UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009
OR
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSITION FROM _______ TO ________.
COMMISSION FILE NUMBER: 000-52848
PALMDALE EXECUTIVE HOMES, CORP.
_________________________________________________________________
(Exact Name of Small Business Issuer as Specified in its Charter)
Nevada 26-1125521
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6767 W. Tropicana Ave., Suite 207
Las Vegas, NV 89103
________________________________________ __________
(Address of principal executive offices) (Zip code)
Issuer's telephone number: (702) 248-1027
N/A
____________________________________________________
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
________________________________________________________________________________
Non-accelerated filer Smaller
Large accelerated (Do not check if a smaller reporting
filer Accelerated filer reporting company) company
[ ] [ ] [ ] [X]
________________________________________________________________________________
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes /X/ No / /
State the number of shares outstanding of each of the issuer's classes of common
equity, for the period covered by this report and as at the latest practicable
date:
At March 31, 2009, and as of the date hereof, there were outstanding
3,400,000 shares of the Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format: Yes / / No /X/
-1-
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
PALMDALE EXECUTIVE HOMES, CORP.
(A Development Stage Enterprise)
MARCH 31, 2009
DECEMBER 31, 2008
-2-
PALMDALE EXECUTIVE HOMES, CORP.
(A Development Stage Enterprise)
CONTENTS
________________________________________________________________________________
FINANCIAL STATEMENTS
Balance Sheets 4
Statements of Operations 5
Statements of Stockholders' Deficit 6
Statements of Cash Flows 7
Notes to Financial Statements 8-12
________________________________________________________________________________
-3-
PALMDALE EXECUTIVE HOMES, CORP.
(A Development Stage Enterprise)
BALANCE SHEETS
March 31, December 31,
2009 2008
_____________ ____________
ASSETS
CURRENT ASSETS $ 0 $ 0
________ ________
Total current assets $ 0 $ 0
________ ________
Total assets $ 0 $ 0
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 0 $ 0
Officers advances 15,335 12,185
________ ________
Total current liabilities $ 15,335 $ 12,185
________ ________
STOCKHOLDERS' DEFICIT
Common stock: $.001 par value;
authorized 25,000,000 shares;
issued and outstanding: 3,400,000 shares at
March 31, 2009 and December 31, 2008 3,400 3,400
Additional paid in capital 30,600 30,600
Accumulated deficit during development stage (49,335) (46,185)
________ ________
Total stockholders' deficit $(15,335) $(12,185)
________ ________
Total liabilities and
stockholders' deficit $ 0 $ 0
======== ========
See Accompanying Notes to Financial Statements.
-4-
PALMDALE EXECUTIVE HOMES, CORP.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
Jan. 14, 2000
Quarter Ended Year Ended (inception) to
March 31, December 31, March 31,
2009 2008 2009
________________ ____________ ______________
Revenues $ 0 $ 0 $ 0
Cost of revenue 0 0 0
__________ __________ __________
Gross profit $ 0 $ 0 $ 0
General, selling and
administrative expenses 3,150 4,572 49,335
__________ __________ __________
Operating loss $ (3,150) $ (4,572) $ (49,335)
Nonoperating income (expense) 0 0 0
__________ __________ __________
Net loss $ (3,150) $ (4,572) $ (49,335)
========== ========== ==========
Net loss per share, basic
and diluted $ (0.00) $ (0.00) $ (0.01)
========== ========== ==========
Average number of shares
of common stock outstanding 3,400,000 3,400,000 3,400,000
========== ========== ==========
See Accompanying Notes to Financial Statements.
-5-
PALMDALE EXECUTIVE HOMES, CORP.
