INTERNATIONAL INDUSTRIAL ENTERPRISES, INC. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - INTERNATIONAL INDUSTRIAL ENTERPRISES, INC.	Financial_Report.xls
EX-31.1 - CERTIFICATION - INTERNATIONAL INDUSTRIAL ENTERPRISES, INC.	f10q0913ex31i_international.htm
EX-32.1 - CERTIFICATION - INTERNATIONAL INDUSTRIAL ENTERPRISES, INC.	f10q0913ex32i_international.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended September 30, 2013

o	Transition Report under Section 13 or 15(d) of the Exchange Act

	For the Transition Period from ________to __________

Commission File Number: 0-52905

INTERNATIONAL INDUSTRIAL ENTERPRISES, INC.

(Exact Name of Registrant as Specified in its Charter)


NEVADA	26-0091556
(State of other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)


4116 Antique Sterling Ct.
Las Vegas, NV	89129
(Address of principal executive offices)	(Zip Code)

Registrant's Phone: (702) 255-4170

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x . No 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.

Large accelerated filer	o .	Accelerated filer	o .
Non-accelerated filer	o . (Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x . No o .

As of October 10, 2013, the issuer had 2,500,000 shares of common stock issued and outstanding.

INTERNATIONAL INDUSTRIAL ENTERPRISES, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		PAGE

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of September 30, 2013 (Unaudited) and December 31, 2012	1

	Condensed Consolidated Statements of Operations (Unaudited) For the Three and Nine Months Ended September 30, 2013 and 2012 and the period from February 2, 2005 to September 30, 2013	2

	Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) For the Nine Months Ended September 30, 2013 and the period from February 2, 2005 to September 30, 2013

	Condensed Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, 2013 and 2012 and the period from February 2, 2005 to September 30, 2013	3

	Notes to Condensed Consolidated Financial Statements (Unaudited)	4

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	8

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9

Item 4.	Controls and Procedures	9

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	10

Item 1A.	Risk Factors	10

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10

Item 3.	Defaults Upon Senior Securities	10

Item 4.	Mine Safety Disclosures	10

Item 5.	Other Information	10

Item 6.	Exhibits	10

Signatures		11

Item 1. Financial Statements

International Industrial Enterprises, Inc.
(A Development Stage Company)
Condensed Consolidated Balance Sheets

	September 30			December 31,
	2013			2012
	(Unaudited)
ASSETS
Current Assets
Cash	$	117		$	43
Total Current Assets		117			43
Total Assets	$	117		$	43

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Related party loan (Note D)	$	29,373		$	29,373
Advance from shareholder (Note D)		31,183			20,804
Total Current Liabilities		60,556			50,177

Total Liabilities		60,556			50,177

Stockholders' Deficit (Note E)
Common stock, par value $.001, 50,000,000 shares authorized; 2,500,000 issued and outstanding at September 30, 2013 and December 31, 2012.		2,500			2,500
Additional paid-in capital		40,685			40,685
Accumulated deficit		(103,624	)		(93,319	)
Total Stockholders' Deficit		(60,439	)		(50,134	)
Total Liabilities and Stockholders' Deficit	$	117		$	43

See accompanying notes to the condensed consolidated financial statements

International Industrial Enterprises, Inc.

(A Development Stage Company)

Condensed Consolidated Statements of Operations (Unaudited)

For the Three and Nine Months Ended September 30, 2013 and 2012 and the

Period from February 2, 2005 to September 30, 2013

	Three Months Ended						Nine Months Ended						Cumulative since Re-entering the Development Stage on February 2, 2005
	September 30,						September 30,						to September 30,
	2013			2012			2013			2012			2013
Revenue
Revenue	$	-		$	-		$	-		$	-		$	1,462

Operating expenses
General and administrative		2,577			3,661			10,305			9,236			91,548

Total operating expenses		2,577			3,661			10,305			9,236			91,548
Loss from operations		(2,577	)		(3,661	)		(10,305	)		(9,236	)		(90,086	)

Other income/(expense)
Interest expense		-			-			-			-			(15,000	)

Total other income (expense)		-			-			-			-			(15,000	)
Net loss	$	(2,577	)	$	(3,661	)	$	(10,305	)	$	(9,236	)	$	(105,086	)

Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average common shares outstanding		2,500,000			2,500,000			2,500,000			2,500,000

See accompanying notes to the condensed consolidated financial statements

International Industrial Enterprises, Inc.

