UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For the quarterly period ended September 30, 2013
Commission File Number 000-54667
INTEGRATED ELECTRIC SYSTEMS CORP.
(Exact name of small business issuer as specified in its charter)
Nevada 20-8624019
(State of incorporation) (IRS Employer ID Number)
16133 Ventura Blvd., Suite 700
Encino, CA 91436
(Address of Principal Executive Offices & Zip Code)
(818) 995-9107
(Telephone Number)
Larry Segal
16133 Ventura Blvd., Suite 700
Encino, CA 91436
(818) 995-9107
(Name, Address and Telephone Number of Agent for Service)
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 has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). 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.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if Smaller reporting company)
There were 54,000,000 shares of Common Stock outstanding as of November 14,
2013.
INTEGRATED ELECTRIC SYSTEMS CORP.
TABLE OF CONTENTS
Page No.
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Part I
Item 1. Condensed Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 9
Item 4. Controls and Procedures 9
Part II
Item 1. Legal Proceedings 11
Item 1A. Risk Factors 11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Mine Safety Disclosures 11
Item 5. Other Information 11
Item 6. Exhibits 12
Signatures 13
2
ITEM 1. FINANCIAL STATEMENTS
The following interim unaudited financial statements of Integrated Electric
Systems Corp. (the "Company") for the three and six month periods ended
September 30, 2013 are included with this Quarterly Report on Form 10-Q:
(a) Balance Sheets as at September 30, 2013 and March 31, 2013.
(b) Statement of Operations and Comprehensive Loss for (i) the three and
six months ended September 30, 2013 and 2012, and (ii) the cumulative
period from inception (March 5, 2007) to September 30, 2013.
(c) Statements of Cash Flows for (i) the six months ended September 30,
2013 and 2012, and (ii) the cumulative period from inception (March 5,
2007) to September 30, 2013.
(d) Notes to Financial Statements.
3
INTEGRATED ELECTRIC SYSTEMS CORP.
(A Development Stage Company)
Condensed Balance Sheets
--------------------------------------------------------------------------------
As of As of
September 30, March 31,
2013 2013
---------- ----------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 748 $ 7,156
Prepaid expenses 1,096 2,990
---------- ----------
TOTAL CURRENT ASSETS 1,844 10,146
---------- ----------
$ 1,844 $ 10,146
========== ==========
LIABILITIES & STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable 1,555 5,182
Accrued interest 3,177 1,337
Note payable 100,000 80,000
---------- ----------
TOTAL CURRENT LIABILITIES 104,732 86,519
---------- ----------
TOTAL LIABILITIES 104,732 86,519
STOCKHOLDERS' DEFICIT
Common stock, $0.001 par value, 750,000,000 shares
authorized; 54,000,000 shares issued and outstanding
as at September 30, 2013 and March 31, 2013 54,000 54,000
Additional paid-in capital 3,000 3,000
Deficit accumulated during exploration stage (159,888) (133,373)
---------- ----------
TOTAL STOCKHOLDERS' DEFICIT (102,888) (76,373)
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ 1,844 $ 10,146
========== ==========
See Notes to Condensed Financial Statements
4
INTEGRATED ELECTRIC SYSTEMS CORP.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
--------------------------------------------------------------------------------
March 5, 2007
Three Months Three Months Six Months Six Months (inception)
Ended Ended Ended Ended through
September 30, September 30, September 30, September 30, September 30,
2013 2012 2013 2012 2013
------------ ------------ ------------ ------------ ------------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
TOTAL REVENUES -- -- -- -- --
EXPENSES
Professional fees 1,743 4,230 6,685 8,230 71,328
General & administrative expenses 9,392 1,720 17,991 3,146 85,383
------------ ------------ ------------ ------------ ------------
NET OPERATING LOSS 11,135 5,950 24,675 11,376 156,711
OTHER EXPENSES
Interest expense 1,000 161 1,840 161 3,177
------------ ------------ ------------ ------------ ------------
NET LOSS $ (12,135) $ (6,112) $ (26,515) $ (11,538) $ (159,888)
============ ============ ============ ============ ============
BASIC AND DILUTED LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 54,000,000 54,000,000 54,000,000 54,000,000
============ ============ ============ ============
See Notes to Condensed Financial Statements
5
INTEGRATED ELECTRIC SYSTEMS CORP.
