UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended September
30, 2014
o 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.) |
233 Wilshire Boulevard, Suite 830
Santa Monica, California |
|
90401 |
(Address of principal executive offices) |
|
(Zip Code) |
(310) 526-8400
(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 o No
x
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes
o No
x
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter 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 o No x
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 o No x
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. x
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
Non-accelerated filer |
☐ |
Smaller reporting company |
☒ |
(Do not check if a smaller reporting company) |
|
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
The aggregate market value of the voting
and non-voting stock held by non-affiliates of the registrant, as of March 1, 2014, was approximately $0. 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, August 18, 2015: 11,125,000.
FORM 10-K
FOR THE FISCAL YEAR ENDED SEPTEMBER
30, 2014
INDEX
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Except for the historical information
contained herein, some of the statements in this Report contain forward-looking statements that involve risks and uncertainties.
These statements are found in the sections entitled "Business," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and "Risk Factors." They include statements concerning: our business strategy;
expectations of market and customer response; liquidity and capital expenditures; future sources of revenues; expansion of our
product lines; addition of new product lines; and trends in industry activity generally. In some cases, you can identify forward-looking
statements by words such as "may," "will," "should," "expect," "plan," "could,"
"anticipate," "intend," "believe," "estimate," "predict," "potential,"
"goal," or "continue" or similar terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including, but not limited to, the risks outlined under "Risk Factors," that
may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. For
example, assumptions that could cause actual results to vary materially from future results include, but are not limited to: our
ability to successfully develop and market our products to customers; our ability to generate customer demand for our products
in our target markets; the development of our target markets and market opportunities; our ability to produce and deliver suitable
products at competitive cost; market pricing for our products and for competing products; the extent of increasing competition;
technological developments in our target markets and the development of alternate, competing technologies in them; and sales of
shares by existing shareholders. Although we believe that the expectations reflected in the forward-looking statements are reasonable,
we cannot guarantee future results, levels of activity, performance or achievements. Unless we are required to do so under U.S.
federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.
PART I
Item 1. Business.
Overview
Inspired Builders, Inc., a Nevada Corporation,
was 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 the real estate construction services business through
a residential property repair and home improvement business.
Since then we have redirected the Company’s
focus to acquiring, investing in, developing and managing real estate properties and related investments. We have evaluated
numerous real estate investment opportunities emphasizing commercial real estate development. Any such efforts in real estate will
require substantial financial and management resources, which the Company does not currently possess. Therefore, while
we will seek to acquire these resources as a part of our business plans, there can be no assurance of our success, and therefore,
in our ability to enter the real estate investment or any other market.
Agreement to Purchase of Duval Property
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 as to $750,000 by the Company’s delivery
of a 3% mortgage in the amount of $750,000, which is due June 15, 2014. 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, $0.001 par value per share,
which was valued by the parties at $6.00 per share. Due to the related party nature of this transaction, the Company’s
carrying value was deemed to be the historical basis of the property, $307,504. The difference between the purchase
price and the historical basis was treated as a deemed distribution and recorded against Additional Paid In Capital.
Joint Venture with Development Property
Holdings, Inc.
As previously disclosed on Form 8-K
filed on December 31, 2013, on December 10, 2013, we entered into a joint venture with Development Property Holdings, Inc. a California
corporation, (the “Joint Venture”) to enter into and become a Florida joint venture for the purpose of acquiring
certain commercial real property in the State of Florida. The Joint Venture will be vested 50% by each partner and all decisions,
costs, expenses and profits will be divided evenly between the two partners. A copy of the Joint Venture Agreement is attached
hereto as Exhibit 10.6.
To date, the Joint Venture has not executed
and closed on any properties and is still searching for its first project.
Employees
As of August 18, 2015, 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.
Our principal executive office is now
located at 233 Wilshire Boulevard, Suite 830, Santa Monica, California 90401, and our telephone number is (310) 526-8400. We do
not have a lease agreement for this property. This property is owned by our sole officer and director and he allows us to use the
space to run the business.
