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EX-32.1 - CERTIFICATION - Inelco Corpinfospi_ex321.htm
EX-31.1 - CERTIFICATION - Inelco Corpinfospi_ex311.htm
EX-31.2 - CERTIFICATION - Inelco Corpinfospi_ex312.htm


U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
AMENDMENT NO. 2 TO
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 March 31, 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)
 
 
 
     
(State or other jurisdiction of incorporation
or organization)
 
(I.R.S. Employer Identification No.)
 
19495 Biscayne Blvd.
Suite 411
Aventura, Florida 33180
(Address of principal executive offices)
 
(305) 932-9795
(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  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 (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  No x
 
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.  Yes o  No o
 
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  May 24, 2010
Common Stock, $0.001
69,990,258



 
 

 
INFOSPI INC.  

Amendment No. 2 to
Form 10-Q

PART 1.   
FINANCIAL INFORMATION
    1  
           
Item 1.
Financial Statements
    1  
           
   
    Restated Balance Sheets
    2  
      
    Restated Statements of Operations
    3  
 
    Restated Statements of Cash Flows
    4  
 
    Restated Statements of Changes in Shareholders’ Equity (Deficit)
    5  
 
   Notes to Restated Financial Statements
    6  
           
Item 2.   
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    14  
      
         
Item 3.   
Quantitative and Qualitative Disclosures About Market Risk
    21  
      
         
Item 4.
Controls and Procedures
    22  
           
PART II.
OTHER INFORMATION
    23  
      
         
Item 1.   
Legal Proceedings
    23  
      
         
Item 1A.
Risk Factors
    23  
           
Item 2.  
Unregistered Sales of Equity Securities and Use of Proceeds
    24  
           
Item 3.   
Defaults Upon Senior Securities
    24  
      
         
Item 4.      
Reserved and Removed
    24  
           
Item 5.  
Other Information
    24  
      
         
Item 6.     
Exhibits
    25  

 
 

 
 
PART I

ITEM 1. FINANCIAL STATEMENTS

INFOSPI INC.
 
  RESTATED FINANCIAL STATEMENTS

MARCH 31, 2010
       (Unaudited)

 
INFOSPI, INC.
(A Development Stage Company)
Restated - Financial Statements
(Expressed in U.S. Dollars)
 
     Index  
         
Index to Restated – Financial Statements     1  
         
Restated - Balance Sheets     2  
         
Restated - Statements of Operations     3  
         
Restated – Statements of Cash Flows     4  
         
Restated - Statements of Stockholders’ Equity (Deficit)     5  
         
Notes to the Restated - Financial Statements     6  
 
 
1

 
                                                                                                                                                                                               
INFOSPI, INC.
(A DEVELOPMENT STAGE COMPANY)
RESTATED – BALANCE SHEETS
 
   
As of March
31,2010
(Unaudited)
   
As of December
31, 2009
 
             
ASSETS
 
   
CURRENT ASSETS
           
Cash
  $ -     $ -  
Receivables from Others
    -       1,000  
                 
TOTAL CURRENT ASSETS
    -       1,000  
                 
OTHER ASSETS
               
Project Development Costs
    27,600       -  
                 
TOTAL ASSETS
  $ 27,600     $ 1,000  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)  
                 
CURRENT LIABILITIES
               
Accrued Expenses
  $ 5,000     $ 64.000  
Accrued Employee Compensation
    195,000       -  
Notes Payable
    107,305       -  
                 
TOTAL CURRENT LIABILITIES
    307,305       64,000  
                 
OTHER LIABILITIES
    -       -  
                 
TOTAL LIABILITIES
    307,305       64,000  
                 
STOCKHOLDERS’ EQUITY (DEFICIT)
               
Common Stock, $0.001 Par Value, 75,000,000
               
Authorized, 69,990,258 and 5,567,324 Shares
               
Issued and Outstanding
    69,990       69,990  
Paid in Capital
    43,132       43,132  
Accumulated Deficit
    (392,827 )     (176,122 )
                 
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
    (279,705 )     (63,000 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
  $ 27,600     $ 1,000  
 
See Notes to Restated Financial Statements
 
 
2

 
 
INFOSPI, INC.
(A DEVELOPMENT STAGE COMPANY)
RESTATED – STATEMENTS OF OPERATIONS
 
     
Three Months Ended  
     
Three Months Ended  
     
Inception
12/31/2007
Through 
 
     
3/31/2010
     
3/31/2009
     
3/31/2010
     
3/31/2009
     
03/31/2010  
 
     
(Unaudited)
     
(Unaudited)
     
(Unaudited)
 
