Attached files
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2010
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 333-144765
(Exact name of registrant as specified in its charter)
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Nevada
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87-0785410
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(State or other jurisdiction of Incorporation or organization)
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(IRS Employer Identification No.)
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1325 Spruce St, Suite 200
Riverside, CA 92507
(Address of Principal Executive Offices) (Zip Code)
(951) 538-8362
Registrant's telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.0001 par value
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No x
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 periods 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 o
1
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 (§ 229.405 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 o No o (Not Required)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained herein, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Yes o No x
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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
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x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
The aggregate market value of the Company's Common Stock held by non-affiliates of the registrant as of March 31, 2009 was approximately $646,250 (based upon 12,925,000 shares at $0.05 per share).
For the fiscal year ended March 31, 2010 the Company's revenue was $0
As of March 31, 2010, the number of shares of Common Stock outstanding was 12,925,000
DOCUMENTS INCORPORATED BY REFERENCE
None
2
AFFORDABLE GREEN HOMES INTERNATIONAL, INC.
TABLE OF CONTENTS
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Page
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PART I
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ITEM 1
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BUSINESS
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4
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ITEM 1A
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RISK FACTORS
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6
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ITEM 1B
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UNRESOLVED STAFF COMMENTS
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6
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ITEM 2
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PROPERTIES
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6
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ITEM 3
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LEGAL PROCEEDINGS
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6
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ITEM 4
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SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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6
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PART II
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ITEM 5
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MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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7
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Holders
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7
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Dividends
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7
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ITEM 6
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SELECTED FINANCIAL DATA
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8
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ITEM 7
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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8
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Results of Operations
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8
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ITEM 7A
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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9
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ITEM 8
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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9
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ITEM 9
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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9
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ITEM 9A
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CONTROLS AND PROCEDURES
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9
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ITEM 9B
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OTHER INFORMATION
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10
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PART III
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ITEM 10
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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10
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Indemnification of Directors and Officers
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11
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Compliance with Section 16(A) of the Exchange Act
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11
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ITEM 11
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EXECUTIVE COMPENSATION
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11
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Summary Compensation Table
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11
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ITEM 12
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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12
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ITEM 13
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
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12
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ITEM 14
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PRINCIPAL ACCOUNTING FEES AND SERVICES
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13
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PART IV
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ITEM 15
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EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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14
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SIGNATURES
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14
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3
PART I
The Company
Affordable Green Homes, International, Inc. (“we”, “us” or “AGHI” ) was incorporated in Nevada on October 10, 2006 A registration Statement on Form SB-2, as amended, was initially filed on July 23, 2007. A post-effective amendment no. 2 to form SB-2 on form S-1 registration statement under the securities act of 1933 was filed on July 8, 2008.
The Business
Affordable Green Homes International, Inc. (“AGHI”) was founded on the basis of developing properties and technologies in an environmentally responsible yet profitable manner and is engaged in the business of construction of Residential, Commercial and Industrial structures using Structural Concrete Insulated Panel (SCIP) Technology. Affordable Green Homes International, Inc. was incorporated in the State of Nevada on October 10, 2006. We intend to provide moderate to low cost housing in the Northern Panhandle of Texas around the Stinnett/Perryton Area where an acute housing shortage currently exists, and in the Hurricane affected areas of Galveston, Texas area. These homes are built out of high quality lightweight prefabricated Structural Concrete Insulated Panels (SCIP’s). The interior and exterior surfaces of the panels are covered with a concrete coating, designed and tested to resist hurricanes, tornados, hail, fire and earthquakes. When the homes are completed they are significantly more structurally sound than wood or concrete alone and can typically be constructed in less than 90 days. We are convinced that there is a real need for homes like these in the economically burgeoning areas in which we are concentrating.
The company intends to operate 3 business units:
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1.
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A SCIP manufacturing unit
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2.
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A construction unit based in the Northern Panhandle of Texas, primarily around the Stinnett/Perryton Area.
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3.
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A construction unit based in the Galveston, Texas area. This unit will do reconstruction following Hurricane Ike.
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SCIP Manufacturing Summary: The Company believes that construction using SCIP technology will start its real growth in 2010. In 2007, Ron Bell built a SCIP home near Crystal Beach. Crystal Beach is directly on the Gulf Coast approximately 10 miles northeast of Galveston. The home was built on pilings that were designed so that a hurricane type high surf would pass underneath and not injure the structure of the home. This house was the only one within several miles to survive Hurricane Ike virtually unscathed. The Crystal Beach House has raised the awareness of construction using this technology in areas prone to hurricanes, tornados and earthquakes. It is our intention to be the leader in this industry. FEMA officials as well as the Structures group from Texas Tech University have both been to the house to inspect it and discuss a wide range of topics concerning using this type of construction all along the gulf coast.
Northern Texas Panhandle Summary: There is an acute housing shortage in the Northern Panhandle of Texas. This is due to a number of factors:
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1.
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Conoco-Phillips – 7 to 10 year plant expansion
|
|
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2.
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Chevron – 7 to 10 year plant expansion
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3.
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Wind Generation – T. Boone Pickens and others building massive wind farms within 10 miles of Stinnett (north, east and west of town)
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4.
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Two Carbon Black plants within 10 miles of Stinnett
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5.
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New plastics plant within 10 miles of Stinnett
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6.
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New aircraft plant (Ospray Project) within 20 miles of Stinnett
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All of the motels and apartments are booked solid and have been for over a year. The company feels that building some medium size houses, 1200-1500 sq ft, as well as one (1) to three (3) 40 unit 2 story motels would sell quickly in this area. Ron Bell (our highly qualified consultant for this area) has met with the Mayor of Stinnett as well as the President of the Stinnett Community Development Corporation, and both have told him that there is a great demand for the products that we can deliver. The City of Stinnett sold us three home lots for a total of $2000. We started construction on the first house on April 19th. The first house was completed in December of 2009. The housing market in the Panhandle of Texas is non-existent. We have a deposit on the house and hope to close the transaction by the end of August 2010.
