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| EX-31 - CERTIFICATION - INFRASTRUCTURE DEVELOPMENTS CORP. | exhibit31.htm |
| EXCEL - IDEA: XBRL DOCUMENT - INFRASTRUCTURE DEVELOPMENTS CORP. | Financial_Report.xls |
| EX-32 - CERTIFICATION - INFRASTRUCTURE DEVELOPMENTS CORP. | exhibit32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2012
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________.
Commission file number: 000-52936
INFRASTRUCTURE DEVELOPMENTS CORP.
(Exact name of registrant as specified in its charter)
Nevada
27-1034540
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
299 S. Main Street, 13th Floor, Salt Lake City, Utah 84111
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (801) 488-2006
Securities registered under Section 12(b) of the Act: none.
Securities registered under Section 12(g) of the Act: common stock (title of class), $0.001 par value.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes oNo þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes oNo þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þNo o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes þNo o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act. Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes oNo þ
The aggregate market value of the registrant’s common stock, $0.001 par value (the only class of voting stock), held by non-
affiliates (322,238,646 shares) was $98,297 based on the average of the bid and ask price ($0.00305) for the common stock on
April 10, 2013.
At April 11, 2013, the number of shares outstanding of the registrant’s common stock, $0.001 par value, was 471,774,657, and
the number of shares outstanding of the registrants preferred stock, $0.001 par value, was 9,000,000.
1
TABLE OF CONTENTS
PART I
Business
3
Risk Factors
11
Unresolved Staff Comments
14
Properties
15
Legal Proceedings
15
Mine Safety Disclosures
15
PART II
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of
16
Equity Securities
Selected Financial Data
19
Management's Discussion and Analysis of Financial Condition and Results of Operations
19
Quantitative and Qualitative Disclosures about Market Risk
23
Financial Statements and Supplementary Data
23
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
24
Controls and Procedures
24
Other Information
25
PART III
Directors, Executive Officers, and Corporate Governance
26
Executive Compensation
29
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
30
Matters
Certain Relationships and Related Transactions, and Director Independence
31
Principal Accountant Fees and Services
31
PART IV
Exhibits, Financial Statement Schedules
32
33
2
PART I
ITEM 1.
As used herein the terms the “Company”, “we”, “our”, and “us” refer to Infrastructure Developments
Corp., its subsidiaries, and its predecessors, unless context indicates otherwise.
Corporate History
The Company was incorporated in Nevada as “1st Home Buy & Sell Ltd.” on August 10, 2006, to operate
as a real estate company. On August 31, 2008, the Company ceased all operations to become a “shell”
company as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and
sought to identify a suitable business opportunity. On March 1, 2010, while evaluating possible business
combinations, acquisitions or development opportunities, the Company changed its name from “1st Home
Buy & Sell Ltd.” to “Infrastructure Developments Corp.”
On April 7, 2010 the Company signed a share exchange agreement to acquire Intelspec International, Inc.
(“Intelspec”) in exchange for 14,000,000 shares of its common stock. The acquisition of Intelspec was
completed on April 14, 2010, whereby the shareholders of Intelspec acquired 70% of the Company. The
closing of the transaction represented a change in control which for financial reporting purposes was
characterized as a reverse acquisition or recapitalization of Intelspec. Following the closing, our 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 effected a six for one forward split of its common stock on June 11, 2010 that increased the
Company’s issued and outstanding shares from 20,000,000 to 120,000,000.
Intelspec changed its name to Interspec International, Inc. ("Interspec") pursuant to an out-of-court legal
settlement with Intel Corporation on November 21, 2011
On February 6, 2012, the Company made the determination to change its fiscal year end from June 30 to
December 31.
The Company
The Company's current operations consist of marketing efforts for Wing House mobile shelters.
The Company’s original business was a limestone mining and earthmoving operation in the United Arab
Emirates operated by Power Track Projects FZE, a United Arab Emirates registered Free Zone Enterprise.
Power Track Projects FZE suffered significant financial losses when the UAE construction and real estate
market collapsed in late 2009. The quarry was closed and most of the assets written off. Losses were
booked in fiscal year 2011.
Beginning in 2008 we targeted a wide variety of private and government funded project management
contracts 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. Between 2009
and 2011 U.S. military contracts in Southeast Asia were a significant source of the Company’s work, with
projects including:
3
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.
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 issues at the end of 2011.
However, due to narrow profit margins on U.S. Navy contracts in Southeast Asia, as well as fierce
competition in this area, we suspended bidding on Southeast Asian projects.
Our recent focus has been on U.S. governmental operations in the United States and on the Company's
alternative engine fuels operations in Thailand and the United States.
The Company's first step into the alternative fuels business was 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. Conversion activities were suspended in late 2012 due to lack of funding.
The Company entered into a memorandum of understanding with Cleanfield Energy, Inc. ("Cleanfield")
on July 1, 2011, as amended on July 7, 2011 whereby it committed to providing Cleanfield with interim
funding to cover expenses for converting vehicles in the US to natural gas. By the end of 2011 we had
established a conversion location with Cleanfield in Tempe, Arizona. The Company intended to establish
a regional network of conversion facilities and fueling points using a number of proven devices, including
fully owned branches, franchises, and innovative joint ventures. The Company acquired 75% interest in
Cleanfield on June 4, 2012 pursuant to a debt settlement agreement. Despite these efforts, the US
conversion activities were suspended in late 2012 due to lack of funding.
Prefabricated Housing
The Company’s prefabricated housing business is focused around the marketing and sale of “Wing
Houses” in North America, the Middle East and parts of South-East Asia as a distributor pursuant to an
agreement with the Renhe Group. The Wing House is a solution for any application requiring low-cost,
rapidly-mobile structures.
4
The standard Wing House units are mobile modular prefabricated structures that fold out from standard
40-foot or 20-foot shipping containers to ready-to-use structures, with all baths, water, plumbing, air
conditioning, lighting, cable, network and electrical fittings in place. This folding capacity allows a
standard 40-foot unit delivered with a 320 square foot footprint to open into an 880 square foot structure
in 4 to 5 hours, in a process requiring only basic hand tools and workers capable of following simple
instructions. Any truck and hoisting equipment capable of handling standard shipping containers can
transport and place a Wing House. Since container sizes are standard around the world, this equipment is
widely available. The combination of standard ISO container dimensions and fittings and the ability to
quickly unfold into a structure much larger than the original container makes the Wing House extremely
economical to ship. Two or more Wing Houses can be joined end to end or side to side to form larger
structures. Multiple standard floor plan configurations are available and custom plans can be ordered.
While other container-based prefabricated structures are available, they offer final available space equal
to that of the original container. We are aware of no other container-based prefabricated modular
structure that shares the ability of the Wing House to open into a structure much larger than the delivered
unit.
Wing Houses are rated for extreme temperatures, safe in hurricanes and earthquakes, meet the highest
safety and building code standards, and are very economical. The units use insulation sourced from
Bradford Insulation, Australia’s leading insulation brand. The units carry a 5-star energy use rating and
are ideal for use in extreme climates
Products
Wing Houses come in many building configurations and room configurations, and they retail at
approximately $45,000-$85,000 ex-port in China. The Wing House is built in China by Renhe
Manufacturing and has been re-branded by the Company. Renhe has an exclusive distribution agreement
with MKL Asia, a company owned by the original patent holder who is also the principal of Renhe.
MKL Asia has granted a sub-distribution license to the Company and its affiliates to market and sell
Wing House in North America, the GCC, and most of Southeast Asia.
Wing Houses are suitable for a wide range of applications, including:
living space
office space
on site showrooms
restaurants
worker accommodation
forward operations bases
Standard configurations include:
3 Bedrooms + 1 Living room + 1 Kitchen + 1 bath + 1 Laundry
4 Bedrooms + 2 Kitchens + 2 baths
4 Bedrooms + 4 baths
6 Bedrooms + 6 baths
8 Bedrooms + 4 baths
1 Classroom + 1 bath + 1 Office
1 large room
The Wing House is available in configurations specifically optimized for classroom use, wired with high-
speed Internet and with computer stations included.