(A Development Stage Enterprise)
STATEMENTS OF STOCKHOLDERS' DEFICIT
Accumulated
Deficit
Common Stock Additional During
_______________________________ Paid-In Development
Shares Amount Capital Stage Total
______________ _____________ ____________ ______________ ____________
February 20, 2000, issue
common stock 3,400,000 $ 3,400 $ 30,600 $ 0 $ 34,000
Net loss, December 31, 2000 (35,200) (35,200)
______________ _____________ ____________ ______________ ____________
Balance, December 31, 2000 3,400,000 $ 3,400 $ 30,600 $ (35,200) $ (1,200)
Net loss, December 31, 2001 (200) (200)
______________ _____________ ____________ ______________ ____________
Balance, December 31, 2001 3,400,000 $ 3,400 $ 30,600 $ (35,400) $ (1,400)
Net loss, December 31, 2002 (200) (200)
______________ _____________ ____________ ______________ ____________
Balance, December 31, 2002 3,400,000 $ 3,400 $ 30,600 $ (35,600) $ (1,600)
Net loss, December 31, 2003 (710) (710)
______________ _____________ ____________ ______________ ____________
Balance, December 31, 2003 3,400,000 $ 3,400 $ 30,600 $ (36,310) $ (2,310)
Net loss, December 31, 2004 (200) (200)
______________ _____________ ____________ ______________ ____________
Balance, December 31, 2004 3,400,000 $ 3,400 $ 30,600 $ (36,510) $ (2,510)
Net loss, December 31, 2005 (200) (200)
______________ _____________ ____________ ______________ ____________
Balance, December 31, 2005 3,400,000 $ 3,400 $ 30,600 $ (36,710) $ (2,710)
Net loss, December 31, 2006 (200) (200)
______________ _____________ ____________ ______________ ____________
Balance, December 31, 2006 3,400,000 $ 3,400 $ 30,600 $ (36,910) $ (2,910)
Net loss, December 31, 2007 (4,703) (4,703)
______________ _____________ ____________ ______________ ____________
Balance, December 31, 2007 3,400,000 $ 3,400 $ 30,600 $ (41,613) $ (7,613)
Net loss, December 31, 2008 (4,572) (4,572)
______________ _____________ ____________ ______________ ____________
Balance, December 31, 2008 3,400,000 $ 3,400 $ 30,600 $ (46,685) $ (12,185)
Net loss, March 31, 2009 (3,150) (3,150)
______________ _____________ ____________ ______________ ____________
Balance, March 31, 2009 3,400,000 $ 3,400 $ 30,600 $ (49,335) $ (15,335)
============== ============= ============ ============== =============
See Accompanying Notes to Financial Statements.
-6-
PALMDALE EXECUTIVE HOMES, CORP.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
Jan. 14, 2000
Quarter Ended Year Ended (inception) to
March 31, December 31, March 31,
2009 2008 2009
_________________ ____________ ______________
Cash Flows From
Operating Activities
Net loss $ (3,150) $ (4,572) $ (49,335)
Adjustments to reconcile net loss
to cash used in operating activities:
Changes in assets and liabilities
Increase (decrease) in accounts payable 0 (1,800) 0
__________ __________ __________
Net cash used in operating activities $ (3,150) $ (6,372) $ (49,335)
__________ __________ __________
Cash Flows From Investing Activities $ 0 $ 0 $ 0
__________ __________ __________
Cash Flows From Financing Activities
Issuance of common stock $ 0 $ 0 $ 34,000
Increase in officer advances 3,150 6,372 15,335
__________ __________ __________
Net cash provided by financing activities $ 3,150 $ 6,372 $ 49,335
__________ __________ __________
Net increase (decrease) in cash $ 0 $ 0 $ 0
Cash, beginning of period $ 0 $ 0 $ 0
__________ __________ __________
Cash, end of period $ 0 $ 0 $ 0
========== ========== ==========
Supplemental Information and Non-monetary
Transactions:
Interest paid $ 0 $ 0 $ 0
========== ========== ==========
Taxes paid $ 0 $ 0 $ 0
========== ========== ==========
See Accompanying Notes to Financial Statements.
-7-
PALMDALE EXECUTIVE HOMES, CORP.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS:
Palmdale Executive Homes, Corp. ("Company") was organized January 14, 2000 under
the laws of the State of Nevada. The Company currently has no operations and, in
accordance with Statement of Financial Accounting Standard (SFAS) No. 7,
"ACCOUNTING AND REPORTING BY DEVELOPMENT STAGE ENTERPRISE" is considered a
Development Stage Enterprise.
A SUMMARY OF THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES IS AS FOLLOWS:
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CASH
For the Statements of Cash Flows, all highly liquid investments with maturity of
three months or less are considered to be cash equivalents. There were no cash
equivalents as of March 31, 2009 and December 31, 2008.