Galveston Area Summary: A major opportunity presented itself with Hurricane Ike. There is a great deal of devastation in the general area and there will be a large number of homes and commercial structures that will need to be rebuilt following the hurricane. Affordable Green Homes will be at the center of the rebuilding. In 2007, Ron Bell built a SCIP home near Crystal Beach. Crystal Beach is directly on the Gulf Coast approximately 10 miles northeast of Galveston. The home was built on pilings that were designed so that a hurricane type high surf would pass underneath and not injure the structure of the home. We are also in discussions with major insurance carriers about rebuilding homes with our type of construction.
4
ITEM 1. BUSINESS. - continued
Markets/ Potential Customer Base
AGHI has been approached by various parties who recognize the value of our type of construction. Potential expansion is worldwide. Some of the countries we have been in contact with to build affordable housing are:
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Mexico
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Peru
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Nigeria
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Saipan
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Guam
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India
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Brazil
Indonesia
Haiti
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Competition
RHINO BULDING INDUSTRIES
Rhino Building Industries offers two different building systems. Both systems have a polystyrene core with 2x2 mesh on both sides. Truss wires are placed every six inches and either welded or clipped to the outside mesh.
CLIP PANEL SYSTEM: This system uses a vertex clip in place of welds. The clip on panel system is less costly than the automated weld system with the same end result.
WELD PANEL SYSTEM: This system has an automated welder.
HADRIAN TRIDI-SYSTEMS
The Tridipanel is a prefabricated panel that consists of a super-insulated core of rigid expanded polystyrene sandwiched between two engineered sheet of eleven gauge steel welded wire fabric mesh. To complete the panel form process a nine gauge galvanized steel truss wire is pierced completely through the polystyrene core at off set angles for superior strength and welded to each of the outer layer sheets of eleven gauge steel welded wire fabric mesh.
Tridipanel is used for numerous building applications. It may be used in place of wood framed walls, metal framed walls, and masonry block walls or in place of pre-cast panels. Tridipanel may also be used for floor systems, ceilings and to provide a roof structure. Tridipanel is also a product for building privacy.
SOLARCRETE
Solarcrete is a built in place system using 7-1/4" foam core with 2-3/8"of fiber reinforced shotcrete over rebar on each side. Sipcrete / Siptec-Sipcrete - The original technology dates back to 1974 which has continually been improved. SIPTEC brings their knowledge of SCIP's manufacturing and application to the Sipcrete Thermocore. Using the SIPTEC composite Interconnector and low cost assembly methodology means Thermocores can be produced by DIY self builders and in low tech plants to local product use. This firm is based in the UK.
The Company faces competition from over 2000 home builders delivering between 100-300 homes per year. However, the housing crunch that started in 2009 has dramatically hurt many of them. The company believes that if we can arrange a reasonable amount of funding, we will be able to leapfrog into a strong position in 2011.
Effect if Governmental Regulations on our Business
It is the intention of the Company to establish an independent operating company in each jurisdiction in which the Company carries out its business. Said operating company will be fully compliant with and abide by all local laws and regulations for the relevant jurisdiction
5
ITEM 1. BUSINESS. - continued
Research and Development Activities and Costs
AGHI has not incurred any costs to date other than the construction of the first house in Stinnett. The company plans to undertake research and development activities during the second half of 2010 to improve our manufacturing process as well as develop “greener” building components.
Costs and Effects of Compliance with Environmental Laws and Regulations
We are not aware of any environmental laws that have been enacted, nor are we aware of any such laws being contemplated for the future, that address issues specific to our business. No assurance can be given that environmental regulations will not, in the future, result in a curtailment of service or otherwise have a materially adverse effect on our business, financial condition or results of operation. Public interest in the protection of the environment has increased dramatically in recent years. The trend of more expansive and stricter environmental legislation and regulations could continue. To the extent that laws are enacted or other governmental action is taken that imposes environmental protection requirements that result in increased costs, our business and prospects could be adversely affected.
Bankruptcy
We have not been involved in any bankruptcy, receivership or similar proceedings.
Equity Incentive Plan
We currently have no equity incentive or option plan in place.
Number of Employees
We currently employ approximately 1 full-time employees and no part-time employees. We have no collective bargaining agreements with any labor organization and we believe that we enjoy good relations with our employees.
ITEM 1A. RISK FACTORS
Not Required
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Required
We are located at 1325 Spruce St, Suite 200 Riverside, CA 92507 County of Riverside, CA. Our present facility is a standard 200 square foot conventional office space.
We are not a party to any pending legal proceedings, nor are we aware of any governmental authority contemplating any legal proceeding against us.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of the Shareholders was held on September 9, 2008. The shareholders elected the Board of Directors to serve for one year or until the next annual meeting. The board remains consisting of Michael Vahl (Chairman), Zachary Lark (Secretary/Treasurer) and Randall Buchanan. Shareholders voted to retain Ronald Chadwick as the Corporate Auditor and Barry Falk as Corporate Counsel.
6
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information.
As of March 31, 2010, the Company’s common stock has not commenced trading.
Holders
As of March 31, 2010 there were approximately 36 holders of record of our common stock, not including persons holding shares in “street” names.
Dividends
We have not paid any cash dividends since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our common stock will be declared in the foreseeable future.
Recent Sales of Unregistered Securities
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CERT #
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SHARES
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AMT. PD.