Item 3. Legal Proceedings.
During May 2015, the Company became
aware that there is a real estate tax lien for unpaid taxes of $10,500.
Other than otherwise disclosed above,
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 companies 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.
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 not traded.
Recent Sales of Unregistered Securities
None.
Holders
As of August 18, 2015, we had
approximately 27 record holders.
Dividends
No dividends were declared on our common
stock in the year ended September 30, 2014, 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
We have commenced limited operations
and we will require outside capital to implement our business model.
Inspired Builders, Inc., a Nevada Corporation,
was 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.
Going forward, we expect to redirect
the Company’s focus to acquiring, investing in, developing and managing real estate properties and related investments. Any
such efforts will require substantial financial and management resources, which the Company does not currently possess. Therefore,
while we will seek to acquire these resources as a part of our business plans, there can be no assurance of our success, and therefore,
in our ability to enter the real estate investment or any other market.
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, 2014 and 2013
For the fiscal year ended September 30, 2014, we had revenues of $0, as compared to $0 in the
same period in 2013. Operating expenses for the year ended September 30, 2014 totaled $189,762 and interest expense was $118,529
resulting in a net loss of $308,291, as compared to operating expenses of $97,748 and a net loss of $132,799 and interest
expense of $35,051 for the year ended September 30, 2013.
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.
Our net revenues are not sufficient
to fund our operating expenses. At September 30, 2014, we had a cash balance of $424. We currently have no material
commitments for capital expenditures. We may be required to raise additional funds, particularly if we are unable to generate
positive cash flow as a result of our operations. We estimate that based on current plans and assumptions, that our available
cash will not be sufficient to satisfy our cash requirements under our present operating expectations, without further financing,
for up to 12 months. We do not have sufficient working capital to fund the expansion of our operations and to provide working
capital necessary for our ongoing operations and obligations. We will need to raise significant additional capital to fund our
operating expenses, pay our obligations, and grow our company. We do not anticipate that we will be profitable in 2014. Therefore
our future operations will be dependent on our ability to secure additional financing. Financing transactions may include the
issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price
of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through
the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur
unexpected costs and expenses, fail to collect amounts owed to us, or experience unexpected cash requirements that would force
us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional
dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common
stock. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to
conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing
and development plans and possibly cease our operations.
We anticipate that depending on market
conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised
substantial doubt about our ability to continue as a going concern.
Our liquidity may be negatively impacted
by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate
governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities
and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial
compliance costs and to make some activities more time consuming and costly.
Critical Accounting Policies and
Estimates
While our significant accounting policies
are more fully described in Note 2 to our financial statements for the year ended September 30, 2014, 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.
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, 2014. 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.
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.
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, 2014 and 2013, 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,
2014 and 2013 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 $308,291 an accumulated deficit of $741,265 and a negative cash flow from continuing operations of
$110,306. 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.
Regards,
Liggett,
Vogt & Webb, P.A.
Liggett,
Vogt & Webb, P.A.