 
REVENUE
                                       
Total Revenue   $ -     $ -     $ -     $ -     $ -  
                                         
EXPENSES
                                       
Professional Expenses
    10,950       -       10,950       -       19,600  
General and Admin Expenses
    -       5,000       -       5,000       59,350  
Stock-Based Compensation
    -       -       -       -       107,555  
Executive Compensation
    195,000       -       -       -       195,000  
Total Expenses
    205,950       5,000       205,950       5,000       381,505  
                                         
OPERATING LOSS
    205,950       5,000       205,950       5,000       381,505  
                                         
OTHER EXPENSES
                                       
Loss on Disposition of Asset
    -       -       -       -       567  
Write-off Amount Due from Others
    1,000       -       1,000       -       1,000  
Bonus – Interest Expense
    9,755       -       9,755       -       9,755  
Total Other Expenses
    10,755       -       10,755       -       11,322  
                                         
NET (LOSS) BEFORE PROVISION FOR INCOME TAXES
    216,705       5,000       216,705       5,000       392,827  
                                         
PROVISION FOR INCOME TAXES
    -       -       -       -       -  
                                         
NET LOSS
  $ 216,705     $ 5,000     $ 216,705     $ 5,000     $ 392,827  
                                         
Basic (Loss) Per Share
  $ 0.01     $ 0.00     $ 0.01     $ 0.00          
                                         
Weighted Average Numberof Common Shares Outstanding
    20,206,624       4,999,558       20,206,624       4,999,558          
 
See Notes to Restated Financial Statements
 
 
3

 
 
INFOSPI, INC.
(A DEVELOPMENT STAGE COMPANY)
RESTATED – STATEMENTS OF CASH FLOWS
 
   
Three MonthsEnded
   
Three Months Ended
   
Inception
12/31/2007
Through
03/31/2010
 
   
3/31/2010
   
3/31/2009
   
3/31/2010
   
3/31/2009
   
(Unaudited)
 
   
(Unaudited)
   
(Unaudited)
       
CASH FLOWS FROM OPERATING ACTIVITIES                              
Net Loss
  $ (216,705)     $ (5,000 )   $ (216,705)     $ (5,000 )   $ (392,827  
Adjustments to Reconcile Net Loss
                                       
To Cash Provided (Used) by Operations
                                       
Stock-Based Compensation
    -       -       -       -       107,555  
Disposition of Software
    -       -       -       -       567  
Increase (Decrease) in Operating
                                       
Assets and Liabilities:
                                       
Receivables from Others
    1,000       -       1,000       -       -  
Accrued Employee Compensation
    195,000       -       195,000       -       195,000  
Accrued Expenses
    (59,000)       5,000       (59,000)       5,000       5,000  
NET CASH USED BY OPERATIONS
    (79,705)       -       (79,705)       -       (84,705)  
CASH FLOWS USED IN INVESTING ACTIVITIES                                        
Acquisition of Software
    -       -       -       -       (567)  
Project Development Costs
    (27,600)       -       (27,600)       -       (27,600)  
NET CASH USED IN INVESTING
                                       
ACTIVITIES
    (27,600)       -       (27,600)       -       (28,167)  
 
CASH FLOWS FROM FINANCING ACTIVITIES
                                       
Notes Payable
    107,305       -       107,305       -       107,305  
Sale of Common Stock
    -       -       -       -       5,567  
NET CASH FROM INVESTING
                                       
ACTIVITIES
    107,305       -       107,305       -       112,872  
NET INCREASE (DECREASE) IN CASH
    -       -       -       -       -  
CASH AT BEGINNING OF PERIOD
    -       -       -       -       -  
CASH AT END OF PERIOD
  $ -     $ -     $ -     $ -     $ -  
SUPPLEMENTARY DISCLOSURE OF
                                       
CASH FLOW INFORMATION
                                       
Interest Paid
  $ -     $ -     $ -     $ -     $ -  
Income Taxes Paid
  $ -     $ -     $ -     $ -     $ -  
Stock-Based Compensation
  $ -     $ -     $ -     $ -     $ 107,555  
  
See Notes to Restated Financial Statements
 
 
 
4

 
 
INFOSPI, INC.
(A DEVELOPMENT STAGE COMPANY)
RESTATED – STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
MARCH 31, 2010
 
   
Common Stock 
   
Additional
Paid In
   
Accumulated
During
the
Development
   
Total
Stockholders’
Equity  
 
   
 
