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: August 31, 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) |
869 E. Schaumburg Rd. Suite 132, Schaumburg, IL 60194
(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 | o | Accelerated filer | o | |
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). oYes 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 August 31, 2009.
INDEX
Page | ||
PART I FINANCIAL INFORMATION | ||
Item 1. | 3 | |
Item 2. | 16 | |
Item 3. | 17 | |
Item 4. | 17 | |
PART II OTHER INFORMATION | ||
Item 1. | 18 | |
Item 1A. | 18 | |
Item 2. | 18 | |
Item 3. | 18 | |
Item 4. | 18 | |
Item 5. | 18 | |
Item 6. | 19 | |
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
(A Development Stage Enterprise)
Financial Statements
(Unaudit)
As of August 31, 2009 and 2008,
And Cumulative from February 28, 2008 (Inception) to August 31, 2009
Table of Contents
(A Development Stage Enterprise) | ||||||||
BALANCE SHEETS | ||||||||
August 31 | February 28 | |||||||
2009 | 2009 | |||||||
ASSETS | Unaudit | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 28,622 | $ | (406 | ) | |||
Account Receivable | 3,485 | - | ||||||
Prepaid expense | - | - | ||||||
Total Current Assets | $ | 32,107 | $ | (406 | ) | |||
Property, plant and equipment, net | $ | 2,512 | $ | 3,248 | ||||
Other assets: | ||||||||
Loan to officers | - | 1,910 | ||||||
Total Other Assets | $ | - | $ | 1,910 | ||||
TOTAL ASSETS | $ | 34,619 | $ | 4,752 | ||||
LIABILITIES & EQUITY | ||||||||
Current liabilities: | ||||||||
Loan from officer | 19,952 | $ | 69,758 | |||||
Account payable | 190,307 | 155,085 | ||||||
Credit card payable | 2,294 | 7,174 | ||||||
Accrued compensation | 108,125 | 70,625 | ||||||
Loans from Private Lenders | 56,667 | - | ||||||
Deferred revenue | 7,230 | 7,730 | ||||||
Total Current Liabilities | $ | 384,575 | $ | 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 | ||||||||
issued and outstanding at August 31, 2009. | $ | 35,480 | $ | 35,480 | ||||
Paid-in capital | 303,520 | 266,020 | ||||||
Deficit accumulated during the development stage | (688,955 | ) | (607,120 | ) | ||||
Total stockholders' equity | (349,955 | ) | $ | (305,620 | ) | |||
TOTAL LIABILITIES & EQUITY | $ | 34,619 | $ | 4,752 |
(A Development Stage Enterprise) | ||||||||
STATEMENT OF OPERATION |
Cumulative from | ||||||||||||||||||||
Six Months Ended | Three Months Ended | February 28, 2008 | ||||||||||||||||||
August 31 | August 31 | (Date of Inception) | ||||||||||||||||||
2009 | 2008 | 2009 | 2008 | to August 31, 2009 | ||||||||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | ||||||||||||||||
Revenues: | $ | 45,525 | $ | - | $ | 21,805 | $ | - | $ | 45,525 | ||||||||||
Cost of Goods Sold | $ | 10,617 | $ | - | $ | - | $ | - | $ | 160,310 | ||||||||||
Gross Profit | $ | 34,908 | $ | - | $ | 21,805 | $ | - | $ | (114,785 | ) | |||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | - | - | - | - | - | |||||||||||||||
Professional, consulting and marketing fees | 14,690 | 35,353 | 14,190 | 33,315 | 248,393 | |||||||||||||||
Selling, general and administrative expenses | 101,518 | 268,149 | 58,212 | 217,887 | 324,177 | |||||||||||||||
Depreciation and amortization expenses | 736 | 429 | 368 | 368 | 1,901 | |||||||||||||||
Total Operating Expenses | 116,944 | 303,931 | 72,770 | 251,570 | 574,471 | |||||||||||||||
Operating Income( Loss) | $ | (82,035 | ) | $ | (303,931 | ) | $ | (50,965 | ) | $ | (251,570 | ) | $ | (689,255 | ) | |||||
Investment income, net | $ | 200 | $ | 100 | $ | - | $ | - | $ | 300 | ||||||||||
Interest Expense, net | - | - | - | - | - | |||||||||||||||
Income(Loss) before taxes | $ | (81,835 | ) | $ | (303,831 | ) | $ | (50,965 | ) | $ | (251,570 | ) | $ | (688,955 | ) | |||||
Income(Loss) tax expense | - | - | - | - | - | |||||||||||||||
Net Income(Loss) | $ | (81,835 | ) | $ | (303,831 | ) | $ | (50,965 | ) | $ | (251,570 | ) | $ | (688,955 | ) | |||||
