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, 2009 |
o | 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 ¨ 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 | o | Accelerated filer | ¨ | |
Non-accelerated filer | o | Smaller reporting company | x | |
(Do not check if a smaller reporting company) |
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: 35,480,000 shares of common stock outstanding as of November 30, 2009.
INDEX
Page | ||
PART I FINANCIAL INFORMATION | ||
Item 1. | 3 | |
Item 2. | 19 | |
Item 3. | 20 | |
Item 4. | 20 | |
PART II OTHER INFORMATION | ||
Item 1. | 21 | |
Item 1A. | 21 | |
Item 2. | 21 | |
Item 3. | 21 | |
Item 4. | 21 | |
Item 5. | 21 | |
Item 6. | 22 |
2
PART I-FINANCIAL INFORMATION
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
Financial Statements
(Unaudited)
As of November 30, 2009 and 2008,
And Cumulative from February 28, 2008 (Inception) to November 30, 2009
3
Table of Contents
Balance Sheets | 5 |
Statement of Operation | 6 |
Statement of Stockholders’ Equity | 7 |
Statement of Cash Flows | 8 |
Notes to Financial Statements | 9 |
4
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
BALANCE SHEET
November 30, | February 28, | |||||||
2009 | 2009 | |||||||
Unaudited | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 23,068 | $ | (406 | ) | |||
Account Receivable | - | - | ||||||
Prepaid expense | - | - | ||||||
Total Current Assets | $ | 23,068 | $ | (406 | ) | |||
Property, plant and equipment, net | $ | 2,144 | $ | 3,248 | ||||
Other assets: | ||||||||
Loan to officers | - | 1,910 | ||||||
Total Other Assets | $ | - | $ | 1,910 | ||||
TOTAL ASSETS | $ | 25,212 | $ | 4,752 | ||||
LIABILITIES & EQUITY | ||||||||
Current liabilities: | ||||||||
Loan from officer | $ | 22,146 | $ | 69,758 | ||||
Account payable | 271,354 | 155,085 | ||||||
Credit card payable | 2,294 | 7,174 | ||||||
Accrued compensation | 114,075 | 70,625 | ||||||
Loans from private lenders | 101,896 | - | ||||||
Deferred revenue | 7,230 | 7,730 | ||||||
Total Current Liabilities | $ | 518,995 | $ | 310,372 | ||||
Stockholders' Equity: | ||||||||
Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued and outstanding | - | - | ||||||
Common stock, $0.001 par value; 100,000,000 shares authorized; 35,480,000 issued and outstanding at November 30, 2009 | $ | 35,480 | $ | 35,480 | ||||
Paid-in capital | 322,270 | 266,020 | ||||||
Deficit accumulated during the development stage | (851,533 | ) | (607,120 | ) | ||||
Total stockholders' equity | $ | (493,783 | ) | $ | (305,620 | ) | ||
TOTAL LIABILITIES & EQUITY | $ | 25,212 | $ | 4,752 |
5
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
STATEMENT OF OPERATIONS
(A Development Stage Company)
Nine Months Ended | Three Months Ended | February 28, 2008 | ||||||||||||||||||
30-Nov | 30-Nov | (Date of Inception) | ||||||||||||||||||
2009 | 2008 | 2009 | 2008 | to November 30, 2009 | ||||||||||||||||
Unaudited | Unaudited | Unaudited | ||||||||||||||||||
Revenues: | $ | 45,525 | $ | $ | - | $ | $ | 45,525 | ||||||||||||
Cost of Goods Sold | 10,617 | 19,614 | - | 19,614 | 160,310 | |||||||||||||||
Gross Profit | $ | 34,908 | $ | (19,614 | ) | $ | - | $ | (19,614 | ) | $ | (114,785 | ) | |||||||
Operating expenses: | ||||||||||||||||||||
Research and development | - | - | - | - | - | |||||||||||||||
Professional, consulting and marketing fees | 79,460 | 325,237 | 64,770 | 52,295 | 316,651 | |||||||||||||||
Selling, general and administrative expenses | 198,957 | 50,850 | 97,439 | 19,340 | 418,128 | |||||||||||||||
Depreciation and amortization expenses | 1,104 | - | 368 | - | 2,269 | |||||||||||||||
Total Operating Expenses | $ | 279,521 | $ | 376,087 | $ | 162,577 | $ | 71,635 | $ | 737,048 | ||||||||||
Operating Income( Loss) | (244,613 | ) | (395,701 | ) | (162,577 | ) | (91,249 | ) | (851,833 | ) | ||||||||||
Investment income, net | 200 | 100 | - | - | 300 | |||||||||||||||
Interest Expense, net | - | - | - | - | - | |||||||||||||||
Income(Loss) before taxes | - | - | - | - | ||||||||||||||||