   
Amount
   
Capital 
   
Stage
    (Deficit)  
Common Stock Issued Per Court Order
                             
Dec. 31, 2007
    567,324     $ 567     $ -     $ -     $ 567  
                                         
Net Loss for the Year Ended
                                       
Dec. 31, 2007
    -       -       -       (225 )     (225
                                         
Balance, Dec. 31, 2007
    567,324       567       -       (225 )     342  
                                         
Common Stock Issued Per Court Order
                                       
Jan. 15, 2008
    1,000,000       1,000       -       -       1,000  
                                         
Common Stock Issued For Cash
                                       
Feb. 4, 2008
    4,000,000       4,000       -       -       4,000  
                                         
Net Loss for Year Ended
                                       
Dec. 31, 2008
    -       -       -       (3,775 )     (3,775
                                         
Balance, Dec. 31, 2008
    5,567,324       5,567       -       (4,000 )     1,567  
Common Stock Issued For Warrants
                                       
                                         
Sept. 22, 2009
    28,571,429       28,571       (28,571 )     -       -  
Common Stock Issued For Compensation
                                       
                                         
Sept. 23, 2009
    35,851,505       35,852       71,703       -       107,555  
Net Loss for the Year Ended
                                       
Dec. 31, 2009
    -       -       -       (172,122 )     (172,122 )
                                         
Balance, Dec. 31, 2009
    69,990,258       69,990       43,132       (176,122 )     (63,000
                                         
Net loss for the Quarter Ended
                                       
Mar. 31, 2010
    -       -       -       (216,705 )     (216,705 )
                                         
Balance, Mar. 31, 2010
    69,990,258     $ 69,990       43,132     $ (392,827 )   $ (279,705 )
 
See Notes to Restated Financial Statements
 
 
5

 
 
INFOSPI, INC.
(A Development Stage Company)
Notes to Restated Financial Statements
March 31, 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 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 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.  The Company has been in the development stage since its formation and has not yet realized any revenues from its planned operations.

Management  believes the Company lacks the resources to  effectively  market its services  on its own and is  therefore  engaged  in a  search  for a  merger  or acquisition  partner with the resources to either develop this business or enter another line of business which will bring value to the Issuer's shareholders.

This Annual Report on Form 10-K is being amended based upon the advisement from our newly appointed public accountants, Randall N. Drake, CPA., P.A. (“Drake”), that our financial statements reviewed and/or audited by our prior independent public accountant, Cornell, Beale & Leigh, LLC (CB&L”), for the periods referenced below as filed with the Securities and Exchange Commission could not be relied upon since CB&L is not registered under the Public Company Accounting Oversight Board (the “PCAOB”):
 
Period Ended
 
Form
 
Date Filed with SEC
         
September 30, 2009 
 
10-Q
 
November 23, 2009
December 31, 2009
 
10-K
 
April 14, 2010
March 31, 2010
 
10-Q
 
April 24, 2010
June 30, 2010
 
10-Q
 
August 13, 2010
 
As a result, our Board of Directors concluded on December 5, 2010 that our previously issued financial statements for the periods above should no longer be relied upon. Therefore, we are restating our financial statements for the quarterly period ended March 31, 2010 to reflect: (i) previous unrecorded expenses; (ii) additional common stock issuances; (iii) change in earnings per share; and (iv) the effect on retained earnings (deficit). We are also amending the disclosure in the Annual Report to reflect these changes.

RESTATED FINANCIAL STATEMENTS

The Company is restating its financial statements to reflect (1) previous unrecorded expenses (2) additional common stock issuances (3) change in earnings per share and (4) the effect on retained earnings (deficit).

The resulting changes do not impact the company’s income tax provision.
 
 
6

 

The following chart represents the company’s operating results as originally filed and as restated for the quarter ended March 31, 2010.
 
   
Originally Filed
   
Restated
 
   
Quarter Ended
   
Quarter Ended
 
   
03/31/2010
   
03/31/2010
 
REVENUE
           
Total Revenue
  $ -     $ -  
EXPENSES
               
Professional Expenses
    -       10,950  
Executive Compensation
    -       195,000  
                 
Total Expenses
    -       205,950  
                 
OPERATING LOSS
    -       205,950  
                 
OTHER EXPENSES
               
Write-off Amount Due from Others
    -       1,000  
Bonus – Interest Expense
    -       9,755  
                 
Total Other Expenses
    -       10,755  
                 
NET LOSS BEFORE
               
                 
PROVISION FOR INCOME TAXES
    -       216,705  
PROVISION FOR INCOME TAXES
    -       -  
NET LOSS
  $ -     $ 216,705  

Basic (Loss) per Share
  $ 0.00     $ 0.01  
                 
Weighted Average Number Of Common Shares Outstanding
    5,567,324        20,060,624   
                 
