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EX-31.2 - CERTIFICATION - Inelco Corpex312.htm
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EX-31.1 - CERTIFICATION - Inelco Corpex311.htm


U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
AMENDMENT NO. 1 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 September 30, 2010

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

        For the transition period from ______ to _______

Commission File No. 000-53104

ONTECO CORPORATION,
formerly known as
InfoSpi Inc.
(Name of small business issuer in its charter)
 
 
Nevada
 
51-0668045
(State or other jurisdiction of incorporation
or organization)
  (I.R.S. Employer Identification No.)
 
 
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  February 14, 2011
Common Stock, $0.001
116,890,258
 


 
 

 
 
INFOSPI INC.  
 
Amendment No. 1 to  
Form 10-Q

PART I.   
FINANCIAL INFORMATION
       
           
Item 1.
Financial Statements
    3  
   
   Balance Sheets
    4  
      
   Statements of Operations
    5  
 
   Statements of Cash Flows
    6  
     Statements of Stockholders’ Equity (Deficit)     7  
 
   Notes to Financial Statements
    8  
           
Item 2.   
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    17  
      
         
Item 3.   
Quantitative and Qualitative Disclosures About Market Risk
    25  
      
         
Item 4.
Controls and Procedures
    25  
           
PART II.
OTHER INFORMATION
    28  
      
         
Item 1.   
Legal Proceedings
    28  
      
         
Item 1A.
Risk Factors
    28  
           
Item 2.  
Unregistered Sales of Equity Securities and Use of Proceeds
    28  
           
Item 3.   
Defaults Upon Senior Securities
    29  
      
         
Item 4.      
Reserved and Removed
    29  
           
Item 5.  
Other Information
    29  
      
         
Item 6.     
Exhibits
    31  
 
 
2

 

PART I

ITEM 1. FINANCIAL STATEMENTS
 
 
INFOSPI, INC.
(A Development Stage Company)
Financial Statements
(Expressed in U.S. Dollars)
 
Index to Financial Statements
 
Index
 
       
Balance Sheets
   
4
 
         
Statements of Operations
    5  
         
Statements of Cash Flows
    6  
         
Statements of Stockholders’ Equity (Deficit)
    7  
         
Notes to the Financial Statements
    8  
 
 
3

 
 
INFOSPI, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
 
   
As of
September 30,
2010
   
As of
December 30,
2009
 
    (Unaudited)        
             
ASSETS
 
CURRENT ASSETS
           
Cash
  $ 4,751     $ -  
Receivables from Others
    -       1,000  
                 
TOTAL CURRENT ASSETS
    4,751       1,000  
                 
OTHER ASSETS
               
Project Development Costs
    27,600       -  
                 
TOTAL ASSETS
  $ 32,351     $ 1,000  
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)  
CURRENT LIABILITIES
               
Accounts Payable
  $ 5,000     $ -  
Accrued Expenses
    5,000       64.000  
Accrued Employee Compensation
    263,000       -  
Notes Payable
    157,955       -  
                 
TOTAL CURRENT LIABILITIES
    430,955       64,000  
                 
OTHER LIABILITIES
    -       -  
                 
TOTAL LIABILITIES
    430,955       64,000  
                 
STOCKHOLDERS’ EQUITY (DEFICIT)
               
                 
Common Stock, $0.001 Par Value, 75,000,000 Shares
               
Authorized, 69,990,258 Issued and Outstanding
    69,990       69,990  
Paid in Capital
    43,132       43,132  
Accumulated Deficit
    (511,726 )     (176,122 )
                 
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
    (398,604 )     (63,000 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
  $ 32,351     $ 1,000  

See Notes to Financial Statements

 
4

 
 
INFOSPI, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
 
     
Three Months Ended
     
Nine Months Ended
     
Inception
12/31/2007
Through
 
     
9/30/2010
     
9/30/2009
     
9/30/2010
     
9/30/2009
     
9/30/2010
 
     
(Unaudited)
     
(Unaudited)
     
(Unaudited)
 
REVENUE                                        
Total Revenue   $ -     $ -     $ -     $ -     $ -  
                                         
EXPENSES
                                       
Professional Expenses
    1,987       2,500       13,163       2,500       21,813  
General and Admin Expenses
    9,116       15,000       12,786       35,000       72,136  
Stock-Based Compensation
    -       107,555       -       107,555       107,555  
Executive Compensation
    45,000       -       285,000       -       285,000  
Staff Compensation
    12,000       -       12,000       -       12,000  
Total Expenses
    68,103       125,055       322,949       145,055       498,504  
                                         
OPERATING LOSS
    68,103       125,055       322,949       145,055       498,504  
                                         
OTHER EXPENSES
                                       
Loss on Disposition of Asset
    -       -       -       -       567  
Write-off Amount Due from Others
    -       -       1,000       -       1,000  
Bonus – Interest Expense
    1,900       -       11,655       -       11,655  
Total Other Expenses
    1,900       -       12,655       -       13,222  
                                         
NET LOSS BEFORE
                                       
PROVISION FOR INCOME TAXES
    70,003       125,055       335,604       145,055       511,726  
                                         
PROVISION FOR INCOME TAXES
    -       -       -       -       -  
                                         
NET LOSS
  $ 70,003     $ 125,055     $ 335,604     $ 145,055     $ 511,726  
                                         
Basic Loss Per Share
  $ 0.00     $ 0.00     $ 0.01     $ 0.00          
                                         
Weighted Average Number of Common Shares Outstanding
    29,199,530       5,817,374       29,199,530       5,817,374          
 
