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The Company

The Company is a global engineering and project management business that provides services through a network of branch offices and subsidiaries located in markets where the Company either has active projects, is bidding on projects, or is investigating project opportunities.

We serve an underserved niche in the global project spectrum, by targeting specialized projects and subcontracts that are too small to attract multinational firms but still require world class engineering expertise. Our business typically focuses on small to mid-size contracts and subcontracts in the $1 million to $10 million range. Few small to medium sized engineering firms in the developed world have the capacity to work in the less developed markets we serve, and local companies generally lack the international-standard expertise demanded by project investors.

Beginning in 2008 we targeted a wide variety of private and government funded jobs in the Middle East, particularly in the U.A.E., but the substantial economic slowdown in these markets shifted our focus to U.S. government contracts and subcontracts in Southeast Asia. However, because of the narrow profit margins on our U.S. Navy contracts in Southeast Asia, as well as our competition in the area, we have suspended bidding on U.S. government projects in Southeast Asian at this time. We will bid on specialty contracts as they arise and we will continue to market prefabricated housing as opportunities arise. The Company has more recently begun focusing on U.S. government operations in the United States and on the Company's alternative engine fuels operations in Thailand and the United States.

U.S. Government Construction and Services

Our key personnel have decades of experience in and performing work for the U.S. Department of Defense (DoD) and Department of State (DoS), largely in challenging overseas environments, and are intimately familiar with both the complex requirements of U.S. government contracts and the unusual challenges of performing high-standard work in isolated and undeveloped environments.

The U.S. military is one of the world’s largest sources of construction and service contracts. Construction in Iraq and Afghanistan and other highly visible projects are only part of the DoD’s global construction program. Hundreds of smaller projects are continuously being carried out, largely related to training and support programs for foreign militaries and wide range of bilateral and multilateral military exercises. Many of these take place in areas where we are well positioned to carry out both construction and service work.

For the past three years U.S. military contracts in Southeast Asia have been a significant source of the Company’s work, with projects including:

·         Design/Build Construction of a Close Quarters Battle (CQB) Training Facility, Camp Erawan, Thailand; the project consists of the construction for the U.S. Navy of a two-story shoot house for military training; awarded May, 2009, completed January 21, 2010.

·         Construction of seven new barracks, wash facilities, food-preparation facilities and dining facilities, along with the repair of existing, and construction of additional roads, sidewalks, wells, lighting and electrical distribution, for the U.S. Navy's GPOI Training Facilities, Kampong Spoe, Cambodia; awarded August 2009, completed April 29, 2010.

·         Blank Purchase Agreements for heavy equipment and adviser and troop transportation, in support of the 2010 U.S. Army  “Angkor Sentinel” exercise in Cambodia, part of the Global Peace Operations Initiative, which aims to train, and where appropriate equip, 75,000 Peacekeepers worldwide; commenced August 2010, completed August 2011.

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·         Design/build contract for the U.S. Navy’s Lido Phase II Project in Indonesia consisting of designing and building a two storey barrack, dining facilities, a mess hall, a kitchen, roads, parking areas, and site utilities; awarded September 29, 2010, we discontinued our involvement with this contract due to subcontractor disputes at the end of 2011.

The number of U.S. government projects available for bidding within our target range is enormous. The challenge facing the Company is not finding projects to bid on, but rather selecting the opportunities that will be profitable and will align with our business development plan without exposing the Company to unnecessary risks. The U.S. government selection criteria are “lowest price, technically acceptable”.  As we have determined that the margins on many of these "lowest price" projects have become too small, we have suspended bidding on a wide range of projects and instead have decided instead to focus our bidding on specialty contracts that do not have hundreds of bidders with whom we must compete.

Prefabricated Housing

We are a co-distributor aligned with an affiliated company for several types of highly portable and economical prefabricated structures manufactured in China and Thailand. These structures are ideal for use as residence and offices space on project sites, and are also a useful solution for disaster relief situations and other environments requiring the rapid deployment of low-cost housing and other structures.

The market for disaster relief and reconstruction efforts encompasses affected populations as well as rapidly deployable operation and residence bases for relief personnel. The need for this type of structure has been powerfully underscored by recent earthquakes and tsunamis. We believe that low-cost, readily transportable prefabricated structures are an ideal solution providing both immediate relief and long-term viability for disaster-affected areas, and are actively pursuing relationships with both relief agencies and governments of disaster-prone areas.

Domestic Operations

The Company has more recently begun contact with major U.S. construction firms to establish strategic partnerships for domestic U.S. military construction projects. Through one of these firms we are able to bid and work on facilities of a classified nature in the United States, a separate and highly specialized market. We continue to pursue these partnerships but to date have not bid on any domestic projects.

On February 1, 2012, we entered into a Share Exchange Agreement (the "Agreement") with InterMedia Development Corporation ("InterMedia") and InterMedia's shareholders. InterMedia is a media production company and defense contractor based in Fairfax, Virginia. For over 15 years InterMedia has supported Naval Air Systems Command, Special Operations Command, Central Command and the U.S. Marine Corps in the areas of video production, broadcast engineering, studio system design, audio-video network engineering, integration and test support, pre-deployment training and documentation.

In 2010, InterMedia added Avionics Systems Design and Testing, and Information Assurance Certification Support to its capabilities, branding the resulting methodology as "IA4" and founding the IA4 workgroup to explore cost-effective ways to provide 100% security solutions for communications-based computers and networks. InterMedia now has the capability to support a project from inception and design, through integration, test, certification, training and lifecycle sustainment. In 2011, InterMedia added electronic publishing and learning management system development to support clients interested in interactive eBook and online training platforms.

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Pursuant to the Agreement, the Company is to acquire 100% of the outstanding shares of InterMedia’s common stock from InterMedia's shareholders in exchange for an aggregate of 84,000,000 shares of the Company's common stock. As an obligation to consummate the closing of the Agreement, the Company will initiate two private placements to raise a minimum of $300,000 within six months and an additional minimum of $400,000 within twelve months of closing the Agreement. If the Company fails to raise the minimum amounts, the Company will be required to issue an additional 20,000,000 shares and may be required to issue an additional 90,000,000 shares, respectively. The parties have allowed the required closing date of the Agreement to pass without having consummated the Agreement, but expect to amend the closing date when each party has performed all required due diligence measures.

Alternative Fuels

During the six month transition period ended December 31, 2011, the Company made the decision to diversify its operations to address a worldwide demand for transportation and energy generation alternative fuels.

The Company's first step into the alternative fuels business is with operations at its facility in Chonburi, Thailand with the diesel to CNG conversion of a 250Kva/200Kw Cummins diesel generator at the end of 2011. The Company expects to expand CNG operations with additional generator acquisitions, conversions and sales in Thailand in the coming months.

At the beginning of the period, the Company entered into a memorandum of understanding with Cleanfield Energy, Inc. ("Cleanfield") on July 1, 2011, as amended on July 7, 2011. The MOU provides the Company with the exclusive right to collaborate with Cleanfield and the right of first refusal to acquire or form a more comprehensive joint venture with Cleanfield. The Company has been committed to providing Cleanfield with interim funding to cover expenses for the furtherance of the business plan.

Cleanfield is focused on developing a network of CNG conversion facilities and fueling stations in key areas where the market is already sustainable. This business model has unique advantages for both investors and communities. Investors have the opportunity to develop a locally oriented, environmentally sensitive business in an industry that’s already making money and that has almost unlimited potential. Communities can seize the opportunity to promote clean energy and local and national employment. Both can take advantage of a huge array of federal and state governmental incentives designed to promote the transition from expensive, polluting, imported gasoline and diesel to clean, affordable CNG.

Cleanfield was formed by an Arizona-based individual for the purpose of pursuing opportunities in the natural gas powered engine industry. The founder spent three years researching and consulting on the industry in the western and southern United States, and developing a business plan suitable for entering into the industry in its early stage.

The founder was attracted to partnering with the Company for its project management experience and that fact that the Company is a Utah-based company. Utah is one of the leading states in the U.S. for natural gas engine power and clean energy initiatives. The founder joined with the Company in a joint venture designed to leverage both parties’ contacts and expertise, and maximize returns on investment.

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Cleanfield has also partnered with U-Fix-It Center – a Tempe, Arizona-based automotive services facility – to provide the Company's CNG vehicle conversion in the Phoenix area. U-Fix-It staff are certified installers and safety inspectors of EPA certified CNG conversion kits. U-Fix-It Center operates a 22-bay repair center offering a broad spectrum of automotive services. Cleanfield’s agreement with U-Fix-It provides for the use of U-Fix-it facilities and the execution of conversion jobs by U-Fix-It mechanics on a per-job basis. These terms allow Cleanfield to enter the conversion business with minimal startup cost, without carrying the overhead cost of the facility and mechanics. Cleanfield also leases space from the U-Fix-It Center.

Products

Cleanfield is an authorized distributor and installer of conversion kits and natural gas compressors produced by Go Natural, a Utah-based company that has emerged as a leading player in the CNG conversion field. All Go Natural products have full EPA and CARB approval.

Go Natural offers one of the largest ranges of EPA and CARB conversion kits in the industry, enabling Cleanfield to service and convert a large number of vehicle types. Because Go Natural’s primary facility is located in Woods Cross, Utah, necessary parts and kits can be easily transported to the Cleanfield facility.