Certified
Public Accountants
Boynton
Beach, Florida
August
21, 2015
INSPIRED BUILDER, INC |
BALANCE SHEETS |
|
ASSETS |
| |
September 30, | |
| |
2014 | | |
2013 | |
ASSETS | |
| | |
| |
| |
| | |
| |
Current Assets: | |
| | |
| |
Cash | |
$ | 424 | | |
$ | 857 | |
Total current assets | |
| 424 | | |
| 857 | |
| |
| | | |
| | |
Real estate | |
| 307,504 | | |
| 307,504 | |
| |
| | | |
| | |
Total assets | |
$ | 307,928 | | |
$ | 308,361 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
| |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 162,585 | | |
$ | 74,600 | |
Accrued salary | |
| 30,000 | | |
| 10,000 | |
Due to related party | |
| 2,453 | | |
| 3,711 | |
Mortgage payable | |
| — | | |
| 750,000 | |
Convertible note payable - related party | |
| — | | |
| | |
Notes payable - related party | |
| — | | |
| 324,520 | |
Total current liabilities | |
| 195,038 | | |
| 1,162,831 | |
| |
| | | |
| | |
Mortgage payable | |
| 750,000 | | |
| — | |
Convertible note payable – related party | |
| 10,000 | | |
| — | |
Notes payable – related party | |
| 515,651 | | |
| — | |
Total long term liabilities | |
| 1,275,651 | | |
| — | |
Total Liabilities | |
| 1,470,689 | | |
| 1,162,831 | |
| |
| | | |
| | |
Commitments and Contingencies (See Note 9) | |
| | | |
| | |
| |
| | | |
| | |
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 | |
| (432,621 | ) | |
| (432,621 | ) |
Accumulated deficit | |
| (741,265 | ) | |
| (432,974 | ) |
Total Stockholders’ deficit | |
| (1,162,761 | ) | |
| (854,470 | ) |
| |
| | | |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
$ | 307,928 | | |
$ | 308,361 | |
See accompanying notes to financial statements.
INSPIRED BUILDERS, INC. |
STATEMENTS OF OPERATIONS |
|
| |
For the Years Ended September 30, | |
| |
2014 | | |
2013 | |
| |
| | |
| |
OPERATING EXPENSES | |
| | |
| |
General and administrative | |
$ | 189,762 | | |
$ | 97,748 | |
Total operating expenses | |
| 189,762 | | |
| 97,748 | |
| |
| | | |
| | |
LOSS BEFORE PROVISION FOR INCOME TAXES | |
| (189,762 | ) | |
| (97,748 | ) |
| |
| | | |
| | |
Other expenses | |
| | | |
| | |
Interest expense | |
| 118,529 | | |
| 35,051 | |
| |
| | | |
| | |
Net Loss before provision for income taxes | |
| (308,291 | ) | |
| (132,799 | ) |
| |
| | | |
| | |
Provision for income taxes | |
| - | | |
| - | |
| |
| | | |
| | |
NET LOSS | |
$ | (308,291 | ) | |
$ | (132,799 | ) |
| |
| | | |
| | |
Net loss per share - basic and diluted | |
$ | (0.03 | ) | |
$ | (0.01 | ) |
| |
| | | |
| | |
Weighted average number of shares outstanding during the period - basic and diluted | |
| 11,125,000 | | |
| 11,051,849 | |
See accompanying notes to financial statements.
INSPIRED BUILDERS, INC |
STATEMENTS OF CASH FLOWS |
|
| |
For the Years Ended
September 30, | |
| |
2014 | | |
2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | |
| |
Net loss | |
$ | (308,291 | ) | |
$ | (132,799 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Increase in prepaid expenses | |
| - | | |
| 4,000 | |
Increase in accounts payable and accrued interest | |
| 167,985 | | |
| 57,171 | |
Increase in accrued salary | |
| 30,000 | | |
| 10,000 | |
Net Cash Used In Operating Activities | |
| (110,306 | ) | |
| (61,628 | ) |
| |
| | | |
| | |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Advances (repayments) - related party | |
| (1,258 | ) | |
| 3,711 | |
Proceeds from convertible note payable - related party | |
| 10,000 | | |
| - | |
Proceeds from notes payable - related party | |
| 101,131 | | |
| 58,774 | |
Net Cash Provided By Financing Activities | |
| 109,873 | | |
| 62,485 | |
| |
| | | |
| | |
NET INCREASE (DECREASE) IN CASH | |
| (433 | ) | |
| 857 | |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | |
| 857 | | |
| - | |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | |
$ | 424 | | |
$ | 857 | |
| |
| | | |
| | |
Supplemental disclosure of non cash investing & financing activities: | |
| | | |
| | |
Cash paid for income taxes | |
$ | - | | |
$ | - | |
Cash paid for interest expense | |
$ | - | | |
$ | - | |
Non Cash Investing and Financing:
During the year ended September 30, 2014, the Company exchanged accrued salary of $90,000 for a note payable with its CEO.
