Inelco Corp - FORM 10-Q - August 13, 2010

Attached files

file	filename
EX-31.1 - CERTIFICATION - Inelco Corp	ex31_1.htm
EX-32.1 - CERTIFICATION - Inelco Corp	ex32_1.htm
EX-31.2 - CERTIFICATION - Inelco Corp	ex31_2.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Mark One

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended June 30, 2010

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File No. 000-53104

InfoSpi Inc.

(Name of small business issuer in its charter)

Nevada		51-0668045
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1720 Harrison Street, 18th Floor, Suite Penthouse A

Hollywood, Florida 33020

(Address of principal executive offices)

(954) 274-0551

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:	Name of each exchange on which registered:
None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001
(Title of Class)

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 Noo

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 (Section 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer o		Accelerated filer o
Non-accelerated filer o		Smaller reporting company x

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o Nox

Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years.

N/A

Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court.

Yeso Noo

Applicable Only to Corporate Registrants

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

Class	Outstanding as of August 13, 2010
Common Stock, $0.001	61,838,753

INFOSPI INC.

Form 10-Q

Part 1. FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Consolidated Balance Sheets	5
	Consolidated Statements of Operations	6
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	189

Item 4.	Controls and Procedures	19

Part II. OTHER INFORMATION

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3.	Defaults Upon Senior Securities	21

Item 4.	Reserved and Removed	21

Item 5.	Other Information	21

Item 6.	Exhibits	22

PART I

ITEM 1. FINANCIAL STATEMENTS

FINANCIAL STATEMENTS FOR

QUARTER ENDED: JUNE 30, 2010

CORNELL, BEALL & LEIGH, LLC

2220 Annie B. Trail

Cumming, Georgia 30040

404.694.9326

INDEPENDENT AUDITOR’S REPORT

To the Board of Directors and Stockholders of INFOSPI, INC.

(A Development Stage Company)

We have audited and updated the accompanying financial statements of INFOSPI, INC. as of June 30, 2010, including the related balance sheet, statement of operations, shareholders’ equity and cash flows for the period ended June 30, 2010. 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 audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board and Generally Accepted Accounting Principles for the United States. Those standards require that we plan and perform the audit 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 audit provides 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 INFOSPI, INC. as of June 30, 2010, and the results of its operation and its cash flows for the period ended June 30, 2010, are in conformity with U.S. Generally Accepted Accounting Principles.

John Beall, CPA

CORNELL, BEALL & LEIGH, LLC.

August 6, 2010

INFOSPI, INC.

(A Development Stage Company)

Balance Sheet (Audited)

ASSETS
	As of June 30, 2010		As of December 31, 2009
CURRENT ASSETS
Cash	$	5,454	$	-
Receivable from Others		1,000		1,000
Software		567		567
Development Costs		97,550		-

TOTAL ASSETS	$	104,571	$	1,567

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT AND LONG-TERM LIABILITIES

Accounts Payable	$	38,550		$	-
Notes Payable – H.Mayan		2,120			-
Long-Term Liabilities		68,982			-

TOTAL CURRENT AND LONG-TERM LIABILITIES	$	109,652		$	-

STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $0.001 par value: 75,000,000 shares
Authorized, 5,567,324 shares issued and outstanding
as of 03.31.2010 and 12.31.09		5,567			5,567
Deficit		(10,648	)		(4,000	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	104,571		$	1,567

INFOSPI, INC.

(A Development Stage Company)

Statements of Operations (Audited)

June 30, 2010

	Three Months Ended					Year Ended					Inception 12.31.07
		06.30.10			06.30.09		12.31.09		12.31.08		Through 06.30.10

REVENUE	$	-		$	-	$	-	$	-		$	-
Total Revenue		-			-		-		-			-

EXPENSES
Professional Expenses		125			-		-		3,425			3,775
General & Admin Exps		6,523			-		-		350			6,873

OPERATING INCOME (LOSS)	$	(6,648	)	$	-	$	-	$	(3,775	)	$	(10,648	)