Go Natural products are price-competitive. The cost of conversion and EPA certified vehicle starts at about $7,500 and increases primarily based upon on cylinder configuration. CNG Kits start at $6,000 and fuel cylinders start at $1,500 each, installed. Depending on range needed more than one cylinder can be used. The installed system includes:

• The Cylinder is used to store CNG at a working pressure of 200 bar. It is fitted with a shutoff valve and a safety burst disc. The cylinders are type approved by the Chief Controller of Explosives, Government of India
• The Vapor Bag encloses the cylinder valve and the pipes connecting it and is vented out of the car
• High Pressure Fuel Lines connect the refueling valve to the CNG Cylinder and Pressure Regulator
• The Refueling Valve is used to refuel the CNG cylinder
• The Pressure Regulator has a Solenoid Valve to shut off gas supply to the engine. The CNG stored at a high pressure in the cylinder is reduced to just below atmospheric pressure by this unit. This negative pressure is also a safety feature that will not allow gas to pass through when the engine is not running
• The Gas-Air Mixer is a unique component, specially designed to suit each engine model. It precisely meters gas fed into the engine
• The Petrol-Solenoid Valve is used to cut off petrol supply to the engine when it is run on CNG
• The Selector Switch is fitted at the dashboard, enabling the driver to choose either the CNG mode or the petrol mode of operation. The electronics built into this unit also ensures safety by switching off the gas solenoid whenever the engine is switched off. It also serves as a fuel indicator for the quantity of CNG available in the cylinder

One of the primary advantages of the Go Natural is a range of products in an industry-leading three-year/100,000 mile warranty.

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Go Natural’s hydraulic compressors were developed in partnership with Parker Hannifin, a multibillion dollar component manufacturer. These new compressors will be available to the market in 2012. The compression chambers compress large amounts of gas with every stroke, compressing gas on both backward and forward strokes and reaching 5,000 psi in only 2 stages. Durability is more than 3 times that of other conventional compressors.

Cleanfield will initially offer Go Natural products in its conversion centers and rely on the proven Go Natural range of solutions for fueling station installations. Cleanfield intends to offer its customers the widest possible range of high-quality natural gas vehicle and service station products available in the market today. Cleanfield is closely monitoring the approval processes of several leading candidates for diesel to natural gas conversion systems, and intends to offer diesel-to-gas conversions as soon as an EPA/CARB-approved system is available.

Services

Cleanfield will initially provide a range of conversion services, including conversion of gasoline engines to CNG and the replacement of diesel engines or gasoline engines for which no EPA/CARB conversion process exists with CNG engines. Diesel-to-CNG conversions will be provided when EPA/CARB-approved processes become available.

Cleanfield also provides consulting services for public or private entities that wish to convert fleets of vehicles to CNG. These packages typically involve fleet conversion, establishment of strategically located fueling points, and assistance in maximizing the benefits offered by a broad but complex range of federal and state incentive programs.

Competition 

Southeast Asian Competitors and Prospective Competitors

Since 2009 the Company has been active in the Southeast Asian construction and project management business. This activity has generated sufficient experience to analyze current and prospective competition.  To date this competition has come almost exclusively from large local and regionally based construction firms.  There are at least 10 other companies that bid on U.S. government projects in the region that are in the $500,000 to $10,000,000 range, and at least 5 more companies that bid on the larger U.S. government projects.  All competitors are well funded, and have more experience and economies of scale than we do.  

Our competitive strategy for bidding on private projects in the future is to maintain an extremely lean corporate structure with minimal staff, facility, and asset depreciation costs, and to focus on a rigorous process of project selection, targeting only those projects the Company is most likely to win and reducing the staff time required for bid preparation. We maintain a very low cost structure, but the Company’s high level of expertise and extensive experience with U.S. government contracting and other projects with rigorous technical specifications enables us to submit bids with a level of technical qualification that other small companies with equivalent cost structures cannot match. Our principal competitive advantages are:

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Alternative Fuels Competition

The CNG conversion business in certain areas of the U.S. is highly competitive. Companies with greater financial resources, existing staff and labor forces, and experience are in a better position than us to compete for conversion bids. However, Cleanfield has unique advantages in the market having teamed up with Go Natural, including:

• three-year/100,000 mile warranty
• Complete turnkey solutions for fleet managers to switch to natural gas
• CFE conversions are approved by the EPA and the air resource board of California
• CFE conversion is a partnership with U-Fix-It mechanics that offers us a low cost high quality facility with minimal overhead cost, U-Fix-It operates a 22-bay secure facility centrally located in Tempe very close to the 101 of the 202 freeways.

This pattern provides obvious profitable locations for future stations. Experience with existing stations indicates that profitability is already possible at today’s vehicle density, suggesting strong growth potential as CNG adoption increases.

Integration of fleet conversion with provision of public CNG fueling infrastructure provides additional opportunity: in-house sales to fleet vehicles provide an immediate revenue source for the fueling facility, while public use provides strong growth potential.

The compressor is an integral part of any CNG filling station, whether for home, fleet, or commercial use. Go Natural is developing a new breed of natural gas compressors running on hydraulics instead of rotary driven motors. These compressors have several distinct advantages over conventional compressors:

• The reduced speed compressor moves at 35 – 50 Strokes per minute compared to conventional technology running over 1,000 RPM. This reduces friction caused damage and will increase the life of the system.
• Most of the rotary driven compressors require crank case lubrication. The Go Natural design is oil free, eliminating the need for coalescing filtration to eliminate injector failure.
• An auto-cycling system keeps all electronic valves separated from the hydraulic power unit. This allows the compressor to avoid using explosion proof motors and controls, which reduces cost significantly
• Use of a modular design allows repairs to be easily accomplished in the field by the users. This reduces maintenance cost.
• The modular design also allows for the customer to start out wi th a small unit then add additional units as demand increases without having to replace the initial investment.
• Used in parallel they provide redundancy to the station so the station is never out of operation if a compressor goes down.

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Contracts

Our contracts can be broadly categorized as either cost-reimbursable or fixed-price, the latter sometimes being referred to as lump-sum. Some contracts can involve both fixed-price and cost-reimbursable elements.

Fixed-price contracts are for a fixed sum to cover all costs and any profit element for a defined scope of work. Fixed-price contracts entail more risk to us because they require us to predetermine both the quantities of work to be performed and the costs associated with executing the work. Although fixed-price contracts involve greater risk than cost-reimbursable contracts, they also are potentially more profitable since the owner/customer pays a premium to transfer more project risk to us.

Cost-reimbursable contracts include contracts where the price is variable based upon our actual costs incurred for time and materials, or for variable quantities of work priced at defined unit rates, including reimbursable labor hour contracts. Profit on cost-reimbursable contracts may be based upon a percentage of costs incurred and/or a fixed amount. Cost reimbursable contracts are generally less risky than fixed-price contracts because the owner/customer retains many of the project risks.

Insurance

All of the Company’s operations carry “All Risks Insurance”, the costs of which are passed on to clients within bid proposals. This insurance is mandatory and any competing bidders will also pass on similar costs.

Markets

The Company has the capacity to execute projects within its target criteria almost anywhere in the world.  The Company has, however, focused its activities in markets where we have regional contact networks, where there are large numbers of available contracts, and where risks are manageable.

Southeast Asia

Southeast Asia has emerged as a major source of contracts.  Since 2010 we have completed U.S. military contracts in Thailand, Indonesia and Cambodia. 

Southeast Asia provides an ideal working environment for the Company.  There is a substantial U.S. military presence in the area, but it is relatively dispersed and focused on training, disaster relief, support for local forces and civic assistance projects.  These activities provide numerous contract opportunities in our target range.  There is substantial diplomatic construction planned in the area.  There are enough underdeveloped areas to draw substantial development and relief aid spending, but the region as a whole is economically dynamic enough to generate substantial private contraction opportunities.  The region enjoys a relatively high degree of political stability and presents a very manageable risk picture.

Indonesia and East Timor, along with Malaysia, Papua New Guinea, and the southern Philippines are active with new U.S. government funded building projects.

Private sector projects, including infrastructure, oil & gas, disaster relief, insurance funded damage rehabilitation, low income and high end residential projects, mining projects and commercial buildings are growing in number as the Southeast Asian regional economies are growing at above average rates. These markets are determined to be relatively open to new qualified bidders, and we will continue to seek opportunities to win contracts in these markets.

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Our demonstrated capacity to perform work in this region and our physical presence in Thailand provide a solid base for regional expansion. Nonetheless, we have suspended bidding on US government projects in the region at this time due to low project margins and greater competition than originally anticipated.

Alternative Fuels Market

CNG is entrenched in a variety of states, notably Arizona, southern California, Colorado, Utah and Louisiana. Cleanfield believes CNG use will predictably expand out from these core areas and along corridors linking these areas. For this reason, the Company has selected the Southwestern United States as its initial target market, beginning in Arizona. CNG is already a significant market presence in nearby California and Utah.

As a major corridor between these early adopters, Arizona is well situated to be the next takeoff point in CNG adoption, providing an ideal ground-floor opportunity. Competition remains limited, giving Cleanfield the opportunity to establish its presence early and build a base for subsequent expansion, rather than entering the already competitive markets of Utah and Southern California.

Arizona is also in the midst of an effort to position itself as a major center for alternative energy development, building from a dominant position in the solar energy industry and expanding into other alternative energy fields. Cleanfield has been granted membership to the exclusive Valley of the Sun Clean Cities Coalition through 2012. The coalition is a group of public agencies and prominent corporations committed to expanding alternative energy use. Coalition members already operate nearly 7,000 alternative fuel vehicles and displace some 30 million gallons of petroleum fuel annually with alternative fuels such as natural gas, biodiesel, propane, ethanol, and electricity. According to a 2010 survey, this represents 10% of the annual consumption of alternative transportation fuel in the U.S. Coalition members have set the target of having one million Alternative Fuel Vehicles in the U.S., with fleet operators in the coalition holding a mandate to reduce carbon footprints. Area companies participating in the initiative include:

• AT&T
• Coca-Cola
• Enterprise Holdings (Enterprise, Alamo, National)
• FedEx
• Frito-Lay
• General Electric
• OSRAM Sylvania
• PepsiCo
• Rider Trucks
• Schwan’s Staples
• Thyssen/Krupp elevators
• UPS
• Verizon

58% of Arizona’s population live in cities of 100,000 or more, the highest ratio in the U.S.. This population concentration makes it easy to reach a large percentage of the populace with a network of strategically located facilities.

