Attached files

file filename
EX-32.1 - CERTIFICATION - Inspired Builders, Inc.f10k2017ex32-1_inspired.htm
EX-31.1 - CERTIFICATION - Inspired Builders, Inc.f10k2017ex31-1_inspired.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

☒  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended September 30, 2017

 

☐  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

 

Commission file number 333-171636

 

Inspired Builders, Inc.

(Name of small business issuer in its charter

 

Nevada   27-1989147

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

     

8950 SW 74th Ct

Suite 2201-A44

Miami, FL

  33156
(Address of principal executive offices)   (Zip Code)

 

(786) 323-7900

(Registrant’s telephone number, including area code)

 

Securities registered under Section 12(b) of the Exchange Act:

 

Title of each class:   Name of each exchange on which registered:
None   None

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☒ No ☐

 

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 ☐ No ☒

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 ☐ No ☒

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. ☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

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

 

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, as of September 30, 2017, was approximately $0 since the Company has had no active trading market. All executive officers and directors of the registrant have been deemed, solely for the purpose of the foregoing calculation, to be “affiliates” of the registrant.

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date, November 22, 2017: 11,125,000.

 

 

 
 

 

FORM 10-K

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017

 

INDEX

 

    PAGE
  PART I  
ITEM 1. Business. 1
ITEM 1A. Risk Factors. 1
ITEM 1B. Unresolved Staff Comments. 1
ITEM 2. Properties. 1
ITEM 3. Legal Proceedings. 1
ITEM 4. Mine Safety Disclosures. 1
     
  PART II  
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 2
ITEM 6. Selected Financial Data. 2
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 2
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk. 4
ITEM 8. Financial Statements and Supplementary Data. F-1
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 5
ITEM 9A. Controls and Procedures. 5
ITEM 9B. Other Information. 5
     
  PART III  
ITEM 10. Directors, Executive Officers and Corporate Governance. 6
ITEM 11. Executive Compensation 7
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 7
ITEM 13. Certain Relationships and Related Transactions, and Director Independence. 7
ITEM 14. Principal Accounting Fees and Services. 8
     
  PART IV  
ITEM 15. Exhibits, Financial Statement Schedules 9
     
SIGNATURES 10

 

 
 

 

PART I

 

Item 1. Business.

 

Overview

 

Inspired Builders, Inc., a Nevada Corporation, was previously located in Boston, Massachusetts. On January 13, 2012, pursuant to the change of control transaction, we relocated to Santa Monica, California. Until the change of control transaction, we focused on repairing and providing home improvements for the homeowners. Until August 15, 2017 the Company was focused on acquiring, investing in, developing and managing real estate properties and related investments. On August 15, 2017, pursuant to another change in control transaction, we relocated to Miami, Florida and ceased all operations as a real estate company.

 

Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We are a shell company which is moving forward with the business of identifying and entering into a business combination with a privately held business or company, domiciled and operating in an emerging market that is seeking the advantages of being a publicly held corporation whose stock is traded on the OTC market place. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

 

We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

 

In the next 12 months if we are unable to satisfy our cash requirements, our major shareholder has indicated that they are willing to loan additional funds to the Company to cover any shortfalls, although there is no written agreement or guarantee.

 

We plan to raise funds through equity financing in the next 12 months. If we successfully raise the funds, it will be used for our operations and to invest in potential joint venture or acquisition.

 

Employees

 

As of November 22, 2017, other than our Chief Executive Officer, we have 0 employees.

 

Item 1A. Risk Factors.

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 1B. Unresolved Staff Comments.

 

None.

 

Item 2. Properties.

 

On June 24, 2013, the Company entered into an agreement with a related party to purchase a parcel of undeveloped land in Duval County, Florida. The purchase price for the Duval property was $1,350,000, payable by the Company’s delivery of a $750,000 mortgage at 3%, which was due on June 24, 2014 and has been extended to June 24, 2016. The maturity date was further extended to June 24, 2017. The $600,000 balance of the purchase price was paid by approving the issuance to the seller of 100,000 shares of the Company’s common stock. The $0.001 par value per share was valued by the parties at $6.00 per share, based on the closing price of the stock on the date of the closing. The note is secured by a lien on the real estate. The Company became aware that there is a real estate tax lien for unpaid taxes at September 30, 2017 and September 30, 2016 of $23,715 and $11,961, respectively. On July 17, 2017, the Company assigned all interests in the property to a related party in exchange for an assumption of the mortgage principal and interest of $750,000 and $91,480 respectively, and of real estate taxes payable of $50,767.

 

Our principal executive office is now located at 8950 SW 74th Ct, Suite 2201, Miami, Florida 33156, and our telephone number is (786) 323-7900. We do not have a lease agreement for this property. This property is leased by our sole officer and director and he allows us to use the space to run the business.

 

Item 3. Legal Proceedings.

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company, threatened against or affecting our company, our common stock, or of our company’s officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

 1 

 

 

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Our common stock commenced quotation on the OTC Bulletin Board under the trading symbol “ISRB” on April 8, 2011. The OTC Bulletin Board is generally considered to be a less active and efficient market than the NASDAQ Global Market, the NASDAQ Capital Market or any national exchange and will not provide investors with the liquidity that the NASDAQ Global Market, the NASDAQ Capital Market or a national exchange would offer. Since being listed on the OTCBB in April 2011 our common stock has only had limited trading volume. We currently trade on the OTC Pink with no information. At such time as the Company is current in its SEC filing the Company will apply to list on OTC Pink Current or OTCQB. The following chart is a summary of the quarterly trading history over the 12 months ended September 30, 2017

 

   Year Ended
September 30, 2017
 
   High   Low 
First Quarter  $0.02   $0.02 
Second Quarter  $0.03   $0.02 
Third Quarter  $0.03   $0.02 
Fourth Quarter  $0.16   $0.02 

 

Recent Sales of Unregistered Securities

 

None.

 

Holders

 

As of November 14, 2017, we had approximately 19 record holders.