Income(Loss) tax expense | - | - | - | - | - | |||||||||||||||
Net Income(Loss) | $ | (244,413 | ) | $ | (395,601 | ) | $ | (162,577 | ) | $ | (91,249 | ) | $ | (851,533 | ) | |||||
Net Income(Loss) per common share-Basic | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) | |||||
Net Income(Loss) per common share-Diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) |
6
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD ENDED NOVEMBER 30, 2009
Deficit | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Additional | During the | Total | ||||||||||||||||||
Common Stock | Paid-in | Development | Stockholders' | |||||||||||||||||
Shares | Amount | Capital | Stage | Equity | ||||||||||||||||
February 28 , 2008 | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Issued common stocks to founder for cash and subscriptions receivable on 2/28/08 | 50,000,000 | 50,000 | - | - | 50,000 | |||||||||||||||
Issued common stocks to Williams for services rendered on 2/28/08 | 2,000,000 | 2,000 | - | - | 2,000 | |||||||||||||||
Net loss for the period ended February 29, 2008 | - | - | - | (6,534 | ) | (6,534 | ) | |||||||||||||
Balance, February 29 , 2008 | 52,000,000 | $ | 52,000 | $ | - | $ | (6,534 | ) | $ | 45,466 | ||||||||||
Issued common stocks for compensation expense @0.05 per share on 3/21/08 | 100,000 | 100 | 4,900 | - | 5,000 | |||||||||||||||
Issued common stocks for cash @0.05 per share | 150,000 | 150 | 7,350 | - | 7,500 | |||||||||||||||
Issued common stocks for services rendered @0.05 per share | 3,240,000 | 3,240 | 158,760 | - | 162,000 | |||||||||||||||
Cancellation of shares by founder for no consideration | (20,010,000 | ) | (20,010 | ) | 20,010 | - | - | |||||||||||||
Contributed capital | - | - | 75,000 | - | 75,000 | |||||||||||||||
Net Loss for the period ended February 28, 2009 | - | - | - | (600,586 | ) | (600,586 | ) | |||||||||||||
Balance, February 28, 2009 | 35,480,000 | $ | 35,480 | $ | 266,020 | $ | (607,120 | ) | $ | (305,620 | ) | |||||||||
Contributed capital | - | - | 56,250 | - | 56,250 | |||||||||||||||
Net Loss for the period ended November 30, 2009 | - | - | - | (244,413 | ) | (244,413 | ) | |||||||||||||
Balance, November 30, 2009 | 35,480,000 | $ | 35,480 | $ | 322,270 | $ | (851,533 | ) | $ | (493,783 | ) |
7
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Cumulative from | ||||||||||||||||||||
Nine Months Ended | Three Months Ended | February 28, 2008 | ||||||||||||||||||
November 30 | November 30 | (Date of Inception) | ||||||||||||||||||
2009 | 2008 | 2009 | 2008 | to November 30, 2009 | ||||||||||||||||
Unaudited | Unaudited | Unaudited | ||||||||||||||||||
Operating Activities: | ||||||||||||||||||||
Net Loss | $ | (244,413 | ) | $ | (395,637 | ) | $ | (162,577 | ) | $ | (91,249 | ) | $ | (851,533 | ) | |||||
Adjustments to reconcile net income to net cash provided by Operating activities: | ||||||||||||||||||||
Depreciation | 1,104 | 797 | 368 | 368 | 2,269 | |||||||||||||||
Non-cash portion of share based legal fee expense | - | - | - | - | 2,000 | |||||||||||||||
Non-cash portion of share based compensation expense | - | 5,000 | - | - | 5,000 | |||||||||||||||
Non-cash portion of share based consulting expense | - | 162,000 | - | - | 162,000 | |||||||||||||||
Non-cash issuances of President's contributed capital | 56,250 | 56,250 | 18,750 | - | 131,250 | |||||||||||||||
Write off of offering costs | - | 20,199 | - | - | 20,199 | |||||||||||||||
Prepaid expense | - | (6,400 | ) | - | - | |||||||||||||||
Loans to officer | (46,943 | ) | - | (3,913 | ) | - | (48,854 | ) | ||||||||||||
Increase (Decrease) in accrued compensation | 43,450 | 51,875 | 5,950 | 18,750 | 114,075 | |||||||||||||||
Increase (Decrease) in accounts payable | 116,269 | 32,912 | 84,493 | 19,201 | 268,113 | |||||||||||||||
Increase (Decrease) in credit card payable | (4,881 | ) | - | - | 2,289 | |||||||||||||||
Increase(Decrease) in deferred revenue | (500 | ) | 7,730 | 7,730 | 7,230 | |||||||||||||||
Net cash provided by operating activities | $ | (79,664 | ) | $ | (65,274 | ) | $ | (56,929 | ) | $ | (45,200 | ) | $ | (185,962 | ) | |||||