OTHER INCOME (EXPENSES)	$	-		$	-	$	-	$	-		$	-

Current Income Tax		-			-		-		-			-
Income Tax Benefit		-			-		-		-			-
NET INCOME (LOSS)	$	(6,648	)	$	-	$	-	$	(3,775	)	$	(10,648	)


Basic (Loss) per Share		(0.0012	)		-		-		(0.0007	)

Weighted Average number
of Common Shares outstanding		5,567,324			6,495,211		5,567,324		5,142,666

Diluted (Loss) per Share assuming
all 5,000,000 warrants were
exercised		(0.0006	)		-		-		0.0004

Weighted number of shares
outstanding after exercise of
5,000,000 warrants		10,567,324			11,495,211		10,567,324		10,142,666

INFOSPI, INC.

(A Development Stage Company)

Statements of Change in Stockholders’ Equity (Audited)

June 30, 2010

	Common Shares		Stock Amount		Additional Paid-In Capital		Accumulated During the Development Stage			Total Stockholders Equity

Common Stock Issued Per Court Order 12.31.07		567,324	$	567		-		-		$	567

Net Loss for year ended 12.31.07		-		-		-		(225	)		(225	)

Balance, 12.31.07		567,324	$	567		-		(225	)	$	342

Common Stock Issued per Court Order 01.15.08	1,000,000	$	1,000	-	-		$	1,000

Common Stock Issued for Cash 02.04.08	4,000,000		4,000	-	-			4,000

Net Loss for year ended 12.31.08	-		-	-	(3,775	)		(3,775	)

Net Loss for Quarter	-		-	-	(6,648	)		(6,648	)
ended 06.30.10

Balance, 06.30.10	5,567,324	$	5,567	-	(10,648	)	$	(5,081	)

INFOSPI, INC.

(A Development Stage Company)

Statements of Cash Flows (Audited)

June 30, 2010

	Three Months Ended					Year Ended					Inception 12.31.07
		06.30.10			06.30.09		12.31.09		12.31.08		Through 06.30.10

CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$	(6,648	)	$	-	$	-	$	(3,775	)	$	(10,648	)

Adjustments to reconcile net income (loss)
To net cash (used in) operations		-			-		-		-			-
Changes in operating assets and liabilities
(Increase) Decrease in receivable from other		-			-		-		(1,000	)		(1,000	)
Increase (Decrease) in note payable-H.Mayan		2,120			-		-		-			2,120
Increase (Decrease) in convertible notes payable		9,982			-		-		-			9,982
NET CASH PROVIDED BY (USED IN) OPERATIONS		5,454			-		-		(4,775	)		454

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of software		-			-		-		-			(567	)

NET CASH PROVIDED BY INVESTING ACTIVITIES		-			-		-		-			(567	)

CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issuance		-			-		-		5,000			5,567

NET CASH PROVIDED BY FINANCING ACTIVITIES		-			-		-		5,000			5,567

NET INCREASE (DECREASE)		5,454			-		-		-			5,454

CASH BEGINNING OF PERIOD		-			-		-		-			-

CASH END OF PERIOD	$	5,454		$	-	$	-	$	-		$	5,454

Supplemental Disclosures of Cash Flow Information:
Development costs financed with LT Note payable		97,550										97,550
Income taxes paid		-		$	-	$	-	$	-		$	-

INFOSPI, INC.

(A Development Stage Company)

Notes to Financial Statements

June 30, 2010

NOTE 1. NATURE AND BACKGROUND OF BUSINESS

InfoSpi, Inc. (“the Company” or “the Issuer”) was organized under the laws of the State of Nevada on December 31, 2007. The Company was established as part of the Chapter 11 reorganization of Arrin Systems, Inc. (“Arrin”). Arrin’s plan of reorganization was confirmed by the Court on December 12, 2007 and became effective on December 30, 2007. The plan of reorganization provided for the establishment of the Issuer and the sale to the Issuer of Arrin’s proprietary software (used in the employee background screening industry) in exchange for 567,324 shares of InfoSpi’s common stock which were distributed to Arrin’s general unsecured creditors. Under Arrin’s Plan of Reorganization, as confirmed by the U.S. Bankruptcy Court for the Southern District of California, InfoSpi was organized to own, develop, and market the proprietary software developed by Arrin to automate background checks of prospective employees.