Net Income(Loss) per common share-Basics | $ | (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 | ) |
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS, INC | ||||||||||||||||||||
(A Development Stage Enterprise) | ||||||||||||||||||||
STATEMENT OF STOCKHOLDERS EQUITY | ||||||||||||||||||||
FOR THE PERIOD ENDED August 31, 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 | $ | 37,500 | $ | 37,500 | ||||||||||||||||
Net Loss for the period | ||||||||||||||||||||
ended August 31, 2009 | $ | (81,835 | ) | $ | (81,835 | ) | ||||||||||||||
Balance, August 31, 2009 | 35,480,000 | $ | 35,480 | $ | 303,520 | $ | (688,955 | ) | $ | (349,955 | ) |
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS, INC | ||||||||||
(A Development Stage Enterprise) | ||||||||||
STATEMENT OF CASH FLOWS |
Cumulative from | ||||||||||||||||||||
Six Months Ended | Three Months Ended | February 28, 2008 | ||||||||||||||||||
August 31 | August 31 | (Date of Inception) | ||||||||||||||||||
2009 | 2008 | 2009 | 2008 | to August 31, 2009 | ||||||||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | ||||||||||||||||
Operating Activities: | ||||||||||||||||||||
Net Loss | $ | (81,835 | ) | $ | (303,831 | ) | $ | (50,965 | ) | $ | (251,570 | ) | $ | (688,955 | ) | |||||
Adjustments to reconcile net income to net cash provided by | ||||||||||||||||||||
Operating activities: | ||||||||||||||||||||
Depreciation | 736 | 429 | 368 | 368 | 1,901 | |||||||||||||||
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 | 162,000 | |||||||||||||||
Non-cash issuances of President's contributed capital | 37,500 | 37,500 | 18,750 | 18,750 | 112,500 | |||||||||||||||
Write off of offering costs | - | 20,199 | - | 20,199 | 20,199 | |||||||||||||||
Prepaid expense | - | (3,400 | ) | - | 3,000 | - | ||||||||||||||
Loans to officer | - | - | - | - | (1,910 | ) | ||||||||||||||
Decrease (Increase) in accounts receivable | (3,485 | ) | - | (490 | ) | - | (3,485 | ) | ||||||||||||
Increase (Decrease) in accrued compensation | 37,500 | 33,125 | 18,750 | 18,750 | 108,125 | |||||||||||||||
Increase (Decrease) in account payable | 35,222 | - | 21,147 | - | 190,307 | |||||||||||||||
Increase (Decrease) in credit card payable | (4,880 | ) | 2,686 | 153 | 2,686 | 2,295 | ||||||||||||||
Increase(Decrease) in deferred revenue | (500 | ) | - | 7,230 | - | 7,230 | ||||||||||||||
Net cash provided by operating activities | $ | 20,257 | $ | (46,292 | ) | $ | 14,944 | $ | (25,817 | ) | $ | (82,794 | ) | |||||||
Investing Activities: | ||||||||||||||||||||
Property, plant and equipment | - | (4,413 | ) | - | - | (4,413 | ) | |||||||||||||
Net cash provided by investing activities | $ | - | $ | (4,413 | ) | $ | - | $ | - | $ | (4,413 | ) | ||||||||
Financing Activities: | ||||||||||||||||||||
Proceeds from issurance of common stock | - | 7,200 | - | 6,900 | 32,233 | |||||||||||||||
Proceeds from collection of subscriptions receivable | - | 25,267 | - | - | 25,267 | |||||||||||||||
Proceeds from officer loans | (47,896 | ) | 31,407 | (42,298 | ) | 22,000 | 21,862 | |||||||||||||
Loans From William Group | 56,667 | - | 45,167 | - | 56,667 | |||||||||||||||
Disbursement of deferred offering costs | - | (3,000 | ) | - | - | (20,199 | ) | |||||||||||||
Net cash provided by financing activities | $ | 8,771 | $ | 60,874 | $ | 2,869 | $ | 28,900 | $ | 115,830 | ||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 29,028 | $ | 10,169 | $ | 17,813 | $ | 3,083 | $ | 28,622 | ||||||||||
Cash and cash equivalents at beginning of the period | (406 | ) | - | 10,809 | 7,086 | - | ||||||||||||||
Cash and cash equivalents at end of the period | $ | 28,622 | $ | 10,169 | $ | 28,622 | $ | 10,169 | $ | 28,622 |
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
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 February 28, 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 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.