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In additional to Arizona, Cleanfield is beginning to focus on areas in and around the gas-rich states of Oklahoma and Texas, which are being heavily promoted and rapidly adopting CNG for vehicles. Louisiana will likely be Cleanfield's jumping off point in the area as the company has been making inroads to landing conversion contracts there in recent months.

Patents, Trademarks, Licenses, Franchises,

Concessions, Royalty Agreements and Labor Contracts

We currently have no patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts. However, all of the Company’s bid packages contain proprietary information related to the Company and the project. We depend on our ability to develop and maintain the proprietary aspects of our bids to distinguish them from our competitors’ bids. To protect this information, we rely primarily on a combination of confidentiality procedures. One method is requiring employees and consultants to execute confidentiality agreements upon the commencement of their relationship with us. These agreements provide that confidential information developed or made known during the course of a relationship with us must be kept confidential and not disclosed to third parties except in specific circumstances and for the assignment to us of intellectual property rights developed within the scope of the employment relationship.

Governmental and Environmental Regulation

Health and Safety

We are subject to numerous health and safety laws and regulations imposed by the governments controlling the jurisdictions in which we operate and by or clients and project financiers. These regulations are frequently changing, and it is impossible to predict the effect of such laws and regulations on us in the future. We actively seek to maintain a safe, healthy and environmentally friendly work place for all of our employees and those who work with us. However, we provide some of our services in high-risk locations and as a result we may incur substantial costs to maintain the safety of our personnel. All of our operations and personnel are covered by comprehensive “all risk” insurance, the costs of which are included in our contracts.

Office of Foreign Assets Control

The Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. OFAC acts under presidential national emergency powers as well as authority granted by specific legislation to impose controls on transactions and freeze assets under U.S. jurisdiction. Since the Company is a U.S. corporation, it is bound to the regulations of OFAC. Although we have never contracted nor made any effort to contract with countries which OFAC has identified as state sponsors of terrorism, the possibility exists that certain OFAC sanctioning methods could be employed against certain of our operations.

Environmental Regulation

The countries where we do business often have numerous environmental regulatory requirements by which we must abide in the normal course of our operations. We do not expect costs related to environmental matters will have a material adverse effect on our consolidated financial position or our results of operations. 

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Climate Change Legislation and Greenhouse Gas Regulation

Many studies over the past couple decades have indicated that emissions of certain gases contribute to warming of the Earth’s atmosphere. In response to these studies, many nations have agreed to limit emissions of “greenhouse gases” or “GHGs” pursuant to the United Nations Framework Convention on Climate Change, and the “Kyoto Protocol.” Although the United States did not adopt the Kyoto Protocol, several states have adopted legislation and regulations to reduce emissions of greenhouse gases. Additionally, the United States Supreme Court has ruled, in Massachusetts, et al. v. EPA , that the EPA abused its discretion under the Clean Air Act by refusing to regulate carbon dioxide emissions from mobile sources. As a result of the Supreme Court decision the EPA issued a finding that serves as the foundation under the Clean Air Act to issue other rules that would result in federal greenhouse gas regulations and emissions limits under the Clean Air Act, even without Congressional action. Finally, acts of Congress, particularly those such as the “American Clean Energy and Security Act of 2009” approved by the United States House of Representatives, as well as the decisions of lower courts, large numbers of states, and foreign governments could widely affect climate change regulation. Greenhouse gas legislation and regulation could have a material adverse effect on our business, financial condition, and results of operations.

Employees

We have one full-time employee in Virginia and one in Arizona. We also have part-time consultants in Utah, Dubai, and Thailand. We believe we have a good working relationship with our employee and consultants, which are not represented by a collective bargaining organization. We also use third party consultants to assist in the completion of various projects; third parties are instrumental to keep the development of projects on time and on budget. Our management expects to continue to use consultants, attorneys, and accountants as necessary, to complement services rendered by our employees.

Reports to Security Holders

The Company’s annual report contains audited financial statements. We are not required to deliver an annual report to security holders and will not automatically deliver a copy of the annual report to our security holders unless a request is made for such delivery. We file all of our required reports and other information with the Securities and Exchange Commission (the “Commission”). The public may read and copy any materials that are filed by the Company with the Commission at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The statements and forms filed by us with the Commission have also been filed electronically and are available for viewing or copy on the Commission maintained Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. The Internet address for this site can be found at www.sec.gov.

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ITEM 1A.       RISK FACTORS

Our operations and securities are subject to a number of risks. Below we have identified and discussed the material risks that we are likely to face. Should any of the following risks occur, they will adversely affect our operations, business, financial condition and/or operating results as well as the future trading price and/or the value of our securities.

Risk Factors Relating To Our Business

The Company’s ability to continue as a going concern is in question

Our auditors included an explanatory statement in their report on our consolidated financial statements for the six month transition periods ended December 31, 2011 and 2010 and the years ended June 30, 2011 and 2010, stating that there are certain factors which raise substantial doubt about the Company’s ability to continue as a going concern. These factors include a working capital deficit, negative cash flows, and accumulated losses.

The scope of our business is has been limited to small and mid-sized private and government contracts.

The Company is a global engineering and project management service provider, focused primarily on U.S. government contracts and subcontracts.  If we cannot continue to attain new government contracts and/or new subcontracts from some larger engineering contractors, our business could be adversely affected. Furthermore, if the market for engineering and project management services continues to be very competitive within our market, the Company could be adversely affected.

We depend on the recruitment and retention of qualified personnel, and our failure to attract and retain such personnel could seriously harm our business. 

Due to the specialized nature of our businesses, our future performance is highly dependent upon the continued services of our key engineering personnel and executive officers, the development of additional management personnel, and the recruitment and retention of new qualified engineering, manufacturing, marketing, sales, and management personnel for our operations. Competition for personnel is intense, and we may not be successful in attracting or retaining qualified personnel.  In addition, key personnel may be required to receive security clearances and substantial training in order to work on government sponsored programs or perform related tasks.  The loss of key employees, our inability to attract new qualified employees or adequately train employees, or the delay in hiring key personnel could impair our ability to prepare bids for new projects, fill orders, or develop new products.

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Our activities are affected by the level of U.S. defense spending, and a reduction in current defense budget expenditures or changing governmental priorities could significantly reduce sales under governmental contracts.

Our revenues from the U.S. government largely result from contracts awarded by military purchasers under various defense programs. The funding of defense programs is subject to the overall U.S. governmental budget and appropriation decisions and processes, and our programs must compete for funding with nondefense programs and other defense programs in which we are not involved. U.S. governmental budget decisions, including defense spending, are based on changing governmental priorities and objectives, which are driven by numerous factors, including national and international geopolitical events and economic conditions, and are beyond our control.  In recent years, the overall level of U.S. defense spending has increased for numerous reasons, including increases in funding of operations in Iraq and Afghanistan and the U.S. Department of Defense’s military transformation initiatives. We cannot assure that U.S. defense spending will continue to grow, particularly in view of the recent changes in the controlling political party in Congress. Significant changes to U.S. defense spending could have long-term consequences for the market of our services. In addition, as a result of changing governmental priorities and requirements, defense spending could shift away from the current importance of military force and facility construction into new areas, and the timing of funding of force and facility construction could change.  Shifts or reductions in defense spending or changes in timing could result in the reduction or elimination of, or the delay in, funding of one or more of our defense programs, which could negatively impact our results of operations and financial condition.

A large scope of our business is governed by U.S. governmental contracts, which are subject to continued appropriations by Congress and termination. 

We supply engineering and project management either directly or as a subcontractor for various U.S. governmental civilian and military programs, all of which are generally subject to congressional appropriations.  Congress generally appropriates funds on a fiscal year basis even though a program may extend for several years.  Consequently, programs are often only partially funded initially, and additional funds are committed only as Congress makes further appropriations.  U.S. governmental contracts and subcontracts under a program are subject to termination or adjustment if appropriations for such program are not available or change.  In addition, U.S. governmental contracts generally contain provisions permitting partial or total termination, without prior notice, at the U.S. government’s convenience as well as termination for default based on performance.  Upon termination for convenience, we generally will be entitled to compensation only for services rendered and commitments completed at the time of termination.  A termination arising out of our default could expose us to liability and have a negative impact on our ability to obtain future contracts and orders.

Our financial performance is highly dependent on our procurement, performance, and payment under our U.S. governmental contracts.  The termination of one or more large contracts, whether due to lack of funding, for convenience, or otherwise, could materially adversely affect our business.  In such an event, our losses would likely increase as we would continue to incur operating costs as we sought to procure new U.S. government contracts to offset the revenues lost as a result of any termination of our contracts.  Among the factors that could materially adversely affect our federal governmental contracting business are: 

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·         budgetary constraints affecting federal government spending generally, or defense and intelligence spending in particular, and annual changes in fiscal policies or available funding;

·         changes in federal governmental programs, priorities, procurement policies, or requirements;

·         new legislation, regulations, or governmental union pressures on the nature and amount of services the government may obtain from private contractors;

·         federal governmental shutdowns (such as during the government’s 1996 fiscal year) and other potential delays in the governmental appropriations process; and

·         delays in the payment of our invoices by governmental payment offices due to problems with, or upgrades to, governmental information systems, or for other reasons.

These or other factors could cause federal governmental agencies, or prime contractors when we are acting as a subcontractor, to reduce their purchases under contracts, to exercise their right to terminate contracts, or to not exercise options to renew contracts, any of which could reduce sales, including our sales backlog, while costs continued as are sought to develop sales have a materially adverse effect on our business, financial condition, and results of operations.