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, the loan maturity dates were further extended to June 24, 2016. 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, 2014 and September 30, 2013 the Company has accrued interest of $28,541 and $6,125, respectively,
due on the mortgage.
See accompanying notes to financial statements.
INSPIRED BUILDERS,
INC |
STATEMENT OF STOCKHOLDERS' DEFICIT
|
| |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
| | |
| | |
| | |
| | |
Additional | | |
| | |
Total | |
| |
Preferred
Stock | | |
Common
Stock | | |
Paid-in | | |
Accumulated | | |
Stockholders' | |
| |
Shares | | |
Par
Value | | |
Shares | | |
Par
Value | | |
Capital | | |
Deficit | | |
Deficit | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Balance, September
30, 2012 | |
| - | | |
| - | | |
| 11,025,000 | | |
| 11,025 | | |
| 9,975 | | |
| (300,175 | ) | |
| (279,175 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Loss for
the year ended September 30, 2013 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (132,799 | ) | |
| (132,799 | ) |
Common
stock issued for purchase of real estate | |
| | | |
| | | |
| 100,000 | | |
| 100 | | |
| (442,596 | ) | |
| - | | |
| (442,496 | ) |
Balance,
September 30, 2013 | |
| - | | |
$ | - | | |
| 11,125,000 | | |
$ | 11,125 | | |
$ | (432,621 | ) | |
$ | (432,974 | ) | |
$ | (854,470 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Loss for
the year ended September 30, 2014 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (308,291 | ) | |
| (308,291 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance,
September 30, 2014 | |
| - | | |
$ | - | | |
| 11,125,000 | | |
$ | 11,125 | | |
$ | (432,621 | ) | |
$ | (741,265 | ) | |
$ | (1,162,761 | ) |
See accompanying notes to financial statements.
Inspired Builders, Inc.
Notes to Financial Statements
For the Years Ended September 30,
2014 and 2013
1. Nature of Operations
Inspired
Builders, Inc. (the “Company”) was incorporated in the State of Nevada in February 2010. The Company is a
construction company that specializes in residential home repair and home improvements. The Company contracts with
homeowners to build custom home improvements, including shelving for closets, bathroom remodeling, upgrading home
entertainment centers and replacing flooring. In May 2013, the Company’s board of directors determined that
conversion of the Company’s corporate status to that of a real estate investment trust (a “REIT”) would
best support the company’s strategic direction. Accordingly, the board passed and adopted a resolution for
the Company to be treated as a REIT. As of August 18, 2015, the Company has not completed the necessary filings to
change its status with the Internal Revenue Services.
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
The Company considers all highly liquid
instruments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents
at September 30, 2014 and September 30, 2013.
The Company minimizes its credit risk
associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may
exceed federally insured limits.
Fair Value of Financial Instruments
For purpose of this disclosure, the
fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced sale or liquidation. The carrying amounts of cash, related party notes payable, mortgage
payable, accounts payable and accrued expenses reported in the balance sheets are estimated by management to approximate fair value
at September 30, 2014 and September 30, 2013.
Revenue Recognition
The Company records revenue for services
rendered when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product/service is
delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable
is reasonably assured.
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, 2014 and September 30, 2013, the Company has no
uncertain tax positions that qualify for either recognition or disclosure in the financial statements. All tax
returns from fiscal years 2010 to 2014 are subject to IRS audit.
Earnings 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 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 years ended September 30, 2015 and
2014, respectively.
The Company did not have any potential
common stock equivalents at September 30, 2014 and September 30, 2013.
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.
3. Going Concern
As reflected in the accompanying financial
statements, the Company has a net loss of $308,291 and net cash used in operations of $110,306 for the year ended September 30,
2014. 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.
