Attached files
| file | filename |
|---|---|
| EX-31.1 - ISDERA NORTH AMERICA, INC. | e607731_ex31-1.htm |
| EX-32.1 - ISDERA NORTH AMERICA, INC. | e607731_ex32-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|
x
|
QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
|
|
FOR THE QUARTERLY PERIOD ENDED September 30, 2010
|
|
|
OR
|
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Commission file number 333-138059
Isdera North America, Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
Room 9B Block 1, Xintuo Garden No.1 Street, Shixia Bei, Futian District
Shenzhen, P.R. China 518000
(Address of principal executive offices, including zip code.)
(86) 137-2373-7042
(Telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 last 90 days. YES x NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).YES o NO x
Indicate by check mark 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
|
o
|
Accelerated filer
|
o
|
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
x
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES x NO o
Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 4,284,400 shares of common stock as of November 15, 2010.
|
ITEM 1. FINANCIAL STATEMENTS
Financial Statements follow the signature pages of this Report.
|
|
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
The following discussion should be read in conjunction with the Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q. The following discussion contains forward-looking statements. Our actual results may differ significantly from those projected in the forward-looking statements.
Plans of Operation
Isdera North America, Inc. (“We,” “Our,” “Isdera,” or the “Company”) is a Nevada corporation (formerly a New York corporation) in the development stage and has not commenced operations. We were incorporated under the laws of the State of New York on October 20, 1987. Our original business plan was to market and sell, in North America, high end automobiles and products produced by the German automaker Isdera GMBH. We had no formal or direct link to Isdera GMBH, other than a verbal agreement to receive commissions on the automobiles that we sell. The business was discontinued on about October 6, 1997, and remained dormant until August 9, 2006. As of August 9, 2006, we re-entered the development stage and raised capital through a private placement of common stock with the purpose of starting a similar business. However, the Company has yet to begin operations and will remain in a dormant state until management of the Company determines a new direction.
On October 4, 2007, Cosell Investments, Ltd. (the “Buyer”), and two stockholders of the Company, Kingsgate Development, Ltd. and Eastern Glow Investment, Ltd. (collectively, the “Sellers”), entered into a Stock Purchase Agreement. Pursuant to the terms and conditions of the Stock Purchase Agreement, the Buyer acquired from the Sellers 1,495,400 shares of common stock of the Company. As a result of the Stock Purchase Agreement, on October 12, 2007, the Buyer acquired approximately 34.9% of the issued and outstanding shares of common stock of the Company directly from the Sellers. Pursuant to the terms and conditions set forth in the Stock Purchase Agreement, immediately following the closing of the transaction to purchase the 1,495,400 shares of common stock of the Company from the Sellers, (i) the Buyers’ nominee, Jing Jiang, was appointed to the Board of Directors, and (ii) Ruediger Albrecht tendered his resignation from the Board of Directors and as an officer of the Company. In addition, Jing Jiang was appointed as the Chairman, Chief Executive Officer, Chief Financial Officer, and Secretary of the Company.
On May 29, 2008, we held a meeting of stockholders, wherein the shareholders approved the following: change of the state of incorporation of the Company from New York to Nevada by merging the Company with and into a newly formed Nevada subsidiary (the “Reincorporation”); amend the Company’s Certificate of Incorporation to increase the authorized common stock, par value $0.001 per share, of the Company from 50,000,000 shares to 500,000,000 shares; and amend the Company’s Bylaws to change the Company’s fiscal year end from June 30 to December 31. On June 16, 2008, we entered into a Plan of Merger with our wholly owned subsidiary Isdera North America, Inc. (a Nevada Corporation) to accomplish the Reincorporation from New York to Nevada.
We currently do not have any business operations. For the near future, the Company will continue in this status.
Results of Operations
The following table presents certain consolidated statement of operations information for the three-month and nine-month periods ended September 30, 2010 and 2009. The discussion following the table is based on these results. Certain columns may not add due to rounding.