 

Dividends

 

No dividends were declared on our common stock in the year ended September 30, 2017, no cash dividends have been declared since such time and it is anticipated that cash dividends will not be declared on our common stock in the foreseeable future. Our dividend policy is subject to the discretion of our board of directors and depends upon a number of factors, including operating results, financial condition and general business conditions. Holders of common stock are entitled to receive dividends as, if and when declared by our board of directors out of funds legally available therefor. We may pay cash dividends if net income available to stockholders fully funds the proposed dividends, and the expected rate of earnings retention is consistent with capital needs, asset quality and overall financial condition.

 

Securities Authorized for Issuance under Equity Compensation Plan

 

None.

 

Item 6. Selected Financial Data.

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations.

 

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

 

Plan of Operations

 

Inspired Builders, Inc., a Nevada Corporation, was previously located in Boston, Massachusetts. On January 13, 2012, pursuant to the change of control transaction, we relocated to Santa Monica, California. Until the change of control transaction, we focused on repairing and providing home improvements for the homeowners. Until August 15, 2017 the Company was focused on acquiring, investing in, developing and managing real estate properties and related investments. On August 15, 2017, pursuant to another change in control transaction, we relocated to Miami, Florida and ceased all operations as a real estate company.

 

 2 

 

 

Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We are a shell company which is moving forward with the business of identifying and entering into a business combination with a privately held business or company, domiciled and operating in an emerging market that is seeking the advantages of being a publicly held corporation whose stock is traded on the OTC market place. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

 

We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

 

In the next 12 months if we are unable to satisfy our cash requirements, our sole officer and director has indicated that he is willing to loan additional funds to the Company to cover any shortfalls, although there is no written agreement or guarantee of such actions.

 

Limited Operating History

 

We have generated no independent financial history and have not previously demonstrated that we will be able to expand our business. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our business model and/or sales methods.

 

Results of Operations

 

Comparison of the year ended September 30, 2017 and 2016

 

For the fiscal year ended September 30, 2017, we had revenues of $0, as compared to $0 in the same period in 2016. Operating expenses for the year ended September 30, 2017 totaled $44,588 and interest expense totaled $22,693, resulting in a net loss of $67,281, as compared to operating expenses of $139,520 and interest expense of $74,298 and a net loss of $213,818 for the year ended September 30, 2016. Expenses for the year ended September 30, 2016 consisted of $120,000 in accrued salary, as compared to $30,000 of accrued salary for the same period in 2017, The decrease in interest expense of $51,605 was due to the forgiveness of debt of $587,406 during 2017.

 

Liquidity and Capital Resources

 

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. We have been funding our operations through the sale of our common stock.

 

As of September 30, 2017 our net revenues were not sufficient to fund our operating expenses and we had a cash balance of $0. As set forth in our business section we are currently pursuing merger opportunities and we will rely on our sole officer and director to fund business operations until we find a suitable acquisition candidate.

 

Critical Accounting Policies and Estimates

 

While our significant accounting policies are more fully described in Note 1 to our financial statements for the year ended September 30, 2017, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.

 

Our financial statements 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, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad debts, recovery of long-lived assets, income taxes, and the valuation of real estate and equity transactions. We base our estimates on historical experience and on various other assumptions that we 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. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements.

 

Revenue recognition

 

We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. For all revenue sources discussed below, in accordance with ASC 605-45 “Principal Agent Considerations”, we recognize revenue net of amounts retained by third party entities pursuant to revenue sharing agreements. Our specific revenue recognition policies are as follows:

 

We recognize revenue from the acceptance of a home remodeling contract and the signing of the contract when the project is completed and collection is reasonably assured.

 

 3 

 

 

Stock-based compensation

 

We account for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. There were no options outstanding as of September 30, 2017. We account for non-employee share-based awards in accordance with ASC Topic 505-50.

 

Recent Accounting Pronouncements

 

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC, did not, or are not believed by management, to have a material impact on the Company’s present or future financial statements.

 

In February 2016, the FASB issued accounting standard update (“ASU”) No. 2016-02, “Leases (Topic 842)”, (“ASU 2016-02”). This ASU requires that an entity should recognize assets and liabilities for leases with a maximum possible term of more than 12 months. A lessee would recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the leased asset (the underlying asset) for the lease term. This guidance also provides accounting updates with respect to lessor accounting under a lease arrangement. This new lease guidance is effective for fiscal years beginning after December 15, 2019. Entities have the option of using either a full retrospective or a modified approach (cumulative effect adjustment in period of adoption) to adopt the new guidance. Early adoption is permitted for all entities. We are currently evaluating the impact of the adoption of this guidance in our financial statements.

 

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718)”, (“ASU 2016-09”). This guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the full impact of the new standard.

 

In March 2016, April 2016, and December 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers - Principal versus Agent Considerations (Reporting Revenue Gross versus Net)", (“ASU 2016-08”), ASU 2016-10, "Revenue from Contracts with Customers - Identifying Performance Obligations and Licensing", (“ASU 2016-10”), and ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers", (“ASU 2016-20”) respectively, which further clarify the guidance for those specific topics within ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients", to reduce the risk of diversity in practice for certain aspects in ASU 2014-09, including collectability, noncash consideration, presentation of sales tax and transition. These updates permit the use of either the retrospective or cumulative effect transition method. Early application is permitted as of the original effective date for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Based on current estimates, we do not expect these provisions of the ASUs to have a material impact on our financial statements. The Company is continuing to evaluate which transition approach it will utilize and the impact these standards will have on the Company's Financial Statements upon adoption.

 

Accounting standards-setting organizations frequently issue new or revised accounting rules. We regularly review all new pronouncements to determine their impact, if any, on our financial statements.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

 

Smaller reporting companies are not required to provide the information required by this item.

 

 4 

 

 

Item 8. Financial Statements and Supplementary Data.

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

To the Board of Directors of Inspired Builders, Inc.