5
The range of products also includes the newly developed “pop out” 20 and 40 foot rapid deployment units
that slide out in minutes and are also pre-fit with all baths and fixtures.
Markets
The Modular Building Institute (MBI) estimates that at the end of 2011 there were well over 500,000
code-compliant relocatable buildings in North America. MBI estimated that the total value of industry
owned relocatable buildings was between $5.5 - $6.0 billion, and that these assets generated estimated
annual revenues of $3.0 billion. MBI reports that
... fleet owners indicated that top markets served were: classrooms or educational units;
construction site offices; general offices; retail/hospitality; and “energy/industrial” This
last category is comprised mainly of workforce housing accommodations in areas of
energy exploration.
Income from the three largest companies primarily engaged in the sale and lease of relocatable buildings
exceeds 50 percent of the total industry revenue. The ten largest fleet owners account for greater than 75
percent of total revenue while the top twenty account for greater than 90 percent. About 75 percent of all
inventory of relocatable buildings in North America is controlled by the ten largest fleet owners, with 90
percent controlled by the top 20 largest fleet owners.
Fleet owners generated revenue from the following sources:
Leasing activity – 45%
Sales – 30%
Service – (transportation, installation, stairs, ramps, etc.) – 25%
A 2011 report by Sage Policy Group, titled The Economic & Financial Performance of the U.S. Modular
Building Industry, analyzed thousands of relocatable building transactions over a 10 year period. The
average annual return on investment of a relocatable building sold was 18 percent, which was achieved
after an average holding period of 5.8 years.
The Company intends to target the North American oil & gas industry by exhibiting Wing Houses at the
2013 Gas & Oil Expo on June 11-13 in Calgary, Alberta, Canada, and at the 2013 South Texas Oilfield
Expo on September 18 and 19 in Corpus Christi, Texas. The Company has invited hundreds of parties
that are active in the prefabricated mobile shelter industry in North America to cooperate in marketing
and placing this unique product, and the response has to date been positive.
The Company’s initial focus on the oil and gas industry is an obvious choice. Growth in the North
American market for modular, transportable, prefabricated structures is dominated by the energy and
mining industries. Soaring commodity prices and the boom in shale-based and other unconventional
energy industries has driven rapid employment growth in many of these industries. IHS Global Insight
reports that the unconventional oil and gas industry in the United States has created 1.7 million jobs in
2012, according to a report by IHS Global Insight. By 2015, that number is expected to grow to 2.5
million and nearly reach 3.5 million by 2035. Many of these jobs will involve field work in areas with
little available worker housing and few existing structures. The chart below illustrates the rapid expansion
of US employment in resource extraction industries.
6
Change in U.S. Employment by Sector
Dec-07 to
Nov-11 to
May-12
May-12
Combined
Mining (including oil & gas)
16.0%
3.3%
19.30%
Education and Health
9.4%
1.3%
10.70%
Leisure & Hospitality
0.2%
1.0%
1.20%
Professional & Business Services
-1.3%
1.7%
0.40%
Government
-1.8%
-0.2%
-2.00%
Total Non-Farm
-3.6%
0.8%
-2.80%
Trade, Transportation & Utilities
-5.2%
0.7%
-4.50%
Financial Activities
-6.1%
0.4%
-5.70%
Manufacturing
-13.0%
1.5%
-11.50%
Construction
-26.4%
-0.1%
-26.50%
Source: Bureau of Labor Statistics, CES
The rapid expansion of North American resource extraction industries has led to the emergence of
multiple companies providing complete solutions for installing and managing workforce accommodation
camps. These facilities range from small temporary installations housing exploration crews to large scale
camps housing thousands of workers engaged in full scale production. Since the Wing House is readily
adaptable to situations requiring easy transport and rapid installation and because of the unique ability to
present an installed footprint far larger than its shipping footprint, we believe the Wing House will have
strong appeal in this market.
While the oil, gas, and mining industries are the priority target, presentation of the Wing House to other
markets, including disaster relief, education, and residential housing, will be pursued as showroom units
become available.
A Freedonia Group's industry market research report from late 2011 indicated that inside the multi-billion
dollar U.S. nonresidential prefabricated building system industry, modular building systems provide the
best growth opportunities, and commercial applications are expected to post the fastest gains of any major
market. The Company's own research on market demand – combined with new features and refinements
of the product to meet more stringent buyer standards – has influenced it to initiate this rollout in 2013.
The Company has a target of 100 unit sales in 2013.
Competition
The Wing House mobile shelter faces no direct competition as a prefabricated expandable container-
based mobile shelter system though a variety of site-built shelter options provide indirect competition.
Typical portable cabins used as temporary offices in some regions are much cheaper than the Wing
Houses, but they (i) have a life span of much less than half that of a Wing House, (ii) cannot be moved
and re-used without virtually rebuilding the units, (iii) can only be trucked as 35 square meters of cabin
space per truck (as opposed to Wing House 80 square meter per truck folded in), and (iv) have inferior
wiring, lighting, bath fixtures, and insulation. The Wing Houses are competitively priced in certain
markets, and for certain users that are looking for more modern and efficient workforce accommodation
as opposed to the more utilitarian pre-fabricated structures used in the past.
7
A number of US and Canadian companies compete in the high quality prefabricated structure market,
notably Sunbelt Modular, Pacific Mobile Structures, Mobile Modular, Satellite Shelters, Williams
Scotsman, M Space Modular Buildings, and ModSpace. These companies use a variety of systems,
typically “panelized”, to install mobile structures in various configurations. Many of these structures are
designed to be semi-permanent, and fill a distinctly different niche from the Wing House. They offer
greater flexibility in terms of size, with larger and more open floor plans available. They are also
typically more expensive and require more time to install. While these structures will continue to
dominate the market for larger structures, the Company believes that the Wing House will fill an
underserved niche demand for high quality structures offering a far higher degree of mobility and far
faster installation than current offerings.
The Company will also compete with companies focused on the leasing of modular workforce housing
and the management of workforce housing facilities. Companies engaged in this business include Black
Diamond Group Limited, Target Logistics, Atco Structures and Logistics, Rapid Camp Ltd, Guerdon
Modular Buildings, Williams Scotsman, Stock Modular, Wilmot Modular Structures, and many others.
While some of these companies do produce their own modular housing units, their primary business lies
in leasing, installation, and management of workforce camps. The rapid growth of this sector is
demonstrated by the recent results of the Black Diamond Group, a publicly traded industry leader with
operations focused on Western Canada.
Black Diamond Group Operating
Income (Millions CAD)
2009
$20
2010
$27
2011
$63
2012
$72
Source: Morningstar.ca
The Company recognizes these companies as competitors but also sees them as potential customers. If
the Company can provide these companies with a facility option that is more economical, more efficient,
and more easily portable than the structures they currently use, we believe that a significant number of
these companies would adopt the Wing House as part of their leasing fleet.
The Company anticipates three probable avenues for marketing the Wing House to North American
resource extraction industries:
Direct sales to exploration companies needing small, rapidly portable facilities below the size
threshold that would justify subcontracting a camp to a turnkey solution provider.
Sales to turnkey workforce camp solution providers.
Eventual formation of a joint management venture, with the Company providing the facilities and
local partners providing installation and management services.
While the third option remains a speculative possibility at this point, the first two are prepared for
immediate initiation at the 2013 Gas & Oil Expo and the 2013 South Texas Oilfield Expo.
8
International Markets
The Company holds distribution rights for the Wing House in both the Gulf Cooperation Council (GCC),
composed of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Fueled by
sustained high oil and gas prices, this has emerged as one of the world’s most rapidly growing regions.