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Nine Months Ended September 30, 2013 and 2012 and the

Period from February 2, 2005 to September 30, 2013

	Nine Months Ended						Cumulative since Re-entering the Development Stage on February 2, 2005
	September 30,						to September 30,
Cash flows from operating activities	2013			2012			2013
Net loss	$	(10,305	)	$	(9,236	)	$	(105,086	)
Adjustments to reconcile net loss to net cash used
in operating activities:		-			-			-
Changes in operating assets and liabilities:
Accrued expense		-			15			-
Net cash used in operating activities		(10,305	)		(9,221	)		(105,086	)

Cash flows from investing activities		-			-			-

Cash flows from financing activities
Proceeds from related party note		-			-			29,373
Advance from shareholder		10,379			9,210			31,183
Proceeds from stock issuance		-			-			43,185
Other items		-			-			1,462
Net cash provided by financing activities		10,379			9,210			105,203

Net change in cash		74			(11	)		117
Cash at beginning of period		43			11			-
Cash at end of period	$	117		$	-		$	117

See accompanying notes to the condensed consolidated financial statements

INTERNATIONAL INDUSTRIAL ENTERPRISES, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Period since Re-entering the Development Stage on February 2, 2005 to September 30, 2013

NOTE A – ORGANIZATION AND DESCRIPTION OF BUSINESS

Basis of Presentation

The unaudited financial statements of International Industrial Enterprises, Inc. as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2012 as filed with the Securities and Exchange Commission as part of our Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.

Organization

International Industrial Enterprises, Inc. (sometimes the “Company”) was incorporated on November 19, 1976 under the laws of the State of Delaware to engage in any lawful corporate activity.

We were engaged in real estate investments from formation until April 1982 and we were dormant until July 29, 1994. As at July 31, 1994, we were deemed to be a developmental stage company and all funds raised in order to fulfill our initial objective had been expanded. Thereafter, we had very limited operations until June 14, 2004 when we purchased Karlton Management, Inc., whose name was changed to Group One Associates Inc., a Nevada Corporation.

In 2004, we were engaged in the designing and printing tourist maps for various Las Vegas destinations. Our business stalled for eight months due to the death of our President in October 2006. On June 18, 2007, a new President was elected and we restarted our business. While we did not own any printing equipment, we intended to job-out our printing needs (maps) to established printing companies. Our tourist maps were to be printed on quality paper stock and our map designs were to be comical as well as informational. We intended to hire experienced advertising salesmen to sell advertising space on our maps. There is vigorous competition in the publishing and distribution of maps of Las Vegas. Some of these maps are sold and some are free. We intended to compete by offering a free Las Vegas map with advertisers, which feature main thoroughfares (no secondary roads) and the location of Hotels, Casinos, Restaurants and tourist locations.

We currently have conducted no business that has resulted in any income to the company.

NOTE B – GOING CONCERN

The accompanying financial statements have been prepared assuming we will continue as a going concern. During the period from February 2, 2005 (date of return to development stage) through September 30, 2013, the Company has incurred an accumulated deficit of $103,624 primarily related to organizational and administrative expenses. The Company has a working capital deficit of $60,439. We expect to incur losses into the foreseeable future. These conditions raise substantial doubt about our ability to continue as a going concern. Management recognizes that in order for us to meet our capital requirements, and continue to operate, additional financing will be necessary. To date the Company has financed its expenses primarily from shareholder loans, payments made by others on behalf of the company and by the settlement of payable amounts with shares of common stock.

The Company has limited financial resources available and has been unable to acquire significant funding which would allow the Company to pursue additional business, enable it to engage in research and development, or purchase revenue generating equipment. However, management has been successful in raising sufficient funds to cover the Company’s administrative expenses including the cost of auditing and other administrative costs.