 

We have audited the accompanying balance sheets of Inspired Builders, Inc. (the “Company”) as of September 30, 2017 and 2016, and the related statement of operations, statement of stockholders’ deficit and cash flows for the two years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the 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.

 

In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of Inspired Builders, Inc. as of September 30, 2017 and 2016 and the results of its operations and its cash flows for the two years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 in the financial statements, the Company has a net loss of $67,281 an accumulated deficit of $1,306,951 and a working capital deficit of $63,813. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty

  

Liggett & Webb, P.A.

 

Liggett & Webb, P.A.

Certified Public Accountants

 

Boynton Beach, Florida

November 22, 2017

 

 F-1 

 

 

INSPIRED BUILDERS, INC.

BALANCE SHEETS

 

  

For the Years Ended

September 30,
 
   2017   2016 
ASSETS        
         
Real estate  $-   $307,504 
           
Total assets  $-   $307,504 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current Liabilities:          
Accounts payable and accrued expenses  $61,313   $355,561 
Accrued salary   -    270,000 
Due to related party   -    2,453 
Mortgage payable   -    750,000 
Notes Payable - related party   2,500    577,453 
Total current liabilities   63,813    1,955,467 
Long Term Liabilities          
Convertible note payable - related party   -    10,000 
Total Long Term Liabilities   -    10,000 
Total Liabilities   63,813    1,965,467 
Commitments and Contingencies (See Note 8)          
           
Stockholders’ deficit:          
Preferred Stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding   -    - 
Common stock, $0.001 par value, 50,000,000 shares authorized, 11,125,000 and 11,125,000 shares issued and outstanding, respectively   11,125    11,125 
Additional paid in capital   1,232,013    (429,418)
Accumulated deficit   (1,306,951)   (1,239,670)
Total Stockholders’ deficit   (63,813)   (1,657,963)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $-   $307,504 

  

See accompanying notes to financial statements.

 

 F-2 

 

 

INSPIRED BUILDERS, INC.

STATEMENTS OF OPERATIONS

 

   For the Years Ended
September 30,
 
   2017   2016 
         
OPERATING EXPENSES        
General and administrative  $44,588   $139,520 
Total operating expenses   44,588    139,520 
           
LOSS BEFORE PROVISION FOR INCOME TAXES   (44,588)   (139,520)
           
Other expenses          
Interest expense   22,693    74,298 
           
Net Loss before provision for income taxes   (67,281)   (213,818)
           
Provision for income taxes   -    - 
           
NET LOSS  $(67,281)  $(213,818)
           
Net loss per share - basic and diluted  $(0.01)  $(0.02)
           
Weighted average number of shares outstanding during the period - basic and diluted   11,125,000    11,125,000 

 

See accompanying notes to financial statements.

 

 F-3 

 

 

INSPIRED BUILDERS, INC.

STATEMENTS OF CASH FLOWS

 

   For the Years Ended
September 30,
 
   2017   2016 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss  $(67,281)  $(213,818)
Adjustments to reconcile net loss to net cash used in operating activities:          
Changes in operating assets and liabilities:          
Increase in accounts payable and accrued interest   66,911    90,371 
Increase in accrued salary   -    120,000 
Net Cash Used In Operating Activities   (370)   (3,447)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Contribution of Capital   370    3,203 
Net Cash Provided By Financing Activities   370    3,203 
           
NET INCREASE (DECREASE) IN CASH   -    (244)
           
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   -    244 
           
CASH AND CASH EQUIVALENTS AT END OF PERIOD  $-   $- 
           
Supplemental disclosure of non cash investing & financing activities:          
Adjustments to APIC from forgiven interest for related party loans  $191,365   $- 
Adjustments to APIC from forgiven accrued salary  $300,000   $- 
Adjustments to APIC from forgiven related party notes  $584,953   $- 
Adjustments to APIC from forgiveness of mortgage payable, real estate taxes, and sale of property  $584,743  $- 

 

See accompanying notes to financial statements.

 

 F-4 

 

 

INSPIRED BUILDERS, INC

STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED SEPTEMBER 30, 2017 AND 2016

 

                   Additional       Total 
   Preferred Stock   Common Stock   Paid-in   Accumulated   Stockholders’ 
   Shares   Par Value   Shares   Par Value   Capital   Deficit   Deficit 
                             
Balance, September 30, 2015   -   $-    11,125,000   $11,125   $(432,621)  $(1,025,851)  $(1,447,347)
                                    
Capital Contribution                       3,203         3,203 
                                    
Net Loss for the year ended September 30, 2016   -    -    -    -    -    (213,819)   (213,819)
                                    
Balance, September 30, 2016   -    -    11,125,000    11,125    (429,418)   (1,239,670)   (1,657,963)
                                    
Forgiveness of related party loans and notes                       776,318         776,318 
                                    
Forgiveness of Accrued Salary                       300,000         300,000 
                                    
Forgiveness of mortgage payable, real estate taxes, and sale of property                       584,743         584,743 
                                    
Capital Contribution                       370         370 
                                    
Net Loss for the year ended September 30, 2017   -    -    -    -    -    (67,281)   (67,281)
Balance, September 30, 2017   -   $-    11,125,000   $11,125   $1,232,013   $(1,306,951)  $(63,813)

  

See accompanying notes to financial statements.

 

 F-5 

 

 

Inspired Builders, Inc.