INCOME TAXES
Income taxes are provided for using the liability method of accounting in
accordance with SFAS No. 109 "ACCOUNTING FOR INCOME TAXES," and clarified by
FASB Interpretation Number ("FIN") 48, "ACCOUNTING FOR UNCERTAINTY IN INCOME
TAXES--AN INTERPRETATION OF FASB STATEMENT NO. 109." Under Statement 109, a
liability method is used whereby deferred tax assets and liabilities are
determined based on temporary differences between basis used for financial
reporting and income tax reporting purposes. Income taxes are provided based on
tax rates in effect at the time such temporary differences are expected to
reverse. A valuation allowance is provided for certain deferred tax assets if it
is more likely than not, that the Company will not realize the tax assets
through future operations. Deferred tax assets and liabilities are adjusted for
the effect of charges in tax laws and rates on the date of enactment. Deferred
tax asset or liability is recorded for all temporary differences between
financial and tax reporting. Temporary differences are the differences between
the reported amounts of assets and liabilities and their tax basis. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effect of changes in tax laws and rates on the date of enactment.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial accounting Standards Statement No. 107, "DISCLOSURE ABOUT FAIR VALUE
OF FINANCIAL INSTRUMENTS," requires the Company to disclose, when reasonably
attainable, the fair market values of its assets and liabilities which are
deemed to be financial instruments. The Company's financial instruments consist
primarily of cash and certain investments.
-8-
PALMDALE EXECUTIVE HOMES, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
EARNINGS PER SHARE INFORMATION
The Company computes per share information in accordance with SFAS No.
128,"EARNINGS PER SHARE" which requires presentation of both basic and diluted
earnings per share on the face of the statement of operations. Basic loss per
share is computed by dividing the net loss available to common shareholders by
the weighted average number of common shares outstanding during such period.
Diluted loss per share gives effect to all dilutive potential common shares
outstanding during the period. Dilutive loss per share excludes all potential
common shares if their effect is anti-dilutive.
SHARE BASED EXPENSES
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123R "SHARE BASED PAYMENT." This statement is a revision to SFAS 123 and
supersedes Accounting Principles Board (APB) Opinion No. 25, "ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES," and amends FASB Statement No. 95, "STATEMENT OF CASH
FLOWS." This statement requires a public entity to expense the cost of employee
services received in exchange for an award of equity instruments. This statement
also provides guidance on valuing and expensing these awards, as well as
disclosure requirements of these equity arrangements. The Company adopted SFAS
No. 123R upon creation of the company and expenses share based costs in the
period incurred.
GOING CONCERN
The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Currently, the Company does not have cash, no material
assets, nor does it have operations or a source of revenue sufficient to cover
its operation costs and allow it to continue as a going concern. The Company
will be dependent upon the raising of additional capital through placement of
our common stock in order to implement its business plan, or merge with an
operating company. There can be no assurance that the Company will be successful
in either situation in order to continue as a going concern. The officers and
directors have committed to advancing certain operating costs of the Company.
RECENT ACCOUNTING PRONOUNCEMENTS
In May, 2008, the Financial Standards Board issued Statement of Financial
Accounting Standards No. 163, "ACCOUNTING FOR FINANCIAL GUARANTEE INSURNACE
CONTRACTS - AN INTERPRETATION OF FASB STATEMENT NO. 60" (SFAS 163). This
Statement requires that an insurance enterprise recognize a claim liability
prior to an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Statement
also clarifies how Statement 60 applies to financial insurance contracts,
including the recognition measurement to be used to account for premium revenue
and claim liabilities. Those clarifications will increase comparability in
financial reporting of financial guarantee insurance contracts by insurance
enterprises. This Statement requires expanded disclosures about financial
-9-
PALMDALE EXECUTIVE HOMES, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
guarantee insurance contracts. The accounting and disclosure requirements of the
Statement will improve the quality of information provided to users of financial
statements. This Statement is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and all interim periods within
fiscal years, except for some disclosures about the insurance enterprise's
risk-management activities. This Statement requires that disclosures about the
risk-management activities of the insurance enterprise be effective for the
first period (including interim periods) beginning after issuance of this
Statement. Except for those disclosures, earlier application is not permitted.
The adaptation of this statement will have no material effect on the Company's
financial condition or results of operations.