We enter into fixed-price contracts that could subject us to losses in the event that we have cost overruns. 

Many of our contracts are entered into on a fixed-price basis.  This allows us to benefit from cost savings, but we carry the financial risk of cost overruns. If our initial estimates on project completion are incorrect, we can lose money on these contracts.  In addition, some of our contracts have provisions relating to cost controls and audit rights, and if we fail to meet the terms specified in those contracts, then we may not realize their full benefits.  Lower earnings caused by cost overruns and cost controls would reduce or eliminate the gross margins under our contracts.

We could be suspended or debarred from contracting with the federal government. 

We could be suspended or debarred from contracting with the federal government generally or any significant agency in the intelligence community or Department of Defense for, among other things, actions or omissions that are deemed by the government to be so serious or compelling that they affect our contractual responsibilities.  For example, we could be debarred for committing a fraud or criminal offense in connection with obtaining, attempting to obtain, or performing a contract or for embezzlement, fraud, forgery, falsification, or other causes identified in applicable federal acquisition regulations. In addition, our reputation or relationship with the governmental agencies could be impaired. If we were suspended or debarred, or if our relationship or reputation were impaired, our sales opportunities and revenues would be reduced and our operating loss would increase.  We did receive a termination for default notice from the US NAVFAC for non-completion of the Lido Phase II project in Indonesia. The termination does not affect our eligibility to win US government contracts. However, it does have the affect of damaging our reputation and credibility for future pre-qualifications.     

International and political events may adversely affect our operations.

Most of our past revenue and some of our future revenue will be derived from non-United States operations, which exposes us to risks inherent in doing business in each of the countries in which we transact business. The occurrence of any of the risks described below could have a material adverse effect on our results of operations and financial condition.

Operations in countries other than the United States are subject to various risks peculiar to each country. With respect to any particular country, these risks may include:

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·         expropriation and nationalization of our assets in that country;

·         political and economic instability;

·         civil unrest, acts of terrorism, force majeure, war, or other armed conflict;

·         natural disasters, including those related to earthquakes and flooding;

·         inflation;

·         currency fluctuations, devaluations, and conversion restrictions;

·         confiscatory taxation or other adverse tax policies;

·         governmental activities that limit or disrupt markets, restrict payments, or limit the movement of funds;

·         governmental activities that may result in the deprivation of contract rights; and

·         governmental activities that may result in the inability to obtain or retain licenses required for operation.

Due to the unsettled political conditions in many oil-producing countries and countries in which we provide governmental logistical support, our revenue and profits are subject to the adverse consequences of war, the effects of terrorism, civil unrest, strikes, currency controls, and governmental actions.

We work in international locations where there are high security risks, which could result in harm to our employees and contractors or substantial costs.

Some of our services are performed in high-risk locations where the country or location is suffering from political, social or economic issues, or war or civil unrest. In those locations where we have employees or operations, we may incur substantial costs to maintain the safety of our personnel. Despite these precautions, the safety of our personnel in these locations may continue to be at risk, and we have in the past and may in the future suffer the loss of employees and contractors.

We are subject to significant foreign exchange and currency risks that could adversely affect our operations and our ability to reinvest earnings from operations, and our ability to limit our foreign exchange risk through hedging transactions may be limited.

A sizable portion of our consolidated revenue and consolidated operating expenses are in foreign currencies. As a result, we are subject to significant risks, including:

• foreign exchange risks resulting from changes in foreign exchange rates and the implementation of exchange controls; and
• limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries.

In particular, we conduct business in countries that have non-traded or “soft” currencies which, because of their restricted or limited trading markets, may be difficult to exchange for “hard” currencies. The national governments in some of these countries are often able to establish the exchange rates for the local currency. As a result, it may not be possible for us to engage in hedging transactions to mitigate the risks associated with fluctuations of the particular currency. We are often required to pay all or a portion of our costs associated with a project in the local soft currency. As a result, we generally attempt to negotiate contract terms with our customer, who is often affiliated with the local government, to provide that we are paid in the local currency in amounts that match our local expenses. If we are unable to match our costs with matching revenue in the local currency, we would be exposed to the risk of an adverse change in currency exchange rates.

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Risks Relating to Our Common Stock

Our stock price is volatile.

The market price of our common stock is highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

·         services offered by us or our competitors;

·         additions or departures of key personnel;

·         our ability to execute its business plan;

·         operating results that fall below expectations;

·         loss of any strategic relationship;

·         industry developments;

·         economic and other external factors; and

·         period-to-period fluctuations in our financial results.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

The Financial Industry Regulatory Authority (“FINRA”) has adopted rules that relate to the application of the Commission’s penny stock rules in trading our securities and require that a broker/dealer have reasonable grounds for believing that the investment is suitable for that customer, prior to recommending the investment. Prior to recommending speculative, low priced securities to their non-institutional customers, broker/dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative, low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker/dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our common stock.

We incur significant expenses as a result of the Sarbanes-Oxley Act of 2002, which expenses may continue to negatively impact our financial performance.

We incur significant legal, accounting and other expenses as a result of the Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission, which control the corporate governance practices of public companies. Compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002, as discussed in the following risk factor, has increased our expenses, including legal and accounting costs, and made some activities more time-consuming and costly.

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Our internal controls over financial reporting are not considered effective, which conclusion could result in a loss of investor confidence in our financial reports and in turn have an adverse effect on our stock price.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our management on our internal controls over financial reporting. Such report must contain, among other matters, an assessment of the effectiveness of our internal controls over financial reporting as of the end of the year, including a statement as to whether or not our internal controls over financial reporting are effective. This assessment must include disclosure of any material weaknesses in our internal controls over financial reporting identified by management. For the six month transition period ending December 31 , 2011, we were unable to assert that our internal controls were effective. Accordingly, our shareholders could lose confidence in the accuracy and completeness of our financial reports, which in turn could cause our stock price to decline.

Our past and future capital funding needs have resulted in dilution to existing shareholders.

We have realized funding to date of $194,000 from Asher Enterprises, Inc. ("Asher"), in the form of convertible notes, $117,500 of which (including $3,000 in interest) to date has been converted into nearly 28,492,826 shares of our common stock. Additionally, we will need to realize capital funding over the next year to further our business plan. We intend to raise this capital through equity offerings, debt placements or joint ventures. Should we secure a commitment to provide us with capital, such commitment may obligate us to issue shares of our common stock, warrants or create other rights to acquire our common stock. The issuances to Asher and any new issuances of our common stock result in a dilution of our existing shareholders interests.

Our common stock is currently deemed to be “penny stock”, which makes it more difficult for investors to sell their shares.

Our common stock is and will be subject to the “penny stock” rules adopted under section 15(g) of the Exchange Act. The penny stock rules apply to companies whose common stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share or that have tangible net worth of less than $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If the Company remains subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of the Company’s securities.

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The elimination of monetary liability against our directors, officers and employees under Nevada law and the existence of indemnification rights for our directors, officers and employees may result in substantial expenditures by the Company and may discourage lawsuits against our directors, officers and employees.

Our certificate of incorporation contains a specific provision that eliminates the liability of directors for monetary damages to the Company and the Company’s stockholders; further, the Company is prepared to give such indemnification to its directors and officers to the extent provided by Nevada law. The Company may also have contractual indemnification obligations under its employment agreements with its executive officers. The foregoing indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which the Company may be unable to recoup. These provisions and resultant costs may also discourage the Company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by the Company’s stockholders against the Company’s directors and officers even though such actions, if successful, might otherwise benefit the Company and its stockholders.

ITEM 1B.        UNRESOLVED STAFF COMMENTS

None.

ITEM 2.          PROPERTIES

During the transition period ended December 31, 2011 and the year ended June 30, 2011, our principals and key consultants operated out of their individual office spaces for which we paid no rent. Our principal executive office is located at 299 S. Main Street, 13^th Floor, Salt Lake City, Utah  84111. The office is located in a shared office space with a yearly rental of $588 payable on a month to month basis; we pay additional amounts to lease out additional space, as needed. Our telephone number is (801) 488-2006 and our fax number is (801) 747-6836.

Cleanfield's conversion facility is in a central location in metro Phoenix, in Tempe, Arizona that is near to a major freeway which makes it easily accessible to the entire Phoenix metropolitan area. Cleanfield has a six-month lease through June 2012 for which the Company pays $2,046 per month.

During the transition period ended December 31, 2011, and the year ended June 30, 2011, we also maintained office space of approximately 1,000 square feet and approximately 10,000 square foot workshop and related buildings located on 2 acres at Moo 4, Tambol Takhientia, Banglamung, Chonburi, Thailand 20150.  The facility, including all improvements, tools and equipment, was leased for a 3 year period starting in January 2009 for a gross amount of $100,000, prepaid through December 2011.

Our belief is that the spaces described are adequate for our immediate needs though additional space may be required at some future time as we seek to expand our operations. Should we require additional space, we do not foresee any significant difficulties in obtaining such space.

We do not presently own any real property.

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ITEM 3.          LEGAL PROCEEDINGS

Legal proceedings were initiated by Intel Corporation against Intelspec and Intelspec, LLC on October 12, 2011, Intel Corporation v. Intelspec International Inc. and Intelspec LLC, CV11-00962, filed in the United States District Court for the District of Delaware. The claim alleges trademark infringement and seeks to (i) restrain the Company from using its Intelspec trade name, (ii) transfer ownership of the Company's intelspec.com web address to Intel, and (iii) damages, if any. The Company disagrees with Intel’s claims as it does not believe that it competes with Intel in any way and does not believe that its trade name causes consumer confusion anywhere in the world, nor does Intelspec’s use of its trade name weaken the Intel mark. The Company retained intellectual property counsel to respond to the claim and made the determination that defending the used of the name Intelspec would not be financially prudent. Intel, the Company, and Intelspec settled out-of-court and Intelspec changed its name to Interspec.