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2017 and 2016

 

NOTE 1. GENERAL ORGANIZATION AND BUSINESS

 

Inspired Builders, Inc. (the “Company”) was incorporated in the State of Nevada in February 2010. Until August 15, 2017 the Company was directing it’s focus on acquiring, investing in, developing and managing real estate properties and related investments. On August 15, 2017, Inspired Builders (the “Company”), the majority shareholders of the Company (the “Sellers”) and JJL Capital Management, LLC (the “Purchaser”) entered into a stock purchase agreement (the “Stock Purchase Agreement”), whereby the Purchaser purchased from the Sellers 5,643,979 shares of common stock, par value $0.001 per share, of the Company (the “Shares”), representing approximately 50.73% of the issued and outstanding shares of the Company, for an aggregate purchase price of $564.39 (the “Purchase Price”). On August 16, 2017, the closing of the transaction occurred (“Closing Date”). Pursuant to the change in control transaction, we relocated to Miami, Florida and ceased all operations as a real estate company. Also, in connection therewith, Matthew Nordgren, the Company’s sole officer and Director, resigned from his positions and named Scott Silverman as sole director and to the positions of CEO, CFO, Chief Accounting Officer and Secretary.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following; estimates of the probability and potential magnitude of contingent liabilities, the valuation allowance for deferred tax assets due to continuing operating losses, valuation of shares issued in connection with the purchase of real estate, the valuation of the real estate and the evaluation of any impairment on the real estate.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

 

Cash and Cash Equivalents

 

Cash and cash equivalents are reported in the balance sheet at cost, which approximates fair value. For the purpose of the financial statements cash equivalents include all highly liquid investments with an original maturity of three months or less when purchased. There were no cash equivalents at September 30, 2017 and September 30, 2016.

 

Earnings (Loss) per Share

 

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. The Company has 0 and 20,833 shares issuable upon conversion of convertible notes payable that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the periods ended September 30, 2017 and September 30, 2016, respectively.

 

 F-6 

 

 

Inspired Builders, Inc.

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2017 and 2016

 

Income Taxes

 

The Company accounts for income taxes in accordance with generally accepted accounting principles which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities.

 

The Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board (FASB) ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the positions will be sustained upon examination by the tax authorities. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of September 30, 2017, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. All tax returns from fiscal years 2011 to 2017 are subject to IRS audit.

 

As a result of the change in ownership during 2017, the Company’s NOL’s are subject to a Section 382 limitation.  As of September 30, 2017, the Company has not determined the amount of any such limitation.

 

Fair Value of Financial Investments

 

The fair value of cash and cash equivalents, accounts payable, accrued liabilities, and notes payable approximates the carrying amount of these financial instruments due to their short-term maturity.

 

Revenue and Cost Recognition

 

The Company has no current source of revenue; therefore, the Company has not yet adopted any policy regarding the recognition of revenue or cost.

 

Recent Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, which creates Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers,” and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. We do not expect the adoption of this standard to have any effect on our financial statements.

 

In February 2016, the FASB issued ASU No. 2016-02, which creates ASC Topic 842, “Leases.” This update increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. We do not expect the adoption of this standard to have any effect on our financial statements.

 

In August 2016, the FASB issued an accounting standards update which provides additional clarity on the classification of specific events on the statement of cash flows. These events include: debt prepayment and extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from settlement of insurance claims, distributions received from equity method investees, and beneficial interests in securitization transactions. The update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with early application permitted. The new accounting standard addresses presentation in the statement of cash flows only and we do not expect the standard to have a material effect on our financial condition, results of operations, cash flows or financial disclosures.

 

 F-7 

 

 

Inspired Builders, Inc.

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2017 and 2016

 

In May 2017, the FASB issued ASU No. 2017-09, which amends ASC Topic 718, “Compensation – Stock Compensation”. This amendment provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The standard is effective beginning after December 15, 2017, with early adoption permitted, including adoption for interim periods. This standard must be applied prospectively upon adoption. We do not expect the standard to have a material effect on our financial condition, results of operations, cash flows or financial disclosures.

 

NOTE 3. GOING CONCERN

 

As reflected in the accompanying financial statements, the Company has a net loss of $67,281, an accumulated deficit of $1,306,951 and used net cash in operations of $370 for the year ended September 30, 2017. In addition, the Company has not had construction revenues since May 2011 and the only prospect for positive cash flow is through the issuance of common stock or debt. If the Company does not begin to generate sufficient revenue or raise additional funds through a financing, the Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence. There are currently no plans or agreements in place to provide such funding. The Company will require additional funding to finance the growth of its future operations as well as to achieve its strategic objectives. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and generate revenue. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 4. REAL ESTATE

 

On June 24, 2013, the Company entered into an agreement with a related party to purchase a parcel of undeveloped land in Duval County, Florida. The purchase price for the Duval property was $1,350,000, payable by the Company’s delivery of a $750,000 mortgage at 3%, which was due on June 24, 2014 and has been extended to June 24, 2015. As of today the note is currently past due. The $600,000 balance of the purchase price was paid by approving the issuance to the seller of 100,000 shares of the Company’s common stock. The $0.001 par value per share was valued by the parties at $6.00 per share, based on the closing price of the stock on the date of the closing. The note is secured by a lien on the real estate. In accordance with ASC 845-10-S99, transfers of nonmonetary assets for stock or other consideration of the registrant are recorded at the predecessor cost. Accordingly, the Company recorded the value of the real estate acquired at the historical basis of $307,504. The Company became aware that there is a real estate tax lien for unpaid taxes at September 30, 2017 and September 30, 2016 of $0 and $23,714, respectively. On July 17, 2017, the Company assigned all interests in the property to a related party in exchange for an assumption of the mortgage principal and interest of $750,000 and $91,480 respectively, and the real estate taxes payable of $50,767.

 

NOTE 5. EMPLOYMENT AGREEMENT

 

On September 1, 2013 the Company entered into a three-year employment contract with its CEO. The CEO is to be paid $10,000 per month plus reimbursement for expenses and bonuses as determined by the board. The CEO will be entitled to one week paid vacation and is subject to a one year non-compete agreement at the end of the employment contract. As of June 30, 2014, the Company has paid the CEO a total of $10,000 and has accrued $90,000 for amounts due to the CEO. On June 30, 2014 the Company’s CEO converted $90,000 of accrued salary into an unsecured promissory note. The Note accrues interest at a rate of 5% per annum and is due June 30, 2015. As of September 30, 2017 and September 30, 2016 Company recorded $30,000 and $270,000, respectively of accrued salary. On November 15, 2016, the CEO and the Company entered into a Release and Settlement Agreement whereby the employment contract was terminated and $300,000 in accrued salary was forgiven. The accrued salary was accounted for as contributed capital.