Steffen Hertog of the London School of Economics states:
No other rich region in the world has grown as fast as the GCC in recent years and none
has as rosy an outlook for the near future: IMF estimates of real GDP growth for 2012
range from 2 percent (Bahrain) to 6.3 percent (Saudi Arabia), with a regional average of
4.9 percent. Average growth for 2013 is expected to again reach above 3 percent - all the
while all countries bar Bahrain are expected to rack up sizeable fiscal surpluses between
5.8 and 26 percent of GDP thanks to continuing high oil prices. Consumer confidence is
at an all-time high and privately driven sectors like retail and construction are expanding
rapidly.
Non-oil growth is emerging as a major growth driver, as regional governments invest oil income in heavy
industry, infrastructure, and other developments in an effort to diversify their oil-dependent economies.
The combination of high investment in increased energy production and surging investment in economic
diversification creates a significant opportunity for the marketing of modular workforce housing
solutions. Virtually all construction labor in the GCC is provided by contractual workers from other
countries. These workers are typically housed on job sites, and construction managers need the ability to
pack up housing facilities as jobs finished and move them to other job sites as easily as possible. The
extreme mobility and rapid deployment of the Wing House make it a strong contender for acceptance in
the GCC market.
The Company also holds marketing rights for the Wing House in Southeast Asia, a region that the OECD
expects to maintain a “robust” average of 5.5% over the next five years. Large infrastructure projects,
energy and mining industry developments, disaster relief, and temporary offices are among the niches
open for the Wing House in Southeast Asia.
The Company’s Prefabricated Housing division will focus primarily on the North American market in
2013, but the Company remains committed to exploring opportunities in both the GCC and Southeast
Asia.
Patents, Trademarks, Licenses, Franchises,
Concessions, Royalty Agreements and Labor Contracts
We neither own nor have applied for any patents or trademarks. We do not license any of our technology
from other companies. However, we have an exclusive distribution agreement with Renhe for the Wing
Houses
Marketing and Advertising Methods
The Company markets the Wing Houses through traditional methods, internet web sites and emails
Dependence on Major Customers or Suppliers
The Company is not dependent on one or a few customers, as we have a product targeted to a wide range
of buyers.
9
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.
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.
10
Employees
We have no employees other than our two officers / directors. We also have part-time consultants and
sales agents in Dubai, Philippines, Thailand and Texas. We believe we have a good working relationship
with our agents 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.
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 years ended December 31, 2012 and 2011, 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.
11
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 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.
International and political events may adversely affect our operations.
To date our revenue is derived entirely 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:
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.
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.
12
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.
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.
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.
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 year ending December 31 2012, 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.
13
Our past capital funding needs have resulted in dilution to existing shareholders.
We have realized funding from Asher Enterprises, Inc. ("Asher"), in the form of convertible notes, which
has been converted into 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.
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.
14
ITEM 2.
During the year ended December 31, 2012, 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, 13th 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 was located in Tempe, Arizona. Cleanfield had a six-month lease through
June 2012 for which the Company paid $2,046 per month.
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.
ITEM 3.
LEGAL PROCEEDINGS
None.
ITEM 4.
MINE SAFTETY DISCLOSURES
Not applicable
15
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.
High and Low Bid Prices Since Quotation on the OTCBB
Year
Quarter Ended
High
Low
2012
December 31
$0.0017
$0.0005
September 30
$0.0027
$0.0011
June 30
$0.0075
$0.0014
March 31
$0.0061
$0.0030
2011
December 31
$0.0195
$0.0022
September 30
$0.19
$0.012
June 30
$0.35
$0.06
March 31
$0.65
$0.10
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, 2012, the Company had 234 shareholders of record holding a total of 432,683,747
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, 2012, 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, 2012, the Company had no warrants to purchase shares of stock.
Stock Options
As of December 31, 2012, the Company had no stock options to purchase shares of stock.
16
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, 2012, the Company had a promissory note with an outstanding value of $10,000
convertible into shares of the Company stock. The note had an interest rate of 8% and the option to
convert the outstanding balances at a 40% discount off the market price at the time of conversion.
Subsequent to the year ended December 31, 2012, the note holder converted $8,600 of the value to shares
and the Company paid off the remaining amounts, including interest, owed.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
On March 15, 2011, June 1, 2011, and March 12, 2012 and May 11, 2012 the Company issued
promissory notes in the amounts of $60,000, $40,000, $19,000, and $20,000 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 were
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:
17
Note
Due
Payment
Conversion Conversion
Conversion
Remaining
Amounts
Amount
Price
Shares
Dates
Balance
$60,000
December 15, 2011
$12,000
0.0049
2,448,980
December 8, 2011
$10,000
0.0017
5,882,353
February 2, 2012
$5,000
0.00099
5,050,505
March 15, 2012
$4,000
0.00099
4,040,404
March 20, 2012
$8,500
0.0014
6,071,429
March 26, 2012
$10,000
0.0014
7,142,857
April 17, 2012
$9,000
0.0014
6,428,571
April 30, 2012
$3,400*
0.0012
3,250,000
May 2, 2012
$0
$40,000
March 1, 2012
$10,000
0.0012
8,333,333
May 3, 2012
$10,000
0.00090
11,111,111
May 16, 2012
$8,000
0.00068
11,764,706
May22, 2012
$10,000
0.00062
16,129,032
May 25, 2012
$3,600**
0.00063
5,714,286
June 13, 2012
$0
$19,000
December 12, 2012
$19,000
***
***
***
$0
$20,000
February 11, 2013
$5,750
0.0003
19,166,666
Nov. 26, 2012
$4,250
0.00022
19,318,182
Dec. 31, 2012
$4,300
0.00022
19,545,455
Jan. 11, 2013
$4,300
0.00022
19,545,455
Jan. 15, 2013
$1,400
****
****
****
$0
Total
$0
*
Includes $2,400 in interest from the note due on December 15, 2011.
**
Includes $1,600 in interest from the note due on March 1, 2012.
***
Amount prepaid by the Company on June 25, 2012.
****
Amount prepaid by the Company on February 18, 2013.
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.
Purchases of Equity Securities made by the Issuer and Affiliated Purchasers
None.
18
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.
For the twelve month period ended December 31, 2012:
(i)
The Company received its final payment for the U.S. Navy’s Lido Phase II Project in
Indonesia and made final payments to our subcontractors.
(ii)
On February 1, 2012, the Company entered into a Share Exchange Agreement (dated January
11, 2012) to acquire InterMedia Development Corporation ("InterMedia"), a media
production company and defense contractor based in Fairfax, Virginia. In July 2012, the
Company determined that it would not pursue the closing of the acquisition of InterMedia.
Based upon the review of due diligence the Company determined that it would not be
possible to raise the funds required to expand InterMedia as agreed. Accordingly, both parties
determined it was in their best interests not to proceed with the acquisition.
(iii)
On February 6, 2012, the Company changed its fiscal year end from June 30 to December 31.
The report covering the transition period was filed on Form 10-K for the six-month period
between June 30, 2011 and December 31, 2012.
(iv)
On July 25, 2012, the Company pre-paid in full an outstanding $19,000 convertible note.
(v)
On August 16, 2012, the Company's board of directors accepted the resignation of the
Company's CEO and member of the board of directors, Thomas R. Morgan, and on August
15, 2012, accepted the resignation of the Company's CFO and Principal Accounting Officer,
Digamber Naswa. The Company's board of directors appointed Eric Montandon as CEO,
CFO and Principal Accounting Officer.
19
Subsequent to the period ended December 31, 2012:
(i)
On February 18, 2013, the Company paid the final amounts outstanding on its convertible
notes.
(ii)
On February 27, 2013, DTC lifted a depository chill on the Company’s common stock.
(iii)
The Company authorized the issuance of 9,000,000 shares of Super Voting Preferred Stock
for the settlement of nearly $256,000 in debt.