1
|
Three Months
|
Nine Months
|
|||||||||||||||
|
Ended September 30,
|
Ended September 30,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
|
Expenses:
|
||||||||||||||||
|
General and administrative -
|
||||||||||||||||
|
Legal fees
|
1,500
|
1,500
|
65,000
|
28,000
|
||||||||||||
|
Accounting and audit fees
|
2,000
|
1,500
|
5,500
|
5,000
|
||||||||||||
|
Filling Fees
|
1,167
|
1,000
|
3,161
|
3,628
|
||||||||||||
|
Transfer agent fees
|
-
|
700
|
742
|
2,100
|
||||||||||||
|
Other
|
-
|
-
|
50
|
-
|
||||||||||||
|
Total general and administrative expenses
|
4,667
|
4,700
|
15,953
|
38,728
|
||||||||||||
|
Net (Loss)
|
$
|
(4,667
|
)
|
$
|
(4,700
|
)
|
$
|
(15,953
|
)
|
$
|
(38,728
|
)
|
||||
We are a development stage company, and have not generated any revenues since re-entering the development stage on August 6, 2006. General and administrative expenses were $ 4,667 and $4,700 for the three-month periods ended September 30, 2010, and 2009, respectively. The expenses incurred in 2010 were mainly attributable to legal fees and other SEC filing fees.
General and administrative expenses were $15,953 and $38,728 for the nine-month periods ended September 30, 2010, and 2009, respectively. The expenses incurred were mainly attributable to legal, accounting and audit fees.
Liquidity and capital resources
Net cash provided by financing activities amounted to $17,511 and $46,183 for the nine-month periods ended September 30, 2010, and 2009, respectively.
Cash and cash equivalents were $ 0 at September 30, 2010, and current assets totaled $0. The Company's total current liabilities were $177,859 at September 30, 2010. Negative working capital as of September 30, 2010, was $(177,859).
Off-Balance Sheet Arrangements
We do not currently have any off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company, as a smaller reporting company, is not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our Disclosure Controls were not effective as of the end of the period covered by this report. During our review of controls, our management discovered that there are material weaknesses in our internal controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified were (i) insufficient evidence of a robust corporate governance function; (ii) lack of sufficient resources with SEC, generally accepted accounting principals (GAAP); (iii) lack of evidence to document compliance with the operation of internal accounting controls in accordance with our policies and procedures. These control deficiencies could result in a material misstatement of significant accounts or disclosures that would result in a material misstatement to our interim or annual financial statements that would not be prevented or detected. Accordingly, management, currently consisting of one person currently serving as the sole executive officer and director, has determined that these control deficiencies constitute material weaknesses exist as of September 30, 2010.
2
Changes in Internal Controls
There have not been any changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2010 that have materially affected or are reasonably likely to materially affect internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS.
The following documents are included herein:
|
Exhibit No.
|
Document Description
|
|
31.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 15th of November, 2010.
|
ISDERA NORTH AMERICA, INC.
|
|||
|
(Registrant)
|
|||
|
By:
|
/s/ Jing Jiang
|
||
|
Jing Jiang
Chief Executive Officer, Chief Financial Officer
|
|||
4
ISDERA NORTH AMERICA, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010, AND 2009
(Unaudited)
|
Financial Statements-
|
|
|
Balance Sheets as of September 30, 2010, and December 31, 2009
|
F-2
|
|
Statements of Operations for the Three and Nine Months Ended September 30, 2010, and 2009, and the Period from Re-entering the Development Stage Through September 30, 2010
|
F-3
|
|
|
|
|
Statements of Cash Flows for the Nine Months ended September 30, 2010, and 2009, and the Period from Re-entering the Development Stage Through September 30, 2010
|
F-4
|
|
Notes to Financial Statements September 30, 2010, and 2009
|
.F-5
|
F-1
|
ISDERA NORTH AMERICA, INC.