Diluted (loss) per Share Assuming all 5,000,000 Warrants were Exercised
  $ 0.00     $ 0.00  
                 
Weighted Number of Shares Outstanding after Exercise of 5,000,000 Warrants
    10,567,324       -  
 
7

 
 
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

The Company computes loss per share for both basic and diluted earnings per share (EPS) on the face of the Income Statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

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 Sheets and Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents.
 
e.  STOCK-BASED COMPENSATION

The Company accounts for employee stock-based compensation costs such that all share-based payments to employees, including grants of employee stock options, are recognized in our statements of operations based on their fair values. We will utilize the Black-Scholes option pricing model, as appropriate, to estimate the fair value of employee stock based compensation at the date of grant, which requires the input of highly subjective assumptions, including expected volatility and expected life. Changes in these inputs and assumptions can materially affect the measure of estimated fair value of our stock-based compensation.

During the three months ended March 31, 2010 and March 31, 2009, the Company had stock-based compensation expenses related to issuances of stock options and warrants to the Company's employees, directors and consultants of $0 and $0 respectively.

f. IMPACT OF NEW ACCOUNTING STANDARDS
 
In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010.
 
 
8

 
 
In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The adoption of this standard is not expected to have a significant impact on the Company’s financial statements.
 
Management has considered and included all current standards through and including ASU No. 2010-29 – Business Combinations and ASU No. 2011-01 – Receivables and does not anticipate the retroactive application of any new accounting standard(s) to change the restated financial statements as currently presented.

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.

Going concern limitations may prevent the realization of the recorded values of assets and/or liabilities.
 
NOTE 4. ACCRUED LIABILITIES
 
   
March 31,
2010
   
March 31,
2009
 
Accrued Liabilities
  $ 5,000     $ 5,000  
                 
Accrued Expenses
    195,000       -  
Accrued Executive Compensation
  $ 200,000     $ 5,000  
 
NOTE 5. EXECUTIVE COMPENSATION AGREEMENT

On January 8, 2010, the Company entered an Executive Employment Agreement effective January 11, 2010 with the previous Chief Executive Officer.  Terms of the agreement include an (inception bonus) of $150,000 and monthly payments of $15,000.  The agreement expires on December 31, 2013.
 
As of March 31, 2010 and 2009, the Company has accrued executive compensation under this agreement in the amounts of $195,000 and $0, respectively.
 
NOTE 6. CONVERTIBLE NOTES PAYABLE

On January 17, 2010 the Company entered into a convertible promissory demand note with an advisory firm in the amount of $59,000.  Terms include a bonus payment (simple interest at 10%) in the amount of $5,900.  The note includes a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Company at a rate of $0.03 per share. The note has no stated due date.
 
 
9

 
 
On February 10, 2010 the Company entered into a convertible promissory demand note with a web designer in the amount of $3,150.  Terms include a bonus payment (simple interest at 10%) in the amount of $315.  The note includes a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Company at a rate of $0.03 per share. The note has no stated due date.
 
On January 3, 2011 the parties amended the terms and conditions of the promissory note dated February 10, 2010 as follows: The “Note Conversion Price” shall be adjusted from $0.03 to the par value of the common stock, or $0.001 per share.

On February 10, 2010 the Company entered into a convertible promissory demand note with a project consultant in the amount of $7,800.  Terms include a bonus payment (simple interest at 10%) in the amount of $780.  The note includes a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Company at a rate of $0.03 per share. The note has no stated due date.
 
On February 10, 2010 the Company entered into a convertible promissory demand note with an engineering firm in the amount of $27,600.  Terms include a bonus payment (simple interest at 10%) in the amount of $2,760.  The note includes a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Company at a rate of $0.03 per share. The note has no stated due date.
 
NOTE 7. 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 December 31, 2009, there were a total of 69,990,258 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 Systems, Inc.  ("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, 2008.

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.

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.

On November 13, 2009 and effective September 22, 2009, our Board of Directors pursuant to unanimous written consent acknowledged the warrants and authorized the exchange of 5,000,000 warrants and issuance of an aggregate 28,571,429 shares of our common stock at a per share price of $0.001.
 
The 28,571,429 shares of common stock were issued to approximately thirteen non-United States investors in reliance on Regulation S promulgated under the United States Securities Act of 1933, as amended.
 
 
10

 
 
SERVICES RENDERED
 
On October 28, 2009 and effective September 23, 2009, our Board of Directors pursuant to unanimous written consent authorized the issuance of an aggregate 35,851,505 shares of restricted common stock in exchange for prior services rendered including, but not limited to, introduction to potential funding arrangements and various strategic partners.
 