See Notes to Financial Statement
 
 
5

 
 
INFOSPI, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
 
   
Three Months Ended
   
Nine Months Ended
   
Inception
12/31/2007
Through
 
   
9/30/2010
   
9/30/2009
   
9/30/2010
   
9/30/2009
    9/30/2010  
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                               
CASH FLOWS FROM OPERATING
                             
ACTIVITIES
                             
Net Loss
  $ (70,003 )   $ (125,055 )   $ (335,604 )   $ (145,055   $ (511,726
                                         
Adjustments to Reconcile Net Loss
                                       
To Cash Provided (Used) by Operations
                                       
                                         
Stock-Based Compensation
    -       107,555       -       107,555       107,555  
Write-off Amounts Due from Others
    -       -       1,000                  
Disposition of Software
    -       -       -       -       567  
                                         
Increase (Decrease) in Operating
                                       
Assets and Liabilities:
                                       
                                         
Accounts Payable
    5,000       -       5,000       -       5,000  
Accrued Expenses
    -       17,500       (59,000     37,500       5,000  
Accrued Employee Compensation
    26,000       -       263,000       -       263,000  
                                         
NET CASH USED BY OPERATIONS
    (39,003     -       (125,604     -       (130,604
                                         
CASH FLOWS USED IN INVESTING
                                       
ACTIVITIES
                                       
Acquisition of Software
    -       -       -       -       (567
Project Development Costs
    -       -       (27,600     -       (27,600
                                         
NET CASH USED IN INVESTING
                                       
ACTIVITIES
    -       -       (27,600     -       (28,167 )
                                         
CASH FLOWS FROM FINANCING
                                       
ACTIVITIES
                                       
Proceeds from Notes Payable
    47,400       -       166,955       -       166,955  
Payments on Notes Payable
    (9,000     -       (9,000 )     -       (9,000
Sale of Common Stock
    -       -       -       -       5,567  
                                         
NET CASH FROM INVESTING
                                       
ACTIVITIES
    38,400       -       157,955       -       163,522  
                                         
NET INCREASE (DECREASE) IN CASH
    (603     -       4,751       -       4,751  
                                         
CASH AT BEGINNING OF PERIOD
    5,354       -       -       -       -  
                                         
CASH AT END OF PERIOD
  $ 4,751     $ -     $ 4,751     $ -     $ 4,751  
                                         
SUPPLEMENTARY DISCLOSURE OF
                                       
CASH FLOW INFORMATION
                                       
                                         
Interest Paid
  $ -     $ -     $ -     $ -     $ -  
Income Taxes Paid
  $ -     $ -     $ -     $ -     $ -  
Stock-Based Compensation   $ -     $ 107,555     $ -     $ 107,555     $ 107,555  
 
See Notes to Financial Statement
 
 
6

 

INFOSPI, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
SEPTEMBER 30, 2010
 
                     
Accumulated
       
                     
During
       
               
Additional
   
the
   
Total
 
   
Common Stock
   
Paid In
   
Development
   
Stockholders’
 
   
Shares
   
Amount
   
Capital
   
Stage
   
Equity (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 )
                                         
Net loss for the Quarter Ended
                                       
June 30, 2010
    -       -       -       (48,896 )     (48,896 )
                                         
Net loss for the Quarter Ended
                                       
Sept. 30, 2010
    -       -       -       (70,003 )     (70,003 )
                                         
Balance, September 30, 2010
    69,990,258     $ 69,990     $ 43,132     $ (511,726 )   $ (398,604 )
 
See Notes to Financial Statements

 
7

 
 
INFOSPI, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2010
 
 
1.  
Nature of Operations and Continuance of Business

InfoSpi, Inc. ("the Company") was organized under the laws of the State of Nevada on December 31, 2007. The Company is a Developmental Stage Company, as defined by ASC 915-10 “Accounting and Reporting by Development Stage Enterprises”.

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.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business.  The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future.  At September 30, 2010 the Company has limited cash resources and will likely require new financing, either through issuing shares or debt, to continue the development of its business.  Management intends to offer additional common stock; however, there can be no assurance that management will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. The continuation of the Company as a going concern is dependent upon the ability of the Company to determine the existence of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, obtain necessary financing and then profitable operations.  As of September 30, 2010, the Company has never generated any revenues and has accumulated losses of $511,726 since inception.  These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
 
 
8

 
 
2.  
Summary of Significant Accounting Policies

a)  
Basis of Presentation
 
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustment) considered necessary for a fair presentation have been included.
 
Operating results for the three month and nine month periods ending September 30, 2010 are not necessarily indicative of the results that may be expected for the year ended December 31, 2010. For further information, refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31. 2009.
 
b)  
Use of Estimates and Assumptions
 
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to its deferred income tax asset valuation allowances.
 
The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

c)  
Cash and Cash Equivalents
 
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
 
d)  
Fair Value of Financial Instruments
 
The Company’s financial instruments consist of cash, prepaid expenses, payables, and due to a stockholder.  The carrying amount of cash, prepaid expenses and payables approximates fair value because of the short-term nature of these items. 
 
e)  
Concentration of Credit Risk
 
Financial instruments that potentially subject the Company to credit risk consist principally of cash. Cash was deposited with a high quality credit institution.
 