Legal proceedings were initiated by Mark B. Aronson against the Company on November 7, 2011, Mark B. Aronson vs. Infrastructure Developments Corp., Civil Action No., GD 11-023062, filed in the Court of Common Pleas of Allegheny County, Pennsylvania. The claim alleges infringement of the Pennsylvania Unsolicited Telecommunication Advertisement Act for the plaintiff's receipt of spam emails marketing the Company's common stock. The Company completely and unequivocally disagrees with Mr. Aronson's claims as it did not send the emails in question to Mr. Aronson. Further the Company does not engage in marketing of its common stock by email or any other non-disclosed source. The Company retained counsel to respond to the claim and to evaluate the possibility of a countersuit due to the frivolity of the plaintiff's claim. The plaintiff subsequently dropped the claim.

ITEM 4.          (REMOVED AND RESERVED)

Removed and reserved.

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PART II

ITEM 5.                      MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock has been quoted on the OTCQB electronic quotation system under the symbol “IDVC”. These prices reflect inter-dealer prices without retail mark-up, mark-down, or commission, and may not necessarily reflect actual transactions. The following table sets forth the high and low bid prices for the common stock as reported for each quarterly period from the last two years.

          *   This price reflects the six for one forward split effected on June 11, 2010.

The following is a summary of the material terms of the Company’s capital stock. This summary is subject to and qualified by our articles of incorporation and bylaws.

Common Stock

As of December 31, 2011, the Company had 229 shareholders of record holding a total of 300,262,978 shares of fully paid and non-assessable common stock of the 500,000,000 shares of common stock, par value $0.001, authorized. The board of directors believes that the number of beneficial owners is substantially greater than the number of record holders since shares of our outstanding common stock are held in broker “street names” for the benefit of individual investors. The holders of the common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.

Preferred Stock

As of December 31, 2011, the Company had no shares of preferred stock issued of the 10,000,000 shares of preferred stock, par value $0.001 per share, authorized. 

Warrants

As of December 31, 2011, the Company had no warrants to purchase shares of stock.

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Stock Options

As of December 31, 2011, the Company had no stock options to purchase shares of stock.

The Company entered into an agreement with its chief executive officer that provides for a three-year term, effective August 5, 2008, that included a monthly fee and participation in a stock option plan. However, during the six month transition period ended December 31, 2011, we cancelled these stock option rights pursuant to a debt settlement agreement with our chief executive officer.

Dividends

The Company has not declared any cash dividends since inception and does not anticipate paying any dividends in the near future. The payment of dividends is within the discretion of the board of directors and will depend on our earnings, capital requirements, financial condition, and other relevant factors.  There are no restrictions that currently limit the Company’s ability to pay dividends on its common stock other than those generally imposed by applicable state law.

Securities Authorized For Issuance under Equity Compensation Plans

None.

Convertible Securities

As of December 31, 2011, the Company had two promissory notes with an aggregate outstanding value of $88,000 convertible into shares of the Company stock. The notes, as amended, have interest rates of 8%, indefinite terms, and the option to convert the outstanding balances at a 55% discount off the market price at the time of conversion.

Subsequent to the six month transition period ended December 31, 2011, we executed an additional promissory note with a value of $19,000. The note has an interest rate of 8%, a nine month term, and the option to convert the outstanding balance at a 40% discount off the market price at the time of conversion.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

On January 27, 2011, March 15, 2011, June 1, 2011, and March 7, 2012 the Company issued promissory notes in the amounts of $75,000, $60,000, $40,000, $19,000 respectively, to Asher Enterprises, Inc. ("Asher"), an unrelated party, at an interest rate of 8%, each with a nine month term, and an option to convert the outstanding balance of principal and interest into shares of our common stock at a 40% discount off the market price at the time of conversion (the March 15 and June 1, 2011 notes have been amended to be converted at a 55% discount with indefinite terms) pursuant to the exemptions from registration provided by Section 4(2) and Regulation D of the Securities Act. We have issued shares of our common stock upon receiving conversion notices by Asher as follows:

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*    Includes $3,000 in interest from the note due on October 27, 2011.

The Company complied with the exemption requirements of Section 4(2) of the Securities Act based on the following factors: (1) the offers were isolated private transactions by the Company which did not involve public offerings; (2) the offeree has access to the kind of information which registration would disclose; and (3) the offeree is financially sophisticated.

The Company complied with the requirements of Regulation D of the Securities Act by: (i) foregoing any general solicitation or advertising to market the securities; (ii) offering only to an accredited offeree; (iii) having not violated antifraud prohibitions with the information provided to the offeree; (iv) being available to answer questions by the offeree; and (v) providing restricted promissory notes to the offeree.

On  December 31, 2012, the Company's board of directors authorized the issuance of 2,493,001 shares of its common stock valued at $37,395 or $0.015 per share to Adderley Davis and Associates and 831,000 shares of its common stock valued at $12,465 or $0.015 per share to Tony Paskell, an aggregate of 3,324,001 shares, for cash received from subscriptions dated between September 6, 2011, and November 11, 2011, pursuant to the exemptions from registration provided by Regulation S of the Securities Act. 

Regulation S provides generally that any offer or sale that occurs outside of the United States is exempt from the registration requirements of the Securities Act, provided that certain conditions are met. Regulation S has two safe harbors. One safe harbor applies to offers and sales by issuers, securities professionals involved in the distribution process pursuant to contract, their respective affiliates, and persons acting on behalf of any of the foregoing (the “issuer safe harbor”), and the other applies to resales by persons other than the issuer, securities professionals involved in the distribution process pursuant to contract, their respective affiliates (except certain officers and directors), and persons acting on behalf of any of the forgoing (the “resale safe harbor”). An offer, sale or resale of securities that satisfied all conditions of the applicable safe harbor is deemed to be outside the United States as required by Regulation S.

The Company complied with the requirements of Regulation S by having directed no offering efforts in the United States, by offering common shares only to offerees who were outside the United States at the time of the offering, and ensuring that the offerees to who the common shares were offered were non-U.S. offerees with addresses in foreign countries.

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On November 21, 2011, the Company's board of directors authorized the issuance of 165,699,842 shares of its common stock to WWA Group, Inc. (“WWA Group”), valued at $2,477,544 or $0.014952 per share on conversion of a convertible promissory note issued to WWA Group on May 17, 2011, as amended, pursuant to the exemption from registration provided by Section 4(2) of the Securities Act.

The Company complied with the exemption requirements of Section 4(2) of the Securities Act based on the following factors: (1) the offer was an isolated private transaction by the Company which did not involve a public offering; (2) the offeree has access to the kind of information which registration would disclose; and (3) the offeree is financially sophisticated.

On October 13, 2011, the board of directors authorized the issuance of 3,666,000 shares of common stock to Thomas R. Morgan, our CEO and a director, pursuant to an accord and satisfaction agreement for the settlement consideration of $109,980 or $0.03 per share, thereby satisfying the terms of his now expired employment agreement with Intelspec, which shares were authorized pursuant to the exemptions from registration provided by Section 4(2) of the Securities Act.

The Company complied with the exemption requirements of Section 4(2) of the Securities Act based on the following factors: (1) the offer was an isolated private transactions by the Company which did not involve a public offering; (2) the offeree has access to the kind of information which registration would disclose; and (3) the offeree is financially sophisticated.

Purchases of Equity Securities made by the Issuer and Affiliated Purchasers

None.

Transfer Agent and Registrar

The contact information for our transfer agent is as follows:

Action Stock Transfer Corp.
2469 E. Fort Union Blvd, Ste 214
Salt Lake City, UT 84121

(801) 274-1088 
www.actionstocktransfer.com

ITEM 6.          SELECTED FINANCIAL DATA

Not applicable.

ITEM 7.          MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other parts of this current report contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can also be identified by words such as “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include but are not limited to those discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition below. The following discussion should be read in conjunction with our financial statements and notes thereto included in this current report. Our fiscal year end is December 31.

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Over the six month transition period ended December 31, 2011 we were managing U.S. government contracts and subcontracts in Southeast Asia. However, because of the narrow profit margins on our U.S. Navy contracts as well as our competition in the area, we have suspended bidding at this time. We will bid on specialty contracts as they arise and we will continue to market prefabricated housing. At the beginning of the transition period the Company began focusing on U.S. operations and on its alternative engine fuels operations in Thailand and the United States with Cleanfield. Cleanfield will initially prioritize profitable operation of the Tempe, Arizona conversion facility. When this facility becomes established, the Company intends to establish a regional network of conversion facilities and fueling points. This expansion will use a number of proven devices, including fully owned branches, franchises, and innovative joint ventures such as the Cleanfield/U-Fix-It agreement.

For the six month transition period ended December 31 , 2011:

(i)                 The Company continued contact with U.S. firms to establish strategic partnerships for domestic U.S. military projects.

(ii)               The Company entered into a memorandum of understanding with Cleanfield dated July 1, 2011 as amended on July 7, 2011. Pursuant to the MOU we acquired a 80% of the company pursuant to our providing them interim funding to cover expenses for the furtherance of the business plan of converting fleet vehicles to compressed natural gas (CNG) and to provide CNG fueling points at new or existing gas stations.

(iii)             We opened a conversion location with Cleanfield in Tempe, Arizona.

(iv)             The Company discontinued operations under the U.S. Navy’s Lido Phase II Project in Indonesia due to labor issues.

(v)               The Company began CNG conversion operations at our facility in Thailand with the conversion of a 250Kva/200Kw Cummins diesel generator. We expect to expand CNG operations in Thailand in the coming months.