Management believes the Company lacks the resources to effectively market this software on its own and is therefore engaged in a search for a merger or acquisition partner with the resources to use the software in its own background search business or market it to others.

The Company has been in the development stage since its formation and has not yet realized any revenues from its planned operations.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. BASIS OF ACCOUNTING

The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 year-end.

b. BASIC EARNINGS PER SHARE

In February 1997, the FASB issued SFAS No. 128, “Earnings Per Share”, which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. SFAS No. 128 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share.

Basic net losses per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted earnings per share are computed by dividing the net loss by the weighted average number of common shares potentially outstanding, assuming that all outstanding warrants, options, etc. were exercised. The Company has warrants outstanding, which are exercisable for a total of 5,000,000 common shares.

c. ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles 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.

d. CASH and CASH EQUIVALENT

For the Balance Sheet and Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents.

INFOSPI, INC.

(A Development Stage Company)

Notes to Financial Statements

June 30, 2010

e. GOODWILL and OTHER INTANGIBLE ASSETS

Goodwill represents the excess of the cost of businesses acquired over the fair value of the identifiable net assets at the date of acquisition. Goodwill and intangible assets acquired in a purchase or business combination and determined to have indefinite useful lives are not amortized, but instead are evaluated for impairment annually and if events or changes in circumstances indicate, the carrying amount may be impaired per Statement of Financial Accounting Standards, No.142 (“SFAS 142”), “Goodwill and Other Intangible Assets”. An impairment loss would generally be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The estimated fair value is determined using a discounted cash flow analysis. SFAS 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets”.

f. REVENUE RECOGNITION

The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Amounts invoiced or collected in advance of product delivery or providing services are recorded as deferred revenue. The Company accrues for warranty costs, sales returns, bad debts, and other allowances based on its historical experience.

g. STOCK-BASED COMPENSATION

Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting for Stock-Based Compensation”, provides for the use of a fair value based method of accounting for stock-based compensation. However, SFAS 123 allows the measurement of compensation cost for stock options granted to employees using the intrinsic value method of accounting prescribed by Accounting Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to Employees”, which only requires charges to compensation expense for the excess, if any, of the fair value of the underlying stock at the date a stock option is granted (or at an appropriate subsequent measurement date) over the amount the employee must pay to acquire the stock. The Company has elected to account for employee stock options using the intrinsic value method under APB 25. By making that election, the Company is required by SFAS 123 to provide pro forma disclosures of net loss as if a fair value based method of accounting had been applied.

h. INCOME TAXES

Income taxes are provided for using the liability method of accounting in accordance with SFAS No. 109 "ACCOUNTING FOR INCOME TAXES." A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.

i. IMPACT OF NEW ACCOUNTING STANDARDS

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.

INFOSPI, INC.

(A Development Stage Company)

Notes to Financial Statements

June 30, 2010

NOTE 3. GOING CONCERN

The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have significant cash or other material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The officers and directors have committed to advancing certain operating costs of the company.

Management plans to seek a merger or acquisition target with adequate funds to support operations. Management has yet to identify a merger or acquisition target, and there is no guarantee that the Company will be able to identify such a target business in the future.

NOTE 4. STOCKHOLDERS' EQUITY - COMMON STOCK

The authorized common stock of the Company consists of 75,000,000 shares with $0.001 par value. No other class of stock is authorized. As of March 31, 2010, there were a total of 5,567,324 common shares issued and outstanding.

The Company’s first and second stock issuances took place pursuant to the Plan of Reorganization confirmed by the Bankruptcy Court: On December 12, 2007, the Court ordered the distribution of shares in InfoSpi, Inc. to all general unsecured creditors of Arrin, with these creditors to receive one share in InfoSpi for each $2.94 of Arrin’s debt which they held. These creditors received an aggregate of 567,324 shares in the Company on December 31, 2007.