 
9

 
 
f)  
Foreign Currency Translation
 
The Company’s functional and reporting currency is the United States dollar. Occasional transactions may occur in foreign currencies and management has adopted ASC 830-20 “Foreign Currency Translation”.  Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
 
g)  
 Income Taxes
 
The Company accounts for income taxes using the asset and liability method in accordance with ASC740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduced deferred tax assets to the amount that is believed more likely than not to be realized.
 
h)  
Loss Per Share
 
The Company computes loss per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations.  Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
 
i)  
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 and nine ended September 30, 2010 and 2009, the Company recorded stock-based compensation expenses related to issuances of stock, stock options and warrants to the Company's employees, directors and consultants; for three months ended September 30, 2010 and 2009, $0 and $0 respectively and for the nine months ended September 30, 2010 and 2009, $0 and $0 respectively.
 
 
10

 
 
j)  
Recent Accounting Pronouncements
 
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.
 
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 financial statements as currently presented.
 
3.  
Project Development Cost
 
On January 15, 2010 the Company engaged an engineering firm to design, plan and supervise the development of proprietary “critical reactor” equipment to be used in environmentally friendly sewer and sludge conversion and used tire and plastic recovery. The initial cost of this project, in the amount of $27,600 was capitalized pending the results of the Company’s efforts to commercialize this technology.
 
4.  
Executive Compensation Agreement
 
On January 8, 2010, the Company entered an Executive Employment Agreement effective January 11, 2010 with its 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 three months and nine ended September 30, 2010 and 2009, the Company recorded executive compensation expenses to the Company's chief executive officer; for three months ended September 30, 2010 and 2009, $45,000 and $0 respectively and for the nine months ended September 30, 2010 and 2009, $285,000 and $0 respectively. During the third quarter ending September 30, 2010, the Company paid $22,000 resulting in an accrued employee compensation liability of $263,000.
 
 
11

 
 
5.  
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.
 
·  
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 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 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.
 
·  
On June 7, 2010 the Company entered into a non-interest-bearing convertible promissory demand note with a related party investor in the amount of $5,000.  Terms include 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.
 
 
12

 
 
·  
On June 7, 2010 the Company entered into a non-interest-bearing convertible promissory demand note with an investor in the amount of $10,000.  Terms include 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 July 19, 2010 the Company entered into a non-interest-bearing convertible promissory demand note with an investor in the amount of $2,500.  Terms include 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 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.
 
·  
On August 9, 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 August 25, 2010 the Company entered into a non-interest-bearing convertible promissory demand note with an investor in the amount of $4,000.  Terms include 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 September 2, 2010 the Company entered into a non-interest-bearing convertible promissory demand note with an investor in the amount of $20,000.  Terms include 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.
 
6.  
Stockholders’ Equity (Deficit) and 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 September 30, 2010 and December 31, 2009, there were a total of 69,990,258 common shares issued and outstanding, respectively.

·  
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.
 
 
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·  
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.
 
·  
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.
 
·  
On June 15, 2010, our Board of Directors and shareholders holding a majority of the total issued and outstanding shares of common stock pursuant to written consents in lieu of a meeting approved an amendment to our Articles of Incorporation to increase the authorized capital (the “2010 Amendment”). The 2010 Amendment was filed with the Nevada Secretary of State on July 22, 2010 increasing our authoirzed capital from 75,000,000 shares of common stock to 350,000,000 shares of common stock, par value $0.001, and 100,000,000 shares of preferred stock, par value $0.001.

·  
On January 18, 2011, our Board of Directors and shareholders holding a majority of the total issued and outstanding shares of common stock pursuant to written consents in lieu of a meeting approved a further amendment to our Articles of Incorporation to increase the authorized capital (the “2011 Amendment”). The 2011 Amendment was filed with the Nevada Secretary of State on January 19, 2011 increasing our authorized capital from 350,000 shares of common stock to 750,000,000 shares of common stock, par value $0.001, and 100,000,000 shares of preferred stock, par value $0.001.
 
7.  
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 September 30, 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 $511,726 which expire in 2024.
 
The amount of and ultimate realization of the benefits from the operating loss carry-forwards 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 September 30, 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 periods ended September 30, 2010 and 2009 and from inception (December 31, 2007) through September 30, 2010 and the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are indicated below:
 
 
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Three Months Ended
   
Nine Months Ended
   
Inception
12/31/2007
Through
 
   
9/30/2010
    9/30/2009    
9/30/2010
    9/30/2009    
9/30/2010
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                               
Net Operating Losses Carried Forward
  $ 70,003     $ 125,055     $ 335,604     $ 145,055     $ 511,726  
Statutory Tax Rate
    35 %     35 %     35 %     35     35 %
Effective Tax Rate
    -       -       -       -       -  
Deferred Tax Asset
  $ 25,000     $ 44,000     $ 118,000     $ 51,000     $ 180,000  
Valuation Allowance
  $ ( 25,000 )   $ ( 44,000 )   $ (118,000   $ (51,000   $ (180,000
Net Deferred Tax Asset
  $ 0     $ 0     $ 0     $ 0     $ 0  
 
8.  
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.
 
9.  
Commitments and Contingencies
 
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 into notes payable each note 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. The notes have a “bonus interest” feature calculated at ten percent (10%) and are due on demand.
 
During the second quarter, 2010, the Company entered into two convertible demand notes. Each note includes 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. The notes have no stated interest rate and are due on demand.
 
During the third quarter, 2010, the Company entered into five convertible demand notes. Each note includes 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. The notes have no stated interest rate and are due on demand.
 
 
10.  
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 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.
 