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
--------------------------------------------------------------------------------
March 5, 2007
Six Months Six Months (inception)
Ended Ended through
September 30, September 30, September 30,
2013 2012 2013
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (26,515) $ (11,538) $ (159,888)
Adjustments to reconcile net loss to net cash
used in operating activities:
Changes in operating assets and liabilities:
Prepaid expenses 1,894 -- (1,096)
Accounts payable and accrued liabilities (1,787) 3,521 4,732
---------- ---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (26,408) (8,017) (156,252)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from a director -- 5,000 --
Note payable 20,000 30,000 100,000
Issuance of common stock -- -- 57,000
---------- ---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 20,000 35,000 157,000
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH (6,408) 26,983 748
CASH AT BEGINNING OF PERIOD 7,156 1,293 --
---------- ---------- ----------
CASH AT END OF PERIOD $ 748 $ 28,277 $ 748
========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ -- $ -- $ --
========== ========== ==========
Income Taxes $ -- $ -- $ --
========== ========== ==========
See Notes to Condensed Financial Statements
6
INTEGRATED ELECTRIC SYSTEMS CORP.
(A Development Stage Company)
Notes to Condensed Financial Statements
As of September 30, 2013
--------------------------------------------------------------------------------
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Integrated Electric
Systems Inc., have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission, and should be read in conjunction with the
audited financial statements and notes thereto contained in Integrated Electric
System's Form 10-K filed with the SEC. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the interim
periods presented have been reflected herein. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the full year. Notes to the financial statements which would substantially
duplicate the disclosure contained in the audited financial statements for
fiscal 2013 as reported in the Form 10-K have been omitted. It is management's
opinion that all adjustments necessary for a fair statement of the results of
the interim periods have been made, and all adjustments are of a normal
recurring nature.
NOTE 2. GOING CONCERN
The accompanying condensed financial statements have been prepared assuming the
Company will continue as a going concern. As shown in the accompanying financial
statements, the Company has no sales and has incurred a net loss of $159,888
since inception. The future of the Company is dependent upon its ability to
obtain financing and upon future profitable operations from any business the
Company engages in. The financial statements do not include any adjustments
relating to the recoverability and classifications of recorded assets, or the
amounts of and classification of liabilities that might be necessary in the
event the Company cannot continue in existence. These factors raise substantial
doubt regarding Integrated Electric System's ability to continue as a going
concern.
NOTE 3. NOTES PAYABLE
Notes payable as of September 30, 2013 are:
Unsecured promissory note payable, dated August 13, 2012
bearing interest at 4% per annum, due August 13, 2014. $ 30,000
Unsecured promissory note payable, dated December 18, 2012
bearing interest at 4% per annum, due December 18, 2013. 50,000
Unsecured promissory note payable, dated June 13, 2013
bearing interest at 4% per annum, due June 13, 2014. 20,000
--------
$100,000
========
Interest expense incurred under debt obligations amounted to $1,000 and $0 for
the three months ended September 30, 2013 and 2012, respectively. Interest
expense incurred under debt obligations amounted to $1,840 and $161 for the six
months ended September 30, 2013 and 2012, respectively. Accrued interest was
$3,177 and $1,337 as of September 30, 2013 and March 31, 2013, respectively.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. Any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act. The words "believes," "anticipates," "plans," "seeks,"
"expects," "intends" and similar expressions identify some of the
forward-looking statements. Forward-looking statements are not guarantees of
performance or future results and involve risks, uncertainties and assumptions.
The factors discussed elsewhere in this Form 10-Q could also cause actual
results to differ materially from those indicated by the Company's
forward-looking statements. The Company undertakes no obligation to publicly
update or revise any forward-looking statements.
BUSINESS AND PLAN OF OPERATION
Integrated Electric Systems Corp (formerly known as Raider Ventures, Inc.) was
incorporated in the State of Nevada on March 5, 2007 as Northern Minerals, Inc.
We are a development stage company with no revenues and a limited operating
history.
Our original business was to engage in the acquisition, exploration and
development of natural resource properties. We received the results of Phase 1
and Phase 1A of the exploration program from the consulting geologist. The
findings were not promising and management determined it was in the best
interests of the shareholders to allow the claim to lapse.
During the next twelve months we anticipate spending approximately $10,000 on
professional fees, including fees payable in complying with reporting
obligations, and general administrative costs.