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DATE
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||||
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Nancy Jones
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101
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250,000
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$2,500
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10/27/06
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|||
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Chris Jones
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102
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100,000
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$1,000
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10/27/06
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|||
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Geoff Mehl
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103
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25,000
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$250
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10/27/06
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|||
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William Tervo
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104
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150,000
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$1,500
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10/27/06
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|||
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Deborah Jones
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105
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100,000
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$1,000
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10/27/06
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|||
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Stephanie Hill
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106
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250,000
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$2,500
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10/27/06
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|||
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William Tervo
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107
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50,000
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$500
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10/27/06
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|||
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John Jones
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108
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1,000,000
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$6,000
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10/27/06
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|||
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Randall Buchanan
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109
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100,000
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$1,000
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10/27/06
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|||
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Juliann Basilio
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110
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100,000
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$1,000
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10/30/06
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|||
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A-Finn Finance & Investment LLC
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111
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2,000,000
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$20,000
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10/30/06
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|||
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Stephen Matthew K.
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112
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260,000
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$2,600
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10/30/06
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|||
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Girvan Kroesing
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113
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100,000
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$1,000
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10/30/06
|
|||
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William & Catherine Kroesing
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114
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20,000
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$200
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10/30/06
|
|||
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Mark & Laurie Kroesing
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115
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20,000
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$200
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10/30/06
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|||
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Steve Kroesing
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116
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1,000,000
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$10,000
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10/30/06
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|||
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Stephanie Hill
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117
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1,500,000
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$15,000
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1/6/2007
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|||
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John Artzer
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118
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200,000
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Services
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2/1/2007
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|||
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John Wachsmith
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119
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800,000
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Services
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2/1/2007
|
|||
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Nancy Jones
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120
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250,000
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Services
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2/1/2007
|
|||
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Burg Family Trust UTD 4/16/06
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121
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600,000
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Services
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2/1/2007
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|||
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Carolyn W Plant
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122
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200,000
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$2,000
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2/1/2007
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|||
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Peter Zampaglione
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123
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200,000
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$2000
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2/22/2007
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|||
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Peter E Zampaglione
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124
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200,000
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$2000
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2/22/2007
|
|||
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Jeannie Mainland
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125
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29,000
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$290
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2/12/2007
|
|||
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Bob Breeden
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126
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30,000
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$300
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2/12/2007
|
|||
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William Tervo
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127
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100,000
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$1,000
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3/12/2007
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|||
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Jessica Santoro
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128
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50,000
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$500
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3/10/2007
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|||
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David H Lee
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129
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95,500
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$955
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7/1/2007
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|||
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Bob Breeden
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130
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95,500
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$955
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7/1/2007
|
|||
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Michael Neville Jr.
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131
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50,000
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$500
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3/10/2007
|
|||
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Michael A Bryan
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133
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334,000
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$5,010
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6/3/08
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|||
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Kurt V. Armbrust
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134
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333,000
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$4,995
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6/3/08
|
|||
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Aaron Buxbaum
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135
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333,000
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$4,995
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6/3/08
|
|||
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Jeff Jones
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136
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500,000
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$7,500
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6/3/08
|
|||
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Green World Construction
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137
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1,500,000
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Services
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6/3/08
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The above shares were pursuant to the exemption from registration provided by section 4(2) of the Securities Act of 1933 as amended.
7
ITEM 6. SELECTED FINANCIAL DATA
Not Required
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This analysis should be read in conjunction with the condensed consolidated financial statements, the notes thereto, and the financial statements and notes thereto included in the Company's Registration Statement on Form SB-2, as amended, initially filed on July 23, 2007. Post-effective amendment no. 2 to form SB-2 on form S-1 registration statement under the securities act of 1933 was filed on July 8, 2008. All non-historical information contained in this annual report is a forward-looking statement. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause the actual results to differ materially from those reflected in the forward-looking statements.
Results of Operations
Total revenue was $0 for the year ended March 31, 2010 as compared to $0 for the year ended March 31 2009. The Company spent the past year solidifying relationships and acquiring rights to infrastructure ready lands on which to exercise its plan of operation. We also completed construction of our first home in Stinnett, Texas. Officer and Administrative Compensation were donated during this period and the Company did not book any accrued compensation. Total Assets were $100,238 at March 31, 2010 as compared to $1,089 at March 31, 2009, a net increase of $99,179. The net increase was a result of construction in progress of the first home being built in Stinnett, Texas..
PLAN OF OPERATION
Affordable Green Homes International, Inc. (“AGHI”) was founded on the basis of developing properties and technologies in an environmentally responsible yet profitable manner and is engaged in the business of construction of Residential, Commercial and Industrial structures using Structural Concrete Insulated Panel (SCIP) Technology. Affordable Green Homes International, Inc. was incorporated in the State of Nevada on October 10, 2006. We intend to provide moderate to low cost housing in the Northern Panhandle of Texas around the Stinnett/Perryton Area where an acute housing shortage currently exists, and in the Hurricane affected areas of Galveston, Texas area. These homes are built out of high quality lightweight prefabricated Structural Concrete Insulated Panels (SCIP’s). The interior and exterior surfaces of the panels are covered with a concrete coating, designed and tested to resist hurricanes, tornados and earthquakes. When the homes are completed they are significantly more structurally sound than wood or concrete alone and can typically be constructed in less than 30 days. We are convinced that there is a real need for homes like these in the economically burgeoning areas in which we are concentrating.
The company intends to operate 3 business units:
|
1.
|
A SCIP manufacturing unit
|
|
|
2.
|
A construction unit based in the Northern Panhandle of Texas, primarily around the Stinnett/Perryton Area.
|
|
3.
|
A construction unit based in the Galveston, Texas area. This unit will do reconstruction following Hurricane Ike.
|
SCIP Manufacturing: The Company believes that construction using SCIP technology will start its real growth in 2010. In 2007, Ron Bell built a SCIP home near Crystal Beach. Crystal Beach is directly on the Gulf Coast approximately 10 miles northeast of Galveston. The home was built on pilings that were designed so that a hurricane type high surf would pass underneath and not injure the structure of the home. This house was the only one within several blocks to survive Hurricane Ike untouched. The Crystal Beach House has raised the awareness of construction using this technology in areas prone to hurricanes, tornados and earthquakes. It is our intention to be the leader in this industry. FEMA officials as well as the Structures group from Texas Tech University have both been to the house to inspect it and discuss a wide range of topics concerning using this type of construction all along the gulf coast.