The 35,851,505 shares of common stock were issued to approximately five United States investors in reliance on Regulation D promulgated under the Securities Act.
 
NOTE 8. INCOME TAXES

The Company accounts for income taxes for financial statement recognition of the impact of a tax position, if that position is more likely than not to be sustained on examination, based on the technical merits of the position.  Based on management's assessment, the Company's results of operations or financial position required no adjustments.  The period-end analysis supports the conclusion that the Company does not have an accrual for uncertain tax positions as of March 31, 2010.  If interest and penalties were to be assessed, the Company would charge interest to interest expense and penalties to other operating expense.  It is not anticipated that unrecognized tax benefits would significantly increase or decrease within twelve (12) months of the reporting date.

The Company provides for a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards.  The Company has incurred net operating losses of $392,827 which expire in 2024.

The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined.  Because of the uncertainty surrounding the realization of the loss carryforwards, the Company has established a valuation allowance equal to the tax effect of the loss carryforwards and, therefore, no deferred tax asset has been recognized for the loss carryforwards.  The net deferred tax asset is approximately $nil as of March 31, 2010, for which the Company recorded a valuation allowance because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

The components of the net deferred tax asset for the quarter ended March 31, 2010 and from inception (December 31, 2007) through March 31, 2010 and the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are indicated below:
 
 
 
Quarter 
Ended
 March 31, 2010
   
Period From Inception on December
31, 2007 to
March 31, 2010
 
Net operating losses carried forward
 
$
 216,705
   
$
392,827
 
Statutory tax rate
   
35%
     
35%
 
Effective tax rate
   
-
     
-
 
Deferred tax asset
   
   76,000
     
138,000
 
Valuation allowance
   
  (76,000)
     
(138,000
)
                 
Net deferred tax asset
 
$
0
   
$
0
 
 
 
11

 
 
NOTE 9. 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 10. COMMITMENT AND CONTINGENCY

As of the date of this Quarterly Report, we have entered into the following material commitments:

On January 8, 2010, the Company entered an Executive Employment Agreement effective January 11, 2010 with the previous Chief Executive Officer.  Terms of the agreement include an (inception bonus) of $150,000 and monthly payments of $15,000.  The agreement expires on December 31, 2013.
 
During the first quarter, 2010, the Company converted certain accrued expense to demand notes payable each including a voluntary convertible feature allowing the holder to convert all or part of the outstanding balance into fully paid non-assessable whole shares of the Company.
 
NOTE 11. CONSULTING AGREEMENT

On March 1, 2009, we entered into a consulting agreement (the “Consulting Agreement”) with an advisory firm. In accordance with the terms and provisions of the Consulting Agreement: (i)  we are to pay monthly fees in the amount of $5,000 and reimburse expenses up to $9,000 previously incurred; (ii) the advisory firm shall provide services including, but not limited to, economic analysis, economic forecast, negotiate and endeavor to arrange sales and/or purchases and/or distribution agreements and/or joint venture agreements on a best efforts basis; and (iii) either party can terminate upon a 90-days written notice.

On January 17, 2010, the agreement was terminated by mutual consent. The parties entered into a convertible promissory demand note in exchange for the outstanding balance of $59,000. Terms include a bonus payment (simple interest at 10%) in the amount of $5,900. The note includeds a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Companyat a rate of $0.03 per share. The note has no stated due date.
 
 
12

 

NOTE 12. SUBSEQUENT EVENTS

These financial statements were approved by management and were issued on January 19, 2011.  Subsequent events have been evaluated through this date and include the following:

·  
Effective June 15, 2010, the Board approved an Amendment to our Articles to increase the authorized capital stock from 75,000,000 shares to 350,000,000 shares of Common Stock, $0.001 par value, and 100,000,000 shares of Preferred Stock, $0.001 par value.

·  
On July 5, 2010 the Company entered into a convertible promissory note with an investment firm (a related party) in the amount of $5,000.  Terms include a bonus payment (interest) in the amount of $500.  The note includes a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Company at a rate of $0.03 per share.
 
·  
On July 19, 2010 the Company entered into a convertible promissory note with a private individual (a related party) in the amount of $14,000.  Terms include a bonus payment (interest) in the amount of $1,400.  The note includes a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Company at a rate of $0.03 per share.
 
·  
Effective July 22, 2010, the Board approved an Amendment to our Articles to: (i) increase the authorized capital structure of the Company by increasing the number of authorized shares of Common Stock from 350,000,000 shares of Common Stock to 750,000,000 shares of Common Stock; and (ii) ratify the prior amendment to the articles of incorporation increasing the number of authorized shares of common stock, par value $0.001, to 350,000,000 shares of Common Stock effected July 22, 2010 (the “2010 Amendment”).