Basis of accounting
The financial statements reflect the assets, revenues and expenditures of the Company on the accrued basis of accounting.
The Company’s fiscal year end is the last day of the February, i.e., February 28th or 29th.
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 August 31, 2009 has $ 28,622 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. In last fiscal year, the company purchased software cost $ 4,413. As of August, 2009, an accumulate value of $ 1,901 was being depreciated; there was $ 368 depreciation expense recorded in the period of June 1, 2009 to August 31, 2009.
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
NOTES TO FINANCIAL STATEMENTS
NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 will be charged against the capital raised or upon effectiveness of the offering. And the costs of $ 17,199 have charged to operations at the period ended February 28, 2009. As of August 31, 2009, there was no deferred offering cost.
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 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 trenched 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) 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.
Basics and Diluted Net Loss Per Common Share
The Company computes per share amounts in accordance with SFAS No. 128, “Earnings per Share”. SFAS No. 128 requires presentation of basis 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 August 31, 2009, the Company issued one type of shares, i.e., common shares only. There are no other types securities were issued. Accordingly, the diluted and basics net loss per common share are the same.
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
NOTES TO FINANCIAL STATEMENTS
NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 six months ended August 31, 2009 $ 45,525 revenue was recognized.
Cost of Goods Sold
For six months ended August 31, 2009, an amount of $ 10,617 Cost of Goods Sold was recorded for the projects performing.
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 Account Receivable of $ 3,485 as of August 31, 2009.
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 August 31, 2009, the Company incurred accounts payable $190,307, included professional fee of $28,108 and cost of goods sold of $162,199, respectively.
The professional fee is consists of $12,000 payable to Williams Law Group for legal fee, $4,000 for 10-Q review fee to KBL, LLP, $ 3,275 for SEC filling to Vintage, and $ 8,833 for 10-K Auditing fee to Enterprise CPAs, Ltd.
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
NOTES TO FINANCIAL STATEMENTS
NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)
Operating Expense
As of August 31, 2009, the company has a total operating expense of $ 116,943.55.
Details are listed in Table below:
Three months Ended | Six months Ended | |||||||||
8/31/2009 | 8/31/2009 | |||||||||
Expense | ||||||||||
Transfer Agent Service Fee | 200.00 | 3,475.00 | ||||||||
Discount Expense | 40.00 | 40.00 | ||||||||
Miscellaneous | - | 198.30 | ||||||||
Organization Cost | 3,924.00 | 3,924.00 | ||||||||
Training | 180.00 | 180.00 | ||||||||
State Fees | 250.00 | 250.00 | ||||||||
Bank Service Charges | 662.00 | 1,498.50 | ||||||||
Compensation Expense | 37,500.00 | 75,000.00 | ||||||||
Depreciation Expense | 368.00 | 736.00 | ||||||||
Dues and Subscriptions | 2,496.13 | 2,496.13 | ||||||||
Office Supplies | 813.47 | 1,005.36 | ||||||||
Postage and Delivery | 59.50 | 59.50 | ||||||||
Printing and Reproduction | 48.15 | |||||||||
Professional Fees | ||||||||||
Accounting | 12,500.00 | 12,500.00 | ||||||||
Legal Fees | 1,689.50 | 2,189.50 | ||||||||
Total Professional Fees | 14,189.50 | 14,689.50 | ||||||||
Rent | 1,400.00 | 2,187.50 | ||||||||
Subcontractors | 9,123.74 | 9,123.74 | ||||||||
Telephone | 1,072.64 | 1,072.64 | ||||||||
Travel & Entertainment | ||||||||||
Auto | 139.29 | 243.73 | ||||||||
Entertainment | 18.12 | 48.12 | ||||||||
Lodging | - | 131.99 | ||||||||
Meals | 311.82 | 514.01 | ||||||||
Other | 21.38 | 21.38 | ||||||||
Total Travel & Entertainment | 490.61 | 959.23 | ||||||||
Total | $ | 72,769.59 | $ | 116,943.55 |
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
NOTES TO FINANCIAL STATEMENTS
NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 July 2006, the FASB issued Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (“FIN 48”), and supplemented by FASB Financial Staff Position FIN 48-1, Definition of Settlement in FASB Interpretation No. 48, issued May 2, 2007. FIN 48 specifies how tax benefits for uncertain tax positions are to be recognized, measured, and derecognized in financial statements; requires certain disclosures of uncertain tax matters; specifies how reserves for uncertain tax positions should be classified on the balance sheet; and provides transition and interim period guidance, among other provisions. FIN 48 is effective for fiscal years beginning after December 15, 2006 and as a result, is effective for the Company in the fiscal year 2008.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for using fair value assets and liabilities, and expends disclosures about fair value measurements. This statement applies whenever other statements require or permit assets or liabilities to be measured at fair value. SFAS 157 is effective for fiscal years beginning after November 15, 2007. The management believes that there is no material impact on its consolidated results of operations, cash flows, and financial position.