Northern Texas Panhandle: There is an acute housing shortage in the Northern Panhandle of Texas. This is due to a number of factors:
|
1.
|
Conoco-Phillips – 7 to 10 year plant expansion
|
|
|
2.
|
Chevron – 7 to 10 year plant expansion
|
|
3.
|
Wind Generation – T. Boone Pickens and others building massive wind farms within 10 miles of Stinnett (north, east and west of town)
|
|
|
4.
|
Two Carbon Black plants within 10 miles of Stinnett
|
|
5.
|
New plastics plant within 10 miles of Stinnett
|
|
|
6.
|
New aircraft plant (Ospray Project) within 20 miles of Stinnett
|
8
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. - continued
PLAN OF OPERATION - continued
All of the motels and apartments are booked solid and have been for over a year. The company feels that building some medium size houses, 1200-1500 sq ft, as well as one (1) to three (3) 40 unit 2 story motels would sell quickly in this area. Ron Bell (our highly qualified consultant for this area) has met with the Mayor of Stinnett as well as the President of the Stinnett Community Development Corporation, and both have told him that there is a great demand for the products that we can deliver. They are currently working with Mr. Bell to locate additional home lots for us to begin construction by the first quarter of 2011.
Galveston Area: A major opportunity presented itself with Hurricane Ike. There is a great deal of devastation in the general area and there will be a large number of homes and commercial structures that will need to be rebuilt following the hurricane. Affordable Green Homes will be at the center of the rebuilding. In 2007, Ron Bell built a SCIP home near Crystal Beach. Crystal Beach is directly on the Gulf Coast approximately 10 miles northeast of Galveston. The home was built on pilings so that a hurricane type high surf would pass underneath and not injure the structure of the home. We are also in discussions with major insurance carriers about rebuilding homes with our type of construction.
RESULTS:
The response our company has received from our panel building process is positive. The costs to build are lower than concrete block or stucco, and the actual construction building time is twice as fast.
Our consultants have estimated that there is a real need for our product. Our company has just completed a video that explains the product and demonstrates the construction of affordable homes and privacy walls.
Markets/ Potential Customer Base
Some of the countries we have been in contact with to build affordable housing in addition to Mexico are:
|
Mexico
|
||
|
Peru
|
||
|
Nigeria
|
||
|
Saipan
|
||
|
Guam
|
||
|
India
|
||
|
Brazil
Indonesia
Haiti
|
||
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Required
The consolidated financial statements required to be filed pursuant to this Item 8 begin on page F-1 of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
There have been no changes in or disagreements with Ronald R Chadwick on accounting and financial disclosure matters at any time.
ITEM 9A. CONTROLS AND PROCEDURES.
Our Chief Executive Officer, President, and Chief Financial Officer (the "Certifying Officers") are responsible for establishing and maintaining disclosure controls and procedures for the Company. The Certifying Officers have designed such disclosure controls and procedures to ensure that material information is made known to them, particularly during the period in which this report was prepared. The Certifying Officers have evaluated the effectiveness of the Company's disclosure controls and procedures within 90 days of the date of this report and believe that the Company's disclosure controls and procedures are effective based on the required evaluation. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
9
9B. OTHER INFORMATION.
None.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The directors and executive officers of the Company are as follows:
|
Name
|
Position Held with the Company
|
Age
|
Date First Elected
or Appointed
|
|
Michael P Vahl
|
President, CEO and Director
|
53
|
September 9, 2008
|
|
Zachary O. Lark
|
Secretary, Treasurer, and Director
|
42
|
September 9, 2008
|
|
Randall Buchanan
|
Director
|
64
|
September 9, 2008
|
The foregoing persons may be deemed "promoters" of Affordable Green Homes International as that term is defined in the rules and regulations promulgated under the Securities and Exchange Act of 1933.
Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the board of directors following the next annual meeting of stockholders and until their successors have been elected and qualified.
No executive officer or director of Affordable Green Homes International has been the subject of any order, judgment, or decree of any court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring, suspending or otherwise limiting him or her from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.
No executive officer or director of Affordable Green Homes International has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding, which is currently pending.
No executive officer or director of Affordable Green Homes International is the subject of any pending legal proceedings.
Mr. Michael P. Vahl Age 53, CEO, President and Director
Michael P. Vahl has owned The Vahl Software Group, a computer and business consulting firm, since 1988. Mr. Vahl also co-founded Capital Development Group, Inc., in 1994 and helped it go public in 1995. Capital Development Group, Inc. was in the business of factoring Medical Accounts Receivables. Mr. Vahl also sits and has sat on a number of non profit Board of Directors in Riverside, California.
Mr. Zachary O. Lark Age 42 Secretary, Treasurer and Director
Zachary O. Lark is Managing Director of ARGO Venture Group, LLC, a boutique venture consulting firm which provides services focused on work out and start-up situations as well as real estate investment services. In 1997, he founded and served as Director of Business Development of an Internet Service Provider named Telisphere Communications catering to Business and Government organizations. In 1999, he sold Telisphere as part of National roll up plan and helped launch a national Software Application Service Provider named Essential Markets. While there, he served as a technical and marketing advisor to the founders ending up as Director of Investor Relations. He left Essential Markets in 2001 to form his own Venture Consulting Company, Grid Ventures, Inc. Over the past 8 years, he has traveled internationally negotiating marketing and distribution agreements, raising money for client companies, assisting them secure long term management teams while hitting business milestones. He has also participated in various roles in several successful real estate developments. He attended Hawaii Pacific University and currently lives in Seattle, WA.