 
15

 
 
11.  
Subsequent Events
 
These financial statements were approved by management and were issued on February 16, 2010.  Subsequent events have been evaluated through this date and include the following:
 
·  
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, Eilay Maman and Oyster Shell Investments LLLP (collectively, the “Seller”), who are the record holders of an aggregate 28,915,810 shares of our common stock entered into a share purchase agreement dated November 25, 2010 (the “Share Purchase Agreement”) with Dror Svorai, our current President/Chief Executive Officer (“Svorai”). In accordance with the terms and provisions of the Share Purchase Agreement, the Seller sold the 28,915,810 shares of restricted common stock to Svorai at a price of $0.011 per share for a total purchase price of $325,000.00. The terms and provisions of the Share Purchase Agreement provide that: (i) $150,000 is to be paid upon execution (which as of the date of this Quarterly Report has been paid); (ii) $50,000 is due and owing on January 15, 2011; (iii) $50,000 is due and owing on February 15, 2011; and (iv) $75,000 is due and owing on March 15, 2011. As of the date of this Quarterly Report, an aggregate amount of $200,000 has been paid to the Seller.
 
Until the purchase price is paid in full by Svorai, the shares of common stock are being held in an escrow account to be released pro-rata to Svorai as the installments are paid to the Seller by Svorai. The sale and purchase of the 28,915,810 shares of our common stock constituted approximately 29.8% of the total issued and outstanding shares.
 
·  
Effective on November 25, 2010, in accordance with the appointment of Dror Svorai as our sole executive officer, President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer, and our sole director, we issued an aggregate 12,500,000 shares of restricted common stock to Svorai at $0.001 per share. The Board of Directors evaluated certain factors regarding the issuance including, but not limited to, the following: (i) the 12,5000,000 shares of common stock are restricted and cannot be resold except under the parameters of Rule 144; (ii) the opportunity for successful new business operations for us based upon the engagement of Svorai and the opportunities and business contacts provided to us through his engagement; and (iii) our inability to monetarily compensate Dror Svorai and recognition of his current and continuous dedication and long-term loyalty to us.
 
·  
On January 1, 2011, we entered into a three-year office building lease for our corporate headquarters located in Aventura, Florida. The lease terms include: (i) monthly rent commencing on February 1, 2011 in the amount of $3,794.35 plus sales tax; (ii) triple-net provisions; and (iii) our responsibility for the cost of build-out and partitioning of the space.

·  
Effective on January 20, 2011, our Board of Directors approved and authorized the execution of a letter of intent dated January 20, 2011 (the “Letter of Intent”) with NexPhase Lighting, Inc., a privately held Florida corporation (“NexPhase”). NexPhase is in the business of designing, developing and manufacturing high quality LED intelligent lighting fixtures.
 
In accordance with the terms and provisions of the Letter of Intent: (i) we will acquire from the shareholders of NexPhase all of the issued and outstanding shares of NexPhase; (ii) in exchange therefore, we will issue a certain number of shares of its restricted common stock, which specific share exchange ratio is currently under negotiation; (iii) NexPhase will transfer and assign to us all existing material contracts including those related to distribution, licensing and marketing and those dealing with the grant of rights for the use of any and all intellectual property; (iv) we will assume all other assets of NexPhase including licenses, royalty rights, equipment, product designs, marketing and sale materials, logos, trademarks, copyrights and website; (v) we will further assume certain liabilities of NexPhase including all trade and debt obligations; and (vi) both parties shall both engage in due diligence to their respective satisfaction.
 
The Letter of Intent is also subject to various conditions precedent including, but not limited to, the successful negotiation and execution by February 21, 2011 of a definitive agreement and related other agreements in a form acceptable to both us and NexPhase. In the event a definitive agreement is not executed by February 21, 2011, the Letter of Intent may be terminated.
 
 
16

 
 
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 is being amended in accordance with the comment letter dated March 28, 2011 from the Securities and Exchange Commission regarding our controls and procedures.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
BUSINESS DEVELOPMENT

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

Agreement for the Purchase of Common Stock and Warrants

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

Thus, based upon our change in control, our business operations currently involve the implementation of proprietary processes through strategic alliances. Our purpose is to commercialize proven technologies which have been developed to address such areas as sewer and sludge conversion and used tires and plastic recovery. The objective is to minimize and reverse the impact of these products on the environment. We have been in the development stage since our formation and have not yet realized any revenues from its planned operations.
 
 
17

 

RECENT DEVELOPMENT

Amendment to Articles of Incorporation

On June 15, 2010, our Board of Directors and shareholders holding a majority of the total issued and outstanding shares of common stock pursuant to written consents in lieu of a meeting approved an amendment to our Articles of Incorporation to increase the authorized capital (the “2010 Amendment”). The 2010 Amendment was filed with the Nevada Secretary of State on July 22, 2010 increasing our authoirzed capital from 75,000,000 shares of common stock to 350,000,000 shares of common stock, par value $0.001, and 100,000,000 shares of preferred stock, par value $0.001.

Amendment to Articles of Incorporation

On January 18, 2011, our Board of Directors and shareholders holding a majority of the total issued and outstanding shares of common stock pursuant to written consents in lieu of a meeting approved a further amendment to our Articles of Incorporation to increase the authorized capital (the “2011 Amendment”). The 2011 Amendment was filed with the Nevada Secretary of State on January 19, 2011 increasing our authorized capital from 350,000 shares of common stock to 750,000,000 shares of common stock, par value $0.001, and 100,000,000 shares of preferred stock, par value $0.001.

The Board of Directors of the Corporation may authorize the issuance from time to time of shares of its stock of any class, whether now or hereafter authorized, or securities convertible into shares of its stock of any class, whether now or hereafter authorized, for such consideration as the Board of Directors may deem advisable, subject to such restrictions or limitation, if any, as may be set forth in the bylaws of the Corporation.