(vi)             On October 26, 2011 our chief executive officer, Thomas R. Morgan, acquired 3,666,000 shares of the Company's common stock at three cents per share pursuant to a debt settlement agreement.

(vii)           On November 21, 2011, the Company authorized the issuance of 165,699,842 shares of common stock to WWA Group valued at $2,477,544 or $0.014952 per share on conversion of a convertible promissory note issued to WWA Group on May 17, 2011, as amended.

(viii)         Intelspec changed its name to Interspec due to an out-of-court legal settlement with Intel Corporation.

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Subsequent to the year ended December 31, 2011:

(i)                 On February 1, 2012, the Company entered into a Share Exchange Agreement (dated January 11, 2012) with InterMedia Development Corporation ("InterMedia") whereby the Company is to acquire 100% of the outstanding shares of InterMedia’s common stock from InterMedia's shareholders in exchange for an aggregate of 84,000,000 shares of the Company’s common stock. As a result of closing the transaction the InterMedia shareholders will hold approximately 20% of our issued and outstanding common stock. The parties expect to amend the closing date of the Agreement to close the Agreement in April of 2012. As an obligation to consummate the closing of the Agreement, the Company will initiate two private placements to raise a minimum of $300,000 within six months and an additional minimum of $400,000 within twelve months of closing the Agreement. If the Company fails to raise the minimum amounts, the Company will be required to issue an additional 20,000,000 shares and may be required to issue an additional 90,000,000 shares, respectively. InterMedia is a media production company and defense contractor based in Fairfax, Virginia.

(ii)               On February 6, 2012, the Company changed its fiscal year end from June 30 to December 31. The report covering the transition period will be filed on Form 10-K for the six-month period between June 30, 2011 and December 31, 2012.

Net Losses

Net loss for the six month transition period ended December 31, 2011 was $184,322 as compared to $526,025 for the six month period ended December 31, 2010, a decrease of 65%. The decrease in net loss over the comparable periods is due to the realization of a gross profit in the current period and a decrease in operating expenses. The Company is confident that it will transition to net income in the next twelve months based on the prospective acquisition and the anticipated entry into CNG related activities in the U.S. and Thailand.  

Net loss for the year ended June 30, 2011 was $5,876,024 as compared $175,309 for the year ended June 30, 2010. The increase in net loss over the comparable periods is primarily due the suspension of Power Track’s business. This suspension had a detrimental affect on our net revenues and accordingly gross profit, our operating expenses, and our other expenses. The Company is confident that it is moving past losses associated with Power Track and that it will transition back to net income in the next twelve months based on the successful completion of project management contracts.

Net Revenues

Net revenues for the six month transition period ended December 31, 2011 were $403,321 as compared to $310,722 for the six month period ended December 31, 2010, an increase of 30%. The increase in net revenues over the comparable periods can be attributed to management contract revenue related to Lido Phase II. We expect net revenues to increase over the next twelve months as a result of our entry into CNG related activities in the U.S. and Thailand.

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Net revenues for the year ended June 30, 2011 decreased to $602,437 from $3,007,737 for the year ended June 30, 2010, a decrease of 80%. The decrease in net revenues over the comparable periods can be attributed to a decrease in project management contract revenues as well as a lack of equipment rentals in the current periods due to Power Track’s suspension of quarry operations. The decrease in project management contract revenues is due to a gap in management contract operations after narrowly losing several bids. The Company remains in competition for several project management contracts and will realize project management contract revenue from the Lido Phase II project through October 2011. Net revenues are expected to increase as a result of the Lido Phase II project and the anticipated successful award of additional contracts over the next twelve months.

Gross Profit/ Loss

Gross profit for the six month transition period ended December 31, 2011 was $43,978 as compared to a gross loss of $186,775 for the six month period ended December 31, 2010. The transition to gross profit in the current period is due to revenues from our Lido Phase II project which exceeded costs. We expect to continue with gross profits over the next twelve months in step with our expected realization of CNG related revenues.

Gross loss for the year ended June 30, 2011 was $275,429 as compared to a gross profit of $329,601 for the year ended June 30, 2010. The transition to gross loss in the current period is due, in part, to the state of our current project which was in its initial revenue phase at the end of the period. We expect to transition to back to gross profit over the next twelve months in step with our expectation of an increase in revenues.

Operating Expenses

Operating expenses for the six month transition period ended December 31, 2011 decreased to $163,831 from $339,081 for the six month period ended December 31, 2010, a decrease of 52%. Operating expenses are from general, selling and administrative expenses, salaries and wages, and depreciation and amortization expense. Over the periods general, selling and administrative expenses decreased to $86,652 from $154,425 and salaries and wages decreased to $77,179 from $184,656. We expect operating expenses to decrease in the near term as we continue to streamline our expenses. We had no depreciation and amortization expenses for the six month transition period ended December 31, 2011 and 2010.

Operating expenses for the year ended June 30, 2011 increased to $1,605,184 from $608,494 for the year ended June 30, 2010, an increase of 164%. Operating expenses are from general, selling and administrative expenses, salaries and wages, and depreciation and amortization expense. Over the periods general, selling and administrative expenses increased to $762,055 from $275,729. Over the periods salaries and wages increased to $318,444 from $276,692. Over the periods bad debt expense increased to $524,684 from $0. Over the periods depreciation and amortization expense decreased to $0 from $56,074. The increase in general, selling and administrative expenses over the periods is primarily due to a royalty expense paid by Power Track of $278,273, repair and maintenance expenses at our Intelspec Thailand branch of $145,581, and an investor relations expense of $115,260. We expect operating expenses to decrease in the near term as we do not expect to incur these three expenses during the year ended June 30, 2012. Depreciation and amortization expenses for the year ended June 30, 2011 and 2010 were $0 and $56,074, respectively.

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Other Expenses/Income

Other expenses for the six month transition period ended December 31, 2011 were $64,469 compared to $169 for the six month period ended December 31, 2010. Other expenses in the current period were comprised of interest expenses related to our loans from WWA Group and Asher.

Other expenses for the year ended June 30, 2011 were $3,995,411 compared to other income for the year ended June 30, 2010 of $103,585. The transition to expenses from income over the comparative periods is primarily due to a current period loss of $1,981,604 on the write down of Power Track’ inventory (mainly processed limestone), a loss of $1,091,071 on the sale of Power Track’s fixed assets (crushing and mobile earthmoving equipment, a mobile labor camp, trucks, generators, and compressors for use in Power Track’s mining operations), and a write off of $1,244,703 on Power Track’s fixed assets.

Liquidity and Capital Resources

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue operations.

As of December 31, 2011, we had a working capital deficit of $306,356. Our current and total assets were $89,805 consisting of cash of $42,690, prepaid expenses of $32,406 and other current assets of $14,709. Our current and total liabilities were $396,161 consisting of notes payable of $328,226, accounts payable of $27,856 and accrued expenses of $40,079. Stockholders deficit was $306,357 as of December 31, 2011.

As of June 30, 2011, the Company had a working capital deficit of $440,384. The Company’s current and total assets were $215,843 consisting of cash, inventories, prepaid expenses and other current assets. The Company’s current liabilities were $656,227 consisting of notes payable, accounts payable and accrued expenses. The Company’s total liabilities were $3,065,230 consisting of current liabilities as well as long-term debt equal to $2,409,003. Stockholders deficit in the Company was $2,849,387 as of June 30, 2011.

Cash flows used in operating activities for the six month transition period ending December 31, 2011 were $358,633 compared to cash flows provided by operating activities of $16,929 for the six month period ending December 31, 2010. Cash flow used in operating activities in the current period is primarily due to net losses and a decrease in notes payable and a decrease in accrued liabilities. Although cash flows used in operating activities has risen over the comparative six month transition periods we do expect to transition to cash flow provided by operations over the next twelve months once we transition from net losses to net income.

Cash flows used in operating activities for the year ending June 30, 2011 were $2,864,418 compared to cash flows provided by operating activities of $623,595 for the year ending June 30, 2010. Cash flow used in operating activities in the current period is primarily due to net losses from Power Track’s operations and an adjustment from the decrease in current debt due to its conversion into long-term debt offset by $175,000 realized from the issuance of three promissory notes each with a nine month term and holder’s option to convert the outstanding balance into shares of the Company’s common stock at a 40% discount to the market price at the time of conversion. The conversion from short term to long-term debt stemmed from our debt obligation to WWA Group, Inc. (a beneficial owner of our common stock) in the amount of $2,442,000 which was converted to a note for the balance bearing interest at 6% due on May 17, 2016. The new note includes a provision by which a nominee of WWA Group may hold one seat on the Company’s board of directors. The Company expects to transition to cash flow provided by operations in the near term with anticipated decreases in losses and increases in revenue.

29

Cash flows provided by investing activities for the six month transition period ending December 31, 2011 and the six month period ended December 31, 2010 were $0. We expect to use cash flow in investing activities over the next twelve months as we enter the distribution of CNG market in the U.S. and Thailand.

Cash flows provided by investing activities for the year ending June 30, 2011 were $412,448 as compared to cash flows used in investing activities $1,165,652 for the year ending June 30, 2010. Cash flows provided in the current period are attributable to the sale of property and equipment related to Power Track’s operations. The Company expects to use cash flow in investing activities in future periods in connection with the expansion of its business or the acquisition of other related businesses.

Cash flows provided by financing activities for the six month transition period ending December 31, 2011 were $318,350 as compared to $0 for the six month period ending December 31, 2010. Cash flows provided by financing activities in the current period are attributable to the issuance of common stock to discharge debt owed to WWA Group and Asher and common stock subscriptions in the period, mostly offset by a decrease in the long term debt owe to WWA Group. We may realize cash flows provided by financing activities over the next twelve months if we remain reliant on debt or equity financings to continue operations.