In May, 2008, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 162, "THE HIERCHY OF GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES" (SFAS No. 162). This Statement identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted principles (GAAP) in the United
States (the GAAP hierarchy). The sources of accounting principles that are
generally accepted are cauterized descending order of authority as follows:
a. FASB Statements of Financial Accounting Standards and Interpretations,
FASB Statement 133 Implementation Issues, FASB Staff Positions, and
American Institute of Certified Public Accountants (AICPA) Accounting
Research Bulletins and Accounting Principles Board Opinions that are
not superseded by actions of the FASB.
b. FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry
Audit and Accounting Guides and Statements of Position.
c. AICPA Accounting Standards Executive Committee Practice Bulletins that
have been cleared by the FASB, consensus positions of the FASB
Emerging Issues Task Force (EITF), and the Topics discussed in
Appendix D of EITF ABSTRACTS (EITF D- Topics).
d. Implementation guides (Q&A's) published by the FASB staff, AICPA
Accounting Interpretations, AICPA Industry Audit and Accounting Guides
and Statement of Position not cleared by the FASB, and practices that
are widely recognized and prevalent either generally or in the
industry. The adoption of this statement will have no material effect
on the Company's financial condition or results of operations.
In March 2008, the FASB issued SFAS No. 161, "DISCLOSURES ABOUT DERIVATIVE
INSTRUMENTS AND HEDGEING ACTIVITIES" an amendment of SFAS No. 133. SFAS 161
applies to all derivative instruments and nonderivative instruments that are
designated and qualify as hedging instruments pursuant to paragraph 17 and 42 of
SFAS 133 and related hedged items accounted for under SFAS 133. SFAS 161requires
entities to provide greater transparency through additional disclosures about
how and why an entity uses derivative instruments, how derivative instruments
and related hedged items are accounted for under SFAS 133 and its related
interpretations, and how derivative instruments and related hedge items affect
an entity's financial position, results of operations , and cash flows.
-10-
PALMDALE EXECUTIVE HOMES, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
SFAS 161 is effective as of the beginning of an entity's first fiscal year that
begins after November 15, 2008. We do not expect that the adaptation of SFAS 161
will have a material impact on our financial condition or results of operation.
NOTE 2. STOCKHOLDERS' EQUITY
COMMON STOCK
The authorized common stock of the Company consists of 25,000,000 shares with
par value of $0.001. On February 20, 2000 the Company authorized and issued
3,400,000 shares of its $0.001 par value common stock in consideration of
$34,000 in cash.
The Company has not authorized any preferred stock.
NET LOSS PER COMMON SHARE
Net loss per share is calculated in accordance with SFAS No. 128, "EARNINGS PER
SHARE." The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. Diluted loss per share is
computed using the weighted averaged number of shares and dilutive potential
common shares outstanding. Dilutive potential common shares are additional
common shares assumed to be exercised.
Basic net loss per common share is based on the weighted average number of
shares of common stock outstanding of 3,400,000 during 2009, 2008, and since
inception. As of March 31, 2009 and since inception, the Company had no dilutive
potential common shares.
NOTE 3. INCOME TAXES
We did not provide any current or deferred U.S. federal income tax provision or
benefit for any of the periods presented because we have experienced operating
losses since inception. Per Statement of Accounting Standard No. 109 -
Accounting for Income Tax and FASB Interpretation No. 48 - Accounting for
Uncertainty in Income Taxes an interpretation of FASB Statement No.109, when it
is more likely than not that a tax asset cannot be realized through future
income the Company must allow for this future tax benefit. We provided a full
valuation allowance on the net deferred tax asset, consisting of net operating
loss carryforwards, because management has determined that it is more likely
than not that we will not earn income sufficient to realize the deferred tax
assets during the carryforward period.