10
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT. - continued
Mr. Randall “Buck” Buchanan Age 64 Director
Randall (“Buck”) Buchanan has been a local resident of the Reno/Sparks area for over twenty-five (25) years and has been involved in many Northern Nevada’s major real estate developments including construction management of some of the largest hotel and gaming resort properties. He served our country for years of service in the military and his tours during the Vietnam Conflict. He earned his Business degree from Penn State University. Mr. Buchanan has achieved many entrepreneurial successes, with one of his latest being the company that he has owned and managed for over fifteen (15) years, Servicemaster by Buchanan. Founded on his belief of “giving back” to those in need, his company exemplifies his character. It’s often said of Mr. Buchanan, his common sense approach united with his high energy and moral values is what inspires his employees, partners and friends to greater heights. His vision and perseverance will be his most valuable asset.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation provide that we must indemnify our directors and officers to the fullest extent permitted under Nevada law against all liabilities incurred by reason of the fact that the person is or was a director or officer or a fiduciary of Affordable Green Homes International. The effect of these provisions is potentially to indemnify our directors and officers from all costs and expenses of liability incurred by them in connection with any action, suit or proceeding in which they are involved by reason of their affiliation with us. Pursuant to Nevada law, a corporation may indemnify a director, provided that such indemnity shall not apply on account of:
|
(a)
|
acts or omissions of the director finally adjudged to be intentional misconduct or a knowing violation of law;
|
|
(b)
|
unlawful distributions; or
|
|
(c)
|
any transaction with respect to which it was finally adjudged that such director personally received a benefit in money, property, or services to which the director was not legally entitled.
|
Our Bylaws provide that we will indemnify our officers and directors for costs and expenses incurred in connection with the defense of actions, suits, or proceedings against them on account of their being or having been directors or officers of Affordable Green Homes International, absent a finding of negligence or misconduct in office.
Our Bylaws also permit us to maintain insurance on behalf of our officers, directors, employees and agents against any liability asserted against and incurred by that person whether or not we have the power to indemnify such person against liability for any of those acts. We do not maintain such insurance.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires directors and certain officers of the Company, as well as persons who own more than 10% of a registered class of the Company's equity securities, ("Reporting Persons") to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission. The Company has been informed that none of the persons required to file in a timely manner as required by Section 16 of the Securities Exchange Act of 1934 and the Rules promulgated there under have done so. The Company is further informed that (a) Forms 3 and Forms 5 will be filed by each of the aforementioned persons on or before December 31, 2010 and (b) such persons have not been required to file any other Forms under Section 16(a) of the Exchange Act during the fiscal year ended March 31, 2010 or prior thereto.
Since Affordable Green Homes International’s date of inception to the date of this filing, our executive officers have not received and are not accruing any compensation. The officers anticipate that they will not receive, accrue, earn, be paid or awarded any compensation during the first year of operations.
We have not entered into any employment agreement or consulting agreement with our directors and executive officers. There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.
11
ITEM 11. EXECUTIVE COMPENSATION. - continued
Directors Compensation
We have no formal plan for compensating our directors for their services in their capacity as directors. In the future we may grant options to our directors to purchase shares of common stock as determined by our Board of Directors or a compensation committee that may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. The board of directors may award special remuneration to any director undertaking any special services on behalf of Affordable Green Homes International other than services ordinarily required of a director. Since inception to the date hereof, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments.
We have no employment agreements with any of our officers.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following is a table detailing the current shareholders of AGHI owning 5% or more of the common stock, and shares owned by AGHI directors and officers as of March 31, 2010 :
|
Title of
Class
|
Name and Address of Beneficial Owner
|
Amount and
Nature of
Beneficial
Ownership
|
Percent of Class(2)
|
|
Common
|
Mr. John Jones
2170 Veneto
Sparks, NV 89434
|
1,000,000
|
7.74%
|
|
Common
|
Mr. Randall Buchanan
Director
545 Valle Verde
Sparks, NV 89436
|
100,000
|
0.77%
|
|
Common
|
Ms. Stephanie Hill
35-502 Canteen Way
Thousand Palms, CA 92276
|
1,750,000
|
13.54%
|
|
Common
|
A-Finn Finance and Investment LLC (1)
461 Donald Drive
Hollister, Ca 95023
|
2,000,000
|
15.47%
|
|
Common
|
Steve Kroesing
P.O. Box 2184
Joshua Tree, CA 92252
|
1,000,000
|
7.74%
|
|
Common
|
John Wachsmith
1255 Tremont Street
Port Townsend, WA 98368
|
800,000
|
6.19%
|
|
Common
|
Directors and officers as a group of two (1)
|
6,650,000
|
51.45%
|
|
1.
|
Juliann Basilio is the controlling member of A-Finn Finance and Investment LLC
|
|
|
2.
|
Based on the total of 12,925,000 outstanding common shares as of the date of this Report.
|
On October 27, 2006, John Jones purchased by subscription 1,000,000 shares of common stock from AGHI for $0.0060 per share or an aggregate of $6,000.
On October 27, 2006, Randall Buchanan purchased by subscription 100,000 shares of common stock from AGHI for $0.01 per share or an aggregate of $1,000.
12
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. - continued
On October 27, 2006, Stephanie Hill purchased by subscription 250,000 shares of common stock from AGHI for $0.01 per share or an aggregate of $2,500 .
On October 30, 2006, A-Finn Finance & Investment, LLC, purchased by subscription 2,000,000 shares of common stock from AGHI for $0.01 per share or an aggregate of $20,000.
On January 6, 2007, Stephanie Hill purchased by subscription 1,500,000 shares of common stock from AGHI for $0.01 per share or an aggregate of $15,000.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following is a summary of the aggregate fees billed to Registrant by its principal accountant(s) for professional services rendered for the fiscal years ended March 31, 2010 and 2009.
|
1.
|
Audit Fees. Consists of fees billed for professional services rendered for the audits of Registrant's financial statements for the fiscal years ended March 31, 2010 and 2009, and for review of the financial statements included in Registrant's Quarterly Reports on Form 10-QSB and 10-Q for those fiscal years.