Cash flows provided by financing activities for the year ending June 30, 2011 were $2,479,003 as compared to $471,831 for the year ending June 30, 2010. Cash flows provided in the current period are attributable to the conversion of current debt with WWA Group into long-term debt and to a lesser extent common stock issued against services. The Company expects to realize cash flows provided by financing activities in the near term in connection with debt or equity financings.

Our current assets are insufficient to meet the Company’s business objectives over the next twelve months. We need a minimum of $100,000 in debt or equity financing to maintain operations and to fulfill our business plan. Although, we have no commitments or arrangements for this level of financing, our shareholders remain the most likely source of loans or equity placements to ensure our continued operation though such support can in no way be assured. Our inability to obtain additional financing will have a material adverse affect on our business operations.

We have no lines of credit or other bank financing arrangements in place.

We have no commitments for future capital expenditures that were material at the end of the period.

We have no defined benefit plan or contractual commitment with any of our officers or directors.

We have no current plans for the purchase or sale of any plant or equipment. 
 

We have no current plans to make any changes in the number of employees.

We do not expect to pay cash dividends in the foreseeable future.

Future Company Financings

We will continue to rely on debt or equity sales to continue to fund our business operations even though the issuance of additional shares will result in dilution to our existing stockholders. 

30

Company Reporting Obligations

We do not anticipate any contingency upon which it would voluntarily cease filing reports with the Securities and Exchange Commission as it is in the interest of the Company to report its affairs quarterly, annually and currently to provide accessible public information to interested parties.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Interest Rates

Interest rates are generally controlled. The majority of our debt is owed to a related party at a fixed interest rate so fluctuations in interest rates do not impact our result of operations at this time. However, we may need to rely on bank financing or other debt instruments in the future in which case fluctuations in interest rates could have a negative impact on our results of operations.  

Forward Looking Statements and Factors That May Affect Future Results and Financial Condition

The statements contained in the section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this annual report, with the exception of historical facts, are forward looking statements. We are ineligible to rely on the safe-harbor provision of the Private Litigation Reform Act of 1995 for forward looking statements made in this annual report. Forward-looking statements reflect our current expectations and beliefs regarding our future results of operations, performance, and achievements. These statements are subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not materialize. These statements include, but are not limited to, statements concerning:

·         our financial performance;

·         the sufficiency of existing capital resources;

·         our ability to fund cash requirements for future operations;

·         uncertainties related to the growth of our business and the acceptance of our services;

·         our ability to achieve and maintain an adequate customer base to generate sufficient revenues to maintain and expand operations;

·         the volatility of the stock market; and

·         general economic conditions.

We wish to caution readers that our operating results are subject to various risks and uncertainties that could cause our actual results to differ materially from those discussed or anticipated including the factors set forth in the section entitled Risk Factors included elsewhere in this report. We also wish to advise readers not to place any undue reliance on the forward looking statements contained in this report, which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances or any changes in our beliefs or expectations, other than is required by law.

31

Going Concern

Our auditors included an explanatory statement in their report on the Company’s consolidated financial statements for the transition periods ended December 31, 2011 and 2010 and the years ended June 30, 2011 and 2010, expressing an opinion as to our ability to continue as a going concern as a result of a working capital deficit, negative cash flows, and accumulated net losses. Our ability to continue as a going concern is subject to the ability of the Company to transition to net income in 2012 and obtaining additional funding from outside sources. Management’s plan to address the Company’s ability to continue as a going concern includes (i) increasing our gross profit; (ii) financing from private placement sources; and (iii) converting outstanding debt to equity. Although the Company believes that it will be able to remain a going concern, through the methods discussed above, there can be no assurances that such methods will prove successful.

Recent Accounting Pronouncements

Please see Note 11 to our consolidated financial statements for recent accounting pronouncements.

Stock-Based Compensation

We have adopted Accounting Standards Codification Topic (“ASC”) 718, Share-Based Payment, which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments.

We account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services.

ITEM 7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our audited financial statements for the six month transition periods ended December 31, 2011 and 2010 and the fiscal years ended June 30, 2011 and 2010 are attached hereto as F-1 through F-14.

32

INFRASTRUCTURE DEVELOPMENTS CORP.

Six Months Ended December 31, 2011 and December 31, 2010 (unaudited)

and

Twelve Months Ended June 30, 2011 and June 30, 2010

INDEX

                                                                                                                                 Page

Report of Independent Registered Public Accounting Firm                        F-2

Consolidated Balance Sheets                                                                   F-3                    

Consolidated Statements of Operations                                                     F-4

Consolidated Statement of Stockholders’ Equity (Deficit)                           F-5

Consolidated Statements of Cash Flows                                                    F-6

Notes to Consolidated Financial Statements                                               F-7                                                                                                                                

F-1

 Pinaki & Associates LLC

Certified Public Accountants

   625 Barksdale Rd, Suite 113,

Newark, DE 19711

   Phone: 510-274-5471 | pmohapatra@pinakiassociates.com

To the Board of Directors

Infrastructure Developments Corp.

299 S. Main Street, 13th Floor

Salt Lake City

Utah 84111

We have audited the accompanying consolidated balance sheets of Infrastructure Developments Corp. and subsidiaries as of December 31, 2011, June 30, 2011 and June 30, 2010 and the related consolidated statements of income, stockholders’ equity and cash flows for the six months period ended December 31, 2011 and years ended June 30, 2011and 2010. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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. We believe that our audits provide a reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations that raises a substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Infrastructure Developments Corp. and subsidiaries as of December 31, 2011, June 30, 2011 and June 30, 2010, and the related consolidated statements of income, stockholders’ equity and cash flows for the six months period ended December 31, 2011 and  years ended June 30, 2011and 2010 , in conformity with accounting principles generally accepted in the United States of America.

/s/ Pinaki & Associates LLC.

Pinaki & Associates LLC.

Hayward, CA

April 11, 2012

F-2

The accompanying notes are an integral part of these consolidated financial statements.

F-3

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Note 1 $89,621 has been reclassed to Common Stock amount from Additional Paid-in-capital in Balance June 30, 2010

The accompanying notes are an integral part of these consolidated financial statements.

F-5

The accompanying notes are an integral part of these consolidated financial statements.

F-6

NOTE 1 - ORGANIZATION AND HISTORY

Infrastructure Developments Corp. (the “Company”), was incorporated in Nevada as “1^st Home Buy & Sell Ltd.” on August 10, 2006, to operate as a real estate company. The Company changed its name from “1st Home Buy & Sell Ltd.” to “Infrastructure Developments Corp.” on March 1, 2010, while evaluating possible business combinations, acquisitions or development opportunities.  

On April 14, 2010, the Company and Intelspec International Inc. (“Intelspec”), a Nevada corporation, engaged in engineering, construction, and project management executed a stock exchange agreement, whereby the Company agreed to acquire 100% of the issued and outstanding shares of Intelspec in exchange for 14,000,000 shares of the Company’s common stock. Because the owners of Intelspec became the principal shareholders of the Company through the transaction, Intelspec is considered the acquirer for accounting purposes and this transaction is accounted for as a reverse acquisition or recapitalization of Intelspec. Following the closing of the share exchange agreement, the Company's principal business became that of Intelspec. On April 26, 2010, the Company disclosed the information that would have been required if it were filing a general form for registration of securities on Form 10, as required under Item 2.01(f) of Form 8-K, thereby removing its status as a “shell” company. 

The Company is a global engineering and project management business that provides services through a network of branch offices and subsidiaries located in markets where the Company either has active projects, is bidding on projects, or is investigating project opportunities.

NOTE 2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liabilities in the normal course of business. Accordingly, they do not include any adjustments relating to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company has accumulated losses and working capital and cash flows from operations are negative which raises doubt as to the validity of the going concern assumptions. These financials do not include any adjustments to the carrying value of the assets and liabilities, the reported revenues and expenses and balance sheet classifications used that would be necessary if the going concern assumption were not appropriate; such adjustments could be material.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

a.   Principles of Consolidation

The consolidated financial statements herein include the operations of Intelspec and the consolidated operations of Infrastructure Development Corp. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation/

F-7

INFRASTRUCTURE DEVELOPMENTS CORP.

Notes to the Financial Statements

Decemer 31, 2011 and June 30, 2011

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

b.   Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities to the Company of three months or less to be cash equivalents.

c.   Accounts Receivable

Accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Specific reserves are estimated by management based on certain assumptions and variables, including the customer’s financial condition, age of the customer’s receivables, and changes in payment histories. Trade receivables are written off when deemed uncollectible.  Recoveries of trade receivables previously written off are recorded when received.

A trade receivable is considered to be past due if any portion of the receivable balance has not been received by the contractual pay date.  Interest is not charged on trade receivables that are past due.

      d.   Inventory

Inventories consisted of limestone quarry run/feed stock/aggregate to be sold, stated at the lower of cost or market.  The cost was determined by specific identification method. Cost included processing costs and other incidental expenses incurred in bringing inventories to their location and condition. The Company recorded a reserve if the fair value of inventory was determined to be less than the cost.

e.    Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation and amortization on capital leases and property and equipment are determined using the straight line method over the estimated useful lives (usually ten years) of the assets or terms of the leases. Expenditures for maintenance and repairs are expensed when incurred and betterments are capitalized. Gains and losses on the sale of property and equipment are reflected in operations.

f.    Revenue Recognition

Revenues from Sales and Services consist of revenues earned in the Company’s activity as Project & Construction Equipment Management & Operations, sale of quarry run, aggregate, equipment rental income and misc. services provided.  All Sales/Service revenue is recognized when the sale/service is complete and the Company has determined that the sale/service proceeds are collectible.

F-8

INFRASTRUCTURE DEVELOPMENTS CORP.