The components of the Company's deferred tax asset as of December 31, 2007 and
December 31, 2006 are as follows:
2009 2008
________ ________
Net operating loss carryforward $ 17,267 $ 16,165
Valuation allowance (17,267) (16,165)
________ ________
Net deferred tax asset $ 0 $ 0
======== ========
-11-
PALMDALE EXECUTIVE HOMES, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 3. INCOME TAXES (continued)
A reconciliation of income taxes computed at the statutory rate to the income
tax amount recorded is as follows:
Since
2009 2008 Inception
________ _______ _________
Tax at statutory rate (35%) $ 1,103 $ 1,600 $ 17,267
Increase in valuation allowance (1,103) (1,600) (17,267)
________ ________ _________
Net deferred tax asset $ 0 $ 0 $ 0
======== ======== =========
The net federal operating loss carry forward will expire between 2026 and 2026.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
NOTE 4. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An officer or
resident agent of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have not been
reflected therein. The officers and directors for the Company are involved in
other business activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity becomes available,
such persons may face a conflict in selecting between the Company and their
other business interest. The Company has not formulated a policy for the
resolution of such conflicts. As of March 31, 2009 and December 31, 2008 the
company owed officers $15,335 and $12,185 respectively.
NOTE 5. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of
common stock of the Company.
-12-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The discussion contained herein contains "forward-looking statements" that
involve risk and uncertainties. These statements may be identified by the use of
terminology such as "believes," "expects," "may," "should" or anticipates" or
expressing this terminology negatively or similar expressions or by discussions
of strategy. The cautionary statements made in this Form 10-Q should be read as
being applicable to all related forward-looking statements wherever they appear
in this Form 10-Q. Our actual results could differ materially from those
discussed in this report.
Generally.
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues in exchange for its
securities. The Company and our officers and directors have not enter into any
negotiations or preliminary discussions regarding the possibility of an
acquisition or merger between the Company and such other company as of the date
hereof.
General Business Plan
Our purpose is to seek, investigate and, if such investigation warrants,
acquire an interest in business opportunities presented to it by persons or
firms who or which desire to seek the advantages of a company who has complied
with the 1934 Act. We will not restrict its search to any specific business,
industry, or geographical location and we may participate in a business venture
of virtually any kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of our virtually
unlimited discretion to search for and enter into potential business
opportunities. Management anticipates that it may be able to participate in only
one potential business venture because we have nominal assets and limited
financial resources. This lack of diversification should be considered a
substantial risk to our shareholders because it will not permit us to offset
potential losses from one venture against gains from another.
We may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes.
We anticipate that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the benefits of an issuer who has complied with the 1934 Act. Such
benefits may include facilitating or improving the terms on which additional
equity financing may be sought, providing liquidity for incentive stock options
or similar benefits to key employees, providing liquidity (subject to
restrictions of applicable statutes), for all shareholders.
We have made no determination as to whether we will continue to file
periodic reports since our obligation to file such reports is not required under
the 1934 Act. Tricia A. Nickson, our majority shareholder, has agreed to provide
the necessary funds, without interest, for the Company to comply with the 1934
Act reporting requirements, provided that she is an officer and director of the
Company when the obligation is incurred. It is our present intent to continue to
comply with all of the reporting requirements under the 1934 Act.
It is anticipated that we will incur nominal expenses in the implementation
of our business plan described herein. Because we have no capital with which to
pay these anticipated expenses, present management of the Company will pay these
charges with their personal funds, as interest free loans to the Company or as
capital contributions. However, if loans, the only opportunity which management
has to have these loans repaid will be from a prospective merger or acquisition
candidate.
-13-
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present management and shareholders of the Company will
no longer be in control of the Company. In addition, our directors may, as part
of the terms of the acquisition transaction, resign and be replaced by new
directors without a vote of our shareholders or may sell her stock in the
Company.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. It is anticipated that it will also be a
method of taking a private company public known as a "back door" 1934 Act
registration procedure. While the actual terms of a transaction to which the
Company may be a party cannot be predicted, it may be expected that the parties
to the business transaction will find it desirable to avoid the creation of a
taxable event and thereby structure the acquisition in a so-called "tax-free"
reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code.
We will participate in a business opportunity only after the negotiation
and execution of appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require some
specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
Our present intent is that we will not acquire or merge with any entity
which cannot provide independent audited financial statements at the time of
closing of the proposed transaction and supply other information that is
normally disclosed in filings with the Securities and Exchange Commission. We
are subject to all of the reporting requirements included in the 1934 Act. These
rules are intended to protect investors by detering fraud and abuse in the
securities markets through the use of shell companies. Included in these
requirements is the affirmative duty of the Company to file independent audited
financial statements as part of its Form 8-K to be filed with the Securities and
Exchange Commission upon consummation of a merger or acquisition, as well as the
Company's audited financial statements included in its annual report on Form
10-K. In addition, in the filing of the Form 8-K that we file to report an event
that causes us to cease being a shell company, we are required to include that
information that is normally reported by a company in its original Form 10.