Audit fees paid for the 2009 audit to Chadwick LLC were $3,910.
Audit fees paid for the 2010 audit to Chadwick LLC were $8,410
|
|
2.
|
Audit-Related Fees. Consists of fees billed for services rendered to Registrant for audit-related services, which generally include fees for audit and review services in connection with a proposed spin-off transaction, separate audits of employee benefit and pension plans, and ad hoc fees for consultation on financial accounting and reporting standards.
None
|
|
3.
|
Tax Fees. Consists of fees billed for services rendered to Registrant for tax services, which generally include fees for corporate tax planning, consultation and compliance.
None
|
|
4.
|
All Other Fees. Consists of fees billed for all other services rendered to Registrant, which generally include fees for consultation regarding computer system controls and human capital consultations.
None
|
None of the "audit-related," "tax" and "all other" services in 2010, as defined above, were approved by the Audit Committee in reliance on the de minimus exception to the preapproval requirements under federal securities laws and regulations.
The Audit Committee's written policy is to pre-approve all audit and permissible non-audit services provided by Registrant's principal accounting firm (independent auditor). These services may include audit services, audit-related services, tax services and other permissible non-audit services. Any service incorporated within the independent auditor's engagement letter, which is approved by the Audit Committee, is deemed pre-approved. Any service identified as to type and estimated fee in the independent auditor's written annual service plan, which is approved by the Audit Committee, is deemed pre-approved up to the dollar amount provided in such annual service plan.
During the year, the principal accounting firm may also provide additional accounting research and consultation services required by, and incident to, the audit of Registrant's financial statements and related reporting compliance. These additional audit-related services are pre-approved up to the amount approved in the annual service plan approved by the Audit Committee. The Audit Committee may also pre-approve services on a case-by-case basis during the year.
The Audit Committee's approval of proposed services and fees are noted in the meeting minutes of the Audit Committee and/or by signature of the Audit Committee on the engagement letter. The principal accounting firm of Registrant and management are periodically requested to summarize the principal accounting firm services and fees paid to date, and management is required to report whether the principal accounting firm's services and fees have been pre-approved in accordance with the required pre-approval process of the Audit Committee.
13
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. - continued
Non-Audit Services
The Audit Committee of the Board of Directors has considered whether the provision of non-audit services by the Registrant's principal accountants is compatible with maintaining auditor independence.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following Exhibits are filed herewith:
Pursuant to the requirements of Section 13 or 15(d) 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.
|
FOR:
|
AFFORDABLE GREEN HOMES INTERNATIONAL, INC.
|
||
|
Dated: August 16, 2010
|
By:
|
/s/ Michael P. Vahl
|
|
|
Michael P Vahl, President
|
|||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated:
|
Signatures
|
Titles
|
Date
|
|
|
/s/ Michael P Vahl
|
Principal Executive Officer
|
August 16, 2010
|
|
|
Michael P Vahl
|
|||
|
/s/ Zachary O. Lark
|
Principal Financial and Accounting Officer
|
August 16, 2010
|
|
|
Zachary O. Lark
|
14
AFFORDABLE GREEN HOMES INTERNATIONAL
FINANCIAL STATEMENTS
TABLE OF CONTENTS
|
Page
|
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-2
|
|
FINANCIAL STATEMENTS
|
|
|
Balance Sheets
|
F-3
|
|
Statements of Operations
|
F-4
|
|
Statements of Stockholders' Equity
|
F-5
|
|
Statements of Cash Flows
|
F-6
|
|
Notes to Financial Statements
|
F-7
|
F-1
RONALD R. CHADWICK, P.C.
Certified Public Accountant
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
Telephone (303)306-1967
Fax (303)306-1944
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Affordable Green Homes International
Riverside, California
I have audited the accompanying balance sheets of Affordable Green Homes International (a development stage company) as of March 31, 2009 and 2010, and the related statements of operations, stockholders' equity and cash flows for the years then and for period from October 10, 2006 (inception) through March 31, 2010. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Affordable Green Homes International as of March 31, 2009 and 2010, and the results of its operations and its cash flows for the years then ended and for period from October 10, 2006 (inception) through March 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 6 to the financial statements the Company has suffered losses from operations and has a working capital and stockholders’ deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 6. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| Aurora, Colorado | Ronald R. Chadwick, P.C. |
| August 12, 2010 | RONALD R. CHADWICK, P.C. |
F-2
|
AFFORDABLE GREEN HOMES INTERNATIONAL
|
||||||||
|
(A Development Stage Company)
|
||||||||
|
BALANCE SHEETS
|
||||||||
|
March 31, 2009
|
March 31, 2010
|
|||||||
|
ASSETS
|
||||||||
|
Current assets
|
||||||||
|
Cash
|
$ | 1,084 | $ | 238 | ||||
|
Total current Assets
|
1,084 | 238 | ||||||
|
Construction in progress
|
- | 100,000 | ||||||
|
Total Assets
|
$ | 1,084 | $ | 100,238 | ||||
|
LIABILITIES & STOCKHOLDERS' EQUITY
|
||||||||
|
Current liabilities
|
||||||||
|
Accounts payable
|
$ | - | $ | 1,820 | ||||
|
Related party payables
|
76,084 | 225,721 | ||||||
|
Customer deposits
|
- | 20,000 | ||||||
|
Accued interest payable
|
- | 21,621 | ||||||
|
Notes payable
|
- | 175,000 | ||||||
|
Total current liabilties
|
76,084 | 444,162 | ||||||
|
Total Liabilities
|
76,084 | 444,162 | ||||||
|
Stockholders' Equity
|
||||||||
|
Common stock, $.0001 par value;
|
||||||||
|
25,000,000 shares authorized;
|
||||||||
|
12,925,000 shares issued
|
||||||||
|
and outstanding
|
1,293 | 1,293 | ||||||
|
Additional paid in capital
|
135,457 | 135,457 | ||||||
|
Deficit accumulated during the
|
||||||||
|
development stage
|
(211,750 | ) | (480,674 | ) | ||||
|
Total Stockholders' Equity
|
(75,000 | ) | (343,924 | ) | ||||
|
Total Liabilities and Stockholders' Equity
|
$ | 1,084 | $ | 100,238 | ||||
|
The accompanying notes are an integral part of the financial statements.