Notes to the Financial Statements

Decemer 31, 2011 and June 30, 2011

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

g.   Stock Based Compensation

The Company adopted SFAS No. 123-R effective January 1, 2006 using the modified prospective method. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1,2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123-R.

The Company issued no compensatory options to its employees during the transition period ended December 31, 2011 and year ended June 30, 2011.

            h.   Foreign Exchange

The Company’s reporting currency is the United States dollar. The Company’s functional currency is also the U.S. Dollar. (“USD”) Transactions denominated in foreign currencies are translated into USD and recorded at the foreign exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated into USD at the foreign exchange rates prevailing at the balance sheet date. Realized and unrealized foreign exchange differences arising on translation are   recognized in the income statement.

i.   Advertising

The Company expenses the cost of advertising as incurred. For the transition period ended December 31, 2011 and year ended June 30, 2011, the Company had no advertising expenses.

j.   Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

k.   Income per Common Share

The computation of basic earnings per common share is based on the weighted average number of shares outstanding during each year. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year, plus the common stock equivalents that would arise from the exercise of stock options and warrants outstanding, using the treasury stock method and the average market price per share during the year.

F-9

INFRASTRUCTURE DEVELOPMENTS CORP.

Notes to the Financial Statements

Decemer 31, 2011 and June 30, 2011

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

l.   Impairment of Long-Lived Assets

The Company reviews long-lived assets such as property, equipment, investments and definite-lived intangibles for impairment annually and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.  As required by Statement of Financial Accounting Standards No. 144, the Company uses an estimate of the future undiscounted net cash flows of the related asset or group of assets over their remaining economic useful lives in measuring whether the assets are recoverable. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the estimated fair value of the asset. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent of other groups of assets.

Assets to be disposed of are reported at the lower of the carrying amount or fair value, less the estimated costs to sell.  In addition, depreciation of the asset ceases.  During the period ended December 31, 2011 and year ended June 30, 2011, $0 and $1,244,703 respectively were written off from the Company’s long-lived assets.

            m.   Concentration of Credit Risk and Significant Customers

Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of receivables and notes receivable. In the normal course of business, the Company provides credit terms to its customers. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses which, when realized, have been within the range of management's expectations.

The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.    

NOTE 4 – ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts. Accordingly, actual results could differ from those estimates.

NOTE 5 – SHORT-TERM NOTES PAYABLE AND LINES OF CREDIT

The Company has from time to time short-term borrowings from various unrelated and related entities.  These advances are non-interest bearing, unsecured and due upon demand. Because of the short-term nature of the notes the Company has not imputed an interest rate.

F-10

INFRASTRUCTURE DEVELOPMENTS CORP.

Notes to the Financial Statements

Decemer 31, 2011 and June 30, 2011

NOTE 6 – REVERSE ACQUISITION           

On April 14, 2010, the Company, Intelspec and those shareholders of Intelspec holding a majority of its outstanding shares closed a transaction pursuant to that certain Share Exchange Agreement, whereby the Company is to acquire up to 100% of the outstanding shares of Intelspec’s common stock from the shareholders of Intelspec in exchange for an aggregate of 14,000,000 shares of its common stock. As a result of closing the transaction the former shareholders of Intelspec will hold approximately 70% of the Company’s issued and outstanding common stock. The shares of common stock of the Company issued pursuant to the Share Exchange Agreement were issued in reliance upon the exemptions from registration provided by Section 4(2) and Regulation S of the Securities Act of 1933, as amended.

NOTE 7 – LITIGATION

The Company may become or is subject to investigations, claims or lawsuits ensuing out of the conduct of its business.  The Company is currently not aware of any such items, which it believes could have a material effect on its financial position.

NOTE 8 – RELATED PARTY TRANSACTIONS

The Company had payable to related parties totaling $0 as of December 31, 2011 and $2,409,003 as of June 30, 2011. The payables as of June 30, 2011 had 6% annual interest effective from May 17, 2011, unsecured and were due in full within 5 year of the execution of the Note. The Note was executed on May 17, 2011.

NOTE 9 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash, investments, receivables, payables, and notes payable.  The carrying amount of cash, investments, receivables, and payables approximates fair value because of the short-term nature of these items.  The carrying amount of long-term notes payable approximates fair value as the individual borrowings bear interest at market interest rates.

NOTE 10 – LONG TERM DEBT

                        On May 17, 2011 the Company converted $2,442,000 of short term loan due to WWA Group, Inc., to long term debt payable in full within 5 years of the execution of the Note. The Note was executed on May 17, 2011. The Note carried an annual interest of 6%.

F-11

INFRASTRUCTURE DEVELOPMENTS CORP.

Notes to the Financial Statements

Decemer 31, 2011 and June 30, 2011

NOTE 11 – RECENT ACCOUNTING PRONOUNCEMENTS

In June 2011, the FASB issued an accounting standard update to provide guidance on increasing the prominence of items reported in other comprehensive income. This accounting standard update eliminates the option to present components of other comprehensive income as part of the statement of equity and requires that the total of comprehensive income, the components of net income, and the components of other comprehensive income be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. It is also required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. This accounting standard update is effective for the Company beginning in the first quarter of fiscal 2013.

In August 2011, the FASB approved a revised accounting standard update intended to simplify how an entity tests goodwill for impairment. The amendment will allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity no longer will be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. This accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2013 and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its Consolidated Financial Statements. 

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income to increase the prominence of items reported in other comprehensive income. Specifically, the new guidance allows an entity to present components of net income or other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the consolidated statement of shareholder's equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We do not believe the adoption of the new guidance will have an impact on our consolidated financial position, results of operations or cash flows.

NOTE 12 – STOCKHOLDERS' EQUITY

a.  Authorized

The Company is authorized to issue 500,000,000 shares of $0.001 par value common stock and 10,000,000 shares of preferred stock, par value $0.001 per share. All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.         

F-12

INFRASTRUCTURE DEVELOPMENTS CORP.

Notes to the Financial Statements

Decemer 31, 2011 and June 30, 2011

NOTE 12 – STOCKHOLDERS' EQUITY (Continued)

b.  Issued

·         On June 11, 2010, the Company effected a 6-to-1 forward split of its 20,000,000 issued and outstanding common shares, resulting in 120,000,000 common shares on a post split basis. Shares and per share amounts have been retroactively restated to reflect the 6-for-1 forward stock split.

·         As of June 30, 2010, the Company had 120,000,000 shares of common stock issued and outstanding

·         On January 17, 2011, the Company issued 125,000 shares of common stock to an unrelated party for consulting services at $0.001 per share

·         As of June 30, 2011, the Company had 120,125,000 shares of common stock issued and outstanding

·         On August 11, 2011, the Company issued 374,065 shares of common stock to an unrelated party against 8% Convertible Note.

·         On August 17, 2011, the Company issued 397,727 shares of common stock to an unrelated party against 8% Convertible Note.

·         On August 22, 2011, the Company issued 526,316 shares of common stock to an unrelated party against 8% Convertible Note.

·         On August 31, 2011, the Company issued 821,918 shares of common stock to an unrelated party against 8% Convertible Note.

·         On September 06, 2011, the Company issued 165,000 shares of common stock against Cash Subscription.

·         On September 26, 2011, the Company issued 1,331,334 shares of common stock against Cash Subscription.

·         On September 29, 2011, the Company issued 665,000 shares of common stock against Cash Subscription.

·         On October 11, 2011, the Company issued 1,351,351 shares of common stock to an unrelated party against 8% Convertible Note.

·         On October 13, 2011, the Company issued 3,666,000 shares of common stock against Debt Settlement.

·         On October 19, 2011, the Company issued 831,000 shares of common stock against Cash Subscription.

·         On November 02, 2011, the Company issued 1,527,778 shares of common stock to an unrelated party against 8% Convertible Note.

·         On November 10, 2011, the Company issued 331,667 shares of common stock against Cash Subscription.

·         On November 21, 2011, the Company issued 165,699,842 shares of common stock to a related party against 6% Convertible Promissory Note.

·         On December 08, 2011, the Company issued 2,448,980 shares of common stock to an unrelated party against 8% Convertible Note.

·         As of December 31, 2011, the Company had 300,262,978 shares of common stock issued and outstanding

F-13

INFRASTRUCTURE DEVELOPMENTS CORP.

Notes to the Financial Statements

Decemer 31, 2011 and June 30, 2011

NOTE 13 – CONVERSION OF NOTES TO EQUITY

On November 21, 2011, the Company's board of directors authorized the issuance of 165,699,842 shares of common stock to WWA Group, Inc. (“WWA Group”), valued at $2,477,544 or $0.014952 per share on conversion of a convertible promissory note issued to WWA Group on May 17, 2011.

NOTE 14 - CHANGE IN FISCAL YEAR END

On November 16, 2011 the Company's board of directors approved a change in the fiscal year end from June 30 to December 31. The change became effective at the end of the quarter ended December 31, 2011.

NOTE 15 – TRANSITION PERIOD COMPARATIVE DATA

The following table presents certain financial information for the six months ended December 31, 2011 and 2010 respectively.

NOTE 16 – SUBSEQUENT EVENTS
 

In accordance with Accounting Standards Codification (ASC) topic 855-10 “Subsequent Events”, the Company has evaluated subsequent events through the date which the financial statements were available to be issued. The Company has determined that the following such event warrants disclosure or recognition in the financial statements:

On January 11, 2012, the Company entered into a memorandum of understanding with Inter Media Development Corporation to acquire 100% of the outstanding shares of InterMedia’s common stock from InterMedia's shareholders in exchange for an aggregate of 84,000,000 shares of the Company's common stock. The Company, InterMedia, and InterMedia's shareholders entered into the Agreement (dated effective January 11, 2012) on February 1, 2012. The parties expect to amend the closing date of the Agreement to close the Agreement in May of 2012.  

F-14