The preferred stock may also be issued by the Corporation from time to time in one or more series and in such amounts as may be determined by the Board of Directors. The designations, voting rights, amounts of preference upon distribution of assets, rates of dividends, premiums of redemption, conversion rights and other variations, if any, the qualifications, limitations or restrictions thereof, shall be such as are fixed by the Board of Directors, authority so to do being hereby expressly granted and as are stated and expressed in a resolution or resolutions adopted by the Board of Directors providing for the issue of such series of preferred stock.”

CURRENT OPERATIONS

Changes in Control
 
Effective on November 25, 2010, Eilay Maman and Oyster Shell Investments LLLP (collectively, the “Seller”), who are the record holders of an aggregate 28,915,810 shares of our common stock entered into a share purchase agreement dated November 25, 2010 (the “Share Purchase Agreement”) with Dror Svorai, our current President/Chief Executive Officer (“Svorai”). In accordance with the terms and provisions of the Share Purchase Agreement, the Seller sold the 28,915,810 shares of restricted common stock to Svorai at a price of $0.011 per share for a total purchase price of $325,000.00. The terms and provisions of the Share Purchase Agreement provide that: (i) $150,000 is to be paid upon execution (which as of the date of this Quarterly Report has been paid); (ii) $50,000 is due and owing on January 15, 2011; (iii) $50,000 is due and owing on February 15, 2011; and (iv) $75,000 is due and owing on March 15, 2011. As of the date of this Quarterly Report, an aggregate amount of $200,000 has been paid to the Seller. Until the purchase price is paid in full by Svorai, the shares of common stock are being held in an escrow account to be released pro-rata to Svorai as the installments are paid to the Seller by Svorai. The sale and purchase of the 28,915,810 shares of our common stock constituted approximately 29.8% of the total issued and outstanding shares.
 
18

 
 
In accordance with the further terms and provisions of the transactions and the appointment of Svorai as our sole executive officer, President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer, and as sole director, we issued 12,500,000 shares of our restricted common stock to Svorai. This resulted in a change in control and new business operations. See “Part II. Other Information. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.”

Letter of Intent

Effective on January 20, 2011, our Board of Directors approved and authorized the execution of a letter of intent dated January 20, 2011 (the “Letter of Intent”) with NexPhase Lighting, Inc., a privately held Florida corporation (“NexPhase”). NexPhase is in the business of designing, developing and manufacturing high quality LED intelligent lighting fixtures.
 
In accordance with the terms and provisions of the Letter of Intent: (i) we will acquire from the shareholders of NexPhase all of the issued and outstanding shares of NexPhase; (ii) in exchange therefore, we will issue a certain number of shares of its restricted common stock, which specific share exchange ratio is currently under negotiation; (iii) NexPhase will transfer and assign to us all existing material contracts including those related to distribution, licensing and marketing and those dealing with the grant of rights for the use of any and all intellectual property; (iv) we will assume all other assets of NexPhase including licenses, royalty rights, equipment, product designs, marketing and sale materials, logos, trademarks, copyrights and website; (v) we will further assume certain liabilities of NexPhase including all trade and debt obligations; and (vi) both parties shall both engage in due diligence to their respective satisfaction.
 
The Letter of Intent is also subject to various conditions precedent including, but not limited to, the successful negotiation and execution by February 21, 2011 of a definitive agreement and related other agreements in a form acceptable to both us and NexPhase. In the event a definitive agreement is not executed by February 21, 2011, the Letter of Intent may be terminated.

RESULTS OF OPERATION

STATEMENT OF OPERATIONS
 
Nine Month Periods Ended September 30, 2010 and September 30, 2009
   
For the Period from December 29, 2003 (inception) to September 30, 2010
                 
Revenue
  $ -0-     $ -0-     $ -0-  
                     
Expenses
                   
Professional expenses
    13,163       2,500       21,813  
General and administrative expenses
    12,786       35,000       72,136  
Stock-Based Compensation
    -0-       107,555       107,555  
Executive Compensation
    285,000       -0-       285,000  
Staff Compensation
    12,000       -0-       12,000  
Operating Income (Loss)
    (322,949 )     (145,055 )     (498,504 )
                     
Other Expenses
                   
     Loss on Disposition of Asset
  $ -0-     $ -0-     $ 567  
     Write-off Amount Due from Others
    1,000       -0-       1,000  
      Bonus – Interest Expense
    11,655       -0-       11,655  
Net Income (Loss)
    (335,604 )     (145,055 )     (511,726 )
 
BALANCE SHEET DATA
 
September 30, 2010
   
December 31, 2009
 
Total Assets
  $ 32,351     $ 1,000  
Total Liabilities
    430,955       64,000  
Total Stockholders’ Equity (Deficit)
    (398,604 )     (63,000 )

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

The summarized financial data set forth in the table below is derived from and should be read in conjunction with our unaudited financial statements for the period from inception (December 31, 2007) through September 30, 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 unaudited 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 unaudited 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 substantially no operations with the exception of the preparation of our filings with the SEC and preliminary discussions with various individuals and businesses concerning acquisitions or a business combination. 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

Nine Month Period Ended September 30, 2010 Compared to Nine Month Period Ended September 30, 2009.

Our net loss for the nine month period ended September 30, 2010 was ($335,604) compared to a net loss of ($145,055) for the nine month period ended September 30, 2009 (an increase of $190,549). During the nine month periods ended September 30, 2010 and 2009, we did not generate any revenue from operations.