|
||||||||
F-3
|
AFFORDABLE GREEN HOMES INTERNATIONAL
|
||||||||||||
|
(A Development Stage Company)
|
||||||||||||
|
STATEMENTS OF OPERATIONS
|
||||||||||||
|
Period From
|
||||||||||||
|
Oct. 10, 2006
|
||||||||||||
|
(Inception)
|
||||||||||||
|
Year Ended
|
Year Ended
|
To
|
||||||||||
|
March 31, 2009
|
March 31, 2010
|
March 31, 2010
|
||||||||||
|
Revenues
|
$ | - | $ | - | $ | - | ||||||
| - | - | - | ||||||||||
|
Operating expenses:
|
||||||||||||
|
General and administrative
|
73,888 | 247,303 | 459,053 | |||||||||
| 73,888 | 247,303 | 459,053 | ||||||||||
|
Gain (loss) from operations
|
(73,888 | ) | (247,303 | ) | (459,053 | ) | ||||||
|
Other income (expense):
|
||||||||||||
|
Interest (expense)
|
- | (21,621 | ) | (21,621 | ) | |||||||
| - | (21,621 | ) | (21,621 | ) | ||||||||
|
Income (loss) before
|
||||||||||||
|
provision for income taxes
|
(73,888 | ) | (268,924 | ) | (480,674 | ) | ||||||
|
Provision for income tax
|
- | - | - | |||||||||
|
Net income (loss)
|
$ | (73,888 | ) | $ | (268,924 | ) | $ | (480,674 | ) | |||
|
Net income (loss) per share
|
||||||||||||
|
(Basic and fully diluted)
|
$ | (0.01 | ) | $ | (0.02 | ) | ||||||
|
Weighted average number of
|
||||||||||||
|
common shares outstanding
|
12,716,667 | 12,925,000 | ||||||||||
|
The accompanying notes are an integral part of the financial statements.
|
||||||||||||
F-4
|
AFFORDABLE GREEN HOMES INTERNATIONAL
|
||||||||||||||||||||
|
(A Development Stage Company)
|
||||||||||||||||||||
|
STATEMENTS OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common Stock
|
During The
|
Stock-
|
||||||||||||||||||
|
Amount
|
Paid In
|
Development
|
holders'
|
|||||||||||||||||
|
Shares
|
($.0001 Par)
|
Capital
|
Stage
|
Equity
|
||||||||||||||||
|
Balances at Oct. 10, 2006 (Inception)
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
|
Compensatory stock issuances
|
2,300,000 | 230 | 22,770 | 23,000 | ||||||||||||||||
|
Sales of common stock
|
7,625,000 | 763 | 75,487 | 76,250 | ||||||||||||||||
|
Net income (loss) for the period
|
(99,298 | ) | (99,298 | ) | ||||||||||||||||
|
Balances at March 31, 2007
|
9,925,000 | $ | 993 | $ | 98,257 | $ | (99,298 | ) | $ | (48 | ) | |||||||||
|
Net income (loss) for the year
|
(38,564 | ) | (38,564 | ) | ||||||||||||||||
|
Balances at March 31, 2008
|
9,925,000 | $ | 993 | $ | 98,257 | $ | (137,862 | ) | $ | (38,612 | ) | |||||||||
|
Compensatory stock issuances
|
1,500,000 | 150 | 14,850 | 15,000 | ||||||||||||||||
|
Sales of common stock
|
1,500,000 | 150 | 22,350 | 22,500 | ||||||||||||||||
|
Net income (loss) for the year
|
(73,888 | ) | (73,888 | ) | ||||||||||||||||
|
Balances at March 31, 2009
|
12,925,000 | $ | 1,293 | $ | 135,457 | $ | (211,750 | ) | $ | (75,000 | ) | |||||||||
|
Net income (loss) for the year
|
(268,924 | ) | (268,924 | ) | ||||||||||||||||
|
Balances at March 31, 2010
|
12,925,000 | $ | 1,293 | $ | 135,457 | $ | (480,674 | ) | $ | (343,924 | ) | |||||||||
|
The accompanying notes are an integral part of the financial statements.