Investing Activities: | ||||||||||||||||||||
Property, plant and equipment | - | (4,413 | ) | - | - | (4,413 | ) | |||||||||||||
Net cash provided by investing activities | $ | - | $ | (4,413 | ) | $ | - | $ | - | $ | (4,413 | ) | ||||||||
Financing Activities: | ||||||||||||||||||||
Proceeds from issuance of common stock | - | 32,767 | - | 19,044 | 35,480 | |||||||||||||||
Proceeds from collection of subscriptions receivable | - | - | - | - | 25,267 | |||||||||||||||
Proceeds from officer loans | 1,242 | - | 6,106 | 8,821 | 70,999 | |||||||||||||||
Loans From Williams Law Group | 101,896 | 40,228 | 45,229 | - | 101,896 | |||||||||||||||
Disbursement of deferred offering costs | - | - | - | (20,199 | ) | |||||||||||||||
Net cash provided by financing activities | $ | 103,138 | $ | 72,995 | $ | 51,335 | $ | 27,865 | $ | 213,443 | ||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 23,474 | $ | 3,308 | $ | (5,594 | ) | $ | (17,335 | ) | $ | 23,068 | ||||||||
Cash and cash equivalents at beginning of the period | (406 | ) | - | 28,662 | 20,643 | - | ||||||||||||||
Cash and cash equivalents at end of the period | $ | 23,068 | $ | 3,308 | $ | 23,068 | $ | 3,308 | $ | 23,068 |
8
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE A- BUSINESS DESCRIPTION
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 November 30, 2009. The Company’s business activities during its development stage consist solely of corporate formation, raising capital, and attempting to secure environmental remediation contracts.
Going Concern
The Company’s lack of operating history and financial resources raise substantial doubt about its 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 the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operations.
NOTE B – SIGNIFICANT ACCOUNTING POLICIES
Development Stage Company
The Company is considered to be in the development stage as defined in FASB ASC Topic 915, “Development Stage Entities”. The Company has devoted substantially all of its efforts to the corporate formation, the raising of capital and attempting to secure environmental remediation contracts.
Basis of Accounting
The financial statements reflect the assets, revenues and expenditures of the Company on the accrual basis of accounting.
The Company’s fiscal year end is the last day of February, i.e., February 28th or 29th.
9
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 certain amounts reported in the financial statements and disclosures. Accordingly, actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The company as of November 30, 2009 has $23,608 cash and cash equivalents.
Property, Plant, and Equipment Depreciation
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. As of November 30, 2009, the company purchased software at a cost $ 4,413. In the period of August 31, 2009 to November 30, 2009, $368 depreciation expense was recorded.
Deferred Offering Costs
At the period ended February 29, 2008, the Company had deferred external costs associated with its planned initial public offering in fiscal 2009, at which time the costs would be charged against the capital raised upon effectiveness of the offering. Due to the fact that the planned offering has been indefinitely deferred, costs of $ 17,199 have been expensed to operations for the period ended February 28, 2009. As of November 30, 2009, there was no deferred offering cost.
10
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
Stock-Based Compensation
On December 16, 2004, the Financial Accounting Standards Board (“FASB”) published Statement ASC 718, “Compensation- Stock Compensation”. ASC 718 requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of ASC 718 include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans. The provisions of ASC 718 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 ASC 718. The Company recognizes these compensation costs, net of an estimated forfeiture rate, on a pro rata basis over the requisite service period of each vested tranche of each award.
