of Topic 14 expresses the views of the staff regarding the use of the “simplified” method in developing an estimate of the expected term of “plain vanilla” share options and allows usage of the “simplified” method for share option grants prior to December 31, 2007. SAB 110 allows public companies which do not have historically sufficient experience to provide a reasonable estimate to continue use of the “simplified” method for estimating the expected term of “plain vanilla” share option grants after December 31, 2007. SAB 110 is effective January 1, 2008 which the Company adopted upon its inception. The Company currently uses the “simplified” method to estimate the expected term for share option grants to employees as it does not have enough historical experience to provide a reasonable estimate. The Company will continue to use the “simplified” method until it has enough historical experience to provide a reasonable estimate of expected term in accordance with SAB 110. The Company does not expect SAB 110 will have a material impact on its balance sheet, statement of operations and cash flows.
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement No. 141R, Business Combinations. Statement No. 141R modifies the accounting and disclosure
9
International Development and Environmental Holdings
(a development stage company)
Notes to Financial Statements
February 29, 2008
Note 1 – Nature of Operations and Summary of Significant Accounting Policies (continued) |
Summary of Significant Accounting Policies (continued)
Recent accounting pronouncements (continued)
requirements for business combinations and broadens the scope of the previous standard to apply to all transactions in which one entity obtains control over another business.
In December 2007, the FASB issued SFAS No. 160 Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51, this Statement amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements” to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is required to be adopted simultaneously with SFAS 141R and is effective for reporting periods on or after December 15, 2008. An earlier adoption is not permitted. Currently, the Company does not have any non-controlling interests and accordingly, the adoption of SFAS 160 is not expected to have a material impact on our financial position, cash flows or results of operations.
In February 2007, the FASB issued SFAS 159 which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The adoption of SFAS 159 on February 28, 2008 did not impact our financial position, cash flows, and results of operations.
Note 2 – Going Concern
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. For the period from February 28, 2008 (inception) to February 29, 2008 the Company had a net loss of $6,534 and net cash used in operations of $7,534. In addition, as of February 29, 2008 the Company was a development stage company with no revenues.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties.
In order to execute its business plan, the Company will need to raise additional working capital and generate revenues. There can be no assurance that the Company will be able to obtain the necessary working capital or generate revenues to execute its business plan.
Management’s plan in this regard, include seeking environmental remediation contracts from potential clients and raising additional funds through a private placement offering of Company common stock anticipated to commence within the second or third quarter of fiscal 2009. Subsequent to February 29, 2008, as discussed further in Note 7, the Company has raised an additional $7,500 of capital in private placements of its common stock through August 31, 2008.
10
International Development and Environmental Holdings
(a development stage company)
Notes to Financial Statements
February 29, 2008
Note 2 – Going Concern (continued) |
Management believes its business development and capital raising activities will provide the Company with the ability to continue as a going concern.
Note 3 – Stock Subscription Receivable - Officer |
At February 29, 2008, the Company had a receivable from its founding stockholder aggregating $25,267 for the purchase of his Company common stock. The outstanding balance bears interest at 5%, pursuant to an oral agreement, is due on demand and is unsecured. This receivable was subsequently paid in full during May 2008.
Note 4 – Stockholders’ Equity |
Issuances of Common Stock
On February 28, 2008, the Company issued 50,000,000 shares of common stock to its founder at $.001 per share or $50,000 in initial capital ($24,733 cash and $25,267 subscription receivable) to fund the Company’s development efforts. Additionally, the Company issued 2,000,000 shares of common stock for services rendered which were valued at $2,000 based on the $.001 contemporaneous cash sales price.
Amendments to Corporate Articles of Incorporation
On February 28, 2008, the Company was originally incorporated with 200,000,000 shares of common stock authorized with a $.0001 par value and 20,000,000 shares of preferred stock with a $.0001 par value. On March 20, 2008, the Company amended its articles to 900,000,000 shares of common stock authorized with a $.0001 par value and 600,000,000 shares of preferred stock with a $.0001 par value. Finally, on May 12, 2008, the Company amended its articles to its present form with 100,000,000 shares of common stock authorized with a $.001 par value and 25,000,000 shares of preferred stock authorized with a $.001 par value.