Results of Operations
Net Losses
Net loss for the year ended December 31, 2012 was $150,144 as compared to $5,534,355 for the year
ended December 31, 2011, a decrease of 97.3%. The decrease in net loss over the comparable periods is
due to decreases in operating expenses and the absence of losses associated with Power Track Projects
FZE’s ("Power Track") business in the current period. Net loss in the previous period was primarily due
to costs associated with Power Track’s business. The Company is confident that it will transition to net
income in the next twelve months based on the anticipated development of its Wing House business.
Net Revenues
Net revenues for the year ended December 31, 2012 were $56,300 as compared to $695,036 for the year
ended December 31, 2011, a decrease of 91.9%. The decrease in net revenues over the comparable
periods can be attributed to the decrease in management contract revenue related to Lido Phase II. We
expect net revenues to increase over the next twelve months as a result of our development of our Wing
House business.
Gross Loss
Gross loss for the year ended December 31, 2012 decreased to $4,886 from $44,676 for the year ended
December 31, 2011, a decrease of 89.1%. The decrease in gross loss in the current period is due the
decrease in costs associated with the Lido Phase II project which costs exceeded corresponding revenues.
We expect to transition to gross income over the next twelve months in step with our expected realization
of Wing House business.
Operating Expenses
Operating expenses for the year ended December 31, 2012 decreased to $128,563 from $1,474,644 for the
year ended December 31, 2011, a decrease of 91.3%. 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 $91,463 from $1,219,011. Over the periods
salaries and wages decreased to $37,100 from $210,967. We expect operating expenses to increase in the
near term as we develop operations.
20
Other Expenses
Other expenses for the year ended December 31, 2012 were $16,695 compared to $4,059,711 for the year
ended December 31, 2011. The decrease in other expenses in the current period was due primarily to the
realization of losses in the previous period from Power Track’s inventory write down and the write down
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).
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, 2012, we had a working capital deficit of $328,541. Our current assets were $17,213
consisting of cash of $7,601 and other current assets of $9,612. Our total assets were $36,514 consisting
of current assets and investments of $19,301. Our current and total liabilities were $345,754 consisting of
notes payable of $283,426 and accrued expenses of $62,328. Stockholders deficit was $309,241 as of
December 31, 2012.
Cash flows used in operating activities for the year ending December 31, 2012 were $163,047 compared
to $3,239,980 for the year ending December 31, 2011. Cash flow used in operating activities in the
current period is primarily due to net losses, and changes in operating assets and liabilities of both a
decrease in notes payable and accounts payable. We 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 investing activities for the year ending December 31, 2012 were $19,301 compared to
cash flows provided by investing activities of $412,450 for the year ending December 31, 2011. Cash
flow used in investing activities in the current period is due to loans to Cleanfield. We expect to use cash
flow in investing activities over the next twelve months as we develop our Wing House business.
Cash flows provided by financing activities for the year ending December 31, 2012 were $147,260 as
compared to $2,797,353 for the year ending December 31, 2011. Cash flows provided by financing
activities in the current period are attributable to common stock issued against debt and cash. In the
previous period cash flow provided by financing activities was due primarily to long term debt owed to
WWA Group. We expect to realize cash flows provided by financing activities over the next twelve
months.
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.
21
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.
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.
22
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.
Going Concern
Our auditors included an explanatory statement in their report on the Company’s consolidated financial
statements for the years ended December 31, 2012 and 2011, 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 2013 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 fiscal years ended December 31, 2012 and 2011 are attached
hereto as F-1 through F-14.
23
INFRASTRUCTURE DEVELOPMENTS CORP.
Twelve Months Ended December 31, 2012 and December 31, 2011
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: 408-896-4405 | 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, 2012, December 31, 2011 and the related consolidated statements of
income, stockholders’ equity and cash flows for the year ended December 31, 2012. 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,
2012, and December 31, 2011, and the related consolidated statements of income, stockholders’ equity
and cash flows for the year ended December 31, 2012, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Pinaki & Associates LLC.
Pinaki & Associates LLC.
Hayward, CA
April 9, 2013
F-2
Infrastructure Developments Corp.
Consolidated Balance Sheet
As of December
As of December
ASSETS
31, 2012
31, 2011
CURRENT ASSETS
Cash
$
7,601 $
42,690
Receivables, net
-
-
Inventories
-
-
Prepaid expenses
-
32,406
Other current assets
9,612
14,709
Total current assets
17,213
89,805
Investment in unconsolidated entity
19,301
-
TOTAL ASSETS
$
36,514 $
89,805
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes Payable
$
283,426 $
328,226
Accounts payable
-
27,856
Accrued expenses
62,328
40,079
Total current liabilities
345,754
396,161
Long-term debt
-
-
TOTAL LIABILITIES
$
345,754 $
396,161
STOCKHOLDERS' EQUITY
Common Stock
Authorized: 500,000,000 common shares with $0.001 par value
Issued : 432,683,747
432,684
300,263
Additional paid-in capital
8,488,704
8,473,865
Retained earnings
(9,230,628)
(9,080,484)
Total Stockholders' Equity
(309,241)
(306,357)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
36,514 $
89,805
The accompanying notes are an integral part of these consolidated financial statements.
F-3
Infrastructure Developments Corp.
Consolidated Statements of Operations
Year Ended
Year Ended
December 31,
December 31,
2012
2011
Net revenues:
(Unaudited)
Contract Income
$
- $
300,492
Revenue from equipment rental
-
-
Project Management
56,300
394,544
Total net revenues
56,300
695,036
Cost of Goods Sold
61,186
739,712
Gross profit (Loss)
(4,886)
(44,676)
Operating expenses:
General, selling and administrative expenses
91,463
1,219,001
Salaries and wages
37,100
210,967
Depreciation and amortization expense
-
-
Total operating expenses
128,563
1,429,968
Income (loss) from operations
(133,448)
(1,474,644)
Other income (expense):
Interest income/(expenses)
(17,695)
(81,046)
Loss in inventory write down
-
(1,981,604)
Loss in sale of fixed assets
-
(1,091,071)
Write off of fixed assets
-
(1,244,703)
Other income (expense)
1,000
338,713
Total other income (expense)
(16,695)
(4,059,711)
Income (loss) before income tax
(150,144)
(5,534,355)
-
Provision for income taxes
-
Net Income (Loss)
$
(150,144) $
(5,534,355)
Basic income (loss) per share
$
(0.00) $
(0.04)
Fully diluted income (loss) per share
$
(0.00) $
(0.04)
Basic weighted average number of shares outstanding
367,790,776
151,269,423
Fully diluted weighted average number of shares outstanding
367,790,776
151,269,423
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Infrastructure Developments Corp.
Consolidated Statements of Stockholders' Equity
Additional
Common Stock
Paid-in
Retained
Shares
Amount
Capital
Earnings
Total
Balance, December 31, 2011
300,262,978
$ 300,262.98
$ 8,473,864.25
$ (9,080,484.00) $ (306,356.77)
Common Stock Issued @$0.001 Per share Ag. Outstanding Debt
5,882,353
5,882.35
4,117.65
10,000
Common Stock Issued @$0.001 Per share Ag. Outstanding Debt
5,050,505
5,050.51
-50.51
5,000
Common Stock Issued @$0.001 Per share Ag. Outstanding Debt
4,040,404
4,040.40
-40.40
4,000
Common Stock Issued @$0.001 Per share Ag. Outstanding Debt
6,071,429
6,071.43
2,428.57
8,500
Net Loss During the Qtr
(54,749)
(54,749)
Balance, March 31 2012
321,307,669
321,308
8,480,320
(9,135,233)
(333,606)
Common Stock Issued @$0.001 Per share Debt (Morningstar)
3,017,334
3,017.33
42,242.67
45,260
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
7,142,857
7,142.86
2,857.14
10,000
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
6,428,571
6,428.57
2,571.43
9,000
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
3,250,000
3,250.00
650.00
3,900
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
8,333,333
8,333.33
1,666.67
10,000
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
11,111,111
11,111.11
-1,111.11
10,000
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
11,764,706
11,764.71
-3,764.71
8,000
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
16,129,032
16,129.03
-6,129.03
10,000
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
5,714,286
5,714.29
-2,114.29
3,600
Net Loss During the Qtr
(49,273)
(49,273)
Balance, June 30 2012
394,198,899
394,199
8,517,188
(9,184,506)
(273,119)
Net Loss During the Qtr
(22,569.31)
(22,569.31)
Balance, September 30 2012
394,198,899
394,199
8,517,188
(9,207,075)
(295,688)
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
19,166,666
19,166.67
(13,417)
5,750
Common Stock Issued @$0.001 Per share Ag. Notes (Asher)
19,318,182
19,318.18
(15,068)
4,250
Net Loss During the Qtr
(23,552.54)
(23,553)
Balance, December 30 2012
432,683,747
$ 432,684
$ 8,488,703
$ (9,230,628)
$ (309,240)
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Infrastructure Developments Corp.