The Court also ordered the distribution of shares and warrants in InfoSpi, Inc. to all administrative creditors of Arrin, with these creditors to receive one share and five warrants in InfoSpi for each $0.10 of Arrin’s administrative debt which they held. On January 15, 2008, these creditors received an aggregate of 1,000,000 common shares in the Company and 5,000,000 warrants consisting of 1,000,000 “A Warrants” each convertible into one share of common stock at an exercise price of $1.00; 1,000,000 “B Warrants” each convertible into one share of common stock at an exercise price of $2.00; 1,000,000 “C Warrants” each convertible into one share of common stock at an exercise price of $3.00; 1,000,000 “D Warrants” each convertible into one share of common stock at an exercise price of $4.00; and 1,000,000 “E Warrants” each convertible into one share of common stock at an exercise price of $5.00.

On February 4, 2008 the Company issued a total of 4,000,000 shares of common stock to an Officer and Director in exchange for $4,000 in cash to be used as operating capital for the Company. The shares were issued at a price of $0.001 per share, which is their par value.

As a result of these issuances there were a total 5,567,324 common shares issued and outstanding, and a total of 5,000,000 warrants issued and outstanding, at March 31, 2010.

NOTE 5. INCOME TAXES

The Company had no business activity and made no U.S. federal income tax provision for the year 2007 or the year ended 2008. As of June 30, 2010 there has been neglible activity and no U.S. federal income tax provision necessary.

NOTE 6. RELATED PARTY TRANSACTIONS

The Company neither owns nor leases any real or personal property. An officer of the corporation provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts.

NOTE 7. WARRANTS AND OPTIONS

There were 5,000,000 warrants outstanding, each to acquire one share of common stock of the Company, as at March 31, 2010. These warrants are more fully described above in Note 4: Stockholders’ Equity.

NOTE 8. COMMITMENT AND CONTINGENCY

As of the year ended December 31, 2008 and December 31, 2009 there were no commitments to report other than the warrants described above. As of March 31, 2010 commitments in the form of development costs were added as reflected, in the amounts of $38,550 as short-term debt and $59,000 as long-term debt.

NOTE 9. SUBSEQUENT EVENTS

There are no subsequent events to report.

August 6, 2010

Dear Sir:

The firm of Cornell, Beall & Leigh, LLC consents to the inclusion of our report of August 6, 2010, on the audited financial statements of InfoSpi, Inc. as of June 30, 2010, in any filings that are necessary now or in the future with the U.S. Securities and Exchange Commission.

Best Regards,

/s/John Beall

John Beall, Principal

Cornell, Beall & Leigh, LLC

2220 Annie B. Trail

Cumming, Georgia 30040

404.694.9326

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BUSINESS DEVELOPMENT

InfoSpi, Inc. was organized under the laws of the State of Nevada on December 31, 2007 as part of the implementation of the Chapter 11 plan of reorganization of Arrin Systems, Inc. ("Arrin"). Arrin filed for Chapter 11 Bankruptcy in April 2007 in the U.S. Bankruptcy Court for the Southern District of California. Arrin's plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of California on December 12, 2007 and became effective on December 30, 2007. The plan of reorganization provided for our establishment and the sale to us of Arrin's proprietary software (used in the employee background screening industry) in exchange for 567,324 shares of our common stock, which were distributed to Arrin's general unsecured creditors. The shares of common stock were distributed to Arrin’s general unsecured creditors pursuant to section 1145 of the Bankruptcy code and were exempt from the registration requirements of Section 5 of the Securities Act of 1933 and any state or local law requiring registration for an offer or sale of securities.

Agreement for the Purchase of Common Stock and Warrants

Effective September 16, 2009, Daniel C. Masters, Attorney at Law, representing certain selling shareholders and warrant holders (collectively, the “Sellers”) and Westmount Securities Corp., a corporation organized under the laws of the Province of Quebec, representing certain purchasers (collectively, the “Purchasers”) entered into that certain agreement for the purchase of common stock and warrants (the “Purchase Agreement”). In accordance with the terms and provisions of the Purchase Agreement, the Sellers sold 4,990,000 shares of our common stock and 5,000,000 warrants to purchase shares of our common stock (the “Warrants”) in exchange for $275,000. In further accordance with the terms and provisions of the Purcahse Agreement, the initial $10,000 was deposited on or before September 22, 2009 and the remaining final payment of $265,000 was to be paid by September 30, 2009. All funds were paid accordingly.

