-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LFcMmqNHkC+itKNMRU7Q6zSFS3BxkXBBgptsSxqWZyIoyovizhaWpNdATmNvccBL 0c89XJXLifprRsg68mAyoQ== 0001165527-10-000842.txt : 20101112 0001165527-10-000842.hdr.sgml : 20101111 20101112141609 ACCESSION NUMBER: 0001165527-10-000842 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20100930 FILED AS OF DATE: 20101112 DATE AS OF CHANGE: 20101112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: International Building Technologies Group, Inc. CENTRAL INDEX KEY: 0001075993 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 201217659 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-32323 FILM NUMBER: 101185466 BUSINESS ADDRESS: STREET 1: 1151 HARBOR BAY PARKWAY STREET 2: SUITE 202 CITY: ALAMEDA STATE: CA ZIP: 94502 BUSINESS PHONE: 510-814-3778 MAIL ADDRESS: STREET 1: 1151 HARBOR BAY PARKWAY STREET 2: SUITE 202 CITY: ALAMEDA STATE: CA ZIP: 94502 FORMER COMPANY: FORMER CONFORMED NAME: MOTORSPORTS EMPORIUM, INC. DATE OF NAME CHANGE: 20041206 FORMER COMPANY: FORMER CONFORMED NAME: TEN STIX INC. DATE OF NAME CHANGE: 20041203 FORMER COMPANY: FORMER CONFORMED NAME: TEN STIX INC DATE OF NAME CHANGE: 20010130 10-Q 1 g4513.txt QTRLY REPORT FOR THE QTR ENDED 9-30-10 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2010 or [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION FROM ____________ TO ____________ Commission File Number: 0-32323 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (Exact name of registrant as specified in its charter) Nevada 20-1217659 (State or other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 17800 Castleton Street, Suite 638 City of Industry, CA 91748 (Address of principal executive offices) (Zip code) Registrant's telephone number: (626) 581-8500 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 [X] No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.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 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 [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of November 12, 2010, there were 3,981,444,259 outstanding shares of the Registrant's Common Stock, $0.00001 par value. INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2010 INDEX Page ---- PART I - FINANCIAL INFORMATION............................................. 3 Item 1. Financial Statements.............................................. 3 Condensed Consolidated Balance Sheets............................. 3 Condensed Consolidated Statements of Operations................... 5 Condensed Consolidated Statements of Cash Flows................... 7 Notes............................................................. 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................. 18 Item 3. Quantitative and Qualitative Disclosures about Market Risk........ 22 Item 4. Controls and Procedures........................................... 22 PART II - OTHER INFORMATION................................................ 25 Item 1. Legal Proceedings................................................. 25 Item 1A. Risk Factors...................................................... 25 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds....... 25 Item 3. Defaults Upon Senior Securities................................... 26 Item 4. Submission of Matters to a Vote of Security Holders............... 26 Item 5. Other Information................................................. 26 Item 6. Exhibits.......................................................... 26 SIGNATURES................................................................. 30 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2010 December 31, 2009 ------------------ ----------------- (unaudited) ASSETS Cash $ 18,077 $ 12,514 Other current assets 1,011 1,011 -------- -------- Total current assets 19,088 13,525 -------- -------- Other assets 2,000 2,000 -------- -------- Total assets $ 21,088 $ 15,525 ======== ========
See accompanying notes to condensed consolidated financial statements 3 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
September 30, 2010 December 31, 2009 ------------------ ----------------- (unaudited) LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY LIABILITIES Accounts payable and accrued expenses $ 301,639 $ 305,897 Accrued expenses - related parties 314,177 207,321 Accrued pension 1,646 -- Derivative liability 1,024,376 2,105,829 Investor deposit 230,000 -- Notes payable 145,500 145,175 Notes payable to shareholders 517,866 668,411 ------------ ------------ Total current liabilities 2,535,204 3,432,633 ------------ ------------ STOCKHOLDERS' (DEFICIT) EQUITY Preferred A stock, $250 par value, 10,000 shares authorized; 96 shares issued and outstanding 24,000 24,000 Preferred C stock, $.001 par value, 3,000,000 shares authorized; 2,000,000 and 1,000,000 shares issued and outstanding 2,000 2,000 Preferred D stock, $.001 par value, 10,000,000 shares authorized; 172,680 and 207,500 shares issued and outstanding 173 208 Preferred E stock, $.001 par value, 50,000,000 shares authorized; 30,800 shares issued and outstanding 25 25 Preferred F stock, $.001 par value, 3,000,000 shares authorized; 20,000 shares issued and outstanding 20 20 Common stock; $.00001 par value, 3,950,000,000 shares authorized; 3,927,674,124 and 2,307,177,093 issued and outstanding 39,277 23,072 Additional paid-in capital 10,101,552 9,882,383 Accumulated deficit - Prior to reentering development stage (5,534,336) (5,534,336) Accumulated deficit - From inception of reentering development stage on 4/1/2007 (7,143,395) (7,813,920) Other comprehensive income / (loss) (3,432) (560) Noncontrolling interest -- -- ------------ ------------ Total stockholders' (deficit) equity (2,514,116) (3,417,108) ------------ ------------ Total liabilities and stockholders' (deficit) equity $ 21,088 $ 15,525 ============ ============
See accompanying notes to condensed consolidated financial statements 4 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Cumulative Since Reentering Three Months Ended Nine Months Ended Deveplopment September 30, September 30, Stage ---------------------------- ---------------------------- 4/1/2007 - 2010 2009 2010 2009 9/30/2010 ----------- ----------- ----------- ----------- ----------- Retail sales $ -- $ -- $ -- $ -- $ -- Cost of sales -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- Revenues -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- Operating expenses: Selling, general and administrative 100,435 175,571 342,513 399,526 2,090,983 Goodwill impairment -- -- -- -- 1,303,277 Depreciation and amortization -- -- -- -- 3,658 ----------- ----------- ----------- ----------- ----------- Total operating expenses 100,435 175,571 342,513 399,526 3,397,918 ----------- ----------- ----------- ----------- ----------- Operating loss (100,435) (175,571) (342,513) (399,526) (3,397,918) ----------- ----------- ----------- ----------- ----------- Other income (expense): Interest income -- -- -- -- 374 Interest expense (20,085) (289,068) (68,462) (850,997) (2,566,785) Loss on settlement -- -- -- -- (23,500) Loss on investment -- (80,750) -- (80,750) (115,750) Gain/(Loss) on extinguishment of debt -- (8,320) -- (64,595) 11,297 Gain on disposal of assets -- -- -- -- 2,565 Change in fair value of derivative liability 270,406 (915,932) 1,081,454 494,000 (1,024,374) Minority interest in net loss of subsidiary -- -- -- -- 15,000 Other income (expense) -- -- 45 -- 3,855 ----------- ----------- ----------- ----------- ----------- Total other income (expense) 250,321 (1,294,070) 1,013,037 (502,342) (3,697,318) ----------- ----------- ----------- ----------- ----------- Income / (Loss) from continuing operations $ 149,886 $(1,469,641) $ 670,524 $ (901,868) $(7,095,236) ----------- ----------- ----------- ----------- -----------
See accompanying notes to condensed consolidated financial statements 5 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