|
||||||||
|
(A DEVELOPMENT STAGE COMPANY)
|
||||||||
|
BALANCE SHEETS (NOTE 2)
|
||||||||
|
AS OF SEPTEMBER 30, 2010, AND DECEMBER 31, 2009
|
||||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
September 30,
|
December 31,
|
|||||||
|
2010
|
2009
|
|||||||
|
Current Assets:
|
||||||||
|
Cash in bank
|
$ | - | - | |||||
|
Total current assets
|
- | - | ||||||
|
Total Assets
|
$ | - | $ | - | ||||
|
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
|
||||||||
|
Current Liabilities:
|
||||||||
|
Accounts Payable - Trade
|
155 | 206 | ||||||
|
Accrued liabilities
|
24,612 | 26,119 | ||||||
|
Due to related party - Stockholder
|
153,092 | 135,581 | ||||||
|
Total current liabilities
|
177,859 | 161,906 | ||||||
|
Total liabilities
|
177,859 | 161,906 | ||||||
|
Commitments and Contingencies
|
||||||||
|
Stockholders' (Deficit):
|
||||||||
|
Common stock, par value $0.001 per share, 500,000,000 shares
|
||||||||
|
authorized; 4,284,400 shares issued and outstanding
|
4,284 | 4,284 | ||||||
|
Additional paid-in capital
|
167,632 | 167,632 | ||||||
|
Prior accumulated (deficit)
|
(53,862 | ) | (53,862 | ) | ||||
|
(Deficit) accumulated during the development stage
|
(295,913 | ) | (279,960 | ) | ||||
|
Total stockholders' (deficit)
|
(177,859 | ) | (161,906 | ) | ||||
|
Total Liabilities and Stockholders' (Deficit)
|
$ | - | $ | - | ||||
The accompanying notes to financial statements
are an integral part of these balance sheets.
F-2
|
ISDERA NORTH AMERICA, INC.
|
||||||||||||||||||||
|
(A DEVELOPMENT STAGE COMPANY)
|
||||||||||||||||||||
|
STATEMENTS OF OPERATIONS (NOTE 2)
|
||||||||||||||||||||
|
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010, AND 2009, AND THE
PERIOD FROM RE-ENTERING THE DEVELOPMENT STAGE
|
||||||||||||||||||||
|
(AUGUST 9, 2006) THROUGH SEPTEMBER 30, 2010
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||
|
Period From
Re-entering the Development
Stage Through
September 30, 2010
|
||||||||||||||||||||
|
Three Months
|
Nine Months
|
|||||||||||||||||||
|
Ended September 30,
|
Ended September 30,
|
|||||||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||||||
|
Revenues
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
|
Expenses:
|
||||||||||||||||||||
|
General and administrative -
|
||||||||||||||||||||
|
Legal fees
|
1,500 | 1,500 | 6,500 | 28,000 | 171,511 | |||||||||||||||
|
Consulting fees
|
- | - | - | - | 38,545 | |||||||||||||||
|
Accounting and audit fees
|
2,000 | 1,500 | 5,500 | 5,000 | 59,520 | |||||||||||||||
|
Transfer agent fees
|
- | 700 | 742 | 2,100 | 11,459 | |||||||||||||||
|
Filing Fees
|
1,167 | 1,000 | 3,161 | 3,628 | 13,219 | |||||||||||||||
|
Other
|
- | - | 50 | - | 450 | |||||||||||||||
|
Bank fees
|
- | - | - | - | 98 | |||||||||||||||
|
Total general and administrative expenses
|
4,667 | 4,700 | 15,953 | 38,728 | 294,802 | |||||||||||||||
|
(Loss) from Operations
|
(4,667 | ) | (4,700 | ) | (15,953 | ) | (38,728 | ) | (294,802 | ) | ||||||||||
|
Other (Expense):
|
||||||||||||||||||||
|
Interest (expense)
|
- | - | - | - | (956 | ) | ||||||||||||||
|
Total other (expense)
|
- | - | - | - | (956 | ) | ||||||||||||||
|
Provision for income taxes
|
- | - | - | - | (155 | ) | ||||||||||||||
|
Net (Loss)
|
$ | (4,667 | ) | $ | (4,700 | ) | $ | (15,953 | ) | $ | (38,728 | ) | $ | (295,913 | ) | |||||
|
(Loss) Per Common Share:
|
||||||||||||||||||||
|
(Loss) per common share - Basic and Diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||||||
|
Weighted Average Number of Common
|
||||||||||||||||||||
|
Shares Outstanding - Basic and Diluted
|
4,284,400 | 4,284,400 | 4,284,400 | 4,284,400 | ||||||||||||||||
The accompanying notes to financial statements are
an integral part of these statements.