Thus, based upon our change in control, our business operations currently involve the implementation of proprietary processes through strategic alliances. Our purpose is to commercialize proven technologies which have been developed to address such areas as sewer and sludge conversion and used tires and plastic recovery. The objective is to minimize and reverse the impact of these products on the environment. We have been in the development stage since our formation and have not yet realized any revenues from its planned operations.

CURRENT OPERATIONS

Our business operations involve the commercialization of proven technologies which have been developed to address such areas as sewer and sludge conversion and used tires and plastic recovery. The objective is to minimize and reverse the impact of these products on the environment. We do not engage in research and development but seek innovations that can clearly demonstrate the viability of large scale implementations with sustainable benefits to the environment.

We have an office in Fort Lauderdale with five employees and additional offices in the United Kingdom and Valencia. We are currently setting up a fabrication center in Israel to take advantage of important technology.

The key areas of business will be:

·	Waste management and treatment

·	Tire recycling

·	Alternate fuels

We plan to implement two revolutionary technologies in the United States that management believes will eliminate some of the most challenging contamination problems.

Used tires and plastic recycling

Management believes that our revolutionary equipment will enable the recovery of up to 95% of raw materials from tires and plastics through pyrolysis technology with no environmental contamination. Pyrolysis is the chemical decomposition of organic materials by heat in the absence of oxygen. This process allows for the treatment of plastic and used tires to be converted to liquid fuel oil and carbon. The system has the following advantages over the procedure that is currently utilized: (i) elimination of contaminated waste being transported to landfills; (ii) neither pollutant outputs nor wasted materials require final disposal; (iii) the pyrolysis technology uses low temperatures; (iv) the exhaust can be completely recycled to the heating system; and (v) reduced environmental hazards by burning tires.

Sewage and Sludge Treatment

The technology that we intend to bring to the North American market will provide for the conversion of sludge and sewer into biocrude. Pursuant to the terms and provisions of an exclusive agreement currently being negotiated with IBS of Spain, we intend to manufacture and install a series of sewage re-treatment plants in North America. Management believes that this technology will permit the process to plug into existing sewage treatment plants prior to the initial stage of the current sewage treatment process at the point where the normal procedure would be to transport the residual sludge to local landfill sites. This process will thus allow for the treatment of the whole biomass obtained at the sewage treatment plants. Management believes that such a process will result in a biofuel of a high energy content.

Management believes that the system has the following advantages over anaerobic digestion treatment, the only alternative currently used: (i) elimination of costly anaerobic digesters; (ii) neither pollutant outputs nor wasted materials require final disposal; (iii) reduced production costs; (iv) the water treatment component can recuperate up to 80% of the volume of sludge input as potable water; (v) there is no waste sent to landfills and no waste water; (vi) all inputs are converted into biopetroleum, which, once burned, does not add to the net Co2 tin the environment; and (vii) methane gas release, which is a direct consequence of anaerobic digesters, is avoided.

Methane gas is a greenhouse pollutant 14 times more potent than carbon dioxide.

Alternate Fuels

Alternate energy crops for biofuel production is another of our key objectives. As of the date of this Quarterly Report, we are developing a strategy with regard to both micro algae feed stock and jatropha/castor feedstock.

RESULTS OF OPERATION

STATEMENT OF OPERATIONS	Six Month Periods Ended					For the Period from December 29, 2003 (inception) to June 30, 2010
	June 30, 2010			June 30, 2009
Revenue		-0-			-0-		-0-

Expenses
Professional expenses		125			-0-		3,775
General and administrative expenses		6,523			-0-		6,873
Operating Income (Loss)		(6,648	)		-0-		(10,648	)

Net Income (Loss)		(6,648	)		-0-		(10,648	)

BALANCE SHEET DATA
Total Assets		104,571			1,567
Total Liabilities		109,652			-0-
Total Stockholders’ Equity		104,571			1,567

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATION

The summarized financial data set forth in the table below is derived from and should be read in conjunction with our audited financial statements for the period from inception (December 31, 2007) through March 31, 2010, including the notes to those financial statements which are included in this Quarterly Report. The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

RESULTS OF OPERATION

Six Month Period Ended June 30, 2010 Compared to Six Month Period Ended June 30, 2009.