|
||||||||||||||||||||
F-5
|
AFFORDABLE GREEN HOMES INTERNATIONAL
|
||||||||||||
|
(A Development Stage Company)
|
||||||||||||
|
STATEMENTS OF CASH FLOWS
|
||||||||||||
|
Period From
|
||||||||||||
|
Oct. 10, 2006
|
||||||||||||
|
(Inception)
|
||||||||||||
|
Year Ended
|
Year Ended
|
To
|
||||||||||
|
March 31, 2009
|
March 31, 2010
|
March 31, 2010
|
||||||||||
|
Cash Flows From Operating Activities:
|
||||||||||||
|
Net income (loss)
|
$ | (73,888 | ) | $ | (268,924 | ) | $ | (480,674 | ) | |||
|
|
||||||||||||
|
Adjustments to reconcile net loss to
|
||||||||||||
|
net cash provided by (used for)
|
||||||||||||
|
operating activities:
|
||||||||||||
|
Construction in progress
|
- | (100,000 | ) | (100,000 | ) | |||||||
|
Bank overdraft
|
(229 | ) | - | - | ||||||||
|
Accounts payable
|
- | 1,820 | 1,820 | |||||||||
|
Related party payables
|
37,701 | 149,637 | 225,721 | |||||||||
|
Accrued payables
|
- | 21,621 | 21,621 | |||||||||
|
Customer deposits
|
- | 20,000 | 20,000 | |||||||||
|
Compensatory stock issuances
|
15,000 | - | 38,000 | |||||||||
|
Net cash provided by (used for)
|
||||||||||||
|
operating activities
|
(21,416 | ) | (175,846 | ) | (273,512 | ) | ||||||
|
Cash Flows From Investing Activities:
|
||||||||||||
| - | - | - | ||||||||||
|
Net cash provided by (used for)
|
||||||||||||
|
investing activities
|
- | - | - | |||||||||
|
Cash Flows From Financing Activities:
|
||||||||||||
|
Notes payable - borrowings
|
- | 175,000 | 175,000 | |||||||||
|
Sales of common stock
|
22,500 | - | 98,750 | |||||||||
|
Net cash provided by (used for)
|
||||||||||||
|
financing activities
|
22,500 | 175,000 | 273,750 | |||||||||
|
Net Increase (Decrease) In Cash
|
1,084 | (846 | ) | 238 | ||||||||
|
Cash At The Beginning Of The Period
|
- | 1,084 | - | |||||||||
|
Cash At The End Of The Period
|
$ | 1,084 | $ | 238 | $ | 238 | ||||||
|
Schedule Of Non-Cash Investing And Financing Activities
|
||||||||||||
|
None
|
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|
Supplemental Disclosure
|
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|
Cash paid for interest
|
$ | - | $ | - | $ | - | ||||||
|
Cash paid for income taxes
|
$ | - | $ | - | $ | - | ||||||
|
The accompanying notes are an integral part of the financial statements.
|
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F-6
AFFORDABLE GREEN HOMES INTERNATIONAL
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2009 and 2010
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Affordable Green Homes International (the “Company”), was incorporated in the State of Nevada on October 10, 2006. The Company is in business to build affordable family homes by using low cost structural concrete insulated panels as the basic construction methodology. The Company plans to purchase land for development, and to market and build finished homes using local labor. The Company is currently considered to be in the development stage, having generated no revenues and conducted only limited activities.
Cash and cash equivalents
The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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.
Income tax
The Company accounts for income taxes under Accounting Standards Codified No. 740 (“ASC 740”). Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. 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 effects of changes in tax laws and rates on the date of enactment.
Net income (loss) per share
The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.
Revenue recognition
Revenue is recognized on an accrual basis after services have been performed under contract terms, the price to the client is fixed or determinable, and collectability is reasonably assured.
Property and equipment
Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life.
Financial Instruments
The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheet, approximates fair value.
Fiscal year
The Company employs a fiscal year ending March 31.
Stock based compensation
The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.
NOTE 2. RELATED PARTY TRANSACTIONS
As of March 31, 2009 and 2010 the Company owed related parties $76,084 and $225,721 for working capital advances. In January 2010 the Company gave its chief executive officer a $20,000 customer deposit credit, it being the intent of the Company to sell the Company’s construction in progress house to the officer under a verbal understanding, in exchange for the Officer reducing amounts owed to him for working capital advances in the same amount of $20,000.
F-7
AFFORDABLE GREEN HOMES INTERNATIONAL
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2009 and 2010
NOTE 3. INCOME TAXES
Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur. The Company accounts for income taxes pursuant to ASC 740. At March 31, 2009 and 2010 the Company had approximately $212,000 and $480,000 in unused federal net operating loss carryforwards, which begin to expire principally in the year 2027. A deferred tax asset of approximately $44,000 and $98,000 resulting from the loss carryforward has been offset by a 100% valuation allowance. The change in the valuation allowance in fiscal year 2009 and 2010 was approximately $15,000 and $54,000.
NOTE 4. NOTES PAYABLE
At March 31, 2010 the Company had $90,000 in notes payable due to a corporation controlled by an officer, bearing interest at 10% per annum plus a 10% fee for late repayment which has been incurred, unsecured, with principal and $12,621 in accrued interest all currently due.
The Company also at March 31, 2010 had $85,000 in notes payable due to several individuals, bearing interest at 10% per annum, unsecured, with principal and $9,000 in accrued interest all currently due. One of these notes for $10,000 is convertible at $.10 per share anytime prior to repayment at the lender’s discretion into 100,000 common shares, and carries a 10% fee for late payment which has been incurred. Another note for $25,000 allows the lender at his discretion to take repayment in cash or 600,000 common shares.
Total principal due under all notes payable at March 31, 2010 was $175,000, all currently due, with accrued interest payable of $21,621. Interest expense under all notes in fiscal year 2010 was $21,621.
NOTE 5. STOCKHOLDERS' EQUITY
Common stock
The Company at March 31, 2009 and 2010 had 25,000,000 shares of authorized common stock, $.0001 par value, with 12,925,000 common shares issued and outstanding.
Stock options and warrants
At March 31, 2009 and 2010 the Company had stock options and warrants outstanding as described below.
Non-employee stock options and warrants
The Company accounts for non-employee stock options and warrants under ASC 718, whereby option and warrant costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.
At March 31, 2008, the Company had 9,925,000 non-employee common stock purchase warrants outstanding, all exercisable at $.01, and expiring at various dates from November 2008 through June 2009. During fiscal year end March 31, 2009, 9,734,000 of the warrants expired, leaving a year end balance of 191,000 non-employee common stock purchase warrants.
During fiscal year end March 31, 2010, 191,000 of the warrants expired, leaving no warrants outstanding at year end.
Employee stock options and warrants
The Company accounts for employee stock options and warrants under ASC 718. Unless otherwise provided for, the Company covers option and warrant exercises by issuing new shares. There were no employee stock options or warrants issued or outstanding at March 31, 2009 and 2010.
NOTE 6. GOING CONCERN
The Company has suffered a loss from operations and has limited operations, and in all likelihood will be required to make significant future expenditures in connection with marketing efforts along with general administrative expenses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions. By doing so, the Company hopes to generate sufficient capital to execute its business plan of building affordable family homes for lower income workers in Texas and Louisiana. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.
F-8