All references in the accompanying financial statements to the number of common and preferred shares, par values and per share amounts have been retroactively adjusted to reflect these amendments.
Note 5 – Income Taxes |
The Company has incurred net losses since inception. The Company has not reflected any benefit of such net operating loss carry forward in the accompanying financial statements.
The income tax benefit differed from the amount computed by applying the US federal income tax rate of 34% to net loss as a result of the following:
11
International Development and Environmental Holdings
(a development stage company)
Notes to Financial Statements
February 29, 2008
Note 5 – Income Taxes (continued) |
2008 | ||||
Computed expected tax benefit | (34.0 | )% | ||
State income tax, net of federal benefit | (6.2 | ) | ||
Change in federal tax rate apportionment | 19.0 | |||
Change in valuation allowance | 21.2 | |||
Income tax benefit | - | % |
The tax effect of temporary differences that give rise to significant portions of the deferred tax assets as of February 29, 2008 is presented below:
Deferred Tax Assets: | 2008 | |||
Organizational start-up costs | $ | 1,400 | ||
Valuation allowance | (1,400 | ) | ||
Net deferred tax assets | $ | - |
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible.
Based upon the lack of historical taxable income and uncertain projections of future taxable income over the periods in which the deferred tax assets are deductible, management believes that it is more likely than not that the Company will not realize the benefits of these deductible differences. Accordingly, the Company has provided a valuation allowance against the net deferred tax assets aggregating $1,400 as of February 29, 2008.
At February 29, 2008, the fiscal year 2008 income tax returns remain subject to examination by federal and state jurisdictions.
Note 6 – Related Party Transactions |
As described in Note 2, the Company has a $25,267 stock subscription receivable from its officer and founding shareholder and. This receivable was subsequently paid in full in May 2008.
As described in Note 5, the Company has entered into a sublease agreement with a business related to the Company’s founding stockholder subsequent to February 29, 2008.
12
International Development and Environmental Holdings
(a development stage company)
Notes to Financial Statements
February 29, 2008
Note 7 – Subsequent Events |
Operating Leases
Subsequent to February 29, 2008, the Company entered into three leases for its corporate offices under terms of non-cancelable operating leases. The first lease term is from June 1, 2008 through November 30, 2008 and requires a $3,458 monthly lease payment. The second lease consists of a sublease of office space from a related party, which is a business affiliated with the Company’s founding shareholder, officer and director. The sublease term runs from August 1, 2008 through January 31, 2010 and requires a $1,464 monthly lease payment. The third lease consists of a sublease of office space. The sublease term runs from September 1, 2008 through August 31, 2009 and required the issuance of 10,000 shares of Company common stock as consideration for the entire lease term.
Note 7 – Subsequent Events (continued) |
Operating Leases (continued)
Future minimum lease payments for both leases are as follows for the years ending February 28:
Total | ||||
2009 | $ | 31,495 | ||
2010 | 16,102 | |||
Thereafter | - | |||
$ | 47,597 |
Common Stock
During the period from March 1, 2008 through August 31, 2008, the Company issued an additional 150,000 shares of its common stock at $.05 per share in a private placement raising an aggregate of $7,500 and issued 3,340,000 shares of common stock for services rendered which were valued at $167,000 based on the $.05 contemporaneous cash sales price. On August 14, 2008, the Company’s founder returned 20,000,000 shares of common stock to the Company for cancelation for no consideration.
13
None.
PROSPECTUS
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS.
Dated October 20, 2008
Dealer Prospectus Delivery Obligation
Until January 19, 2009 (90 days from the date of this Prospectus) all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a Prospectus. This is in addition to the dealers' obligation to deliver a Prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.