During the nine month period ended September 30, 2010, we incurred expenses of $322,949 compared to expenses of $145,055 incurred during the nine month period ended September 30, 2009 (an increase of $177,894). The expenses incurred during the nine month period ended September 30, 2010 consisted of: (i) professional expenses of $13,163 (2009: $2,500); (ii) general and administrative expenses of $12,786 (2009: $35,000); (iii) stock-based compensation of $-0- (2009: $107,555); (iv) executive compensation of $285,000 (2009: $-0-); and (v) staff compensation of $12,000 (2009: $-0-). We did not have any substantial business operations during the nine month period ended September 30, 2009 as a result of the bankruptcy.  Our expenses increased primarily based on the incurrence of $285,000 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.

The basic weighted average number of shares outstanding was 29,199,530 for the nine month period ended September 30, 2010 compared to 5,817,374 for the nine month period ended September 30, 2009.
 
 
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Three Month Period Ended September 30, 2010 Compared to Three Month Period Ended September 30, 2009.

Our net loss for the three month period ended September 30, 2010 was ($70,003) compared to a net loss of ($125,055) for the nine month period ended September 30, 2009 (an increase of $55,052). During the three month periods ended September 30, 2010 and 2009, we did not generate any revenue from operations.

During the three month period ended September 30, 2010, we incurred expenses of $68,103 compared to expenses of $125,055 incurred during the three month period ended September 30, 2009 (an increase of $56,952). The expenses incurred during the three month period ended September 30, 2010 consisted of: (i) professional expenses of $1,987 (2009: $2,500); (ii) general and administrative expenses of $9,116 (2009: $15,000); (iii) stock-based compensation of $-0- (2009: $107,555); (iv) executive compensation of $45,000 (2009: $-0-); and (v) staff compensation of $12,000 (2009: $-0-). We did not have any substantial business operations during the three month period ended September 30, 2010 as a result of the bankruptcy.  Our expenses increased primarily based on the incurrence of $45,000 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.

The basic weighted average number of shares outstanding was 29,199,530 for the three month period ended September 30, 2010 compared to 5,817,374 for the three month period ended September 30, 2009.
 
LIQUIDITY AND CAPITAL RESOURCES

Nine Month Period Ended September 30, 2010

As of September 30, 2010, our current assets were $4,751 and our current liabilities were $430,955, which resulted in a working capital deficit of $426,204. As of September 30, 2010, our total assets of $32,351 were comprised of: (i) $4,751 in cash; and (ii) $27,600 in project development costs. As of September 30, 2010, our total liabilities of $430,955 were comprised of: (i) $5,000 in accrued expenses; (ii) $5,000 in accrued expenses; (iii) $263,000 in accrued employee compensation; and (iv) $157,955 in notes payable.

Stockholders’ equity (deficit) increased from ($63,000) for fiscal year ended December 31, 2009 to ($398,604) for the nine month period ended September 30, 2010.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the nine month period ended September 30, 2010, net cash flows used by operating activities was ($125,604). Net cash flows used in operating activities for the nine month period ended September 30, 2010 consisted of a net loss of ($335,604) adjusted by $1,000  in write-off amounts due from others, increased by $263,000 in accrued employee compensation and $5,000 in accounts payable and further decreased by $59,000 in accrued expenses. . For the nine month period ended September 30, 2009, net cash flows used in operating activities was $-0-.
 
 
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Cash Flows from Investing Activities

For the nine month period ended September 30, 2010, net cash flows used in investing activities was ($27,600) consisting of project development costs. We did not engage in any investing activities during the nine month period ended September 30, 2009.

Cash Flows from Financing Activities

We have financed our operations primarily from debt or the issuance of equity instruments. For the nine month period ended September 30, 2010, net cash flows provided from financing activities was $157,955 consisting of notes payable. We did not engage in any financing activities during the nine month period ended September 30, 2009.

PLAN OF OPERATION AND FUNDING

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

As of the date of this Quarterly Report, we do not have any material commitments other than as described 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 January 3, 2011, we amended the terms and conditions of the convertible promissory note regarding the conversion price, which was adjusted from $0.03 to $0.001, the par value of our shares of common stock.

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.

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.

On June 7, 2010, we entered into a non-interest bearing convertible promissory demand note with a related party investor in the amount of $5,000. The terms of the convertible promissory demand note include 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.  The note has no stated due date.

On June 7, 2010, we entered into a non-interest bearing convertible promissory demand note with a related party investor in the amount of $10,000. The terms of the convertible promissory demand note include 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.  The note has no stated due date.

On July 19, 2010, we entered into a non-interest bearing convertible promissory demand note with a related party investor in the amount of $2,500. The terms of the convertible promissory demand note include 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.  The note has no stated due date.

On July 19, 2010, we entered into a non-interest bearing convertible promissory demand note with a related party investor in the amount of $14,000. The terms of the convertible promissory demand note include a bonus payment (interest) in the amount of $1,400 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.  The note has no stated due date.
 
 
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On August 9, 2010, we entered into a non-interest bearing convertible promissory demand note with a related party investor in the amount of $5,000. The terms of the convertible promissory demand note include a bonus payment (interest) of $500 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.  The note has no stated due date.

On August 25, 2010, we entered into a non-interest bearing convertible promissory demand note with a related party investor in the amount of $4,000. The terms of the convertible promissory demand note include 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.  The note has no stated due date.