F-3
|
ISDERA NORTH AMERICA, INC.
|
|
(A DEVELOPMENT STAGE COMPANY)
|
|
STATEMENTS OF CASH FLOWS (NOTE 2)
|
|
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010, AND 2009, AND THE PERIOD
|
|
FROM RE-ENTERING THE DEVELOPMENT STAGE (AUGUST 9, 2006)
|
|
THROUGH SEPTEMBER 30, 2010
|
|
(Unaudited)
|
|
Period From
|
||||||||||||
|
Re-entering
|
||||||||||||
|
Nine Months Ended
|
the Development
|
|||||||||||
|
September 30,
|
Stage Through
|
|||||||||||
|
2010
|
2009
|
September 30, 2010
|
||||||||||
|
Operating Activities:
|
||||||||||||
|
Net (loss)
|
$ | (15,953 | ) | $ | (38,728 | ) | $ | (295,913 | ) | |||
|
Adjustments to reconcile net (loss) to net cash
|
||||||||||||
|
(used in) operating activities:
|
||||||||||||
|
Consulting and professional fees paid by issued shares
|
- | - | 108,545 | |||||||||
|
Accrued interest expense paid by issued shares
|
- | - | 956 | |||||||||
|
Changes in net assets and liabilities -
|
||||||||||||
|
Prepaid expenses
|
- | (700 | ) | - | ||||||||
|
Accounts payable - Trade
|
(51 | ) | (2,500 | ) | 155 | |||||||
|
Accrued liabilities
|
(1,507 | ) | (4,255 | ) | 24,612 | |||||||
|
Net Cash (Used in) Operating Activities
|
(17,511 | ) | (46,183 | ) | (161,645 | ) | ||||||
|
Investing Activities:
|
||||||||||||
|
Cash provided by investing activities
|
- | - | - | |||||||||
|
Net Cash Provided by Investing Activities
|
- | - | - | |||||||||
|
Financing Activities:
|
||||||||||||
|
Due to related party - Director and stockholder
|
17,511 | 46,183 | 225,853 | |||||||||
|
Repayment of related party loans - Director and stockholder
|
- | - | (67,058 | ) | ||||||||
|
Issuance of common stock for cash
|
- | - | 1,950 | |||||||||
|
Net Cash Provided by Financing Activities
|
17,511 | 46,183 | 160,745 | |||||||||
|
Net (Decrease) in Cash
|
- | - | (900 | ) | ||||||||
|
Cash - Beginning of Period
|
- | - | 900 | |||||||||
|
Cash - End of Period
|
$ | - | $ | - | $ | - | ||||||
|
Supplemental Disclosure of Cash Flow Information:
|
||||||||||||
|
Cash paid during the periods for:
|
||||||||||||
|
Interest
|
$ | - | $ | - | $ | - | ||||||
|
Income taxes
|
$ | - | $ | - | $ | - | ||||||
|
Supplemental Information of Noncash Investing and Financing Activities:
|
|
On January 9, 2007, a loan to the Company of $52,862 by a Director and stockholder plus accrued interest of $956 were satisfied with the issuance of 1,249,900 shares of common stock.
|
||||||||||||
|
On January 9, 2007, the Company issued 2,097,200 shares of common stock for consulting services of $70,000 performed in agreement with a Consulting Agreement dated August 10, 2006.
|
||||||||||||
|
On January 9, 2007, the Company issued 898,200 shares of common stock for consulting services of $38,545 performed in agreement with a Consulting Agreement dated August 10, 2006.
|
||||||||||||
|
During the year ended December 31, 2007, a former Director and shareholder forgave the Company of a related party debt in the amount of $5,000.
|
||||||||||||
|
During the year ended December 31, 2007, a former Director and shareholder forgave the Company of a related party debt in the amount of $1,603.
|
||||||||||||
The accompanying notes to financial statements are
an integral part of these statements.