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. 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. As of June 24, 2015, the Company
is in default on the note. The loan maturity dates were further extended to June 24, 2016. In
addition during May 2015 the Company became aware that there is a real estate tax lien for unpaid taxes of
$10,500.
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, 2014 Company record $30,000 of accrued salary.
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, the loan maturity dates were further extended to June 24, 2016. 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, 2014 and September 30, 2013 the Company has accrued interest of $28,541 and $6,125, respectively,
due on the mortgage.
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, which was further extended until January 24, 2016. 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, 2014 amounted
to $819.
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 $22,033 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, the loan maturity dates was further extended to February 6, 2016. The total outstanding principal
at June September 30, 2014 amounted to $345,019. Accrued interest at September 30, 2014 and September 30, 2013, amounted to $78,355
and $45,768, 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, 2014 amounted to $1,099.
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, 2014 amounted to $1,664.
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, 2014 amounted to $847.
On June 26, 2014 the Company’s
CEO loaned the Company $3,080, which is evidenced by an unsecured note payable with an interest rate of 5% and a maturity of June
25, 2015. The loan maturity dates were extended to February 26, 2016. Accrued interest at September 30, 2014 amounted to $41.
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.
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. The Company became aware that there is a real
estate tax lien for unpaid taxes of $10,500.
10. Income Taxes
Provision for income taxes is comprised of the following: | |
| | |
| |
| |
| | |
| |
| |
September 30, 2014 | | |
September 30, 2013 | |
| |
| | |
| |
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 | % | |
| 0 | % |
Less valuation allowance | |
| (39.83 | )% | |
| (34 | )% |
Effective rate | |
| 0 | % | |
| 0 | % |
| |
| | | |
| | |
Deferred income taxes are comprised of the following: | |
| | | |
| | |
| |
| | | |
| | |
Tax loss carryforwards | |
$ | 295,038 | | |
$ | 172,232 | |
Less valuation allowance | |
| (295,038 | ) | |
| (172,232 | ) |
Deferred tax benefit | |
$ | 0 | | |
$ | 0 | |
The increase in the valuation allowance for the year ended
September 30, 2014 was an increase of $122,806.
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.
12. Related Party Transaction
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 $22,033 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 June September 30, 2014 amounted
to $345,019. Accrued interest at September 30, 2014 and September 30, 2013, amounted to $78,355 and $45,768, respectively.
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, the loan maturity dates were further extended to June 24, 2016. 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, 2014 and September 30, 2013 the Company has accrued interest of $28,541 and $6,125, respectively,
due on the mortgage.
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, 2014 amounted to $1,099.
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, 2014 amounted to $1,664.
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, 2014 amounted to $819.
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, 2014 amounted to $847.
(TERMS )
On June 26, 2014 the Company’s
CEO loaned the Company $3,080, which is evidenced by an unsecured note payable with an interest rate of 5% and a maturity of June
25, 2015. The loan maturity dates were extended to February 26, 2016. Accrued interest at September 30, 2014 amounted to $41.
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.
13. Subsequent Events
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.
On October 14, 2014 the Company’s
CEO 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.
On February 2, 2015, a related party
entered into an unsecured note payable for $55,000 with an interest rate of 10% due February 20, 2016.
In
December 2013 the Company entered into a joint venture agreement with Development Property Holdings, Inc. a California corporation,
to enter into and become a Florida joint venture for the purpose of acquiring certain commercial real property in the State of
Florida. The joint venture was supposed to be vested 50% by each partner and all decisions, costs, expenses and profits will be
divided evenly between the two partners. To date, the Florida joint venture has not been executed nor closed on any properties
and is still searching for its first project. As of August 18, 2015 the joint venture formed with Development Property
Holdings, Inc. has not executed any agreements .
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, 2014. 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, 2014, 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, 2014 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.
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, 2014. 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.
Name |
|
Age |
|
Position |
Matthew Nordgren |
|
31 |
|
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 31, 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.
Director Independence and Board Committees
We do not have any independent directors
on our board of directors. Our board of directors solely consists of Brendan Powderly, 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.