 

 F-8 

 

 

Inspired Builders, Inc.

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2017 and 2016

 

NOTE 6. MORTGAGE PAYABLE – RELATED PARTY

 

On June 24, 2013, the Company entered into an agreement with a related party to purchase a parcel of undeveloped land in Duval County, Florida. The purchase price for the Duval property was $1,350,000, payable by the Company’s delivery of a $750,000 mortgage at 3%, which was due on June 24, 2014 and has been extended to June 24, 2015. As of today the note is currently past due. The $600,000 balance of the purchase price was paid by approving the issuance to the seller of 100,000 shares of the Company’s common stock. The $0.001 par value per share was valued by the parties at $6.00 per share, based on the closing price of the stock on the date of the closing. As of September 30, 2017 and September 30, 2016 the Company has accrued interest of $0 and $73,603, respectively, due on the mortgage. On July 17, 2017, the Company assigned all interests in the property to a related party in exchange for an assumption of the mortgage principal, real estate taxes, and interest of $750,000, $50,767, and $91,480 respectively.

 

NOTE 7. CONVERTIBLE NOTES PAYABLE – RELATED PARTY

 

On January 24, 2014, a related party loaned the Company $10,000, which is evidenced by a secured note payable with an interest rate of 12% and a maturity of January 24, 2015. These funds were used to pay 1 months’ salary to our Chief Executive Officer. If the loan in not repaid by January 24, 2015 it is convertible at the option of the holder into common stock at a share price of $.48 per share. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $3,222, respectively. Subsequently, the related party agreed to extend the promissory note maturity date to January 24, 2017. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $10,000 in principal and $3,373 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

NOTE 8. NOTES PAYABLE – RELATED PARTIES

 

On January 13, 2012 the Company entered into a 12-month unsecured promissory note in the amount of $211,000. Interest accrues in arrears on the outstanding principal at the rate of ten percent (10.00%) per annum. Interest shall be payable on the last day of each quarter, commencing March 30, 2012, and continuing until the maturity date. Should the maker fail to pay the entire principal and accrued interest by the maturity date, the maker agrees that the interest rate shall increase to twelve percent (12.00%) per annum. On May 10, 2013, the Company and the related party agreed to extend the maturity of the loan for an additional year or until January 13, 2014. The loan maturity dates were further extended to January 13, 2016. On May 22, 2012, the Company borrowed an additional $32,714 from the related party, with the same terms, the loan maturity dates were extended to January 13, 2016. On September 17, 2012, the Company borrowed an additional $22,032 from the related party, with the same terms, the loan maturity dates were extended to January 13, 2016. On February 7, 2013, the Company borrowed an additional $28,773 from the related party, with the same terms, and on July 31, 2013, the Company borrowed an additional $30,000 from the related party, with the same terms. The loans maturity dates were further extended to February 7, 2016 and July 31, 2016, respectively. On December 20, 2013, the Company borrowed $2,500, on January 7, 2014, the Company borrowed $5,000, on February 6, 2014, the Company borrowed $5,520, the loans maturity dates were further extended to December 20, 2015 and January 7, 2016. On February 17, 2014, the Company borrowed $4,400 and on June 26, 2014, the Company borrowed $3,080, the loans maturity dates were further extended to February 6, 2016 and February 17, 2016, respectively. The total outstanding principal at September 30, 2017 and September 30, 2016 amounted to $2,500 and $345,019, respectively. Accrued interest at September 30, 2017 and September 30, 2016, amounted to $473 and $145,401, respectively. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $342,519 in principal and $149,258 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On November 13, 2013, a related party entered into an unsecured note payable for $25,000 with an interest rate of 5% due November 13, 2014, the maturity date on the loan was further extended to November 11, 2015. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $3,603. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $25,000 in principal and $3,760 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

 F-9 

 

 

Inspired Builders, Inc.

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2017 and 2016

 

On January 13, 2014 and January 20, 2014, a related party entered into two unsecured note payables for a total of $25,632 with an interest rate of 5% due January 20, 2015, the loans maturity dates were further extended to January 13, 2016 and January 20, 2016, respectively. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $6,461. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $25,632 in principal and $6,763 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On June 19, 2014 the Company’s CEO entered into an unsecured note payable of $30,000 with an interest rate of 10% due on June 19, 2015, the loans maturity was further ended to June 16, 2016. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 an $6,855 respectively. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $30,000 in principal and $7,233 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On October 14, 2014 the Company’s CEO loaned the Company $3,482, which is evidenced by an unsecured note payable with an interest rate of 5% and a maturity of October 13, 2015. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $342. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $3,482 in principal and $364 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On October 14, 2014 a related party loaned the Company $3,320, which is evidenced by an unsecured note payable with an interest rate of 5% and a maturity of October 13, 2015. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $326. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $3,320 in principal and $347 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On June 30, 2014 the Company’s CEO converted $90,000 of accrued salary into an unsecured promissory note. The Note accrues interest at a rate of 5% per annum and is due June 30, 2015. Accrued interest at September 30, 2017 and September 30, 2016 was $0 and $10,147, respectively. On November 15, 2016, the CEO and the Company entered into a Release and Settlement Agreement whereby the Note, comprising of $90,000 of principal and $10,714 of interest was forgiven. The transaction was accounted for as contributed capital.

 

On February 20, 2015, a related party entered into an unsecured note payable for $55,000 with an interest rate of 10% due February 20, 2016. Accrued interest as of June 30, 2015 amounted to $2,214. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $8,860. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $55,000 in principal and $9,553 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

NOTE 9. COMMITMENTS AND CONTINGENCIES

 

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.

 

NOTE 10. STOCKHOLDERS’ EQUITY

 

During the year ended September 30, 2017, a related party paid expenses on behalf of the Company of $370.

 

NOTE 11. CONCENTRATION OF CREDIT RISK

 

The Company relies heavily on the support of its president and majority shareholder. A withdrawal of this support, for any reason, will have a material adverse effect on the Company’s financial position and its operations.