F-4
ISDERA NORTH AMERICA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010, AND 2009
(Unaudited)
(1) Summary of Significant Accounting Policies
General Organization and Business
Isdera North America, Inc. (“Isdera” or the “Company”) is a Nevada corporation (formerly a New York corporation – see Note 7) in the development stage and has not commenced operations. The Company was incorporated under the laws of the State of New York on October 20, 1987. The original business plan of the Company was to market and sell, in North America, high-end automobiles and products produced by the German automaker Isdera GMBH. The Company has no formal or direct link to Isdera GMBH, other than a verbal agreement to receive commissions on the automobiles that the Company sells. The business was discontinued on October 6, 1997, and remained dormant until August 9, 2006. On August 9, 2006, the Company re-entered the development stage and raised capital through a private placement of common stock with the purpose of starting a similar business. The accompanying financial statements of Isdera were prepared from the accounts of the Company under the accrual basis of accounting.
Unaudited Interim Financial Statements
The accompanying financial statements of the Company as of September 30, 2010, and December 31, 2009, and for the three and nine months ended September 30, 2010, and 2009, and cumulative from the date of re-entering the development stage, are unaudited. However, in the opinion of management, the financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of September 30, 2010, and December 31, 2009, and the results of its operations and its cash flows for the three and nine months ended September 30, 2010, and 2009, and cumulative from the date of re-entering the development stage. These results are not necessarily indicative of the results expected for the fiscal year ending December 31, 2010. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States of America. Refer to the audited financial statements of the Company as of December 31, 2009, filed with the SEC in its Annual Report on Form 10-K for additional information, including significant accounting policies.
Cash and Cash Equivalents
For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.
Revenue Recognition
The Company is in the development stage and has yet to realize revenues from operations. Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.
Loss per Common Share
Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the three and nine months ended September 30, 2010, and 2009.
F-5
ISDERA NORTH AMERICA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010, AND 2009
(Unaudited)
Income Taxes
The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Fair Value of Financial Instruments
The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of September 30, 2010, and December 31, 2009, the carrying value of the Company’s financial instruments approximated fair value due to the short-term nature and maturity of these instruments.
Deferred Offering Costs
The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.
Common Stock Registration Expenses
The Company considers incremental costs and expenses related to the registration of equity securities with the Securities and Exchange Commission (“SEC”), whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.
Estimates
The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. 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 as of September 30, 2010, and December 31, 2009, and expenses for the three and nine months ended September 30, 2010, and 2009, and the period from re-entering the development stage (August 9, 2006) through September 30, 2010. Actual results could differ from those estimates made by management.
F-6
ISDERA NORTH AMERICA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010, AND 2009
(Unaudited)
(2) Development Stage Activities and Going Concern
Initial activities of the Company through September 30, 2010, include organization, completion of a capital formation activity to raise $1,950 from the sale of common stock to various stockholders, target market identification, and marketing plans. The Company completed in early May 2007 an activity to submit a Registration Statement on Form SB-2 to the SEC to register 2,788,600 shares of common stock on behalf of selling stockholders. The Company will not receive any of the proceeds of this registration activity once the shares of common stock are sold. The Company intends to conduct additional capital formation activities through the issuance of its common stock to establish sufficient working capital to commence operations.
While management of the Company believes that the Company will be successful in its capital formation and operating activities, there can be no assurance that the Company will be able to raise additional equity capital, or be able to generate sufficient revenues to sustain the operations of the Company.
The accompanying financial statements have been prepared in conformity with accounting principals generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred an operating loss since inception and the cash resources of the Company are insufficient to meet its planned business objectives. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
(3) Common Stock
On January 9, 2007, the Company issued 39,000 shares of common stock in connection with a Private Placement Offering (“PPO”), exempt from registration under the Securities Act of 1933, that was offered by the Company at $0.05 per share of common stock for total proceeds of $1,950.
On January 9, 2007, the Company issued 1,249,900 shares of common stock to a Director and shareholder as repayment of a loan. (See Note 5 for additional information.)
On January 9, 2007, the Company issued 2,097,200 shares of common stock to satisfy the terms of a Consulting Agreement with Kingsgate Development Ltd. (See Note 6 for additional information.)
On January 9, 2007, the Company issued 898,200 shares of common stock to satisfy the terms of a Consulting Agreement with Eastern Glow Investments, Ltd. (See Note 6 for additional information.)