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Group One Associates Inc. All intercompany accounts and transactions have been eliminated.

Estimates

The preparation of the Company’s consolidated financial statements requires management to make estimates and use assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions.

Cash and Cash Equivalents

For purposes of the consolidated statement of cash flows, the Company considers all short-term debt securities purchased with maturity of three months or less to be cash equivalents.

Fair Value Measurement

The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities valued with Level 1 inputs.

Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities valued with Level 2 inputs.

Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities valued with Level 3 inputs.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts payable, and accrued liabilities approximate their fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

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 the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. 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 and carry-forwards 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. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively. See “Note G. Income Taxes” for further discussion.

Net Income (Loss) Per Share

Pursuant to ASC 260-10-45-10, the computation of basic earnings per share (“EPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. However, pursuant to ASC 260-10-45-17, the computation of diluted net income per share shall not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive. Furthermore, pursuant to ASC 260-10-45-25, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money). See “Note F. Net Loss Per Share” for further discussion.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets with indefinite useful lives are no longer amortized, but are evaluated for impairment annually, or immediately if conditions indicate that impairment could exist. The evaluation requires a two-step impairment test to identify potential goodwill impairment and measure the amount of a goodwill impairment loss. The first step of the test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of the impairment loss. Both steps of the goodwill impairment testing involve significant estimates.

Recently Adopted Accounting Pronouncements

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company believes that none of the new standards will have a significant impact on its consolidated financial statements.

NOTE D - RELATED PARTY TRANSACTIONS

A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

The Company has an unsecured non-interest bearing related party loan in the amount of $29,373 at September 30, 2013 and December 31, 2012. This advance is from, Jose Fernando Garcia, a shareholder with 20% of the Company’s outstanding common shares. The proceeds were used for daily business operations. The loan bears no interest and it is due on demand.

During the nine months ended September 30, 2013 and the year ended December 31, 2012, Jose Fernando Garcia advanced $10,379 and $13,293, respectively, to the Company by making payments for administrative expenses on behalf of the Company. These advances are recorded as accrued liabilities.

NOTE E - CAPITAL STOCK

The Company has no authorized preferred stock.

The Company had authorized Fifty Million (50,000,000) shares of common stock with a par value of $0.001 as of September 30, 2013. There were 2,500,000 shares of common stock issued and outstanding as of September 30, 2013.

NOTE F - NET LOSS PER SHARE

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. There are no potentially dilutive securities or derivative instruments outstanding as of September 30, 2013 and 2012.

Following is the computation of basic and diluted net loss per share for the three and six months ended September 30, 2013 and 2012:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Basic and Diluted EPS Computation
Numerator:
Loss available to common stockholders'	$	(2,577	)	$	(3,661	)	$	(10,305	)	$	(9,236	)

Denominator:
Weighted average number of common shares outstanding		2,500,000			2,500,000			2,500,000			2,500,000

Basic and diluted EPS	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

NOTE G – INCOME TAXES

No provisions for income taxes have been recorded since the Company has incurred losses since inception.

Based on management‘s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset attributable to the future utilization of net operating loss carry forwards as of September 30, 2013 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements at September 30, 2013. The Company will continue to review this valuation allowance and make adjustments as appropriate.

Current United States tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

NOTE H – SUBSEQUENT EVENTS

Pursuant to FASB Accounting Standards Codification 855, Subsequent Events, Including ASC 855-10-S99-2, the Company evaluated subsequent events through the date of this report. No additional disclosures required.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the consolidated results of operations and financial condition of International Industrial Enterprises, Inc. and its subsidiaries. The MD&A is provided as a supplement to, and should be read in conjunction with financial statements and the accompanying notes to the financial statements included in this Form 10-Q.

Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Overview

We are a shell company with no operations. Our statement of operations contains costs primarily associated with the administration of our public company entity.