 

 F-10 

 

 

Inspired Builders, Inc.

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2017 and 2016

 

NOTE 12. INCOME TAXES

 

Provision for income taxes is comprised of the following:

 

   September 30,
2017
   September 30,
2016
 
         
Current tax expense:        
Federal  $    0   $    0 
State   0    0 
Total  $0   $0 

 

A reconciliation of provision for income taxes at the statutory rate to provision for income taxes at the Company’s effective tax rate is as follows:

 

Statutory U.S. federal rate   34%   34%
Statutory state income tax   5.83%   5.83%
Less valuation allowance   (39.83%)   (39.83%)
Effective rate   0%   0%
           
Deferred income taxes are comprised of the following:          
 Deferred Tax Asset  $-   $148,538 
Tax loss carryforwards   

319,972

    344,821 
Less valuation allowance   

(319,972

)   (493,359)
Deferred tax benefit  $0   $0 

 

As of September 30, 2017 and 2016, the Company net operating loss carryforward of approximately $696,000 and $$732,600, respectively.

 

The increase (decrease) in the valuation allowance for the years ended September 30, 2017 and 2016 was an increase (decrease) of ($173,000) and $84,320 respectively.

 

NOTE 13. RELATED PARTY TRANSACTIONS

 

On January 13, 2012 the Company entered into a 12-month unsecured promissory note in the amount of $211,000. Interest accrues in arrears on the outstanding principal at the rate of ten percent (10.00%) per annum. Interest shall be payable on the last day of each quarter, commencing March 30, 2012, and continuing until the maturity date. Should the maker fail to pay the entire principal and accrued interest by the maturity date, the maker agrees that the interest rate shall increase to twelve percent (12.00%) per annum. On May 10, 2013, the Company and the related party agreed to extend the maturity of the loan for an additional year or until January 13, 2014. The loan maturity dates were further extended to January 13, 2016. On May 22, 2012, the Company borrowed an additional $32,714 from the related party, with the same terms, the loan maturity dates were extended to January 13, 2016. On September 17, 2012, the Company borrowed an additional $22,032 from the related party, with the same terms, the loan maturity dates were extended to January 13, 2016. On February 7, 2013, the Company borrowed an additional $28,773 from the related party, with the same terms, and on July 31, 2013, the Company borrowed an additional $30,000 from the related party, with the same terms. The loans maturity dates were further extended to February 7, 2016 and July 31, 2016, respectively. On December 20, 2013, the Company borrowed $2,500, on January 7, 2014, the Company borrowed $5,000, on February 6, 2014, the Company borrowed $5,520, the loans maturity dates were further extended to December 20, 2015 and January 7, 2016. On February 17, 2014, the Company borrowed $4,400 and on June 26, 2014, the Company borrowed $3,080, the loans maturity dates were further extended to February 6, 2016 and February 17, 2016, respectively. The total outstanding principal at September 30, 2017 and September 30, 2016 amounted to $2,500 and $345,019, respectively. Accrued interest at September 30, 2017 and September 30, 2016, amounted to $473 and $145,401, respectively. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $342,519 in principal and $149,258 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

 F-11 

 

 

Inspired Builders, Inc.

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2017 and 2016

 

On June 24, 2013, the Company entered into an agreement with a related party to purchase a parcel of undeveloped land in Duval County, Florida. The purchase price for the Duval property was $1,350,000, payable by the Company’s delivery of a $750,000 mortgage at 3%, which was due on June 24, 2014 and has been extended to June 24, 2015. As of today the note is currently past due. The $600,000 balance of the purchase price was paid by approving the issuance to the seller of 100,000 shares of the Company’s common stock. The $0.001 par value per share was valued by the parties at $6.00 per share, based on the closing price of the stock on the date of the closing. As of September 30, 2017 and September 30, 2016 the Company has accrued interest of $0 and $73,603, respectively, due on the mortgage. On July 17, 2017, the Company assigned all interests in the property to a related party in exchange for an assumption of the mortgage principal, real estate taxes, and interest of $750,000, $50,767, and $91,480 respectively.

 

On November 13, 2013, a related party entered into an unsecured note payable for $25,000 with an interest rate of 5% due November 13, 2014, the maturity date on the loan was further extended to November 11, 2015. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $3,603. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $25,000 in principal and $3,760 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On January 13, 2014 and January 20, 2014, a related party entered into two unsecured note payables for a total of $25,632 with an interest rate of 5% due January 20, 2015, the loans maturity dates were further extended to January 13, 2016 and January 20, 2016, respectively. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $6,461. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $25,632 in principal and $6,763 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On January 24, 2014, a related party loaned the Company $10,000, which is evidenced by a secured note payable with an interest rate of 12% and a maturity of January 24, 2015. These funds were used to pay 1 months’ salary to our Chief Executive Officer. If the loan in not repaid by January 24, 2015 it is convertible at the option of the holder into common stock at a share price of $.48 per share. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $3,222, respectively. Subsequently, the related party agreed to extend the promissory note maturity date to January 24, 2017. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $10,000 in principal and $3,373 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On June 19, 2014 the Company’s CEO entered into an unsecured note payable of $30,000 with an interest rate of 10% due on June 19, 2015, the loans maturity was further ended to June 16, 2016. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $6,855 respectively. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $30,000 in principal and $7,233 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On October 14, 2014 the Company’s CEO loaned the Company $3,482, which is evidenced by an unsecured note payable with an interest rate of 5% and a maturity of October 13, 2015. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $342. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $3,482 in principal and $364 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

On October 14, 2014 a related party loaned the Company $3,320, which is evidenced by an unsecured note payable with an interest rate of 5% and a maturity of October 13, 2015. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $326. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $3,320 in principal and $347 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

 F-12 

 

 

Inspired Builders, Inc.