The Company completed on May 9, 2007, an activity to submit a Registration Statement on Form SB-2 to the Securities and Exchange Commission (“SEC”) and register 2,788,600 shares of common stock on behalf of selling stockholders. The Company will not receive any of the proceeds of this registration activity once the shares of common stock are sold. The Company intends to conduct additional capital formation activities through the issuance of its common stock to establish sufficient working capital to commence operations.
On October 4, 2007, Cosell Investments, Ltd. (the “Buyer”), and two stockholders of the Company, Kingsgate Development, Ltd. and Eastern Glow Investment, Ltd. (collectively, the “Sellers”), entered into a Stock Purchase Agreement. Pursuant to the terms and conditions of the Stock Purchase Agreement, the Buyer acquired from the Sellers 1,495,000 shares of common stock of the Company. As a result of the Stock Purchase Agreement, on October 12, 2007, the Buyer acquired approximately 34.9 percent of the issued and outstanding shares of common stock of the Company directly from the Sellers.
Pursuant to the terms and conditions set forth in the Stock Purchase Agreement, immediately following the closing of the transaction to purchase the 1,495,000 shares of common stock of the Company from the Sellers, (i) the Buyers’ nominee, Jing Jiang, was appointed to the Board of Directors, and (ii) Ruediger Albrecht tendered his resignation from the Board of Directors and as an officer of the Company, effective as of 10 days after the delivery to the stockholders of the Company of an Information Statement pursuant to Rule 14f. In addition, Jing Jiang was appointed as the Chairman, Chief Executive Officer, Chief Financial Officer, and Secretary of the Company.
F-7
ISDERA NORTH AMERICA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010, AND 2009
(Unaudited)
(4) Income Taxes
The provision (benefit) for income taxes for the nine months ended September 30, 2010, and 2009, were as follows (using a 15 percent effective Federal and state income tax rate):
|
Nine Months Ended
|
||||||||
|
September, 30
|
||||||||
|
2010
|
2009
|
|||||||
|
Current Tax Provision:
|
||||||||
|
Federal-
|
||||||||
|
Taxable income
|
$ | - | $ | - | ||||
|
Total current tax provision
|
$ | - | $ | - | ||||
|
Deferred Tax Provision:
|
||||||||
|
Federal-
|
||||||||
|
Loss carryforwards
|
$ | 2,393 | $ | 5,809 | ||||
|
Change in valuation allowance
|
(2,393 | ) | (5,809 | ) | ||||
|
Total deferred tax provision
|
$ | - | $ | - | ||||
The Company had deferred income tax assets as of September 30, 2010, and December 31, 2009, as follows:
|
2010
|
2009
|
|||||||
|
Loss carryforwards
|
$ | 52,466 | $ | 50,073 | ||||
|
Less - Valuation allowance
|
(52,466 | ) | (50,073 | ) | ||||
|
Total net deferred tax assets
|
$ | - | $ | - | ||||
The Company provided a valuation allowance equal to the deferred income tax assets for the three and nine months ended September 30, 2010, and 2009, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.
As of September 30, 2010, and December 31, 2009, the Company had approximately $349,755 and $333,822, respectively, in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and expire at various times through the year 2029.
(5) Related Party Transactions
In August 2006, the Company signed a promissory note with Mr. Ruediger Albrecht, the President and Director of Isdera, for $52,862. The Company borrowed the money from Mr. Albrecht at various times from 1987 through 2006. The note was dated August 9, 2006, was payable on June 30, 2007, and carried an interest rate of five percent per annum with interest accruing on September 1, 2006. The promissory note and accrued interest of $956 were satisfied on January 9, 2007, through the issuance of 1,249,900 shares of common stock of the Company.
During the year ended December 31, 2007, a former Director and shareholder forgave the Company of a related party debt in the amount of $5,000. The amount forgiven was recorded as additional paid-in capital.
During the year ended December 31, 2007, a former Director and shareholder forgave the Company of a related party debt in the amount of $1,603. The amount forgiven was recorded as additional paid-in capital.
As of September 30, 2010, and December 31, 2009, the Company owed to a stockholder $153,092 and $135,581, respectively, that was loaned to the Company. The loan was provided for working capital purposes, is unsecured, non-interest bearing, and has no terms for repayment.