Consolidated Statements of Cash Flows
Year Ended
Year Ended
December 31,
December 31,
2012
2011
CASH FLOWS FROM OPERATING ACTIVITIES
(Unaudited)
Net income ( loss)
$
(150,144) $
(5,534,355)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization
-
38,169
(Gain)Loss on disposition of assets
-
2,335,774
Changes in operating Assets and Liabilities:
Decrease (increase) in:
Accounts receivable
-
358,541
Inventories
-
1,981,604
Prepaid expenses
32,406
119,982
Other current assets
5,097
198,184
Increase (decrease) in:
Notes payable
(44,800)
(2,158,926)
Accounts payable
(27,856)
(402,320)
Accrued liabilities
22,249
(176,633)
Net Cash Provided (Used) in Operating Activities
(163,047)
(3,239,980)
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in Unconsolidated Entity
(19,301)
-
Proceeds from sale of Fixed Assets
-
412,450
Net Cash Provided (Used) by Investing Activities
(19,301)
412,450
CASH FLOWS FROM FINANCING ACTIVITIES
Common Stock issued against services
-
70,000
Common stock issued Against Debt and Cash
147,260
2,727,353
Increase in Long term debt
-
-
Net Cash Provided by Financing Activities
147,260
2,797,353
NET INCREASE IN CASH
(35,089)
(30,178)
CASH AT BEGINNING OF PERIOD
42,690
72,868
CASH AT END OF PERIOD
$
7,601 $
42,690
The accompanying notes are an integral part of these consolidated financial statements.
F-6
INFRASTRUCTURE DEVELOPMENTS CORP.
Notes to the Financial Statements
December 31, 2012 and 2011
NOTE 1 - ORGANIZATION AND HISTORY
Infrastructure Developments Corp. (the “Company”), formerly 1st Home Buy and Sell Ltd., was
incorporated under the laws of the state of Nevada on August 10, 2006. The Company changed
its name to “Infrastructure Developments Corp.” on March 1, 2010.
On April 14, 2010, the Company and Interspec International, Inc. (“Interspec”, formerly Intelspec
International, Inc.), 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 Interspec in exchange for 14,000,000 shares of the
Company’s common stock. Because the owners of Interspec became the principal shareholders of
the Company through the transaction, Interspec is considered the acquirer for accounting
purposes and this transaction is accounted for as a reverse acquisition or recapitalization of
Interspec.
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 the Company and its wholly-owned subsidiaries. All intercompany
transactions and balances have been eliminated in consolidation.
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.
F-7
INFRASTRUCTURE DEVELOPMENTS CORP.
Notes to the Financial Statements
December 31, 2012 and 2011
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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.
e.
Revenue Recognition
Revenues from Sales and Services consist of revenues earned in the Company’s activity as
Project & Construction Equipment Management & Operations, 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.
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 year ended December
31, 2012 and 2011.
F-8
INFRASTRUCTURE DEVELOPMENTS CORP.
Notes to the Financial Statements
December 31, 2012 and 2011
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (Continued)
g.
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.
h.
Advertising
The Company expenses the cost of advertising as incurred. For the years ended December 31,
2012 and 2011, the Company had no advertising expenses.
i.
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.
j.
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.
k.
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.
F-9
INFRASTRUCTURE DEVELOPMENTS CORP.
Notes to the Financial Statements
December 31, 2012 and 2011
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (Continued)
k.
Impairment of Long-Lived Assets (Continued)
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 year ended
December 31, 2012 and 2011, no amounts were written off from the Company’s long-lived
assets.
l.
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
On May 9, 2012, the Company issued a promissory note in the amount of $20,000 to Asher
Enterprises, Inc., an unrelated party, at an interest rate of 8%, with an option to convert the
outstanding balance into shares of the Company’s common stock with a discount off the market
price at the time of conversion. At December 31, 2012, $10,000 remained outstanding under the
note.
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
December 31, 2012 and 2011
NOTE 6 – REVERSE ACQUISITION
On April 14, 2010, the Company, Interspec and those shareholders of Interspec holding a
majority of its outstanding shares closed a transaction pursuant to that certain Share Exchange
Agreement, whereby the Company acquired up to 100% of the outstanding shares of
Interspec’s common stock from the shareholders of Interspec 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 Interspec held at closing approximately 70% of the Company’s issued and
outstanding common stock.
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 no payable to related parties as of December 31, 2012
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 – RECENT ACCOUNTING PRONOUNCEMENTS
In February 2013, the FASB issued authoritative guidance related to reclassifications out of
accumulated OCI. Under the amendments in this update, an entity is required to report, in one
place, information about reclassifications out of accumulated OCI and to report changes in its
accumulated OCI balances. For significant items reclassified out of accumulated OCI to net
income in their entirety in the same reporting period, reporting is required about the effect of the
reclassifications on the respective line items in the statement where net income is presented. For
items that are not reclassified to net income in their entirety in the same reporting period, a cross
reference to other disclosures currently required under U.S. GAAP is required in the notes to the
consolidated financial statements. We plan to adopt this guidance in the first quarter of fiscal year
2013 and do not believe that the adoption of this guidance will have a material impact on its
Consolidated Financial Statements.
F-11
INFRASTRUCTURE DEVELOPMENTS CORP.
Notes to the Financial Statements
December 31, 2012 and 2011
NOTE 11 – 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.
b.
Outstanding
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.
On June 17, 2011, the Company issued 125,000 shares of common stock to an unrelated
party for consulting services at $0.001 per share.
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.
F-12
INFRASTRUCTURE DEVELOPMENTS CORP.
Notes to the Financial Statements
December 31, 2012 and 2011
NOTE 11 – STOCKHOLDERS' EQUITY (Continued)
b.
Outstanding (Continued)
As of December 31, 2011, the Company had 300,262,978 shares of common stock issued
and outstanding
On February 2, 2012, the Company issued 5,882,353 shares of common stock to an
unrelated party against 8% Convertible Note.
On March 15, 2012, the Company issued 5,050,505 shares of common stock to an
unrelated party against 8% Convertible Note.
On March 20, 2012, the Company issued 4,040,404 shares of common stock to an
unrelated party against 8% Convertible Note.
On March 26, 2012, the Company issued 6,071,429 shares of common stock to an
unrelated party against 8% Convertible Note.
On April 11, 2012, the Company issued 3,017,334 shares of common stock to an
unrelated party for services.
On April 17, 2012, the Company issued 7,142,857 shares of common stock to an
unrelated party against 8% Convertible Note.
On April 30, 2012, the Company issued 6,428,571 shares of common stock to an
unrelated party against 8% Convertible Note.
On May 2, 2012, the Company issued 3,250,000 shares of common stock to an unrelated
party against 8% Convertible Note.
On May 3, 2012, the Company issued 8,333,333 shares of common stock to an unrelated
party against 8% Convertible Note.
On May 16, 2012, the Company issued 11,111,111 shares of common stock to an
unrelated party against 8% Convertible Note.