Plan of operation for the next twelve months

We intend to seek, investigate, and, if warranted, effect a business combination with an existing, privately held company. The business combination may be structured as a reverse merger, consolidation, our exchange of stock or any other form which will effectuate the combined entity being a publicly held company. We intend to seek to acquire assets or shares of an entity actively engaged in business which generates revenues in exchange for its securities.

We do not propose to restrict our search for any investment opportunity to any particular industry, and may therefore, engage in essentially any business, to the extent of its limited resources.

We intend to seek a business opportunity in the form of firms which (i) have recently commenced operations, (ii) are seeking to develop a new product or service, or (iii) are established businesses.

We may or may not issue securities in any proposed business combination.

Results of Operations

Three and Nine Months Ended September 30, 2013 Compared with the Three and Nine Months Ended September 30, 2013

The Company has earned no significant revenue or profits to date, and the Company anticipates that it will continue to incur net losses for the foreseeable future.

General and administrative expenses primarily includes costs to administer the public entity. The Company incurred general and administrative expenses of $2,577 for the three months ended September 30, 2013, as compared to $3,661 for the three months ended September 30, 2012. The Company incurred general and administrative expenses of $10,305 for the nine months ended September 30, 2013, as compared to $9,236 for the nine months ended September 30, 2012.

From the date of return to development stage February 2, 2005, to September 30, 2013, the Company lost a total of $105,086. Most labor and services have been compensated with issuances of stock or cash that has been paid by our primary shareholder and resulted in the increase in the balance sheet account, "Advance from shareholder".

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming we will continue as a going concern. During the period from February 2, 2005 (date of return to development stage) through September 30, 2013, the Company has incurred an accumulated deficit of $103,624 primarily related to organizational and administrative expenses. We expect to incur losses into the foreseeable future. These conditions raise substantial doubt about our ability to continue as a going concern. Management recognizes that in order for us to meet our capital requirements, and continue to operate, additional financing will be necessary. To date the Company has financed its expenses primarily from shareholder loans, payments made by others on behalf of the company and by the settlement of payable amounts with shares of common stock.

Net cash provided by operating activities was $74 for the nine months ended September 30, 2013, compared to net cash used by operating activities of $9,221 for the nine months ended September 30, 2012.

Net cash provided by financing activities was $10,379 and $9,210 for the nine months ended September 30, 2013 and 2012.

The Company will continue to identify new financial partners and investors. However, there can be no assurance that any additional funds will be available on terms acceptable to the Company or at all. As of September 30, 2013, the company was authorized to issue 50,000,000 shares of common stock.

Commitments

We do not have any commitments which are required to be disclosed in tabular form as of September 30, 2013.

Off-Balance Sheet Arrangements

As of September 30, 2013, we have no off-balance sheet arrangements such as guarantees, retained or contingent interest in assets transferred, obligation under a derivative instrument and obligation arising out of or a variable interest in an unconsolidated entity.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not exposed to market risk related to interest rates or foreign currencies.

ITEM 4. CONTROLS AND PROCEDURES

The Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. This evaluation was done under the supervision and with the participation of the Company's President and Chief Financial Officer. Based upon that evaluation, they concluded that as of the date of this report, the Company's disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to satisfy the Company's disclosure obligations under the Exchange Act.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the foregoing evaluation that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings.

ITEM 1A. RISK FACTORS

There are no material changes in the risk factors set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year-ended December 31, 2012.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no sales of unregistered equity securities during the covered time period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are included or incorporated by reference as exhibits to this report:

Exhibit No.		Identification of Exhibit

31.1*		Certification of David Rodgers, Chief Executive Officer and Chief Financial Officer of International Industrial Enterprises, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of David Rodgers, Chief Executive Officer and Chief Financial Officer of International Industrial Enterprises, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

* Filed Herewith

SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 7, 2013

	International Industrial Enterprises, Inc.
	Registrant

	By:	/s/ David Rodgers
		David Rodgers Chairman of the Board Chief Executive Officer Chief Financial Officer

INTERNATIONAL INDUSTRIAL ENTERPRISES, INC. - FORM 10-Q - November 7, 2013

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