Accounting for a Business Combination
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards "SFAS" No. 141, "Business Combinations" and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method of accounting, and broadens the criteria for recording
intangible assets separate from goodwill. Recorded goodwill and intangibles will
be evaluated against these new criteria and may result in certain intangibles
being subsumed into goodwill, or alternatively, amounts initially recorded as
goodwill may be separately identified an recognized apart from goodwill. SFAS
No. 142 requires the use of a non-amortization approach to account for purchased
goodwill and certain intangibles. Under a non-amortization approach, goodwill
and certain intangibles is more than its fair value. Goodwill is the excess of
the acquisition costs of the acquired entity over the fair value of the
identifiable net assets acquired. The Company is required to test goodwill and
intangible assets that are determined to have an indefinite life for impairments
at least annually. The provisions of SFAS No. 142 require the completion of an
annual impairment test with any impairment recognized in current earnings. The
provisions of SFAS No. 141 and SFAS No. 142 may be applicable to any business
combination that we may enter into in the future.
-14-
We have also been informed that most business combinations will be
accounted for as a reverse acquisition with us being the surviving registrant.
As a result of any business combination, if the acquired entity's shareholders
will exercise control over us, the transaction will be deemed to be a capital
transaction where we are treated as a non-business entity. Therefore, the
accounting for the business combination is identical to that resulting from a
reverse merger, except no goodwill or other intangible assets will be recorded.
For accounting purposes, the acquired entity will be treated as the accounting
acquirer and, accordingly, will be presented as the continuing entity.
Shell Issues.
The Securities and Exchange Commission has adopted a rule (Rule 419) which
defines a blank-check company as (i) a development stage company, that is (ii)
offering penny stock, as defined by Rule 3a51-1, and (iii) that has no specific
business plan or purpose or has indicated that its business plan is engage in a
merger or acquisition with an unidentified company or companies. We have been
informed that the Securities and Exchange Commission position is that the
securities issued by all blank check companies that are issued in unregistered
offerings must be registered with the Commission before resale. At the time that
our shareholders acquired our stock in 1992, we had a specific business plan and
purpose. In addition, Rule 419 is applicable only if a registration statement is
filed covering an offering of a penny stock by a blank check company.
On June 29, 2005, the Securities and Exchange Commission adopted final
rules amending the Form S-8 and the Form 8-K for shell companies like us. The
amendments expand the definition of a shell company to be broader than a company
with no or nominal operations/assets or assets consisting of cash and cash
equivalents, the amendments prohibit the use of a From S-8 (a form used by a
corporation to register securities issued to an employee, director, officer,
consultant or advisor, under certain circumstances), and revise the Form 8-K to
require a shell company to include current Form 10 information, including
audited financial statements, in the filing on Form 8-K that the shell company
files to report the acquisition of the business opportunity. The rules are
designed to assure that investors in shell companies that acquire operations or
assets have access on a timely basis to the same kind of information as is
available to investors in public companies with continuing operations.
On February 15, 2008, the Securities and Exchange Commission adopted final
rules amending Rule 144 (and Rule 145) for shell companies like us. The
amendments currently in full force and effect provide that the current revised
holding periods applicable to affiliates and non-affiliates is not now available
for securities currently issued by either a reporting or non-reporting shell
company, unless certain conditions are met. An investor will be able to resell
securities issued by a shell company subject to Rule 144 conditions if the
reporting or non-reporting issuer (i) had ceased to be a shell, (ii) is subject
to the Exchange Act reporting obligations, (iii) has filed all required Exchange
Act reports during the proceeding twelve months, and (iv) at least 90 days has
elapsed from the time the issuer has filed the "Form 10 Information" reflecting
the fact that it had ceased to be a shell company before any securities were
sold Rule 144. The amendment to Rule 144(i)(1)(i) was not intended to capture a
"startup company," or a company with a limited operating history or the shares
originally issued by us in 2000.
Financial Condition.