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 2014 and fiscal year 2013.
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, | |
2014 | |
$ | 120,000 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
$ | 0 | | |
$ | 120,000 | |
Chief Executive Officer | |
2013 | |
$ | 10,000 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
$ | 0 | | |
$ | 10,000 | |
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 approved
an employment agreement for Matthew Nordgren. Pursuant to the employment agreement, Mr. Nordgren shall be paid $10,000 per month
and is eligible for an annual bonus in stock or cash. The term of the employment agreement is for 3-years. A copy of the Employment
Agreement is attached hereto as Exhibit 10.1.
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 August 18,
2015, 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 (1) | |
Matthew Nordgren; 233 Wilshire Boulevard, Suite 830, Santa Monica, CA 90401 | |
| 0 | | |
| * | % |
All Executive Officers and Directors as a group (1 person) | |
| 0 | | |
| * | % |
Swan Associates Group, LLC | |
| 3,508,333 | | |
| 31.536 | % |
* denotes ownership of less than 1%.
(1) |
Based
on 11,125,000 shares of common stock outstanding as of August 18, 2015. |
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 |
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(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. |
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:
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the director is, or at any time during the past three years was, an employee of the company; |
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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); |
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a family member of the director is, or at any time during the past three years was, an executive officer of the company; |
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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); |
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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 |
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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 is not considered independent
because he is an executive officer of the Company.
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, 2014 and 2013, we have incurred $19,000 and $25,000, 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:
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approved by our audit committee; or |
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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.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a) Documents filed as part of this Annual Report
1. Financial Statements
2. Financial Statement Schedules
3. Exhibits
10.1 |
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Employment Agreement for Matthew Nordgren (2) |
10.2 |
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Purchase and Sale Agreement between the Company for the Duval property (1) |
10.3 |
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Assignment of Special Warranty Deed to the Duval Property (1) |
10.4 |
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Secured $750,000 promissory note of the Company (1) |
10.5 |
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Mortgage and Security Agreement on the Duval property (1) |
10.6 |
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Joint Venture Agreement between Inspired Builders, Inc. and Development Property Holdings, Inc. dated December 10, 2013(2) |
31.1 |
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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 |
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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 |
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XBRL Instance Document |
101.SCH |
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XBRL Taxonomy Schema |
101.CAL |
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XBRL Taxonomy Calculation Linkbase |
101.DEF |
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XBRL Taxonomy Definition Linkbase |
101.LAB |
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XBRL Taxonomy Label Linkbase |
101.PRE |
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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.
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.
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INSPIRED BUILDERS, INC. |
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Date : August 21, 2015 |
By: |
/s/ Matthew Nordgren |
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Matthew Nordgren
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 |
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Capacity |
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Date |
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/s/ Matthew Nordgren |
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Chief Executive Officer and Chief Financial Officer |
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August 21, 2015 |
Matthew Nordgren |
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(Principal Executive Officer and Principal Financial Officer) and Sole Director |
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14
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
AND PRINCIPAL FINANCIAL OFFICER,
PURSUANT TO 18 U.SC. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Matt Nordgren, certify that:
1. I have reviewed this Annual Report on Form 10-K of Inspired Builders, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
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5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
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Dated: August 21, 2015
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By:
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/s/ Matt Nordgren
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Matt Nordgren
Chief Executive Officer and Chief Financial Officer
(Principal Executive Officer and Principal Financial Officer)
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Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
AND PRINCIPAL FINANCIAL OFFICER,
PURSUANT TO 18 U.SC. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Inspired Builders, Inc. (the “Company”) on Form 10-K for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Matt Nordgren, chief executive officer and chief financial officer of the Company, certifies, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:
(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
August 21, 2015
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By:
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/s/ Matt Nordgren
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Matt Nordgren
Chief Executive Officer and Chief Financial Officer
(Principal Executive Officer and Principal Financial Officer)
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A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.