·  
On August 5, 2010 the Board of Directors approved the acceptance of a loan from an investment firm (a related party) in the amount of $11,000.  On October 14, 2010 the Board approved a convertible promissory note in the amount of $11,000.  Terms include a bonus payment (interest) in the amount of $1,100.  The note includes a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Company at a rate of $0.001 per share.
·  
On August 11, 2010 the Board of Directors approved the acceptance of a loan from an investment firm (a related party) in the amount of $5,000.  On November 9, 2010 the Board approved a convertible promissory note in the amount of $5,000.  Terms include a bonus payment (interest) in the amount of $500.  The note includes a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Company at a rate of $0.001 per share.
 
·  
On November 2, 2010 the Board of Directors approved the acceptance of a loan from a management firm (a related party) in the amount of $9,300.  On November 29, 2010 the Board approved a convertible promissory note in the amount of $9,300.  Terms include a bonus payment (interest) in the amount of $930.  The note includes a voluntary conversion feature allowing the holder to convert all or part of the amount outstanding into fully paid, non-assessable whole shares of the Company at a rate of $0.001 per share.
 
·  
On November 10, 2010 the Company received a letter of comment from the Securities and Exchange Commission (SEC) regarding Form 10-K for the fiscal year ending December 31, 2009. Management is cooperating fully with the SEC regarding their comments.
 
·  
Effective on November 25, 2010, the holders of an aggregate 28,915,810 shares of common stock of InfoSpi. Inc., a Nevada corporation (the “Company”), entered into a share purchase agreement dated November 25, 2010 (the “Share Purchase Agreement”) with the Chief Executive Officer (the “Buyer”). In accordance with the terms and provisions of the Share Purchase Agreement, the Seller sold the 28,915,810 shares of restricted common stock of the Company to the Buyer at a price of $0.011 per share for a total purchase price of $325,000.00.
 
  
The sale and purchase of the 28,915,810 shares of common stock of the Company constitutes 29.8% of the total issued and outstanding shares. In accordance with the further terms and provisions of the transactions, the Company shall issue an additional 12,500,000 shares of restricted common stock to the Chief Executive Officer pursuant to his appointment as the sole officer and sole director of the Company. This will result in a change in control of the Company. The source of funds used by Buyer to acquire the 28,915,810 shares of common stock of the Company is personal funds. There are no arrangements or understandings between the Buyer and Seller and their respective associates with respect to election of directors or other matters.
 
·  
On January 1, 2011 the Company entered into an Office Building Lease for its corporate headquarters located in Aventura, Florida. Lease terms include: (i) Thirty six (36) month lease term; (ii) Triple-net provisions; (iii) Rent commencing on February 1, 2011 and; (iv) Company responsible for the cost of build-out and partitioning of the space.
 
 
13

 

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.

This Quarterly Report on Form 10-Q is being amended based upon the advisement from our newly appointed public accountants, Randall N. Drake, CPA., P.A. (“Drake”), that our financial statements reviewed and/or audited by our prior independent public accountant, Cornell, Beale & Leigh, LLC (CB&L”), for the quarters referenced below as filed with the Securities and Exchange Commission could not be relied upon since CB&L is not registered under the Public Company Accounting Oversight Board (the “PCAOB”):
 
Period Ended                                                       Form                                         Date Filed with SEC

September 30, 2009                                             10-Q                                         November 23, 2009
December 31, 2009                                              10-K                                         April 14, 2010
March 31, 2010                                                    10-Q                                         April 24, 2010
June 30, 2010                                                       10-Q                                         August 13, 2010

As a result, our Board of Directors concluded on December 5, 2010 that our previously issued financial statements for the periods above should no longer be relied upon. Therefore, we are restating our financial statements for the quarterly period ended September 30, 2009 to reflect: (i) previous unrecorded expenses; (ii) additional common stock issuances; (iii) change in earnings per share; and (iv) the effect on retained earnings (deficit). We are also amending the disclosure in the Quarterly Report to reflect these changes.

ITEM 2.  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.
 
 
14

 

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 pany (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. See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

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
 
 
15

 
 
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 in 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.
 