Cumulative Since Reentering Three Months Ended Nine Months Ended Deveplopment September 30, September 30, Stage ------------------------------- -------------------------- 4/1/2007 - 2010 2009 2010 2009 9/30/2010 -------------- -------------- -------------- -------------- -------------- Income/(Loss) from continuing operations $ 149,886 $ (1,469,641) $ 670,524 $ (901,868) $ (7,095,236) -------------- -------------- -------------- -------------- -------------- Discontinued operations: Income (loss) from operations of discontinued business -- -- -- -- (20,063) Income (loss) on disposal of assets -- -- -- -- 61,058 -------------- -------------- -------------- -------------- -------------- Income (loss) on discontinued operations -- -- -- -- 40,995 -------------- -------------- -------------- -------------- -------------- Net Income / (loss) 149,886 (1,469,641) 670,524 (901,868) (7,054,241) Preferred dividend -- -- -- -- (89,154) -------------- -------------- -------------- -------------- -------------- Net Income / (loss) attributable to common shareholders 149,886 (1,469,641) 670,524 (901,868) (7,143,395) -------------- -------------- -------------- -------------- -------------- Other comprehensive income Foreign currency translation (577) (319) (2,871) (386) (3,432) -------------- -------------- -------------- -------------- -------------- Comprehensive income / (loss) $ 149,309 $ (1,469,960) $ 667,653 $ (902,254) $ (7,146,827) ============== ============== ============== ============== ============== Net income / (loss) per common share - basic and diluted Continuing operations $ 0.00 $ (0.00) $ 0.00 $ (0.00) ============== ============== ============== ============== Discontinued operations $ -- $ -- $ -- $ -- ============== ============== ============== ============== Net Income (loss) per common share $ 0.00 $ (0.00) $ 0.00 $ (0.00) ============== ============== ============== ============== Weighted average common shares outstanding: Basic 3,690,270,009 488,698,648 3,014,486,425 1,375,648,624 ============== ============== ============== ============== Diluted 3,950,000,000 -- 3,950,000,000 -- ============== ============== ============== ==============
See accompanying notes to condensed consolidated financial statements 6 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Cumulative Since Reentering Nine Months Ended Deveplopment September 30, Stage ------------------------- 4/1/2007 - 2010 2009 9/30/2010 ------------- -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income /(loss) from continuing operations $ 670,524 $ (901,868) $(7,143,395) Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation -- -- 3,660 Impairment of goodwill -- -- 1,303,277 Amortization of debt discounts -- -- 128,933 Loss /(Gain) on extinguishment of debt -- 64,595 (70,843) Loss on Investments -- 80,750 115,750 Interest expense associated with beneficial conversion feature 2,788 779,980 2,165,375 Change in fair value of derivative liability (1,081,453) (494,000) 1,024,376 Director stock based compensation -- 50,000 100,000 Common stock issued for services -- -- 394,519 Common stock issued for settlement -- -- 13,500 Gain on disposal of equipment -- -- (2,565) Minority interest in net loss of subsidiary -- -- (15,000) Changes in assets and liabilities Prepaid expenses and other assets -- 1,863 529 Accounts payable and accrued expenses 126,574 295,305 766,291 ----------- ----------- ----------- Net cash used in continuing operations (281,567) (123,375) (1,215,593) Net income (loss) from discontinued operations -- -- 40,995 Net cash provided by (used in) discontinued operations -- -- (83,796) ----------- ----------- ----------- Net cash used in operating activities (281,567) (123,375) (1,258,394) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Deposit on investment -- -- (80,750) ----------- ----------- ----------- Net cash used in continuing operations -- -- (80,750) ----------- ----------- ----------- Net cash provided by in investing activities $ -- $ -- $ (80,750) ----------- ----------- -----------
See accompanying notes to condensed consolidated financial statements 7 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)
Cumulative Since Reentering Nine Months Ended Deveplopment September 30, Stage ------------------------- 4/1/2007 - 2010 2009 9/30/2010 ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from related party notes payable -- -- 80,000 Proceeds from notes payable -- -- 628,876 Proceeds from investor deposit 230,000 -- 230,000 Repayments of notes payable -- -- (34,448) Proceeds from issuance of preferred stock 60,000 122,501 204,301 Proceeds from issuance of common stock -- -- 180,464 Proceeds from issuance of common stock for asset purchase -- -- 6,206 Proceeds from exercise of stock options -- -- 4,375 ----------- ----------- ----------- Net cash provided by financing activities 290,000 122,501 1,299,774 ----------- ----------- ----------- Effect of exchange rate changes on cash (2,871) (386) (3,431) CASH AND CASH EQUIVALENTS: Increase (decrease) in cash 5,563 (1,260) (42,801) CASH, beginning of period 12,514 1,567 60,878 ----------- ----------- ----------- CASH, end of period $ 18,077 $ 307 $ 18,077 =========== =========== =========== SUPPLEMENTAL DISCLOSURES: Tax paid $ -- $ -- $ 4,800 =========== =========== =========== Cash paid for interest $ 235 $ -- $ 1,501 =========== =========== =========== NON-CASH DISCONTINUED OPERATION ACTIVITIES: Employee stock based compensation $ -- $ -- $ 30,698 Issuance of common stock for debt $ -- $ -- $ 389,360 NON-CASH FINANCING AND INVESTING ACTIVITIES: Issuance of note for accrued expenses $ -- $ -- $ 201,026 Issuance of common stock by conversion of preferred stock D $ 94,820 $ -- $ 215,810 Issuance of common stock for payment of debt $ 175,338 $ 162,354 $ 924,719 Issuance of common stock for settlement $ -- $ -- $ 13,500 Issuance of Preferred D Stock for deposit on the Rosetop Project $ -- $ 50,000 $ 50,000 Issuance of Preferred E Stock for director fees $ -- $ -- $ 400,000 Cancelation of Rosetop project and related Preferred E Stock $ -- $ -- $ (315,000) Issuance of common stock for Purchase of Company $ -- $ -- $ 1,300,000
See accompanying notes to condensed consolidated financial statements 8 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) Notes to Condensed the Consolidated Financial Statements September 30, 2010 NOTE 1: ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Organization International Building Technologies Group, Inc. (OTCBB: INBG) (the "Company") has four total subsidiaries, one active subsidiary and three dormant subsidiaries. Active Subsidiaries: * International Building Technologies Co., Ltd. ("IBT Hong Kong") - a Hong Kong Corporation with equity interest of 100% Dormant Subsidiaries: * Scottsdale Diecast, Inc. - a Nevada Corporation with equity interest of 100% * Quadriga Motorsports, Inc. - a Nevada Corporation with equity interest of 100% * International Building Technologies, Inc. ("IBT") - a Nevada Corporation with equity interest of 80% Currently the Company or its subsidiary is focusing its attention on several viable businesses that could be well suited to possibly merge into the company. Currently the Company has signed a letter of intent (LOI) with a Chinese company and entered into the process of merge. The Company believes it is in a position of strength and is going to explore every opportunity to bring value assets, revenue and profit back to its stockholders and investors. The Company has engaged a Chinese law firm to conduct the due diligent, as well an audit firm to conduct the audit as required for the merge. Result and progress of such Due Diligent and audit will be announced once they are completed. On May 25, 2010, the Company signed a non-binding Letter of Intent to merge with FHH Sino New Energies CO., Ltd., a Chinese company ("FHH Sino") located in Weihai, Shandong Province of China. FHH Sino is a petroleum storage company that offers petroleum storage tanks and facilities for rental to the petroleum importers/exporters in Weihai, a coastal city in Shandong Province of Northern China. Upon signing of the Letter of Intent on May 27, 2010 (effective date), FHH Sino made a U.S. $230,000 deposit with the Company. The Company intends to merge with FHH Sino by exchanging