Our net loss for the six month period ended June 30, 2010 was ($6,648) compared to a net loss of $-0- for the six month period ended June 30, 2009. During the six month periods ended June 30, 2010 and 2009, we did not generate any revenue from operations.

During the six month period ended June 30, 2010, we incurred operating expenses of $6,648 compared to operating expenses of $-0- incurred during the six month period ended June 30, 2009. The operating expenses incurred during the six month period ended June 30, 2010 consisted of $125 in professional expenses and $6,523 in general and administrative expenses. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

The basic weighted average number of shares outstanding was 10,567,324 for the six month period ended June 30, 2010 compared to 11,495,211 for the six month period ended June 30, 2009.

LIQUIDITY AND CAPITAL RESOURCES

Six Month Period Ended June 30, 2010

As at June 30, 2010, our current assets were $104,571 and our current liabilities were $109,652, which resulted in a working capital deficit of $5,081. As at June 30, 2010, current assets were comprised of: (i) $5,454 in cash; (ii) $1,000 in receivable from others; (iii) $567 in software; and (iv) $97,550 in development costs.

As at June 30, 2010, our total current liabilities were $109,652. As at June 30, 2010, total currant liabilities were comprised of: (i) $38,550 in accounts payable; (ii) $2,120 in notes payable; and (iii) $68,982 in long term liabilities.

Stockholders’ equity for the six month period ended June 30, 2010 was $104,571 and $1,567 for fiscal year ended December 31, 2009.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the six month period ended June 30, 2010, net cash flows provided by operating activities was $5,454 consisting primarily of a net loss of ($6,648) changed by $2,120 in note payable and $9,982 in convertible note payable. For the six month period ended June 30, 2009, net cash flows used in operating activities was $-0-.

Cash Flows from Investing Activities

We did not engage in any investing activities during the six month periods ended June 30, 2010 and June 30, 2009.

Cash Flows from Financing Activities

We have financed our operations primarily from debt or the issuance of equity instruments. For the six month period ended June 30, 2010, net cash flows provided from financing activities was $-0- compared to $-0- for the six month period ended June 30, 2009.

PLAN OF OPERATION AND FUNDING

As noted above, we were recently organized as the result of the bankruptcy of our former affiliate. We have conducted no operations other than acquisition of certain software from our former affiliate, Arrin Systems, Inc., the preparation of our filings with the SEC, and preliminary discussions with various individuals and businesses concerning licensing (with one party) or a business combination (with several parties). We have no cash. It is anticipated that we will incur expenses in the implementation of the business plan described herein. Because we have no capital with which to pay these anticipated expenses, our present management may pay these charges with their personal funds, as interest free loans us, or as capital contributions. Therefore, we will also need advances and issuance of debt instruments to fund our operations over the next six months. In connection with our future business plan, management anticipates additional increases in operating expenses and capital expenditures relating to our business operations. We would finance these expenses with further issuances of securities and debt issuances. We expect we would need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities would result in dilution to our current shareholders. Further, such securities may have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all.

MATERIAL COMMITMENTS

As of the date of this Quarterly Report, we do not have any material commitments other than as described below.

On January 17, 2010, we issued a promissory note in the principal amount of $59,000 (the “Note”) payable upon demand to Scholnic Consulting Corp. (“SCC”). The terms and provisions of the Note provide that upon repayment of the Note, we shall pa to SCC issue an additional $5,900 bonus payment. The Note further provides that in the event the Note is not paid prior to the demand date, SCC shall have the right to convert the outstanding principal and bonus payment into shares of our common stock at the rate of $0.03 per share.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next twelve months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

GOING CONCERN

The independent auditors' report accompanying our December 31, 2009 and December 31, 2008 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

ITEM III. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse change in foreign currency and interest rates.