The Company considers voluntary termination behavior as well as trends of actual option forfeitures when estimating the forfeiture rate.
The Company measures compensation expense for its non-employee stock-based compensation under the Financial Accounting Standards Board (FASB) ASC 505 “Equity-Based Payments to Non-Employees”. 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.
11
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basic and Diluted Net Loss Per Common Share
The Company computes per share amounts in accordance with FASB ASC Topic 260, “Earnings per Share”. ASC 260 requires presentation of basic and diluted EPS. Basic EPS is computed by dividing the income (loss) available to Common Shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods.
As of November 30, 2009, the Company has issued one type of share, i.e., common shares only. There are no other types of securities. Accordingly, the diluted and basic net loss per common share are the same.
Revenues
The Company will recognize revenue from the contracts they enter into for environmental remediation and recognize revenue in accordance with the terms of those contracts. For the nine months ended November 30, 2009, $45,525 revenue was recognized.
Cost of Goods Sold
For the nine months ended November 30, 2009, an amount of $10,617 Cost of Goods Sold was recorded for the projects performed.
Accounts Receivable
The Company will extend credit based on an evaluation of a customer’s 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 Accounts Receivables of $0 as of November 30, 2009.
12
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Tax
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 concurrent 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.
Accounts Payable
As of November 30, 2009, the Company incurred accounts payable of $271,354, including professional fees of $34,216, cost of goods sold of $160,310, $21,444 of rent payable and other service fee payables of $55,385.
The professional fees consist of $12,000 payable to Williams Law Group for legal fees and $22,216 payable to various accounting firms for audit, review and accounting services.
For total rental expense of $21,444 during the period of September 1 to November 30, 2009, $3,925 was estimated based on the contingency of the settlement of a lawsuit with Chatham Executive Suite LLC, according to FASB ASC 450-20-25, Recognition of Loss Contingencies, a loss contingencies should be accrued when it is reasonable estimable and relates to the current or prior period. The lawsuit was eventually settled for the exact final rental payment of $3,925 on January 7, 2010.
Operating Expense
For the nine months ended November 30, 2009, the company has a total operating expense of $279,521.
Details are listed in Table below:
13
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Operating Expense (Continued)
Three months Ended | Nine months Ended | |||||||
11-30-2009 | 11-30-2009 | |||||||
Expense | ||||||||
Transfer Agent Service Fee | $ | - | $ | 3,475 | ||||
Discount Expense | - | 40 | ||||||
Miscellaneous | 34,008 | 33,927 | ||||||
Organization Cost | - | 3,924 | ||||||
Training | - | 180 | ||||||
State Fees | - | 250 | ||||||
Bank Service Charges | 1,175 | 2,642 | ||||||
Compensation Expense | 37,500 | 112,500 | ||||||
Computer Expense | 1,416 | 1,416 | ||||||
Consulting Expense | 53,770 | 53,770 | ||||||
Depreciation Expense | 368 | 1,104 | ||||||
Dues and Subscriptions | - | 2,746 | ||||||
Office Supplies | 1,245 | 2,311 | ||||||
Postage and Delivery | - | 60 | ||||||
Printing and Reproduction | - | 48 | ||||||
Professional Fees | ||||||||
Accounting | $ | 11,000 | $ | 23,500 | ||||
Legal Fees | 2,190 | |||||||
Total Professional Fees | 11,000 | 25,690 | ||||||
Rent | 21,444 | 23,632 | ||||||
Subcontractors | - | 9,124 | ||||||
Telephone | 594 | 1,667 | ||||||
Travel & Entertainment | ||||||||
Auto | $ | 30 | $ | 274 | ||||
Entertainment | - | 48 | ||||||
Lodging | - | 132 | ||||||
Meals | 27 | 541 | ||||||
Other | $ | - | $ | 20 | ||||
Total Travel & Entertainment | $ | 57 | $ | 1,015 | ||||
Total | $ | 162,577 | $ | 279,521 |
14
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Issued Accounting Pronouncements
The following pronouncements have become effective during the period covered by these financial statements or will become effective after the end of the period covered by these financial statements:
Pronouncement | Issued | Title | ||
ASC 805 | December 2007 | Business Combinations | ||
ASC 810 | December 2007 | Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 | ||
ASC 815 | March 2008 | Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133 | ||
ASC 944 | May 2008 | Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60 | ||
ASC 855 | May 2009 | Subsequent Events | ||
ASC 105 | June 2009 | The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162 |
Management does not anticipate that the new accounting pronouncements listed above will have a material impact on our financial statements.