On May 22, 2012, the Company issued 11,764,706 shares of common stock to an
unrelated party against 8% Convertible Note.
On May 25, 2012, the Company issued 16,129,032 shares of common stock to an
unrelated party against 8% Convertible Note.
On June 13, 2012, the Company issued 5,714,286 shares of common stock to an
unrelated party against 8% Convertible Note.
On November 26, 2012, the Company issued 19,166,666 shares of common stock to an
unrelated party against 8% Convertible Note.
On December 31, 2012, the Company issued 19,318,182 shares of common stock to an
unrelated party against 8% Convertible Note.
As of December 31, 2012, the Company had 432,683,747 shares of common stock issued
and outstanding
NOTE 12 – 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 (“Note”)
issued to WWA Group on May 17, 2011.
F-13
INFRASTRUCTURE DEVELOPMENTS CORP.
Notes to the Financial Statements
December 31, 2012 and 2011
NOTE 13 – CHANGE IN FISCAL YEAR END
On February 6, 2012, the Company changed its fiscal year end from June 30 to December 31.
The change became effective at the end of the quarter ended December 31, 2011.
NOTE 14 – 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 IDVC is not aware of any subsequent
events which would require recognition or disclosure in the financial statements.he
Company has determined that the following such event warrants disclosure or recognition
in the financial statements:
On each of January 11 and 15, 2013, Asher Enterprises converted $4,300 of a note payable into
19,545,455 shares of the Company's common stock. On February 18, 2013, the Company paid
off the remainder of the note to Asher Enterprises.
On February 27, 2013, following the review of a petition by the Company, the Depository Trust
Company (DTC) lifted the deposit chill that had been on the Company's common stock since
October 2012. The Deposit Chill prevented some shareholders from depositing physical share
certificates into the market for sale. The DTC has now resumed accepting deposits for
depository and book-entry transfer services.
On February 4, 2013, the Company's board of directors authorized and on March 4, 2013
Nevada Secretary of State accepted a Certificate of Designation that authorized the issuance of
up to nine million (9,000,000) shares of a new series of preferred stock, par value $0.001 per
share designated "Super Voting Preferred Stock." The designation allows that each holder of
outstanding shares of Super Voting Preferred Stock shall be entitled to fifty (50) votes for each
share of Super Voting Preferred Stock held on the record date for the determination of
stockholders entitled to vote at each meeting of stockholders of the Company. Additionally,
immediately following an increase in the authorized common stock of the Company, par value
$0.001 per share, beyond 500,000,000 shares, each share of Super Voting Preferred Stock then
outstanding shall automatically and mandatorily be converted into fifty (50) shares of common
stock.
On February 4, 2013, Entered into a debt settlement agreement with Adderley Davis &
Associates for the settlement of $255,928.46 in amounts owed in exchange for 9,000,000 shares
of Super Voting Preferred Stock.
F-14
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have not been any changes in or disagreements with accountants on accounting and financial
disclosure or any other matter.
ITEM 9A.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report, an evaluation was carried out by the Company’s
management, with the participation of the chief executive officer and the chief financial officer, of the
effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of December 31, 2012.
Disclosure controls and procedures are designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported
within the time periods specified in the Commission’s rules and forms, and that such information is
accumulated and communicated to management, including the chief executive officer and the chief
financial officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, the Company’s management concluded, as of the end of the period covered by
this report, that the Company’s disclosure controls and procedures were effective in recording,
processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commission’s rules and forms, and such information was accumulated and communicated
to management, including the chief executive officer and the chief financial officer, to allow timely
decisions regarding required disclosures.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control
over financial reporting. The Company’s internal control over financial reporting is a process, under the
supervision of the chief executive officer and the chief financial officer, designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of the Company’s financial
statements for external purposes in accordance with United States generally accepted accounting
principles (GAAP). Internal control over financial reporting includes those policies and procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the Company’s assets;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
the financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures are being made only in accordance with authorizations of management
and the board of directors; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Company’s assets that could have a material effect on the
financial statements.
24
Due to its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate.
The Company’s management conducted an assessment of the effectiveness of our internal control over
financial reporting as of December 31, 2012, based on criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which
assessment identified material weaknesses in internal control over financial reporting. A material
weakness is a control deficiency, or a combination of deficiencies in internal control over financial
reporting that creates a reasonable possibility that a material misstatement in annual or interim financial
statements will not be prevented or detected on a timely basis. Since the assessment of the effectiveness
of our internal control over financial reporting did identify a material weakness, management considers its
internal control over financial reporting to be ineffective.
The Company identified the following material weakness: Lack of Appropriate Independent Oversight.
The board of directors has not provided an appropriate level of oversight of the Company’s consolidated
financial reporting and procedures for internal control over financial reporting since there are, at present,
no independent directors who could provide an appropriate level of oversight, including challenging
management’s accounting for and reporting of transactions. While this control deficiency did not result in
any audit adjustments to our 2012 or 2011 interim or annual period financial statements, it could have
resulted in material misstatement that might have been prevented or detected by independent oversight.
Accordingly, we have determined that this control deficiency constitutes a material weakness.
The Company intends to remedy the material weaknesses by forming an audit committee made up of
independent directors that will oversee management.
This annual report does not include an attestation report of our independent registered public accounting
firm regarding internal control over financial reporting. We were not required to have, nor have we,
engaged our independent registered public accounting firm to perform an audit of internal control over
financial reporting pursuant to the rules of the Commission that permit us to provide only a
management’s report in this annual report.
Changes in Internal Controls over Financial Reporting
During the period ended December 31, 2012, there has been no change in internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect our internal control over
financial reporting.
ITEM 9B.
OTHER INFORMATION
None.
25
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following table sets forth the names and ages of our current directors and executive officers. Our
Board of Directors appoints our executive officers. Our directors serve until the earlier occurrence of the
election of his or her successor at the next meeting of stockholders, death, resignation or removal by the
Board of Directors. There are no family relationships among our directors, executive officers, or director
nominees.
Name
Age
Position(s) and Office(s)
Eric Montandon
47
Chief Executive Officer, Chief Financial
Officer and Director
Shawn Teigen
40
Secretary and Director
The following is a brief account of the business experience of our directors, executive officers, and other
significant employees, including their background occupations and employment over the past five years.
We also provide the responsibilities and qualifications of our executive officers and other significant
employees and the qualifications of our directors. The following includes other directorships in public
companies over the past five years of our directors. Except as otherwise noted, none of the following
referenced organizations are affiliates of the Company.
Eric Montandon was appointed as a director of the Company on May 17, 2011, as Chief Executive
Officer on August 16, 2012, and as Chief Financial Officer on August 15, 2012. He will serve until the
next annual meeting of our shareholders and his successor is elected and qualified.
Business Experience:
Mr. Montandon joined the board of directors of Asia8, Inc., in 2000 and became its CEO and CFO. He
and was instrumental in Asia8, Inc.’s acquisition and development of World Wide Auctioneers, Ltd.
His primary business focus has been on those two companies and WWA Group, Inc., since 2003
(WWA Group holds approximately 50% of the Company's common stock). Mr. Montandon is
responsible for the overall management of these companies and is involved in many of their day-to-
day operations, finance and administration. In 1994 Mr. Montandon was involved in forming
Momentum Asia, Inc., a design and printing operation in Subic Bay, Philippines. He operated this
company as its CEO until the middle of 2000. Between 1988 and 1992 he worked for Winius-
Montandon, Inc. as a commercial real estate consultant and appraiser in Phoenix, Arizona.
Officer and Director Responsibilities and Qualifications:
Mr. Montandon is responsible for the overall management of the Company and is involved in many
of its day-to-day operations, finance and administration.
Mr. Montandon graduated from Arizona State University in 1988 with a Bachelor’s Degree in
Business Finance. He has worked with early stage companies for the past two decades.