Exchange Rate

Our reporting currency is United States Dollars (“USD”). Since we plan to distribute and market our products outside of the United States, the fluctuation of exchange rates may have positive or negative impacts on our results of operations. However, all revenue and expenses will be denominated in U.S. Dollars, and the net income effect of appreciation and devaluation of the currency against the U.S. Dollar will be limited to our costs of goods sold.

Interest Rate

Interest rates in the United States are generally controlled. Any potential future loans will relate mainly to acquisition of properties and will be mainly short-term. However our debt may be likely to rise in connection with expansion and if interest rates were to rise at the same time, this could have a significant impact on our operating and financing activities. We have not entered into derivative contracts to hedge existing risks for speculative purposes.

ITEM IV. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our management, including our Chief Executive Officer/Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of June 30, 2010 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Management’s Annual Report on Internal Control Over Financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Under the supervision and with the participation of our management, including the chief executive officer and chief financial officer, we evaluated the effectiveness of our internal control over financial reporting as of March 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.

This Quarterly 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 SEC that permit us to provide only management’s report in this Quarterly Report on Form 10-Q.

Inherent Limitations on Effectiveness of Controls

We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and our Chief Executive Officer/Chief Financial Officer have concluded that these controls and procedures are effective at the “reasonable assurance” level.

Changes in internal controls

No significant changes were implemented in our internal controls over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

AUDIT COMMITTEE REPORT

Our Board of Directors has not established an audit committee. The respective role of an audit committee has been conducted by our Board of Directors. We are contemplating establishment of an audit committee during fiscal year 2010. When established, the audit committee's primary function will be to provide advice with respect to our financial matters and to assist our Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties

ITEM 1A. RISK FACTORS

No report required.

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

No report required.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

No report required.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Removed and reserved.

ITEM 5. OTHER INFORMATION

DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.

Effective on May 25, 2010, our Board of Directors accepted the resignation from Ashley Hollington as the Chief Operating Officer and a director effective May 25, 2010. Therefore, as of the date of this Current Report, the Board of Directors is comprised of Haim Mayan and Michel Brunet. There were no disagreements between us and Mr. Hollington relating to his resignation.

Effective on April 27, 2010, our Board of Directors accepted the resignations from Chris Hamilton as the Vice President and a director and Oliver Danan as the Vice President and Chief Operating Officer and a director effective April 27, 2010. Simultaneously, out Board of Directors accepted the consent from Haim Mayan as the interim Chief Executive Officer and Chief Financial Officer effective April 27, 2010 and confirmed Mr. Mayan’s continuing appointment to our Board of Directors.

Biography

Haim Mayan. Since 1990, Mr. Mayan has been engaged in executive roles with private and/or public companies. Prior to joining us, Mr. Mayan served as president of Mayan group LLC in Miami, Florida. Mayan Group LLC owned and operated a large condo community and home rentals. From 1991 to present, Mr. Mayan owned and managed a construction company and several real-estate development and commercial properties including, Oxembergeve LTD, Gvahim LTD in Tel Aviv, and Mayan Group LLC which had several other successful development. Since 2005, Haim has made exhaustive research into the conversion of existing products into oil especially into the tire to oil market and the conversion of algae into oil for bio-diesel.

ITEM 6. EXHIBITS

Exhibits:

31.1		Certification of the registrant’s Principal Executive Officer under the Exchange Act Rules, 12a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act 2002.

31.2		Certification of the registrant’s Principal Financial Officer under the Exchange Act Rules, 12a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act 2002.

32.1.1		Certifications of the registrant’s Principal Executive Officer and Principal Financial Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INFOSPI INC.

Dated: August 13, 2010	By:	/s/ Haim Mayan
		Haim Mayan, interim Chief Executive Officer


Dated: August 13, 2010	By:	/s/ Haim Mayan
		Haim Mayan, interim Chief Financial Officer

Inelco Corp - FORM 10-Q - August 13, 2010

Attached files

Inelco Corp Reports