NOTE C – RELATED PARTY TRANSACTIONS
Loans from Officer and Shareholder
For the period ending November 30, 2009, Williams Law Group loaned an additional $ 45,229 to the company. As of November 30, 2009, the shareholder, Williams Law Group, loaned a total of $ 101,896 to the Company for continuing operations.
Accrued Compensation
As of November 30, 2009, the company has a total of $114,075 accrued compensation for its then COO, Ronald Hardesty. This accrual started from March 21, 2008 to November 30, 2009.
During the period March 1, 2008 to November 30, 2009, the Company’s President and founding shareholder, Philip J. Huseyinof, has provided services to the Company without the expectation of receiving any compensating payment. The value of these services was estimated at $131,250, based upon the value of another executive officer of the Company then 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.
15
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
NOTE D – SHAREHOLDERS’ EQUITY
Common Stock
On February 28, 2008 (date of inception) the Company issued 50,000,000 shares of common stock to its founder at $0.001 per share or $50,000 in initial capital ($24,733 cash and $25,267 subscription receivable) to fund the Company’s development efforts.
Additionally on February 28, 2008, the Company issued 2,000,000 shares of common stock for legal services rendered which were valued at $2,000 based on the $0.001 value of the shares issued at.
On March 21, 2008, the company issued 100,000 shares at a value of $ 0.05 per share to one of the officer for compensation expense upon to the employment agreement at a total value of $5,000.
During the period March 1, 2008 through February 28, 2009, the Company issued an additional 150,000 shares of common stock at $0.05 per share in a private placement raising an aggregate of $7,500, and issued 3,240,000 shares of stock at the $0.05 value for consulting services rendered at a value of $162,000.
The Company’s founder returned 20,010,000 shares of common stock to the Company for no consideration of cancellation on August 14, 2008.
During the period of March 1, 2009 to November 30, 2009, the Company issued no additional shares. Therefore, as of November 30, 2009, there were a total of 35,480,000 common shares outstanding.
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.
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INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE D – SHAREHOLDERS’ EQUITY (Continued)
Contributed Capital
For the nine months period ended November 30, 2009, 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 then 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 E – SUBSEQUENT EVENTS
Entry into a Material Definitive Agreement
An AGREEMENT AND PLAN OF MERGER (hereinafter referred to as the “Merger Agreement”) dated as of January 8, 2010 was entered into by and between INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS, a corporation existing under the laws of Nevada (“IDEH”) and PETROCOM ENERGY LIMITED, a Cayman Islands corporation (the “Target”).
The closing of the transactions contemplated by the Merger Agreement is subject to a number of conditions precedent including, but not limited to, (i) the validity of certain representations and warranties as of closing, (ii) the approval by the shareholders of both IDEH and Target, and (iii) the completion of the sales of substantially all of the assets and business of IDEH to a new entity to be formed by certain existing shareholders and directors of IDEH in a related party transaction. All members of the Board of Directors of IDEH that voted to approve the Merger Agreement have agreed to vote the shares that they and their affiliates hold in IDEH in favor of the merger.
The agreement, without schedules and exhibits, is filed as an exhibit to Form 8-K and should be referred to in its entirety for complete information concerning this agreement.
Changes in Control of Registrant
On November 25, 2009, JTMW Partners, Michael T. Williams and Bernard J. Tanenbaum III principals, acquired 29,900,000 shares, or approximately 84%, of our common stock from Philip Huseyinof for $12,000 using personal funds.
Departure of Directors or Certain Officers and Appointment of Certain Officers
Ronald Hardesty was dismissed as COO and Interim CFO/Comptroller effective on or before November 25, 2009. Philip Huseyinof was removed as a Director of the Company by a vote of shareholders as required under Nevada law on December 31, 2009. Effective December 31, 2009, Michael T. Williams and Bernard J. Tanenbaum III were elected Directors of the Corporation. On the same date, Michael T. Williams was elected Secretary/Treasurer and Bernard J. Tanenbaum III was elected President of the Corporation by the new Board of Directors.