 
16

 

RESULTS OF OPERATION
 
   
Three Month Periods Ended 
   
For the Period from December 31, 2007 (inception) to March
STATEMENT OF OPERATIONS
  March 31, 2010     March 31, 2009      31, 2010
                 
Revenue
    -0-       -0-       -0-  
                     
Expenses
                   
Professional expenses
  $ 10,950       -0-     $ 19,600  
General and administrative expenses
    1,000       5,000       74,350  
Stock-Based Compensation
    -0-       -0-       107,555  
Executive Compensation
    195,000       -0-       195,000  
Operating Income (Loss)
  $ (206,950 )   $ (5,000 )   $ (396,505 )
                     
Other Income (Expenses)
                   
     Loss on Disposition of Asset
    -0-       -0-       (567 )
     Bonus – Interest Expense
    (9,755 )     -0-       (9,755 )
Net Income (Loss)
  $ (216,705 )   $ (5,000 )   $ (406,827 )
                     
BALANCE SHEET DATA
 
March 31, 2010
   
December 31, 2009
     
Total Assets
  $ 27,600     $ 1,000      
Total Liabilities
    307,305       64,000          
Total Stockholders’ Equity (Deficit)
  $ (279,705     $ (63,000 )    

 
17

 
 
The summarized restated financial data set forth in the table below is derived from and should be read in conjunction with our restated un 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.

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). 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 classification of liabilities that might be necessary should we be unable to continue in operation.

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

Three Month Period Ended March 31, 2010 Compared to Three Month Period Ended March 31, 2009.

Our net loss for the three month period ended March 31, 2010 was ($216,705) compared to a net loss of ( $ 5,000) for the three month period ended March 31, 2009. During the three month periods ended March 31, 2010 and 2009, we did not generate any revenue from operations.

During the three month period ended March 31, 2010, we incur red expenses of $206,950 as compared to expenses of $ 5,000 incurred during the three month period ended March 31, 2009 (an increase of $201,950). These operating expenses incurred during the three month period ended March 31, 2010 consisted of: (i) professional expenses of $10,950 (2009: $-0-); (ii) general and administrative expenses of $1,000 (2009: $5,000); and (iii) executive compensation of $195,000 (2009: $-0-). We did not have any business operations during the three month period ended March 31, 2009 as a result of the bankruptcy.  Our expenses increased primarily based on the incurrence of $195,000 as executive compensation resulting from the consummation of an executive services agreement dated January 8, 2010 with Haim Mayan, our prior  President/Chief Executive Officer. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.   See – “Material Commitments” below.
 
 
18

 
 
The basic weighted average number of shares outstanding was 20,206,624 for the three month period ended March 31, 2010 compared to 4,999,558 for the three month period ended March 31, 2009.

LIQUIDITY AND CAPITAL RESOURCES

Three Month Period Ended March 31, 2010

As of March 31, 2010, our current assets were $ -0-   and our current liabilities were $ 307,305, which resulted in a working capital deficit of $ 307,305 . As of March 31, 2010, our total assets were $ 27,600 comprised of project development costs. .  As at March 31, 2010, our total liabilities were $307,305 comprised of: (i) $5,000 in accrued expenses; (ii) $195,000 in accrued employee compensation; and (iii) $107,305 in notes payable.
 
Stockholders’ equity (deficit) increased from ($63,000) at fiscal year ended December 31, 2009 to ($279,705) for the three month period ended March 31, 2010.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the three month period ended March 31, 2010, net cash flows used in operating activities was $ 79,705. Net cash flows used in operating activities for the three month period ended March 31, 2010 of $79,705 consisted of a net loss of ($216,705) increased by $195,000 in accrued employee compensation and $1,000 in receivables from others and decreased by $59,000 in accrued expenses. For the three month period ended March 31, 2009, net cash flows used in operating activities was $-0-.

Cash Flows from Investing Activities

For the three month period ended March 31, 2010, net cash flows used in financing activities was $27,600 consisting of project development costs relating to capitalization of an accrued expense for an engineering firm. We did not engage in any investing activities during the three month period ended March 31, 2009.

Cash Flows from Financing Activities

For the three month period ended March 31, 2010, net cash flows from financing activities was $107,305 consisting of notes payable. We have financed our operations primarily from debt or the issuance of equity instruments. For the three month period ended March 31, 2010, net cash flows provided from financing activities was $-0- compared to $-0- for the three month period ended March 31, 2009.
 
 
19

 

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 to 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 disclosed below.

Convertible Promissory Notes

On January 17, 2010, we entered into a convertible promissory note with an advisory consulting firm in the amount of $59,000. The terms of the convertible promissory note included a bonus payment (interest) in the amount of $5,900 and a voluntary conversion feature allowing the holder thereof to convert all or a portion of the amount outstanding into shares of our restricted common stock at the rate of $0.03 per share.

On February 10, 2010, we entered into a convertible promissory note with a web designer in the amount of $3,150. The terms of the convertible promissory note included a bonus payment (interest) in the amount of $315 and a voluntary conversion feature allowing the holder thereof to convert all or a portion of the amount outstanding into shares of our restricted common stock at the rate of $0.03 per share.