the Company's common stock with FHH Sino's holding or subsidiary company. This merger will give the Company the opportunity to switch its nature of business into the energy sector, the ability to generate revenue and profit once the FHH Sino commences its operation in early 2011, thus benefits our shareholders in the near future. The Company had offices in Alameda, CA, and Shanghai, China in 2007. In December, 2008, the Company closed the office in Shanghai, China. In January, 2009, the Company closed the office in Alameda, CA and moved to City of Industry, CA. BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed 9 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) Notes to Condensed the Consolidated Financial Statements September 30, 2010 consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, these interim condensed consolidated financial statements should be read in conjunction with the Company's most recent audited financial statements and notes thereto included in its December 31, 2009 Annual Report on Form 10-K. Operating results for the period ended September 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. Reclassification Certain reclassifications, which have no effect on net income (loss), have been made in the prior period financial statements to conform to the current presentation. Intangible Assets The license agreement was abandoned in accordance with FASB Accounting Codification Standards 360-10-20 (previous guidance Statement of Accounting No. 144, "Accounting for the Impairment or Disposal of Long Lived Assets") and consequently the remaining value of the asset was fully amortized as of September 30, 2010 and 2009. Impairment of Long-Lived Assets The Company evaluates its long-lived assets in accordance with FASB Accounting Codification Standards 360-10-20 by measuring the carrying amounts of assets against the estimated undiscounted future cash flows associated with them. At the time the carrying value of such assets exceeds the fair value of such assets, impairment is recognized. Incomes Taxes The Company accounts for income taxes under the liability method of accounting for income taxes in accordance with the provisions of FASB Accounting Codification Standards 740 - "Income Taxes" (previous guidance Statements of Financial Accounting Standards No. 109, "Accounting for Income Taxes," ("FAS 109") and related interpretations and guidance including FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109" ("FIN 48")). Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than 10 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) Notes to Condensed the Consolidated Financial Statements September 30, 2010 not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statement of income. Translation of Non-U.S. Currency Amounts Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment are translated to U.S. dollars at year-end exchange rates. Income and expense items are translated at weighted-average rates of exchange prevailing during the year. Translation adjustments are recorded in Other Comprehensive Income not affecting retained earnings within Stockholders' equity. Inventories, plant, rental machines and other property-net, and other non-monetary assets and liabilities of non-U.S. subsidiaries and branches that operate in U.S. dollars, or whose economic environment is highly inflationary, are translated at approximate exchange rates prevailing when the company acquired the assets or liabilities. All other assets and liabilities are translated at year-end exchange rates. Cost of sales and depreciation are translated at historical exchange rates. All other income and expense items are translated at the weighted-average rates of exchange prevailing during the year. Current and historical exchange rates are not indicative of what future exchange rates will be and should not be construed as such. Relevant exchange rates used in the preparation of the financial statements of the subsidiary are as follows for the quarters ended September 30, 2010 and 2009 (denoted in Hong Kong dollars per one U.S. dollar): 2010 2009 ------ ------ Current exchange rate at September 30, HKD 7.7582 7.7504 Weighted average exchange rate 7.7718 7.7513 Fair Value of Financial Instruments The carrying amounts of cash, accounts payable, and accrued expenses approximate fair value because of the short maturity of these items. See Note 6 relating to the fair value of the derivative liability. 11 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) Notes to Condensed the Consolidated Financial Statements September 30, 2010 Loss per Common Share Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and common stock equivalents outstanding during the period. As the Company incurred net losses for the quarter ended September 30, 2010 and 2009, common stock equivalents were excluded from diluted net loss per share as their effect would be anti-dilutive. As a result, for all periods presented, the Company's basic and diluted net loss per share is the same. Stock-Based Compensation FASB Accounting Codification Standards (ACS) Topic 825, "Compensation - Stock Compensation" (previous guidance Statement of Accounting Standards SFAS No. 123R, "Share-Based Payment") requires all share-based payments to employees, including grants of employee stock options to be recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). During the quarter ended September 30, 2010 and 2009, the Company did not recognize any of compensation expense associated with stock-based compensation. Under FASB ACS Topic 825, the expense recognition for variable awards is the same under the intrinsic value and the fair value methods. Recent Accounting Pronouncements On July 1, 2009, Financial Accounting Standards Board ("FASB") Accounting Standards Codification(TM) ("ASC") became the sole source of authoritative Generally Accepted Accounting Principles ("GAAP") literature recognized by the Financial Accounting Standards Board for financial statements issued for interim and annual periods ending after September 15, 2009. Rules and interpretive releases of the Security Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Except for applicable SEC rules and regulations and a limited number of grandfathered standards, all other sources of GAAP for nongovernmental entities were superseded by the issuance of ASC. ASC did not change GAAP, but rather combined the sources of GAAP and the framework for selecting among those sources into a single source. Accordingly, the adoption of ASC had no impact on the financial results of the Company. NOTE 2: MATERIAL EVENTS On May 25, 2010, the Company signed a non-binding Letter of Intent to merge with FHH Sino New Energies CO., Ltd., a Chinese company ("FHH Sino") located in Weihai, Shandong Province of China. FHH Sino is a petroleum storage company that offers petroleum storage tanks and facilities for rental to the petroleum importers/exporters in Weihai, a coastal city in Shandong Province of Northern China. Upon signing of the Letter of Intent on May 27, 2010 (effective date), FHH Sino made a U.S. $230,000 deposit with the Company. The Company intends to merge with FHH Sino by exchanging the Company's common stock with FHH Sino's holding or subsidiary company. This merger will give the Company the opportunity to switch its nature of business into the energy sector, the ability to generate revenue and profit once the FHH Sino commences its operation in early 2011, thus benefits our shareholders in the near future NOTE 3: GOING CONCERN The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and satisfaction of 12 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) Notes to Condensed the Consolidated Financial Statements September 30, 2010 liabilities in the normal course of business. The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow from operations to meet its obligations on a timely basis and/or obtain financing as may be required. As of September 30, 2010, the Company has incurred net losses from operations prior to reentering the development stage and has a stockholders' deficit of $5,534,336. Since the inception of reentering the development stage on April 1, 2007, the Company has a stockholders' deficit of $7,143,395 as of September 30, 2010. The Company has a working capital deficit of $2516,116 as of September 30, 2010. These factors raise substantial doubt about the Company's ability to continue as a going concern. During the next 12 months, the Company's foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with reviewing or investigating any potential business ventures. The Company may experience a cash shortfall and be required to raise additional capital. Historically, it has relied upon internally generated funds and funds from the sale of shares of stock and loans from its shareholders and private investors to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company's stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company's failure to do so could have a material and adverse affect upon it and its shareholders. The Company has entered into negotiation with a private owned company in China for a possible merger and joint venture and will announce the terms and condition of such merger or joint venture if the transaction proceeds and when there is a signed LOI, MOU or a binding agreement. In the past 3 months, the Company funded operations through investor's deposit. For the coming 12 months, the Company plans to continue to fund the Company through debt and securities sales and issuances, focus on a possible joint venture or merger until the company generates revenues through the operations of such merged company or joint venture as stated above. Note 4: Notes Payable & Debt Discounts The chart below summarizes the Notes Payable & Debt Discounts of the Company as of September 30, 2010. The Company is technically in default of its promissory notes to the above persons or entities, most of which notes matured on December 31, 2009. The Company is currently working with the note holders to restructure the terms of such notes and extend the maturity dates. The interest rate for these loans will be at 12% in 2010 since they were default at the year end.
Terms Amount - ----- ------ Short Term Notes Payable to Shareholders: 12% Interest; principal of $6,597; convertible to common stock based on 75% of average price; due on 9/3/2009, net of unamortized discount related to the debt discount of $0 $ 6,597 12% Interest; principal of $18,307; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 18,307 12% Interest; principal of $11,000; convertible to common stock based on 75% of average price; due on 10/9/2009, net of unamortized discount related to the debt discount of $0 11,000
13 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) Notes to the Consolidated Financial Statements September 30, 2010
12% Interest; principal of $31,925; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 31,925 12% Interest; principal of $10,269; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 10,269 12% Interest; principal of $12,500; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 12,500 12% Interest; principal of $15,000; convertible to common stock based on 75% of average price; due on 8/1/2009, net of unamortized discount related to the debt discount of $0 15,000 12% Interest; principal of $1,070; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 1,070 12% Interest; principal of $333; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 333 12% Interest; principal of $3,023; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 3,023 12% Interest; principal of $9,458; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 9,458 12% Interest; principal of $37,133; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 37,133 12% Interest; principal of $5,000; convertible to common stock based on 75% of average price; due on 10/28/2009, net of unamortized discount related to the debt discount of $0 5,000 12% Interest; principal of $10,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $3,271 10,000 12% Interest; principal of $13,000; convertible to common stock based on 75% of average price; due on 8/1/2009, net of unamortized discount related to the debt discount of $0 13,000 12% Interest; principal of $7,209; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 7,209 12% Interest; principal of $23,847; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 23,847
14 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) Notes to the Consolidated Financial Statements September 30, 2010
12% Interest; principal of $20,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 20,000 12% Interest; principal of $25,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 25,000 12% Interest; principal of $70,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 70,000 12% Interest; principal of $36,867; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 36,867 12% Interest; principal of $73,975; convertible to common stock based on 75% of average price; due on 7/1/2009, net of unamortized discount related to the debt discount of $0 73,975 12% Interest; principal of $1,112; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 1,112 12% Interest; principal of $10,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 10,000 12% Interest; principal of $15,000; convertible to common stock based on 75% of average price; due on 10/29/2009, net of unamortized discount related to the debt discount of $0 15,000 12% Interest; principal of $50,240; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 50,241 -------- Total Short Term Notes Payable to Shareholders $517,866 ======== Short Term Notes Payable: 12% Interest; principal of $50,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 $ 50,000 12% Interest; principal of $50,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 50,000 12% Interest; principal of $15,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 15,000
15 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) Notes to the Consolidated Financial Statements September 30, 2010
12% Interest; principal of $10,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 10,000 12% Interest; principal of $20,500; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 20,500 -------- Total Short Term Notes Payable $145,500 ========
NOTE 5: STOCKHOLDERS' EQUITY PREFERRED STOCK On July 28, 2010, First Apex Management Ltd. exchanged 22,500 shares of Preferred D Stock valued at $1.00 per share into 90,000,000 shares of Common Stock at a $0.00025 conversion price. On July 28, 2010, CEPA Group Pacific Holdings Ltd. exchanged 12,680 shares of Preferred D Stock valued at $1.00 per share into 50,720,000 shares of Common Stock at a $0.00025 conversion price. On August 13, 2010, First Apex Management Ltd. purchased 20,000 shares of Preferred D Stock valued at $1.00 per share for a total consideration of $20,000. On August 13, 2010, CEPA Group Pacific Holdings Ltd. purchased 20,000 shares of Preferred D Stock valued at $1.00 per share for a total consideration of $20,000. On August 13, 2010, Ms. Chen Yunxia purchased 20,000 shares of Preferred D Stock valued at $1.00 per share for a total consideration of $20,000. On August 31, 2010, Jade C. Uno exchanged 15,000 shares of Preferred D Stock valued at $1.00 per share into 65,217,391 shares of Common Stock at a $0.00023 conversion price. COMMON STOCK During the quarter ended September 30, 2010, the Company issued a total of 516,856,143 shares of common stock valued at $75,096 for repayment of debt and $50,180 for conversion from Preferred D Stock detailed in the following chart: Number of Aggregate Date of Issue Shares Issued Sales Price Nature of Transaction - ------------- ------------- ----------- --------------------- 7/21/2010 90,427,769 $22,697 In exchange for debt repayment 7/28/2010 90,000,000 $22,500 In exchange of Preferred D Stock 7/28/2010 50,720,000 $12,680 In exchange of Preferred D Stock 8/23/2010 151,298,410 $38,013 In exchange for debt repayment 8/31/2010 53,832,943 $10,642 In exchange for debt repayment 8/31/2010 65,217,391 $15,000 In exchange of Preferred D Stock 9/1/2010 15,359,630 $ 3,744 In exchange for debt repayment ----------- -------- Total 516,856,143 $125,276 =========== ======== 16 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. (A DEVELOPMENT STAGE COMPANY) Notes to the Consolidated Financial Statements September 30, 2010 NOTE 6: DERIVATIVE LIABILITY As of September 30, 2010, the common stock equivalents of the Company on all convertible debentures and preferred stock exceeded the total common stock available for issuance by approximately by 26,312,402,156 shares. The Company's Chief Executive Officer, Kenneth Yeung, holds 2,000,000 shares of Series C Preferred Stock that are convertible into 21,164,021,164 common shares of the Company. Unless and until there is enough authorized common stock available to cover all common stock equivalents, Mr. Yeung will not convert any of his preferred shares. Furthermore, the stock is only convertible upon management's discretion. Management currently does not intend on converting such stock. Also, warrant options are not included in common stock equivalents since the exercise price of $0.25 for the warrant is more than the fair value of common stock of $0.0002 per share on September 30, 2010. The remaining common stock equivalent of 5,148,380,992 shares has been accounted for as a derivative liability. Accordingly, the excess common stock equivalents exceeding the total common stock available for issue is marked to market through earnings at the end of each reporting period. Utilizing the Black-Scholes valuation model and the following assumptions: estimated volatility of 559.26%, a contractual life of approximately a year, a zero dividend rate, 0.27% risk free interest rate, exercise price of $0.00019891 and the fair value of common stock of $0.0002 per share as of September 30, 2010, the Company determined the allocated fair value of the derivative liability. The Company reflected an income of $270,406 in the quarter ended September 30, 2010 to adjust the derivative liability to $1,024,376 as of September 30, 2010, representing the initial fair value of excess common stock equivalents exceeding the total common stock available for issuance. Three months Nine months ended ended September 30, September 30, 2010 2010 ----------- ----------- Opening balance at July 1, 2010 and January 1, 2010 $ 1,294,782 $ 2,105,830 Change in fair value of derivative liabilities (270,406) (1,081,454) ----------- ----------- Closing balance at September 30, 2010 $ 1,024,376 $ 1,024,376 =========== =========== Total gain included in the statement of operations for the change in fair value of derivative liability $ 270,406 $ 1,081,454 =========== =========== NOTE 7: SUBSEQUENT EVENTS On October 1, 2010, the board has approved an amendment to increase the Company's Common Stock to 5,590,000,000 shares at a par value of $0.00001 per share. STOCK ISSUANCES The Company issued the following Stock in subsequent of the quarter ended September 30, 2010 and prior to the filing of these financial statements. * On October 5, 2010, 1,000,000 shares of Preferred Series C Stock were issued to Kenneth Yeung for cash payment of $1,000 as soon as the Amended Certificate of Designation for the Preferred Series C Stock is approved by the Nevada Secretary of State. Management has reviewed material subsequent events in accordance with FASB ASC 855 "Subsequent Events". No additional disclosures are required. 17 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. CAUTIONARY FORWARD - LOOKING STATEMENT The following discussion should be read in conjunction with our financial statements and related notes. Certain matters discussed herein may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties include, but are not limited to, the following: * the volatile and competitive nature of our industry, * the uncertainties surrounding the rapidly evolving markets in which we compete, * the uncertainties surrounding technological change of the industry, * our dependence on its intellectual property rights, * the success of marketing efforts by third parties, * the changing demands of customers and * the arrangements with present and future customers and third parties. Should one or more of these risks or uncertainties materialize or should any of the underlying assumptions prove incorrect, actual results of current and future operations may vary materially from those anticipated. RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2009 Since discontinuing the prior business and re-entering the development stage as of April 1, 2007 the Company's results of operations has changed. There are no revenues during the current development stage as we are in the process of starting our manufacturing process. For the quarter ended September 30, 2010, Operating Expenses for current operations totaled $100,435 is less than the quarter ended September 30, 2009's Operating Expenses of $175,571. The decrease of $75,136 in Operating Expenses between quarters ended 2010 and 2009 was mostly attributed to the decrease in accounting fees. One of the significant changes in our results of operations is interest Expense which was $20,085 for the quarter ended September 30, 2010 and for the quarter ended September 30, 2009, Interest Expense was $289,068. The $268,983 drop in Interest Expense was due to the change in beneficial conversion feature of the notes. There is also a significant change in the fair value of derivative. As of September 30, 2010, change in fair value of derivative resulting in an increase from $494,000 to $1,081,454. This increase in the fair value of derivative is resulted from the liability of derivative that was less than that at September 30, 2010. The change in the fair value of derivative is resulted from the common stock equivalents of the Company on all convertible debentures and preferred stock exceeded the total common stock available for issuance by approximately by 26,312,402,156 shares. The Company's Chief Executive Officer, Kenneth Yeung, holds 2,000,000 shares of Series C Preferred Stock that are convertible into 21,164,021,164 common shares of the Company. Unless and until there is enough authorized common stock available to cover all common stock equivalents, Mr. Yeung will not convert any of his preferred shares. Furthermore, the stock is only convertible upon management's discretion. Management currently does not intend on converting such stock. Also, warrant options are not included in common stock equivalents since the exercise price of $0.25 for the warrant exceeds the fair value of common stock of $0.0002 per share on September 30, 2010. The remaining common stock equivalent of 5,148,380,992 shares has been accounted for as a derivative liability. The fair value of the derivative of $1,024,376 was determined by utilizing the Black-Scholes valuation model. 18 LIQUIDITY AND CAPITAL RESOURCES Our future success and viability is primarily dependent upon our ability to increase operating cash flows and develop new business opportunities. During the next 12 months, the Company's foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with reviewing or investigating any potential business ventures. Additionally, we may experience a cash shortfall and be required to raise additional capital. In the three months ended September 30, 2010 we relied on funds from the investor deposit. Management may raise additional capital through future public or private offerings of our stock or through loans from private investors, although there can be no assurance that we will be able to obtain such financing. Our failure to do so could have a material and adverse affect upon us and our shareholders. The Company has entered into negotiation with a private owned company in China for a possible merger and joint venture and will announce the terms and condition of such merger or joint venture if the transaction proceeds and when there is a signed LOI, MOU or a binding agreement. The chart below summarizes our debt (see Note 4 - Notes Payable & Debt Discounts of the Consolidated Financial Statements - Notes Payable and Beneficial Conversions):