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2017 and 2016

 

On June 30, 2014 the Company’s CEO converted $90,000 of accrued salary into an unsecured promissory note. The Note accrues interest at a rate of 5% per annum and is due June 30, 2015. Accrued interest at September 30, 2017 and September 30, 2016 was $0 and $10,147, respectively. On November 15, 2016, the CEO and the Company entered into a Release and Settlement Agreement whereby the Note, comprising of $90,000 of principal and $10,714 of interest was forgiven. The transaction was accounted for as contributed capital.

 

On February 20, 2015, a related party entered into an unsecured note payable for $55,000 with an interest rate of 10% due February 20, 2016. Accrued interest as of June 30, 2015 amounted to $2,214. Accrued interest at September 30, 2017 and September 30, 2016 amounted to $0 and $8,860. On November 15, 2016, the Company and the related party entered into a Release and Settlement Agreement whereby $55,000 in principal and $9,553 in accrued interest was forgiven. The transaction was accounted for as contributed capital.

 

During the year ended September 30, 2017, a related party paid expenses on behalf of the Company of $370.

 

NOTE 14. SUBSEQUENT EVENTS

 

On October 17, 2017, a related party loaned the Company $14,300. The loan is interest free and is payable on demand.

 

On October 20, 2017, a related party loaned the Company $825. The loan is interest free and is payable on demand.

 

 F-13 

 

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None.

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) (the Company’s principal executive officer) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

 

Management’s Annual Report on Internal Control Over Financial Reporting.

 

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of 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.

 

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2017. The framework used by management in making that assessment was the criteria set forth in the document entitled “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of September 30, 2017, the Company’s internal control over financial reporting was not effective for the purposes for which it is intended.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over our financial reporting as of September 30, 2017 the Company determined that the following items constituted a material weakness:

 

The Company does not currently have an active Chief Financial Officer to oversee the day to day transactions and operations, which ensures the timely and accurate identification and reporting of all necessary transactions.

 

The Company does not have an independent audit committee that can review and approve significant transactions and the reporting process and provide independent oversight of the Company.

 

The Company is dependent on related parties for funding and decision making, which is provided on a very limited basis, therefore accurate accounting, record retention and financial disclosures are not performed in a timely and efficient manner.

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm as we are a smaller reporting company and not required to provide the report.

 

Changes in Internal Controls over Financial Reporting

 

No change in our system of internal control over financial reporting occurred during the period covered by this report, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B. Other Information.

 

None.

 

 5 

 

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance

 

The following table sets forth the name and age of officers and director as of September 30, 2017. Our Executive Officers are appointed by our Board of Directors and hold their offices until they resign or are removed by the Board. Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws.

 

As of Septebmer 30, 2016

 

Name   Age   Position
Matthew Nordgren   33   Chief Executive Officer, Chief Operating Officer and Director

 

Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years.

 

Matthew Nordgren, age 33, has served as the Chief Executive Officer of Nordco Consulting since he founded it in February 2009. From 2007 to 2010, Mr. Nordgren has been a partner and Vice President of Schlegel Woy Management. Since 2008, Mr. Nordgren has been the Texas President of VEEV, where he is responsible for marketing, distribution, and sales within the State of Texas. Since 2002, Mr. Nordgren has served as an executive at Nordco, Inc., where he is responsible for corporate development and marketing strategies. Mr. Nordgren received his B.A. in government from the University of Texas.

 

On August 15, 2017, pursuant to a change in control transaction, Matthew Nordgren resigned as sole officer and director and Scott Silverman was appoints as the Company’s sole executive officers and directors. Directors are elected to hold offices until the next annual meeting of shareholders and until their successors are elected or appointed and qualified. Officers are appointed by the board of directors until a successor is elected and qualified or until resignation, removal or death.

 

As of November 16, 2017

 

Name   Age   Position
Scott Silverman   48   President, Chief Executive Officer, Treasurer, Chief Financial Officer, Chairman

 

Scott Silverman (age 48)

 

Mr. Silverman is a financial executive who has over 25 years of business success on national and international levels, with strong concentration and successes in SME operational and financial management. He has a highly diverse knowledge of financial, legal and operations management; public company management, accounting and Securities and Exchange Commission regulations. Mr. Silverman specializes in establishing and streamlining back-office policies and procedures and implementing sound financial management and internal controls necessary for enterprise growth and scalability. While serving as the VP of Finance of Itopia, Mr. Silverman was involved in the raise of over $5 million, reduced expenses by more than 40% and participated in a 100% increase in year-over-year top line revenues. Mr. Silverman is also one of the founders, and serves as President and CEO, of EverAsia Financial Group, which grew into a multi-national corporate financial management and advisory firm serving clients in the United States and Asia. He also serves as the Chief Financial Officer, and is a director on the Board of Directors, of Jade Global Holdings, Inc. Well versed in securities regulations and accounting, Mr. Silverman has orchestrated investor exits for multiple companies, including ushering five client companies through successful public offerings. While at ICV, a boutique private equity firm, Mr. Silverman managed a $35 million portfolio of companies, simultaneously serving as the CFO for both the parent company and for several portfolio companies, one of which was listed on the Entrepreneur Magazine “Hot 100” list, and was ultimate successfully spun off, delivering added value to its shareholders. In addition to being an Intuit QuickBooks ProAdvisor, Mr. Silverman is well versed in Microsoft licensing and Office365 administration and has a working knowledge of IT systems.

 

Mr. Silverman received a Bachelor’s degree in Finance from the George Washington University and a Master’s Degree in Accounting from Nova Southeastern University.

 

Director Independence and Board Committees

 

We do not have any independent directors on our board of directors. Our board of directors solely consists of Matt Nordgren, our Chief Executive Officer, who is not independent. Our board of directors does not have any committees, as companies whose securities are traded on the OTC Bulletin Board are not required to have board committees. However, if, at such time in the future, we appoint independent directors on our board we expect to form the appropriate board committees.

 

We currently do not have a standing audit, nominating or compensation committee. Our board of directors handles functions that would otherwise be handled by each of the committees. We believe that there is not a need for a nominating committee at this time because our board of directors consists of solely one director who is not independent and who is the only decision maker. At such point when we have independent board of directors we will need to establish a nomination committee.