On February 10, 2010, we entered into a convertible promissory note with a project consultant in the amount of $7,800. The terms of the convertible promissory note included a bonus payment (interest) in the amount of $780 and a voluntary conversion feature allowing the holder thereof to convert all or a portion of the amount outstanding into shares of our restricted common stock at the rate of $0.03 per share.
 
 
20

 

On February 10, 2010, we entered into a convertible promissory note with an engineering firm in the amount of $27,600. The terms of the convertible promissory note included a bonus payment (interest) in the amount of $2,760 and a voluntary conversion feature allowing the holder thereof to convert all or a portion of the amount outstanding into shares of our restricted common stock at the rate of $0.03 per share.

Executive Employment Agreement

On January 8, 2010, we entered into an executive employment agreement effective January 11, 2010 with our then President/Chief Executive Officer (the “Executive Employment Agreement”). In accordance with the terms and provisions of the Executive Employment Agreement: (i) we shall pay a monthly fee of $15,000; (ii) we shall pay an inception bonus of $150,000; and (iii) the termination date shall be December 31, 2013. As of the date of this Quarterly Report, the Executive Employment Agreement has been terminated.

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.
 
 
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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

Prior management p erformed an evaluation under the supervision and with the participation of prior management, including our prior 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, prior management, including our Chief Executive Officer/Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of March 31, 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.

As of the date of this amended Quarterly Report, current management does not believe that internal controls and procedures were effective as of March 31, 2010.

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.
 
 
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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.

As of the date of this amended Quarterly Report, current management does not believe that internal controls and procedures were effective as of March 31, 2010.
 
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 2011. 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.
 
 
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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 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 director effective April 27, 2010. Simultaneously, our 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. Therefore, as of the date of this Quarterly Report, the Board of Directors is comprised of Haim Mayan, Michel Brunet and Ashley Hollington.

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.

Ashley Michael Hollington.  During the past thirty years, Mr. Hollington has been engaged as a chartered quantity surveying professional providing project solutions at stratgeic and technical levels to a diverse range of clients. Mr. Hollington has been a leader in a variety of project environments and has extensive knowledge of project controls, risk management, value engineering, problem solving and process development with the ability to view strategy and translate into results.
 
 
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From approximately February 2008 to present, Mr. Hollington has been engaged as the associate director of Gleeds Management Services where he is responsible for delivery of project management services throughout Wales and the lead project manager on two new hospital projects. From approximately February 1998 to January 2008, Mr. Hollington was an associate at EC Harris where he was the commercial manager to Capital Alliance Development Team, implemented common processes, procedures and reporting structures across whole capital delivery units, the lead commercial manager in the area of delivery team and lead commercial support to the commercial director and team in operations and maintenance arena. From approximately 1996 through 1998, Mr Hollington was the contract development manager at Beard Dove Ltd. where he structured contracts, contract amendments, national framework agreements and refurbished contracts and cost plans. From approximately 1993 through 1995, Mr. Hollington was the area office manager with Robinson Low Francis where he was responsible for contract and staff management and business marketing. From approximately 1992 through 1993, Mr. Hollington was the senior surveyor with Balfour Beatty Project and Engineering where he was the commercial lead on colling section of projects. From approximately 1989 thoguh 1992, Mr. Hollington was the associate director with How Design and Management Limited where he was responsible for all financial and commercial aspects of projects. From approximately 1982 through 1989, Mr. Hollington was the senior quantity surveyor with WPE Limited (Bristol, Cardiff and London) where he was responsible for a variety of projects involving the opening of new offices and businesses. Lastly, from approximately 1973 through 1980, Mr. Hollington was a surveyor with Tilbury Construction Limted and Espley Tyas Construction Limited, respectively, where he was the surveyor on a variety of civil engineering and building projects.

As of the date of this amended Quarterly Report, our management has changed and effective November 25, 2010; (i) Haim Mayan resigned as a member of the Board of Directors and as the President/Chief Executive Officer, Secretary and Treasurer/Chief Financial Officer of the Company; and (ii) Dror Svorai consented to act as a member of the Board of Directors and as the President/Chief Executive Officer, Secretary and Treasurer/Chief Financial Officer of the Company. Michel Brunet previously had resigned as a member of the Board of Directors effective August 3, 2010.

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.
 
 
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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: February 9, 2011 
By:
 /s/ Dror Svorai  
    Dror Svorai, President/Chief Executive Officer  
 
 
Dated: February 9, 2011 
By:
 /s/ Dror Svorai  
   
Dror Svorai, Chief Financial Officer
 

 
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