Terms Amount - ----- ------ Short Term Notes Payable to Shareholders: 12% Interest; principal of $6,597; convertible to common stock based on 75% of average price; due on 9/3/2009, net of unamortized discount related to the debt discount of $0 $ 6,597 12% Interest; principal of $18,307; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 18,307 12% Interest; principal of $11,000; convertible to common stock based on 75% of average price; due on 10/9/2009, net of unamortized discount related to the debt discount of $0 11,000 12% Interest; principal of $31,925; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 31,925 12% Interest; principal of $10,269; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 10,269 12% Interest; principal of $12,500; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 12,500
19
12% Interest; principal of $15,000; convertible to common stock based on 75% of average price; due on 8/1/2009, net of unamortized discount related to the debt discount of $0 15,000 12% Interest; principal of $1,070; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 1,070 12% Interest; principal of $333; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 333 12% Interest; principal of $3,023; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 3,023 12% Interest; principal of $9,458; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 9,458 12% Interest; principal of $37,133; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 37,133 12% Interest; principal of $5,000; convertible to common stock based on 75% of average price; due on 10/28/2009, net of unamortized discount related to the debt discount of $0 5,000 12% Interest; principal of $10,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $3,271 10,000 12% Interest; principal of $13,000; convertible to common stock based on 75% of average price; due on 8/1/2009, net of unamortized discount related to the debt discount of $0 13,000 12% Interest; principal of $7,209; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 7,209 12% Interest; principal of $23,847; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 23,847 12% Interest; principal of $20,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 20,000 12% Interest; principal of $25,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 25,000 12% Interest; principal of $70,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 70,000
20
12% Interest; principal of $36,867; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 36,867 12% Interest; principal of $73,975; convertible to common stock based on 75% of average price; due on 7/1/2009, net of unamortized discount related to the debt discount of $0 73,975 12% Interest; principal of $1,112; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discounted related to the debt discount of $0 1,112 12% Interest; principal of $10,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 10,000 12% Interest; principal of $15,000; convertible to common stock based on 75% of average price; due on 10/29/2009, net of unamortized discount related to the debt discount of $0 15,000 12% Interest; principal of $50,240; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 50,241 -------- Total Short Term Notes Payable to Shareholders $517,866 ======== Short Term Notes Payable: 12% Interest; principal of $50,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 $ 50,000 12% Interest; principal of $50,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 50,000 12% Interest; principal of $15,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 15,000 12% Interest; principal of $10,000; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 10,000 12% Interest; principal of $20,500; convertible to common stock based on 75% of average price; due on 12/31/2009, net of unamortized discount related to the debt discount of $0 20,500 -------- Total Short Term Notes Payable $145,500 ========
21 NINE MONTHS ENDED SEPTEMBER 30, 2010 As of September 30, 2010, the Company's current assets were $19,088 and its current liabilities were $2,535,204, resulting in a working capital deficit of $2,516,116. As of September 30, 2010, current assets were comprised of (i) $18,077 in cash; (ii) $1,011 in other current assets. As of September 30, 2010, current liabilities were comprised of (i) $1,024,376 in derivative liability; (ii) $517,866 in notes payable to stockholders and $145,500 in notes payable; (ii) $301,639 in accounts payable and accrued expenses and $314,177 of other amounts due to shareholders. As of September 30, 2010, the Company's total assets were $21,088 and its total liabilities were $2,535,204, with a net stockholder's deficit of $2,514,116. For the nine months ended September 30, 2010, net cash flows used in operating activities were $281,567 compared to net cash flows used in operating activities of $123,375, before the net cash used in and provided by discontinued operations, for the quarter ended September 30, 2009. The increase of $158,192 during the twelve-month period ended September 30, 2010 was primarily due to the change in fair value of derivative liability. For the nine months ended September 30, 2010 and September 30, 2009, net cash flows used in investing activities were both $0. For the nine months ended September 30, 2010, net cash flows provided by financing activities was $290,000 compared to net cash flows provided by financing activities of $122,501 for the nine months period ended September 30, 2009. Cash inflow for in 2010 consisted of the investor deposit of $230,000 and sale of preferred stock while cash inflows in 2009 consisted of the sale of preferred stock. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classifications of liabilities that might be necessary should we be unable to continue our operations. As of the date of this Annual Report, the Company has generated no revenues from operations since it entered the development stage on April 1, 2007. Therefore, the Company's auditors have expressed substantial doubt about the Company's ability to continue as a going concern. Management believes that it can maintain its status as a going concern based on its ability to raise funds pursuant to future public and private offerings and to obtain advances and minimize operating expenses by not duplicating or incurring needless expenses. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK. Not applicable. ITEM 4. CONTROLS AND PROCEDURES. (a) Evaluation of Disclosure Controls and Procedures We conducted an evaluation under the supervision and with the participation of our management, including Kenneth Yeung, our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended ("Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. 22 Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2009, and again as of September 30, 2010, that our disclosure controls and procedures have been improved and were maintained effectively at the reasonable assurance level in our internal controls over financial reporting discussed immediately below. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed 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. Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. 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. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2009, and again at September 30, 2010. In making this assessment, management used the framework set forth in the report entitled Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company's internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permits us to provide only management's report in this annual report. IDENTIFIED MATERIAL WEAKNESSES AND SIGNIFICANT DEFICIENCIES A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. Management identified the following internal control deficiency which we had 23 assessed as a material weakness as of September 30, 2010, December 31, 2009 and 2008 during its assessment of our internal control over financial reporting as follows: 1. We did not have adequate segregation of duties over certain areas of our financial reporting process. The internal control deficiency identified above will only be completely corrected if the company expands and has the capacity to adequately segregate the duties to mitigate risk in financial reporting. Expansion will depend mostly on the ability of management to begin operations and generate enough income to warrant growth in personnel. We did not have effective comprehensive entity-level internal controls specific to the structure of our board of directors and organization of critical committees. Due to our expected expansion, as disclosed in this Form 10-Q, without correcting this significant deficiency and ensuring that our board of directors has the proper oversight and committees are properly established, the control environment in subsequent years may not be effective. We had engaged a regionally-recognized independent consulting firm assisted management with its assessment of the effectiveness of our internal control over financial reporting, including scope determination, planning, staffing, documentation, testing, remediation and retesting and overall program management of the assessment project. In conclusion, our Chief Executive Officer and Chief Financial Officer surmised that the Company has improved the effective internal control over financial reporting as of December 31, 2009, and again as of September 30, 2010. MANAGEMENT'S REMEDIATION INITIATIVES We are in the further process of evaluating our material and significant deficiencies. We have already begun to remediate many of the deficiencies. However, others will require additional people, including adding to our board of directors, which will take longer to remediate. In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures: 1. Identify and retain one or two new directors for our board of directors including a member who is appropriately credentialed as a financial expert with a goal of having sufficient independent board of directors oversight; 2. Ensure all entity level controls are applied at all levels of the organization and are scalable for acquisition or merge targets; 3. Establish comprehensive formal general accounting policies and procedures and require directors or employees to sign off such policies and procedures as documentation of their understanding of and compliance with company policies; 4. Make all directors or employees subject to our Code of Ethics (including those employees in acquisition targets) and require all employees and directors to sign our Code of Ethics on an annual basis and retain the related documentation; and, 5. Implement better segregation of duties given the size of our company. We believe that the above five initiatives had been at least partially, if not fully, implemented by the end of 2009. Additionally, we plan to test our updated controls and remediate our deficiencies by December 31, 2010. 24 CONCLUSION The above identified improvement, material weaknesses and deficiency did not result in material audit adjustments to our 2009 financial statements. However, it is reasonably possible that, if not re-mediated, one or more of the identified material weaknesses noted above could result in a material misstatement in our reported financial statements that might result in a material misstatement in a future annual or interim period. In light of the identified material weaknesses, management, performed (1) significant additional substantive review of those areas described above, and (2) performed additional analyses, including but not limited to a detailed balance sheet and statement of operations analytical review that compared changes from the prior period's financial statements and analyzed all significant differences. These procedures were completed so management could gain assurance that the financial statements and schedules included in this Form 10-Q fairly present in all material respects the Company's financial position, results of operations and cash flows for the periods presented. The changes noted above, are the only changes during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our Annual Report on Form 10-K for 2009 did 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 pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in its Annual Report. (b) Changes in Internal Control over Financial Reporting During the quarter ended September 30, 2010, we did not make any changes in Internal Control over Financial Reporting. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company is not aware of any threatened or pending litigation against the Company. ITEM 1A. RISK FACTORS. Not applicable. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. Since June 30, 2010, the Company has issued the following securities without registration under the Securities Act of 1933: Number of Aggregate Nature of Date of Issue Shares Issued Sales Price Transaction ------------- ------------- ----------- ----------- Common Stock Issued: 7/22/2010 90,427,769 $22,697.37 Debt Conversion 8/2/2010 140,720,000 $35,380.00 Conversion of Series D Preferred Stock 25 8/26/2010 151,298,410 $ 38,013.13 Debt Conversion 8/31/2010 53,832,943 $ 10,642.00 Debt Conversion 9/8/2010 69,192,573 $ 16,865.63 Debt Conversion 9/8/2010 65,217,391 $ 15,000.00 Conversion of Series D Preferred Stock Preferred Stock: Series D Preferred Stock Issued: 8/13/2010 60,000 $60,000.00 Cash Purchase Series C Preferred Stock: 10/25/2010 1,000,000 $ 1,000.00 Cash Purchase Management believes the above shares of Common Stock and Series C Preferred Stock were issued pursuant to the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended. Management believes the above shares of Series D Preferred Stock were issued pursuant to the exemption from registration under Regulation S of the Securities Act of 1933, as amended. No broker or underwriter was involved in any of the above transactions. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. (REMOVED AND RESERVED). ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS. See Exhibit Index below for exhibits required by Item 601 of Regulation S-K. 26 EXHIBIT INDEX List of Exhibits attached or incorporated by reference pursuant to Item 601 of Regulation S-K: Exhibit Description - ------- ----------- 2(i)* Agreement and Plan of Merger (Appendix D of the Company's Definitive Proxy Statement on Form DEF 14A filed with the Commission on June 25, 2004). 3(i)(1)* Restated Articles of Incorporation filed with the Secretary of State of Colorado on August 10, 2004 (Appendix A of the Company's Definitive Proxy Statement on Form DEF 14A filed with the Commission on June 25, 2004). 3(i)(2)* Articles of Incorporation of Ten Stix, Inc. filed with the Secretary of State of Nevada on May 28, 2004 (Appendix F of the Company's Definitive Proxy Statement on Form DEF 14A filed with the Commission on June 25, 2004). 3(i)(3)* Certificate of Amendment to Articles of Incorporation of Ten Stix, Inc. filed with the Secretary of State of Nevada on December 1, 2004 (Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on December 6, 2004). 3(i)(4)* Certificate of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of Nevada on October 12, 2006 (Exhibit 3 (1) to the Company's Quarterly report on Form 10-QSB filed with the Commission on November 14, 2006). 3(i)(5)* Certificate of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of Nevada on July 17, 2007 (Exhibit 3 (i) (5) to the Company's form 10-KSB Annual Report for the Fiscal Year Ended December 31, 2007, filed with the Commission on April 3, 2008). 3(i)(6)* Certificate of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of Nevada on May 22, 2008, changing par value of common stock to $.00001 (Exhibit 3.1 to the Company's Quarterly Report for the Period Ended June 30, 2008, filed with the Commission on August 13, 2008). 3(i)(7)* Certificate of Amendment to Articles of Incorporation to change the total authorized shares and conversion terms of the Company's Series E Preferred Stock filed with the Secretary of State of Nevada on July 28, 2008 (Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q for the Period Ended June 30, 2008, filed with the Commission on August 13, 2008). 