26
Other Public Company Directorships in the Last Five Years:
Over the last five years Mr. Montandon has been an officer and director of three public companies:
WWA Group, Inc. (from 2003 to present) (chief executive officer and director); Asia8, Inc., product
distributor (from February 2000 to present) (chief executive officer, chief financial officer and
director); and Net Telecommunications, Inc., formerly a telecommunications service provider (from
September 2000 to present) (director).
Shawn Teigen was appointed to serve as Secretary and as a director of the Company on April 10, 2010.
He has been a director of Intelspec since July 15, 2008. He will serve until the next annual meeting of our
shareholders and his successor is elected and qualified.
Business Experience:
Shawn Teigen has been providing consulting services to early-stage businesses for the past 10 years.
He is the president of an oil and gas company with operations in Wyoming. Mr. Teigen spent two years in
Kazakhstan as a U.S. Peace Corps volunteer.
Director Qualifications:
Mr. Teigen holds a Master of Public Policy and a BS in Management from the University of Utah. He
also serves on the board of directors of certain public-sector and non-profit organizations.
Other Public Company Directorships in the Last Five Years:
Over the last five years Mr. Teigen has not been an officer or director of any other public company.
Directors
Each director serves until our next annual meeting of the stockholders or unless they resign earlier. The
board of directors elects officers and their terms of office are at the discretion of the board of directors.
Each of our directors serves until his or her successor is elected and qualified. Each of our officers is
elected by the board of directors to a term of one year and serves until his or her successor is duly elected
and qualified, or until he or she is removed from office. At the present time, members of the board of
directors are not compensated for their services to the board.
Compliance with Section 16(a) o f the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and
persons who beneficially own more than 10% of our equity securities, to file reports of ownership and
changes in ownership with the Commission. Officers, directors and greater than 10% shareholders are
required by Commission regulation to furnish the Company with copies of all Section 16(a) forms they
file. Based solely upon a review of Forms 3, 4 and 5 furnished to the Company, the Company is aware of
the following persons or entities which, during the period ended December 31, 2012, failed to file, on a
timely basis, reports required by Section 16(a) of the Securities Exchange Act of 1934.
WWA Group, Inc., failed to file Forms 4 and/or 5.
27
Family Relationships
There are no family relationships between or among the directors or executive officers
Involvement in Certain Legal Proceedings
During the past ten years there are no events that occurred related to an involvement in legal proceedings
that are material to an evaluation of the ability or integrity of any of the Company’s directors, persons
nominated to become directors or executive officers.
Code of Ethics
The Company has adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K of the
Securities Exchange Act of 1934. The Code of Ethics applies to directors and senior officers, such as the
principal executive officer, principal financial officer, controller, and persons performing similar
functions. The Company has incorporated a copy of its Code of Ethics as Exhibit 14 to this Form 10-K.
Further, the Company’s Code of Ethics is available in print, at no charge, to any security holder who
requests such information by contacting us.
Board of Directors Committees
Audit Committee
The Company intends to establish an audit committee of the board of directors, which will consist of
soon-to-be-nominated independent directors. The audit committee’s duties would be to recommend to the
Company’s board of directors the engagement of an independent registered public accounting firm to
audit the Company’s financial statements and to review the Company’s accounting and auditing
principles. The audit committee would review the scope, timing and fees for the annual audit and the
results of audit examinations performed by the internal auditors and independent registered public
accounting firm, including their recommendations to improve the system of accounting and internal
controls. The audit committee would at all times be composed exclusively of directors who are, in the
opinion of the Company’s board of directors, free from any relationship which would interfere with the
exercise of independent judgment as a committee member and who possess an understanding of financial
statements and generally accepted accounting principles.
Compensation Committee
The Company intends to establish a compensation committee of the board of directors. The compensation
committee would review and approve the Company’s salary and benefits policies, including
compensation of executive officers.
Directors Compensation
Directors receive no compensation for their services as directors. We do not anticipate adopting a
provision for compensating directors in the foreseeable future.
28
ITEM 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The objective of our compensation program is to provide compensation for services rendered by our
executive officers in the form of a salary. We utilize this form of compensation because we believe that it
is adequate to both retain and motivate our executive officers. The amount we deem appropriate to
compensate our executive officers is determined in accordance with other like corporations; we have no
specific formula to determine compensatory amount at this time. We have deemed that our current
compensatory program and the decisions regarding compensation are easy to administer and are
appropriately suited for our objectives. We may expand our compensation program to additional future
employees and to include other compensatory elements.
Executive compensation for the year ended December 31, 2012 was $4,000 and the years ended
December 31, 2011 was $107,500. The decrease in executive compensation over the periods is
attributable primarily to the expiration on August 4, 2011, of an employment agreement between
Intelspec and our former chief executive officer dated August 5, 2008; a salary expense had been paid or
accrued at a consistent monthly during the period of the agreement. On October 13, 2011, effective
August 5, 2011, the Company and our former chief executive officer executed a one-year agreement at a
salary of $500 per month due to current cash flow restrictions. Our former chief financial officer,
appointed June 14, 2011, earned no compensation. Our current chief executive officer and chief financial
officer earned no compensation due to cash flow restrictions.
Summary Compensation Table
The following table provides summary information for the years ended December 31, 2012 and 2011
concerning cash and non-cash compensation paid or accrued to or on behalf of (i) the chief executive
officer, (ii) the two most highly compensated executive officers other than the chief executive officer if
compensated over $100,000 and (iii) additional individuals if compensated over $100,000.
Executives Summary Compensation Table
Name and
Year
Salary
Bonus
Stock
Option
Non-Equity
Change in
All Other
Total
Principal
($)
($)
Awards
Awards
Incentive Plan
Pension Value Compensation
($)
Position
($)
($)
Compensation
and Nonqualified
($)
($)
Deferred
Compensation
($)
Eric
Dec. 31,
Montandon (1)
2012
-
-
-
-
-
-
-
-
CEO,CFO and
Dec. 31
Director
2011
-
-
-
-
-
-
-
-
Thomas R.
Dec. 31,
Morgan (2)
2012
4,000
-
-
-
-
-
-
4,000
former CEO
Dec. 31
and Director
2011
107,500
-
-
-
-
-
- 107,500
1. On August 16, 2012, Mr. Montandon consented to act as the Chief Executive Officer, and on August 15, 2012 he consented to
act as the Chief Financial Officer and Principal Accounting Officer, and on May 17, 2011 he consented to act as a director of the
Company. During the period he has received no compensation.
2. On April 14, 2010, Mr. Morgan consented to act as the Chief Executive Officer, Chief Financial Officer, Principal Accounting
Officer and a director of the Company. During the period Mr. Morgan accrued compensation of $15,000 per month pursuant to a
three-year employment agreement with Intelspec made effective August 5, 2008. On August 5, 2011, Mr. Morgan consented to
act as the Chief Executive Officer for compensation of $500 per month pursuant to a one-year employment agreement with the
Company. On August 16, 2012, the Company accepted the resignation of Mr. Morgan as the Company's CEO and director.
29
The Company currently has no employment agreements. The Company currently has no option or
stock award plan. The Company has no long-term incentive plan. The Company has no plans that
provides for the payment of retirement benefits, or benefits that will be paid primarily following
retirement. The Company has no agreement that provides for payment to our executive officer at,
following, or in connection with the resignation, retirement or other termination, or a change in control
of Company or a change in our executive officer's responsibilities following a change in control.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information concerning the ownership of the Company’s
471,774,657 shares of common stock issued and outstanding as of April 11, 2013 with respect to: (i) all
directors; (ii) each person known by us to be the beneficial owner of more than five percent of our
common stock; and (iii) our directors and executive officers as a group. Except as otherwise indicated,
each of the stockholders listed below has sole voting and investment power over the shares beneficially
owned. Beneficial ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated.