 

Term of Office

 

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

 

 6 

 

Code of Ethics

 

We have not adopted a code of ethics that applies to our principal executive officer and principal financial officer. We intend to adopt a Code of Ethics as we develop our business.

 

Item 11. Executive Compensation.

 

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us for fiscal year 2017 and fiscal year 2016.

 

SUMMARY COMPENSATION TABLE

 

Name and Principal Position  Year  Salary
($)
  

Bonus

($)

  

Stock Awards

($)

  

Option

Awards

($)

  

Non-Equity

Incentive Plan

Compensation

($)

  

Non-Qualified

Deferred

Compensation

Earnings

($)

   All Other Compensation
($)
   Totals
($)
 
Matthew Nordgren, Chief Executive  2017  $30,000    0    0    0    0    0   $0   $30,000(1)
Officer  2016  $120,000    0    0    0    0    0   $0   $120,000(1)

 

(1) Mr. Nordgren’s compensation for the years ended September 30, 2017 and September 30, 2016 amounted to $30,000 and $120,000, which has all been accrued and not paid. This amount was subsequently waived as set forth below.

 

Compensation of Directors

 

Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.

 

Employment Agreements

 

On September 1, 2013 the Company entered into a three-year employment contract with its CEO. The CEO is to be paid $10,000 per month plus reimbursement for expenses and bonuses as determined by the board. The CEO will be entitled to one week paid vacation and is subject to a one year non-compete agreement at the end of the employment contract. As of June 30, 2014, the Company has paid the CEO a total of $10,000 and has accrued $90,000 for amounts due to the CEO. On June 30, 2014 the Company’s CEO converted $90,000 of accrued salary into an unsecured promissory note. The Note accrues interest at a rate of 5% per annum and is due June 30, 2016. As of September 30, 2017 and September 30, 2016 Company recorded $30,000 and $270.000, respectively of accrued salary. On November 15, 2016, the CEO and the Company entered into a Release and Settlement Agreement whereby the employment contract was terminated and $300,000 in accrued salary was forgiven. The accrued salary was accounted for as contributed capital.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding shares of common stock as of November 22, 2017, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly and the shareholders listed possesses sole voting and investment power with respect to the shares shown.

 

Name  Number of
Shares
Beneficially
Owned
   Percent
of
Class (2)
 
JJL Capital Management, LLC (1)   5,643,979    50.73%
All Executive Officers and Directors as a group (1 person)   5,643,979    50.73%

 

  (1) JJL Capital Management, LLC is a company beneficially owned and controlled by Scott J. Silverman, our sole officer and director.
  (2) Based on 11,125,000 shares of common stock outstanding as of November 22, 2017.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

Other than the above, none of the following persons has any direct or indirect material interest in any transaction to which we are a party since our incorporation or in any proposed transaction to which we are proposed to be a party:

 

  (A) Any of our directors or officers;
  (B) Any proposed nominee for election as our director;
  (C) Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our common stock; or
  (D) Any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary of our company.

 7 

 

 

Director Independence

 

We do not have any independent directors. Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:

 

  the director is, or at any time during the past three years was, an employee of the company;
     
  the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);
     
  a family member of the director is, or at any time during the past three years was, an executive officer of the company;
     
  the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);
     
  the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or
     
  the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.

 

Matthew Nordgren was not considered independent at September 30, 2017 because he is an executive officer of the Company and Scott Silverman is not considered independent because he is an executive officer at this time.

 

We do not currently have a separately designated audit, nominating or compensation committee.

 

Item 14. Principal Accounting Fees and Services.

 

Audit Fees

 

For the Company’s fiscal year ended September 30, 2017 and 2016, we have incurred $10,306 and $10,306 respectively, for professional services rendered for the audit and reviews of our financial statements.

 

All Other Fees (including, Audit Related Fees and Tax Fees)

 

None.

 

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:

 

  approved by our audit committee; or
     
  entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee’s responsibilities to management.

 

We do not have an audit committee. Our entire board of directors pre-approves all services provided by our independent auditors.

 

The pre-approval process has just been implemented in response to the new rules. Therefore, our board of directors does not have records addressing the percentage of pre-approved audit fees. However, all of the above services and fees were reviewed and approved by the entire board of directors either before or after the respective services were rendered.

 

 8 

 

 

PART IV

 

Item 15. EXHIBITS

 

(a) Exhibits

 

Exhibit Number   Description
     
10.1   Employment Agreement for Matthew Nordgren (2)
10.2   Purchase and Sale Agreement between the Company for the Duval property (1)
10.3   Assignment of Special Warranty Deed to the Duval Property (1)
10.4   Secured $750,000 promissory note of the Company (1)
10.5   Mortgage and Security Agreement on the Duval property (1)
10.6   Joint Venture Agreement between Inspired Builders, Inc. and Development Property Holdings, Inc. dated December 10, 2013 (2)
31.1   Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1   Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Schema
101.CAL   XBRL Taxonomy Calculation Linkbase
101.DEF   XBRL Taxonomy Definition Linkbase
101.LAB   XBRL Taxonomy Label Linkbase
101.PRE   XBRL Taxonomy Presentation Linkbase

 

(1) Referred to and incorporated by reference to the Current Report on Form 8-K filed on June 24, 2013.
(2) Referred to and incorporated by reference to the Annual Report on Form 10-K filed on March 6, 2014.

 

In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

 

 9 

 

 

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.

 

  INSPIRED BUILDERS, INC.
     
Date: November 22, 2017 By: /s/ Scott J. Silverman
   

Scott J. Silverman

Chief Executive Officer and Chief Financial Officer

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature   Capacity   Date
         
/s/ Scott J. Silverman   Chief Executive Officer and Chief Financial Officer   November 22, 2017
Scott J. Silverman   (Principal Executive Officer and Principal Financial Officer)
and Sole Director
   

 

 

 

10