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INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE E – SUBSEQUENT EVENTS (continued)
Settlement of Lawsuit
For total rental expense of $21,444 during the period of September 1 to November 30, 2009, $3,925 was estimated based on the contingency of the settlement of a lawsuit with Chatham Executive Suite LLC, according to FASB ASC 450-20-25, Recognition of Loss Contingencies, a loss contingencies should be accrued when it is reasonable estimable and relates to the current or prior period. The lawsuit was eventually settled for the exact final rental payment of $3,925 on January 7, 2010.
NOTE F - GOING CONCERN
As shown in the 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 $244,613 and $395,701 in the nine months ended November 30, 2009 and 2008; and a cumulative losses $851,533 for the period February 28, 2008 (date of inception) through November 30, 2009.
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. As of November 30, 2009, the Company has realized revenue of $45,525. Management believes that the Company’s business development and capital raising or merger and acquisition 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.
The Company’s lack of operating history and financial resources raise substantial doubt about its 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 the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operations.
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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 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.
Since inception, we have completed two contracts. The first is with Alliance Petroleum in Bedford Park, Illinois completed on December 15, 2008.
The second contract is with Park Forest Marathon in Park Forest, Illinois completed on November 26, 2008.
In addition, we have 16 remediation contracts that we are awaiting funding to commence.
Development Stage Revenues and Expenditures
Development stage revenues during the period from inception on February 28, 2008 to November 30, 2009 were $45,525. Development stage expenditures during the period from inception on February 28, 2008 to November 30, 2009 were $851,833, which consisted primarily of professional, consulting and marketing fees of $316,651 and general and administrative expenses of $418,128 related to our formation, our registration statement and related expenses of becoming and being a public company and initial operations; $160,310 in cost of sales related to our operations and $2,269 of depreciation expenses.
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 and private lenders.
At November 30, 2009, we had total assets of $25,212 consisting of cash, property and equipment and deposits.
At November 30, 2009, our total liabilities were $518,955, consisting of loans from officer and private lender, accounts payable, credit card payable, accrued compensation, and deferred revenue.
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Cash Requirements
We intend to provide funding for our activities, if any, through collection of potential receivables from our remediation activities and borrowing from our current officers and directors. Our previous president 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, 2009, the unpaid amount advanced was $22,146. He is not obligated to make any further advances. We do not anticipate our prior president providing further funding.
We have a loan agreement with two private lenders who have now become our officers and directors to advance us up to $75,000 in stages through September 30, 2009. At November 30, 2009, $101,896 had been advanced. The Due Date is the earlier of: (i) the collection of Receivables by Borrower, (ii) a Change in Control Transaction of Borrower, or (iii) December 31, 2009. Change in Control means any transaction pursuant to which more than 50% of the voting rights of the stock of Borrower are transferred, directly or indirectly, to any person, firm or entity. Our current officers and directors have indicated they will continue to provide us funding under the above loan agreement and to increase the amount agreed to be advanced and extend the due date as necessary to continue our current operations and to meet our obligations under the Merger Agreement. At December 31, 2009, they agreed to extend the due date until closing of the merger under the Merger Agreement. Except as set forth below, we have no agreement, commitment or understanding to secure any such funding from any other source.
We have $23,068 of cash and are continuing operations by minimizing expenditures to the maximum extent possible and through the forbearance of our creditors. We are focusing on collection of potential receivables from past operations, determining how to move forward with existing remediation contracts and on closing the merger agreement.
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 to 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.
Not Applicable
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act (defined below)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
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Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Changes in Internal Control Over Financial Reporting
In addition, our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has determined that no change in our internal control over financial reporting occurred during or subsequent to the quarter ended November 30, 2009 that has materially affected, or is (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
On January 7, 2010, we settled a lawsuit for unpaid rent with Chatham Executive Suites, LLC, paying $3,925 and receiving a full release. At November 30, 2009 such amount was fully accrued.
A smaller reporting company is not required to provide the information required by this Item.
None
None
None
None
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Exhibit Number | 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. | |
31.2 | 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 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS | |||
By: | /s/ Bernard J. Tanenbaum III | ||
Bernard J. Tanenbaum III | |||
President | |||
By | /s/ Michael T. Williams | ||
Michael T. Williams | |||
Principal Financial and Principal | |||
Accounting Officer |
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