LIQUIDITY AND CAPITAL RESOURCES
Our cash in the bank at September 30, 2013 was $748, total assets were $1,844
and outstanding liabilities were $104,732. We have sold $57,000 in equity
securities since inception, $10,000 from the sale of 2,000,000 shares of stock
to our officers and directors, $7,000 from the issuance of 1,400,000 shares of
stock to a director in repayment of the funds paid by him for the acquisition of
the mineral claim and $40,000 from the sale of 2,000,000 shares registered
pursuant to our SB-2 Registration Statement which became effective on October
12, 2007. If we experience a shortfall of funds our director has agreed to
continue to loan us funds, however he has no obligation to do so.
RESULTS OF OPERATIONS
We are still in our development stage and have no revenues to date. Our net loss
since inception through September 30, 2013 was $159,888.
We incurred operating expenses of $11,135 and $5,950 for the three months ended
September 30, 2013 and 2012, respectively. These expenses consisted of general
operating expenses and professional fees incurred in connection with the day to
day operation of our business and the filing of our required statements with the
Securities and Exchange Commission.
We incurred operating expenses of $24,675 and $11,376 for the six months ended
September 30, 2013 and 2012, respectively. These expenses consisted of general
operating expenses and professional fees incurred in connection with the day to
day operation of our business and the filing of our required statements with the
Securities and Exchange Commission.
8
If we experience a shortage of funds we may utilize funds from our director, who
has informally agreed to advance funds, however he has no formal commitment,
arrangement or legal obligation to advance or loan funds to the company. If he
fails to do so we may be required to terminate our business. We are a
development stage company and have generated no revenue to date.
As of September 30, 2013, there are loans payable to an unrelated party for
$100,000 principal and $3,177 accrued interest. The loans bear interest at 4%
per annum and are due August 2014 ($30,000), December 2013 ($50,000) and June
2014 ($20,000).
Through September 30, 2013 we had sold $57,000 in equity securities to pay for
our business operations. On February 18, 2008, we closed our offering pursuant
to a SB-2 Registration Statement filed with the U.S. Securities and Exchange
Commission, which became effective on October 12, 2007. We sold 2,000,000 shares
of common stock to 30 unaffiliated shareholders at $.02 per share for total
proceeds of $40,000.
Our auditor has issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated revenues and no revenues are anticipated until we
begin removing and selling minerals. There is no assurance we will ever reach
that point.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we
are not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Management maintains "disclosure controls and procedures," as such term is
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed in Integrated Electric Systems Corp.'s Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission rules and forms, and that such
information is accumulated and communicated to management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, an
evaluation was carried out by management, with the participation of the Chief
Executive Officer and the Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of September 30, 2013.
Based on that evaluation, management concluded, as of the end of the period
covered by this report, that Integrated Electric Systems Corp.'s disclosure
controls and procedures were effective in recording, processing, summarizing,
9
and reporting information required to be disclosed, within the time periods
specified in the Securities and Exchange Commission's rules and forms.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
As of the end of the period covered by this report, there have been no changes
in Integrated Electric Systems Corp.'s internal controls over financial
reporting during the quarter ended September 30, 2013, that materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting subsequent to the date of management's last evaluation.
10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Integrated Electric Systems Corp. is not currently involved in any legal
proceedings and we are not aware of any pending or potential legal actions.
ITEM 1A. RISK FACTORS
There has been no change to the Risk Factors disclosed in our Form 10-K filed
with the Securities and Exchange Commission for the year ended March 31, 2013.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no sales of unregistered securities during the period covered by this
report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There were no defaults upon senior securities during the period covered by this
report.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following exhibits are included with this quarterly filing. Those marked
with an asterisk and required to be filed hereunder, are incorporated by
reference and can be found in their entirety in our original Form SB-2
Registration Statement, filed under SEC File Number 333-144840, at the SEC
website at www.sec.gov:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31 Rule 13a-14(a)/15d-14(a) Certification
32 Certification Pursuant to 18 U.S.C. 1350
101 Interactive data files pursuant to Rule 405 of Regulation S-T
11
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.
November 14, 2013 Integrated Electric Systems Corp., Registrant
/s/ Larry Segal
---------------------------------------------
By: Larry Segal, President & Director
(Chief Executive Officer, Principal Financial
Officer & Principal Accounting Officer)
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Larry Segal November 14, 2013
---------------------------------- -----------------
Larry Segal, President & Director Date
(Chief Executive Officer,
Principal Financial Officer,
Principal Accounting Officer)
12