Amount of
Percentage of
Name and Address of Beneficial Owner(1)
Class of Stock
Beneficial
Beneficial
Ownership
Ownership per
Class of Stock
Directors and Officers
Shawn Teigen
163 Williams Ave., Salt Lake City, UT 84111
Common
51,618
0.01%
Eric Montandon(2)700 Lavaca Street, Suite 1400, Austin
Texas 78701
Common
149,484,393
31.69%
All executive officers and directors as a group
Common
149,536,011
31.70%
Beneficial owners greater than 5%
WWA Group, Inc. (2)
700 Lavaca Street, Suite 1400, Austin, Texas 78701
Common
111,484,393
23.63%
Adderley Davis & Associates, Ltd.
Suite Z-12, PO Box 8497, Sharjah, UAE
Preferred
9,000,000
100.00%
1. Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes
the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose
or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one
person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares
are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example,
upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the
percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares
beneficially owned by such person (and only such person) by reason of these acquisition rights.
2. Mr. Eric Montandon, a Company director and chief executive officer, has voting and dispositive control over the
shares of the Company held by WWA Group, Inc., by virtue of being the Chief Executive Officer of WWA
Group, Inc. Mr. Montandon holds 38,000,000 shares in his own name.
30
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
None of our directors or executive officers, nor any proposed nominee for election as a director, nor any
person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights
attached to all of our outstanding shares, nor any members of the immediate family (including spouse,
parents, children, siblings, and in−laws) of any of the foregoing persons has any material interest, direct
or indirect, in any transaction since the beginning of our last fiscal year or in any presently proposed
transaction which, in either case, has or will materially affect us, except as follows:
On November 21, 2011, the Company authorized the issuance of 165,699,842 shares of common
stock to WWA Group, Inc., - which our director, Eric Montandon, is CEO - valued at $2,477,544
or $0.014952 per share on conversion of a convertible promissory note issued to WWA Group on
May 17, 2011, as amended. WWA Group has subsequently a portion of these shares per debt
settlement agreements.
Director Independence
Our common stock is listed on the OTCQB inter-dealer quotation system, which does not have director
independence requirements. For purposes of determining director independence, we have applied the
definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not
considered to be independent if he or she is also an executive officer or employee of the corporation.
Accordingly, we do not consider either of our directors to be independent.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following is a summary of the fees billed to us by Pinaki & Associates LLC (“Pinaki”) for
professional services rendered for the past two fiscal years:
Pinaki
Pinaki
Fee Category
Fiscal December 31, Fiscal December 31,
2012 Fees ($)
2011 Fees ($)
Audit Fees
15,000
31,000
Audit-Related Fees
0
0
Tax Fees
0
0
All Other Fees
0
0
Audit Fees consist of fees billed for professional services rendered for the audit of our financial
statements and review of the interim financial statements included in quarterly reports and services that
are normally provided by Pinaki in connection with statutory and regulatory filings or engagements.
Audit Committee Pre-Approval
The Company did not have a standing audit committee at the time its respective auditors were engaged.
Therefore, all services provided by Pinaki, as detailed above, were pre-approved by the Company’s board
of directors. Pinaki performed all work only with their permanent full time employees.
31
PART IV
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)
Financial Statements
The following documents are filed under “Item 8. Financial Statements and Supplementary Data,” pages
F-1 through F-14, and are included as part of this Form 10-K:
Financial Statements of the Company for the fiscal years ended December 31, 2012 and December
31, 2011:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
(b)
Exhibits
The exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on
page 34 of this Form 10-K, and are incorporated herein by this reference.
(c)
Financial Statement Schedules
We are not filing any financial statement schedules as part of this Form 10-K because such schedules are
either not applicable or the required information is included in the financial statements or notes thereto.
32
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Infrastructure Developments Corp.
Date
/s/ Eric Montandon
April 11, 2013
By: Eric Montandon
Its: Chief Executive Officer, Chief Financial Officer, Principal Accounting
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date
/s/ Eric Montandon
April 11, 2013
Eric Montandon
Chief Executive Officer, Chief Financial Officer, Principal Accounting
Officer and Director
/s/ Shawn Teigen
April 11, 2013
Shawn Teigen
Director
33
INDEX TO EXHIBITS
Number Description
3.1.1*
Articles of Incorporation filed with the Nevada Secretary of State on August 10, 2006. Incorporated by reference as
Exhibits to the Form SB-1 filed on May 11, 2007.
3.1.2*
Certificate of Amendment to the Articles of Incorporation filed with the Nevada Secretary of State on April 23,
2007. Incorporated by reference to the Company’s Registration Statement on Form SB-1 filed with the Commission
on May 11, 2007.
3.1.3*
The Certificate of Amendment to the Company’s Articles of Incorporation was filed with the Secretary of State of
the Nevada on March 1, 2010. Incorporated by reference to the Company’s Definitive Information Statement on
Schedule 14C as filed with the Commission on February 2, 2010.
3.1.4*
The Certificate of Amendment to the Company’s Articles of Incorporation was filed with the Secretary of State of
the Nevada on April 9, 2010. Incorporated by reference to the Company’s current Report on Form 8-K as filed with
the Commission on April 14, 2010.
3.2*
Bylaws. Incorporated by reference to the Company’s Registration Statement on Form SB-1 filed with the
Commission on May 11, 2007.
10.1*
Securities Purchase Agreement, dated July 1, 2008, between Interspec, Interspec LLC and Tom Morgan.
Incorporated by reference to our current Report on Form 8-K as filed with the Commission on April 26, 2010.
10.2*
Employment Agreement, dated August 1, 2008, between Interspec and Tom Morgan. Incorporated by reference to
the Company’s current Report on Form 8-K as filed with the Commission on April 26, 2010.
10.3*
Share Exchange Agreement dated April 1, 2010, between the Company and Interspec. Incorporated by reference to
the Company’s current Report on Form 8-K as filed with the Commission on April 8, 2010.
10.4*
Promissory Note with WWA Group, Inc., dated May 17, 2011. Incorporated by reference to the Company’s Form
10-Q filed with the Commission on May 23, 2011.
10.5*
Security Purchase Agreement and Convertible Promissory Note with Asher Enterprises, Inc. Incorporated by
reference to the Company’s Form 10-K filed with the Commission on October 7, 2011.
10.6*
Memorandum of Understanding and Addendum with Cleanfield Energy, Inc. Incorporated by reference to the
Company’s Form 10-K filed with the Commission on October 7, 2011.
10.7*
Accord and Satisfaction with Thomas R. Morgan. Incorporated by reference to the Company’s Form 10-Q filed with
the Commission on November 18, 2011.
10.8*
Share Exchange Agreement with InterMedia Development Corporation (dated January 11, 2012) entered into on
February 1, 2012. Incorporated by reference to the Company’s Form 8-K filed with the Commission on February 13,
2012.
10.9*
Debt Settlement Agreement with Morningstar Corporate Communications (dated April 11, 2012). Incorporated by
reference to the Company's Form 10-Q filed with the Commission on May 15, 2012.
10.10
Debt Settlement Agreement with Cleanfield Communications (dated June 4, 2012). Incorporated by reference to the
Company's Form 10-Q filed with the Commission on August 20, 2012.
14*
Code of Ethics adopted October 6, 2011. Incorporated by reference to the Company’s Form 10-K filed with the
Commission on October 7, 2011.
21*
Subsidiaries. Incorporated by reference to the Company’s current Report on Form 8-K as filed with the Commission
on April 26, 2010.
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the Securities
and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(attached).
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (attached).
101. INS XBRL Instance Document†
101. PRE XBRL Taxonomy Extension Presentation Linkbase†
101. LAB XBRL Taxonomy Extension Label Linkbase†
101. DEF XBRL Taxonomy Extension Label Linkbase†
101. CAL XBRL Taxonomy Extension Label Linkbase†
101. SCH XBRL Taxonomy Extension Schema†
*
Incorporated by reference from previous filings of the Company.
†
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a
registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, or deemed “furnished” and
not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under
these sections.
34