F-8
ISDERA NORTH AMERICA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010, AND 2009
(Unaudited)
(6) Commitments and Contingencies
The Company entered into a one-year Consulting Agreement on August 1, 2006, with Kingsgate Development, Ltd. (a British Virgin Islands Corporation and “Kingsgate”) whereby Kingsgate agreed to assist the Company in becoming publicly traded, by utilizing its skills and by bearing up to $90,000 of registration costs on behalf of the Company. In exchange for its services, on January 9, 2007, Kingsgate was issued 2,097,200 shares of common stock for a value of $70,000 or $0.033 per share to satisfy this obligation. At that time, Kingsgate owned 49 percent of the issued and outstanding shares of common stock of the Company
On August 1, 2006, the Company entered into a one-year Consulting Agreement with Eastern Glow Investments, Ltd. (a British Virgin Islands Corporation and “Eastern Glow”) whereby Eastern Glow agreed to assist the Company in becoming publicly traded by utilizing its skills on behalf of the Company as well as a commitment to loan to the Company up to a maximum of $50,000 at the libor interest rate plus 2.5 percent for the marketing plan of the Company. In exchange for its services, on January 9, 2007, Eastern Glow was issued 898,200 shares of common stock of the Company at $0.043 per share to satisfy this obligation. At that time, Eastern Glow owned 21 percent of the issued and outstanding shares of common stock of the Company.
(7) Changes in State of Incorporation, Common Stock and Year End
On May 2, 2008, the Company filed a Proxy Statement on Schedule 14A with the SEC. On May 29, 2008, the Company held a meeting of stockholders to vote upon the change of the state of incorporation of the Company from New York to Nevada by merging the Company with and into a newly formed Nevada subsidiary, and to amend the Company’s Certificate of Incorporation to increase the authorized common stock, par value $0.001 per share, of the Company from 50,000,000 to 500,000,000. The shareholders also voted to amend the Company’s Bylaws to change the Company’s fiscal year end from September 30 to December 31.
On June 24, 2008, the Company filed a Current Report on Form 8-K with the SEC and disclosed that on May 29, 2008, the shareholders of the Company approved the changes mentioned above. The 8-K also disclosed that on June 16, 2008, the Company entered into the Plan of Merger with its wholly owned subsidiary Isdera North America, Inc. (a Nevada Corporation) to accomplish the Reincorporation from New York to Nevada.
(8) Recent Accounting Pronouncements
Effective July 1, 2009, the Company adopted FASB ASC Topic 105-10, “Generally Accepted Accounting Principles – Overall” (“Topic 105-10”). Topic 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification is non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASU’s”). The FASB will not consider ASU’s as authoritative in their own right. ASU’s will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the change(s) in the Codification. References made to FASB guidance throughout this document have been updated for the Codification.
F-9
ISDERA NORTH AMERICA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010, AND 2009
(Unaudited)
In January 2010, the FASB issued ASU 2010-06, "Improving Disclosures about Fair Value Measurements.” This update requires additional disclosure within the roll forward of activity for assets and liabilities measured at fair value on a recurring basis, including transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy and the separate presentation of purchases, sales, issuances and settlements of assets and liabilities within Level 3 of the fair value hierarchy. In addition, the update requires enhanced disclosures of the valuation techniques and inputs used in the fair value measurements within Levels 2 and 3. The new disclosure requirements are effective for interim and annual periods beginning after December 15, 2009, except for the disclosure of purchases, sales, issuances, and settlements of Level 3 measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010. As ASU 2010-06 only requires enhanced disclosures, the Company does not expect that the adoption of this update will have a material effect on its financial statements.
In February 2010, the FASB issued ASU No. 2010-09, "Amendments to Certain Recognition and Disclosure Requirements,” which eliminates the requirement for SEC filers to disclose the date through which an entity has evaluated subsequent events. ASC No. 2010-09 is effective for its fiscal quarter beginning after December 15, 2010. The adoption of ASC No. 2010-06 will not have a material impact on the Company's financial statements.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future financial statements.
F-10