On September 2, 2010, we entered into a non-interest bearing convertible promissory demand note with a related party investor in the amount of $20,000. The terms of the convertible promissory demand note include 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.  The note has no stated due date.

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 September 30, 2010, we accrued executive compensation of $285,000.

Lease

On January 1, 2011, we entered into a three-year office building lease for our corporate headquarters located in Aventura, Florida. The lease terms include: (i) monthly rent commencing on February 1, 2011 in the amount of $3,794.35 plus sales tax; (ii) triple-net provisions; and (iii) our responsibility for the cost of build-out and partitioning of the space.

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

Interest Rate

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

ITEM IV. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures
 
Management performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our prior management, including our C hief Executive Officer/Chief Financial Officer, concluded that our disclosure controls and procedures were not effective as of September 30, 2010 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer/Chief Financial Officer, as appropriate to allow timelydecisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procesures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  Based upon that evaluation and the identification of certain material weakness described below, our Chief Executive Officer/Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report.
 
 
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We began preparing to be in compliance with the internal control obligations, including Section 404, for our fiscal year ending December 31, 2010. We believe that our current accounting staff is professional and experienced in accounting requirements and procedures generally accepted in the United States. Management, however, has determined that our internal audit function may be deficient due to insufficient qualified resources to perform internal audit functions. Our management determined that the lack of an audit committee of our Board of Directors at March 31, 2010 may have contributed to insufficient oversight of our accounting and audit functions.
 
In order to correct the foregoing weaknesses, we have taken certain remediation measures and designed new internal controls and procedures to ensure: (a) effectiveness and efficiency of operations; (b) reliability of financial reporting; and (c) compliance with laws and regulations. To that end, management will provide a controlled environment which organizes and influences its people.
 
In early January 2011, we acquired new office space and relocated its headquarters. Additionally, management is establishing an information and communication system for its executives and employees allowing them to carry out their responsibilities in an organized and process driven manner.
 
Following the recent change in control the following steps have been implemented:
 
 (a)      
The new public accounting firm Randall N. Drake, CPA, P.A. has been engaged on December  5, 2010 to review and or audit our restated financial statements beginning with the quarterly report for period ended September 30, 2010.
   
 (b)      
The firm engaged an accounting facilitator on November 26, 2010 to assist with: (a) compiling and maintaining our financial records; (b) assisting the bookkeeping staff with proper recording of transactions; (c) maintaining permanent accounting records and proper backup procedures; and (d) providing continuous monitoring of accounting functions throughout the company. In addition, the facilitator will perform a risk assessment which identifies and analyzes the relevant risks management should address in order to achievement of its objectives. The facilitator will also assist with the preparation of written policies and procedures that will help ensure management directives are carried out.
   
(c)      
Our President/Chief Executive Officer is serving as the primary point of communication between us and the audit firm.  Management has established a direct line of communication with the audit firm to ensure that the auditor is aware of management's intent and actions.
 
Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets and the recording of transactions will be performed by separate individuals.
 
 
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We believe that the foregoing steps will remediate the significant deficiencies identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate. A material weakness (within the meaning of PCAOB Auditing Standard No. 5) 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. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company's financial reporting.
 
Inherent Limitations on Effectiveness of Controls
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate
 
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 prior Chief Executive Officer/Chief Financial Officer have concluded that these controls and procedures are effective at the “reasonable assurance” level.

Changes in internal controls

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

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

In accordance with the appointment of Dror Svorai as our sole executive officer, President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer, and our sole director, we issued an aggregate 12,500,000 shares of restricted common stock to Svorai at $0.001 per share. The Board of Directors evaluated certain factors regarding the issuance including, but not limited to, the following: (i) the 12,5000,000 shares of common stock are restricted and cannot be resold except under the parameters of Rule 144; (ii) the opportunity for successful new business operations for us based upon the engagement of Svorai and the opportunities and business contacts provided to us through his engagement; and (iii) our inability to monetarily compensate Dror Svorai and recognition of his current and continuous dedication and long-term loyalty to us.
 
The following table sets forth certain information, as of the date of this Quarterly Report, with respect to the beneficial ownership of the outstanding common stock by (i) any holder of more than five (5%) percent; (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group. Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned. Shares of common stock subject to options, warrants, or other rights currently exercisable or exercisable within 60 days of the date of this Current Report are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the stockholder holding such options and warrants, but are not deemed outstanding for computing the percentage of any other stockholder.
 
 
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Unless otherwise indicated, each of the stockholders named in the table below has sole voting and investment power with respect to such shares of common stock.  

Name of Beneficial Owner
 
Number of Shares Beneficially Owned
 
Percentage Beneficially Owned (1)
         
Officers and Directors:
       
Dror Svorai
1720 Harrison Street, 18th Floor
Suite Penthouse A
Hollywood, Florida 33020
10% or Greater Owners
 
41,415,810 (2)
 
35.4%
         
Oliver Danan
256 SW 5th Street
Boca Raton, Florida 33432
 
16,666,300
 
14.3%
____________________
 
(1)  
Based on 116,890,258 shares of common stock issued and outstanding as of the date of this Quarterly Report.
 
(2)  
Mr. Svorai holds of record 12,500,000 shares of common stock. Upon payment of the full purchase price of $325,000, the 14,400,000 shares held of record by Eilay Maman (representing a 14.9% equity interest) and the 14,515,810 shares held of record by Oyster Shell Investment LLLP (representing a 15.0% equity interest) will be transferred to Dror Svorai upon full payment of the purchase price no later than March 15, 2011. As of the date of this Quarterly Report, the 28,915,810 shares are being held in escrow. In accordance with the terms and provisions of the Share Purchase Agreement, a certain number of shares have and will be periodically released and transferred to Mr. Svorai.