Our auditor's going concern opinion for the prior year ended and the
notation in the financial statements indicate that we do not have significant
cash or other material assets and that we are relying on advances from
stockholders, officers and directors to meet limited operating expenses. We do
not have sufficient cash or other material assets or do we have sufficient
operations or an established source of revenue to cover our operational costs
that would allow us to continue as a going concern. We are insolvent in that we
are unable to pay our debts in the ordinary course of business as they become
due.
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Liquidity and Operational Results.
The Company has no current operating history and does not have any revenues
or earnings from operations. The Company has no assets or financial resources.
We will, in all likelihood, sustain operating expenses without corresponding
revenues, at least until the consummation of a business combination. This may
result in the Company incurring a net operating loss that will increase
continuously until the Company can consummate a business combination with a
profitable business opportunity. There is no assurance that the Company can
identify such a business opportunity and consummate such a business combination.
We are dependent upon our officers to meet any de minimis costs that may
occur. Tricia A. Nickson, an officer and director of the Company, has agreed to
provide the necessary funds, without interest, for the Company to comply with
the 1934 Act; provided that she is an officer and director of the Company when
the obligation is incurred. All advances are interest-free.
Liquidity.
As of March 31, 2009, we had total liabilities of $15,335 and we had a
negative net worth of $15,335. As of December 31, 2008, we had total liabilities
of $12,185 and a negative net worth of $12,185.
We have had no revenues from inception through December 31, 2008 and we had
no revenues for the period ended March 31, 2009. We have a loss from inception
through December 31, 2008 of $46,185 and a loss from inception through March 31,
2009 of $49,335.
We have officer's advances of $15,335 from inception to March 31, 2009. The
officer's advances as of December 31, 2008 were $12,185.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable to smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES.
Internal control over financial reporting refers to the process designed
by, or under the supervision of, our Chief Executive Officer and Chief Financial
Officer, and effected by our Board of Directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles, and includes those policies and
procedures that:
o Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of our
assets;
o Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorization
of our management and directors; and
o Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisitions, use or disposition of our assets that
could have a material effect on the financial statements.
Internal control over financial reporting cannot provide absolute assurance
of achieving financial reporting objectives because of its inherent limitations.
It is a process that involves human diligence and compliance and is subject to
lapses in judgment and breakdowns resulting from human failures. It also can be
circumvented by collusion or improper management override.
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Because of such limitations, there is a risk that material misstatements
may not be prevented or detected on a timely basis by internal control over
financial reporting. However, these inherent limitations are known features of
the financial reporting process. Therefore, it is possible to design into the
process certain safeguards to reduce, though not eliminate, this risk.
Management is responsible for establishing and maintaining adequate internal
control over our financial reporting. To avoid segregation of duties due to
management accounting size, management has engaged an outside CPA to assist in
the financial reporting.
Management has used the framework set forth in the report entitled Internal
Control - Integrated Framework published by the Committee of Sponsoring
Organizations of the Treadway Commission, known as COSO, to evaluate the
effectiveness of our internal control over financial reporting. Based upon this
assessment, management has concluded that our internal control over financial
reporting was effective for the quarter ended March 31, 2009.
The Company is not an "accelerated filer" for the 2008 fiscal year because
it is qualified as a "small business issuer." Hence, under current law, the
internal controls certification and attestation requirements of Section 404 of
the Sarbanes-Oxley act will not apply to the Company.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.................................................None
ITEM 1A. RISK FACTORS.
There has been no material change in the risk factors previously disclosed.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.......None
ITEM 3. DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES..................None
ITEM 4. SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS..................None
ITEM 5. OTHER INFORMATION.................................................None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the quarter for which this
report is filed. The following exhibits are filed with this report:
31.1 Rule 13a-14(a)/15d-14(a) - Certification of Chief Executive
Officer.
31.2 Rule 13a-14(a)/15d-14(a) - Certification of Chief Financial
Officer.
32.1 Section 1350 Certification - Chief Executive Officer.
32.1 Section 1350 Certification - Chief Financial Officer.
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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.
Dated: May 12, 2009
PALMDALE EXECUTIVE HOMES, CORP.
By: /s/ SUZETTE M. MAJOR
_____________________________________
Suzette M. Major
President
By: /s/ TRICIA A. NICKSON
_____________________________________
Tricia A. Nickson
Secretary and Treasurer
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