3(i)(8)* Certificate of Amendment to Articles of Incorporation to change the total authorized capital stock of the Company filed with the Secretary of State of Nevada on August 11, 2008 (Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q for the Period Ended June 30, 2008, filed with the Commission on August 13, 2008). 27 3(i)(9)* Certificate of Amendment to Articles of Incorporation to change the total authorized capital stock of the Company filed with the Secretary of State of Nevada on October 13, 2009. 3(ii)* By-laws of the Company (Exhibit 3. II to the Company's Registration Statement on Form 10SB filed with the Commission on February 8, 2001). 4(i)* Certificate of Designation of Series A Preferred Stock of Ten Stix, Inc. (Appendix G of the Company's Definitive Proxy Statement on Form DEF 14A filed with the Commission on June 25, 2004). 4(ii)* Certificate of Designation of Series C Preferred Stock of the Company (Exhibit 99.1 to the Company's Current report on Form 8-K filed with the Commission on September 14, 2006). 4(iii)* Certificate of Amendment to Certificate of Designation of Series B Preferred Stock of the Company filed with the Secretary of State of Nevada on May 30, 2007 (Exhibit 4 (iii) to the Company's Annual Report on Form 10-KSB for the Fiscal Year Ended December 31, 2007, filed with the Commission on April 3, 2008). 4(iv)* Certificate of Amendment to Certificate of Designation of Series C Preferred Stock of Company filed with the Secretary of State of Nevada on May 30, 2007 (Exhibit 4 (iv) to the Company's Annual Report on Form 10-KSB for the Fiscal Year Ended December 31, 2007, filed with the Commission on April 3, 2008). 4(v)* Certificate of Amendment to Certificate of Designation of Series D Preferred Stock of the Company filed with the Secretary of State of Nevada on December 10, 2007 (Exhibit 4 (v) to the Company's Annual Report on Form 10-KSB for the Fiscal Year Ended December 31, 2007, filed with the Commission on April 3, 2008). 4(vi)* Certificate of Designation of Series E Preferred Stock of the Company filed with the Secretary of State of Nevada on December 10, 2007 (Exhibit 4 (vi) to the Company's Annual Report on Form 10-KSB for the Fiscal Year Ended December 31, 2007, filed with the Commission on April 3, 2008). 4(vii)* Certificate of Designation of Series F Preferred Stock of the Company filed with the Secretary of State of Nevada on April 23, 2008 (Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the Period Ended June 30, 2008, filed with the Commission on August 13, 2008). 4(viii)* Amendment to Certificate of Designation After Issuance of Class or Series to change the total authorized shares and conversion terms of the Company's Series E Preferred Stock filed with the Secretary of State of Nevada on August 28, 2008 (Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q for the Period Ended June 30, 2008, filed with the Commission on August 13, 2008). 28 10.1* Stock Sale and Purchase Agreement dated March 14, 2007, by, between David Keaveney, Kenneth Yeung and the Company (Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on March 27, 2007). 10.2* Asset Sale and Purchase Agreement dated July 8, 2007, by and between International Building Technologies Co., Ltd. and Suining Yinfa Construction & Engineering Co., Ltd. (Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on July 23, 2007). 10.3* Amendment to Asset Sale and Purchase Agreement by and between the Company and Suining Yinfa Construction and Engineering, Ltd., executed on December 5, 2007 (Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the Commission on April 29, 2008). 10.4* Rescission to the Asset Sale and Purchase Agreement by and between the Company and Suining Yinfa Construction and Engineering, Ltd., executed on April 23, 2008 (Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the Commission on April 29, 2008). 10.5* Twelve Month Convertible Note Amendment dated March 14, 2007 (Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on March 27, 2007). 10.6* Employment Agreement between the Company and Kenneth Yeung dated May 21, 2007, effective May 1, 2007 (Exhibit 10.8 to the Company's Annual Report on Form 10-KSB for the Fiscal Year Ended December 31, 2007, filed with the Commission on April 3, 2008). 10.7* Employment Agreement between the Company and Kenneth Yeung dated February 1, 2010, effective May 1, 2010 (Exhibit 10.7 to the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2009, filed with the Commission on March 31, 2010). 10.8* Stock Sale and Purchase Agreement by and between the Company and Wuhan Intepower Co., Ltd., executed on April 17, 2008 (Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the Commission on April 21, 2008) 10.9* Compensation Agreement between the Company and Peter Chin dated September 30, 2009 (Exhibit 10.9 to the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2009, filed with the Commission on March 31, 2010). 14* Code of Ethics (Exhibit 14 to the Company's Annual Report on Form 10-KSB for the Fiscal Year Ended December 31, 2007, filed with the Commission on April 3, 2008). 31.1** Certification under Section 302 of Sarbanes-Oxley Act of 2002. 32.1** Certification under Section 906 of Sarbanes-Oxley Act of 2002. - ---------- * Exhibits incorporated herein by reference. File No. 0-32323. ** Filed herewith 29 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. Date: November 12, 2010 /s/ Kenneth Yeung ----------------------------------------------- Kenneth Yeung President, Chief Executive Officer and Chief Financial Officer (Principal Accounting, Executive and Financial Officer) 30 EX-31.1 2 ex31-1.txt SECTION 302 CERTIFICATION Exhibit 31.1 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. A Nevada corporation CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER Section 302 Certification I, Kenneth Yeung, certify that: 1. I have reviewed this quarterly report on Form 10-Q of International Building Technologies Group, Inc. for the three months ended September 30, 2010. 2. Based on my knowledge, this quarterly 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 interim 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. I am 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: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this annual report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my 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; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my 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; d) 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 that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. I have disclosed, based on my 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): a) All significant deficiencies in the design of operation of internal controls which would adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: November 12, 2010 /s/ Kenneth Yeung ----------------------------------------------- Kenneth Yeung President, Chief Executive Officer and Chief Financial Officer (Principal Accounting, Executive and Financial Officer) EX-32.1 3 ex32-1.txt SECTION 906 CERTIFICATION Exhibit 32.1 INTERNATIONAL BUILDING TECHNOLOGIES GROUP, INC. A Nevada corporation CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of International Building Technologies Group, Inc. ("Company") on Form 10-Q for the quarter ended September 30, 2010, as filed with the Securities and Exchange Commission on the date hereof ("Report"), I, Kenneth Yeung, President, Chief Executive Officer and Chief Financial Officer, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. A signed original of this written statement required by Section 906, or other document authentication, acknowledging, or otherwise adopting the signature that appears in typed from within the electronic version of this written statement required by Section 906, 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. Date: November 12, 2010 /s/ Kenneth Yeung ----------------------------------------------- Kenneth Yeung President, Chief Executive Officer and Chief Financial Officer (Principal Accounting, Executive and Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----