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.
 
Following the Share Purchase Agreement 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 our President/Chief Executive Officer, Secretary and Treasurer/Chief Financial Officer.
 
 
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The biography of the new sole director and officer is set forth below as follows:

Dror Svorai. During the past ten years, Mr. Svorai has served in executive positions, including president and chief executive officer, and as a member of the board of directors of certain publicly traded companies. From 1995 to April 26, 2010, Mr. Svorai was the president and chief executive officer of Green LED Technologies, Inc., a Florida corporation, which he founded. On September 18, 2009, Green LED Technologies, Inc. was subsequently acquired by Hi Score Corporation.  The acquisition resulted in the appointment of Mr. Svorai as the president/chief executive officer and a director of Hi Score Corporation. In April 2010, Mr. Svorai resigned from his executive positions and as a director with Hi Score Corporation. Prior to and during this period, Mr. Svorai also was involved in investment of real estate and as a business owner in the garment industry and the private jet industry. From 1997 until 2001, Mr. Svorai was the founder and chief executive officer of Ocean Drive of Orlando. From 1998 until 2003, Mr. Svorai was the founder and chief executive officer of Ocean Drive Fashion. From 2003 until 2006 Mr. Svorai was the founder and chief executive officer of the D & D Fashion Group Inc.

Effective on May 25, 2010, our Board of Directors accepted the resignation from Ashley Hollington as the Chief Operating Officer and a director effective May 25, 2010. Michel Brunet previously had resigned as a member of the Board of Directors effective August 3, 2010.

Effective on April 27, 2010, our Board of Directors accepted the resignations from Chris Hamilton as the Vice President and a director and Oliver Danan as the Vice President and Chief Operating Officer and a director effective April 27, 2010. Simultaneously, 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.

CHANGES IN OUR CERTIFYING ACCOUNTANT
 
We have engaged Randall N. Drake, CPA, P.A. (“Drake”) as our principal independent registered public accounting firm effective December 5, 2010. We accepted the resignation of Cornell, Beall & Leigh, LLC (“CB&L”) effective December 1, 2010. The decision to change our principal independent registered public accounting firm was based upon the fact that CB&L was not registered under the Public Company Accounting Oversight Board (“PCAOB”). The decision to change our principal independent registered public accounting firm was approved by our Board of Directors. We restated our financial statements for the quarters ended September 30, 2009, March 31, 2010 and June 30, 2010 and for fiscal year ended December 31, 2009 to include reviewed and/or audited financial statements.
 
The report of CB&L on our financial statements for fiscal year ended December 31, 2009 (which included the balance sheet as of December 31, 2009 and the statement of operations, cash flows and stockholders’ equity from inception through December 31, 2009), did not contain an adverse opinion or disclaimer of opinion, nor was it modified as to uncertainty, audit scope or accounting principles, other than to state that there is substantial doubt as to our ability to continue as a going concern.  During our fiscal year ended December 31, 2009, and during the subsequent period through to the date of CB&L’s resignation, there were no disagreements between us and CB&L, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of CB&L, would have caused CB&L to make reference thereto in its report on our audited financial statements.
 
We provided CB&L with a copy of the Current Report on Form 8-K and requested that CB&L furnish us with a letter addressed to the Securities and Exchange Commission stating whether or not CB&L agreed with the statements made in the Current Report on Form 8-K with respect to CB&L and, if not, stating the aspects with which they do not agree.  We received the requested letter from CB&L wherein they have confirmed their agreement to our disclosures in the Current Report with respect to CB&L.  A copy of CB&L’s letter was filed as an exhibit to the Current Report.
 
In connection with our appointment of Drake as our principal registered accounting firm at this time, we have not consulted Drake on any matter relating to the application of accounting principles to a specific transaction, either completed or contemplated, or the type of audit opinion that might be rendered on our financial statements.
 
 
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NON RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OF COMPLETED INTERIM REVIEW.

On approximately December 5, 2010, our Board of Directors was advised by our newly appointed independent 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 was 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.

As of the date of this Quarterly Report, we have filed amendments to all of the Form 10-Qs and the Form 10-K for the periods referenced above restating our financial statements and including either reviewed or audited financial statements.

Our Chief Executive Officer/President discussed these matters disclosed in the filing on Form 8-K with our independent public accountants on approximately December 5, 2010.

ITEM 6. EXHIBITS
 
Exhibits:
 
10.1 
Letter of Intent dated January 20, 2011 between InfoSpi Inc. and NexPhase LightingInc.(1)
 
16.1 
Letter from Cornell, Beale and Leigh, LLC dated December 14, 2010.  (2)

16.1 
Letter from Randall N. Drake, CPA, dated January 5, 2011 regarding confirmationof Section 4.02(b).(3)

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.
_________________
(1) 
Incorporated by reference from Current Report on Form 8-K filed with the Commissionon January 24, 2011.

(2) 
Incorporated by reference from Current Report on Form 8-K filed with the Commission on December 14, 2010.

(3) 
Incorporated by reference from Current Report on Form 8-K filed with the Commission on January 5, 2011.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
 
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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.
 
 
ONTECO CORPORATION
 
       
Dated: April 25, 2011  
By:
/s/ Dror Svorai  
    Dror Svorai, Chief Executive Officer  
       
Dated: April 25, 2011   By: /s/ Dror Svorai  
    Dror Svorai, Chief Financial Officer  

 
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