In September 2006, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 108, Quantifying Financial Misstatements (“SAB 108”), which expresses the Staff’s views regarding the process of quantifying financial statement misstatements. Registrants are required to quantify the impact of correcting all misstatements, including both carryover and reversing effects of prior year misstatements, on the current year financial statements. The financial statements would require adjustment when either approach results in quantifying a misstatement that is material, after considering all relevant quantitative and qualitative factors. SAB 108 is effective for financial statements covering the first fiscal year ending after November 15, 2006. The management believes that there is no material impact on its consolidated results of operations, cash flows, and financial position.
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 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.
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
NOTES TO FINANCIAL STATEMENTS
NOTE C – RELATED PARTY TRANSACTIONS
Loans from Officer and Shareholder
For the period of June 1, 2009 to August 31, 2009, William Group loaned additional $45,166.66 to the company. As of August 31, 2009, the shareholder William Group loans total of $56,666.66 to the Company for continuing operating.
Accrued Compensation
As of August 31, 2009, the company has a total of $108,125 accrued compensation for COO, Ronald Hardesty started from March 21, 2008 to August 31, 2009.
During the period March 1, 2008 to August 31, 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 $112,500, 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.
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 August 31, 2009, the Company issued no additional shares.
Therefore, as of August 31, 2009, there were a total of 35,480,000 common shares outstanding.
INTERNATIONAL DEVELOPMENT AND ENVIRONMENTAL HOLDINGS
NOTES TO FINANCIAL STATEMENTS
NOTE D – SHAREHOLDERS’ EQUITY (Continued)
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.
Contributed Capital
For the six months period ended August 31, 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 $37,500, 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 E – SUBSEQUENT EVENTS
On September 15, the account receivable of $3,485 was paid by Olsen Properties.
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 $81,835 and $303,831 in the six months ended August 31, 2009 and 2008; and a cumulative losses $88,955 for the period February 28, 2008 (date of inception) through August 31, 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 August 31, 2009, the Company has raised revenue of $45,525. 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.
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.
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 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 Alliance Petroleum in Bedford Park, Illinois on completed on December 15, 2008. We have submitted a formal request for reimbursement to the State of Illinois for this project and hope to have a response and acceptance from the Illinois EPA within 120 days.
The second contract is Park Forest Marathon in Park Forest, Illinois on November 26, 2008. We are in the process of a formal request for reimbursement to the State of Illinois for this project and should have this completed within the near future and should have a response and acceptance from the Illinois EPA within 120 days after submission.
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 August 31, 2009 were $45,525. Development stage expenditures during the period from inception on February 28, 2008 to August 31, 2009 were $689,255 , which consisted primarily of professional, consulting and marketing fees of $249,393 and general and administrative expenses $324,177 related to our formation, our registration statement and related expenses of becoming and being a public company and initial operations; and $160,310 in cost of sales related to our operations.
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 August 31, 2009, we had total assets of $34,619 consisting of cash, property and equipment and deposits.
At August 31, 2009, our total liabilities were $384,575, consisting of loans from officer and private lender, accounts payable, credit card payable, accrued compensation, and deferred revenue.
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 August 31, 2009, the unpaid amount advanced was $19,952. He is not obligated to do make any further advances. Except as set forth below, 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. We continue to engage in discussions with third party companies concerning potential acquisition, but we have no binding agreement in place at this time.
We have a loan agreement with two private lenders to advance us up to $75,000 in stages through September 30, 2009. At August 31, 2009, $56,667 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 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
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.
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 have determined that no change in our internal control over financial reporting occurred during or subsequent to the quarter ended August 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
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
None
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 Number | Name and/or Identification of Exhibit | |
31.1 | ||
31.2 | ||
32.1 | ||
32.2 |
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 | |||
October 19, 2009 | By: | /s/ Philip J. Huseyinof | |
Philip J. Huseyinof Chairman and CEO | |||
October 19, 2009 | By | /s/ Ronald Hardesty | |
Ronald Hardesty Principal Financial and Principal Accounting Officer |
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