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EX-32.1 - EX 32.1 SECTION 906 CERTIFICATIONS - HARBOR ISLAND DEVELOPMENT CORP.f093011q_ex32z1.htm
EX-31.2 - EX 31.2 SECTION 302 CERTIFICATIONS - HARBOR ISLAND DEVELOPMENT CORP.f093011q_ex31z2.htm
EX-31.1 - EX 31.1 SECTION 302 CERTIFICATIONS - HARBOR ISLAND DEVELOPMENT CORP.f093011q_ex31z1.htm
EXCEL - IDEA: XBRL DOCUMENT - HARBOR ISLAND DEVELOPMENT CORP.Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

________________


FORM 10-Q

________________

 

  X . QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011


      . TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______ to _______


Commission File Number 333-166522


HARBOR ISLAND DEVELOPMENT CORP.

(Name of small business issuer in its charter)

 

Nevada

 

27-2464185

(State of incorporation)

  

(I.R.S. Employer Identification No.)

 

2275 NW 150th Street, Unit B

Opa Locka, FL 33054

 (Address of principal executive offices)

 

305-688-7494

 (Registrant’s telephone number)


with a copy to:

Carrillo Huettel, LLP

3033 Fifth Ave. Suite 400

San Diego, CA 92103

Telephone (619) 546-6100

Facsimile (619) 546-6060

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

  X . Yes          . No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

  X . Yes           .  No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer

      .                                      

Accelerated Filer  

      .   


Non-Accelerated Filer

      .                 

Smaller Reporting Company  

  X .


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    X .  Yes        .    No


As of November 14, 2011, there were 5,000,000 shares of the registrant’s $0.001 par value common stock issued and outstanding.


 





HARBOR ISLAND DEVELOPMENT CORP.


TABLE OF CONTENTS 

 

 

 

  

Page

 

 

PART I.              FINANCIAL INFORMATION

 

  

 

ITEM 1.

FINANCIAL STATEMENTS

3

 

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

11

 

 

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

14

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES

14

  

 

PART II.            OTHER INFORMATION

 

  

 

ITEM 1.

LEGAL PROCEEDINGS

14

 

 

 

ITEM 1A.

RISK FACTORS

14

 

 

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

15

 

 

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

15

 

 

 

ITEM 4.

[REMOVED AND RESERVED]

15

 

 

 

ITEM 5.

OTHER INFORMATION

15

 

 

 

ITEM 6.

EXHIBITS

15


Special Note Regarding Forward-Looking Statements


Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Harbor Island Development Corp. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.


*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "HIDC" refers to Harbor Island Development Corp.




2



PART I - FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS



Harbor Island Development Corp.

(A Development Stage Company)


September 30, 2011


Index


Balance Sheets (unaudited)

4


Statements of Operations (unaudited)

5


Statements of Cash Flows (unaudited)

6


Notes to the Financial Statements (unaudited)

7








3





Harbor Island Development Corp.

(A Development Stage Company)

Balance Sheets

(expressed in U.S. dollars)

(unaudited)

 

September 30,

2011

$

March 31,

2011

$

 



ASSETS



 



Current Assets



 



Cash

1,927

242

 

 

 

Total Assets

1,927

242

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable

32,485

12,000

Accrued liabilities

7,969

4,645

Due to related parties

42,500

27,500

Notes payable – related

64,301

53,551

Notes payable

8,100

8,100

 

 

 

Total Liabilities

155,355

105,796

 

 

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

Preferred stock, 10,000,000 shares authorized, $0.001 par value;

nil shares issued and outstanding

 

 

 

Common stock, 250,000,000 shares authorized, $0.001 par value;

5,000,000 shares issued and outstanding

5,000

5,000

 

 

 

Deficit accumulated during the development stage

(158,428)

(110,554)

 

 

 

Total Stockholders’ Deficit

(153,428)

(105,554)

 

 

 

Total Liabilities and Stockholders’ Deficit

1,927

242



(The accompanying notes are an integral part of these financial statements)



4





Harbor Island Development Corp.

(A Development Stage Company)

Statements of Operations

(expressed in U.S. dollars)

(unaudited)


Three months ended September 30,

2011

$

Three months ended September 30,

2010

$

Six months ended September 30,

2011

$

Six months ended September 30,

2010

$

Accumulated from March 19, 2010 (date of inception) to September 30,

2011

$

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

General and administrative

2,505

10,995

2,800

12,390

17,259

Management fees

7,500

7,500

15,000

12,500

47,500

Professional fees

12,250

17,700

26,750

37,200

85,700

 

 

 

 

 

 

Total Operating Expenses

22,255

36,195

44,550

62,090

150,459

 

 

 

 

 

 

Loss from Operations

(22,255)

(36,195)

(44,550)

(62,090)

(150,459)

 

 

 

 

 

 

Other Expense

 

 

 

 

 

 

 

 

 

 

 

Interest expense

(1,765)

(913)

(3,324)

(1,458)

(7,969)

 

 

 

 

 

 

Net loss

(24,020)

(37,108)

(47,874)

(63,548)

(158,428)

 

 

 

 

 

 

Net loss per share, basic and diluted

(0.01)

(0.01)

(0.01)

 

 

 

 

 

 

 

Weighted average number of shares outstanding

5,000,000

5,000,000

5,000,000

5,000,000

 


(The accompanying notes are an integral part of these financial statements)



5





Harbor Island Development Corp.

(A Development Stage Company)

Statements of Cash Flows

(expressed in U.S. dollars)

(unaudited)

 

For the six months ended September 30,

2011

$

For the six months ended September 30,

2010

$

Accumulated from

March 19, 2010 (date of inception)

to September 30,

2011

$

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

Net loss for the period

 (47,874)

 (63,548)

 (158,428)

 

 

 

 

Adjustments to reconcile net loss for non-cash items relating to operating activities:

 

 

 

 

 

 

 

Shares issued for management fees

 –

 –

 5,000

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts payable and accrued liabilities

 23,809

 5,923

 40,454

Due to related parties

 15,000

 12,500

 42,500

 

 

 

 

Net cash used in operating activities

 (9,065)

 (45,125)

 (70,474)


 

 

 

Financing Activities

 

 

 

 

 

 

 

Proceeds from notes payable

 –

 –

 8,100

Proceeds from notes payable – related

 10,750

 45,488

 64,301

 

 

 

 

Net cash provided by financing activities

 10,750

 45,488

 72,401

 

 

 

 

Increase (decrease) in cash

 1,685

 363

 1,927

 

 

 

 

Cash, beginning of period

 242

 15,444

 –

 

 

 

 

Cash, end of period

 1,927

 15,807

 1,927

 

 

 

 

Supplemental disclosures:

 

 

 

 

 

 

 

Interest paid

 –

 –

 –

Income taxes paid

 –

 –

 –

 

 

 

 


(The accompanying notes are an integral part of these financial statements)



6



Harbor Island Development Corp.

 (A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

(unaudited)



1.

Nature of Operations and Continuance of Business


Harbor Island Development Corp. (the “Company”) was incorporated in the State of Nevada on March 19, 2010. The Company is a Development Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company’s principal business is the retail sales of beach and island resort apparel.


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 not generated significant revenues since inception and is unlikely to generate significant revenue or earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at September 30, 2011, the Company has not generated revenues, has a working capital deficit of $153,428, and accumulated losses totaling $158,428 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. 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.


The Company currently has no significant revenues and must rely on the debt and/or equity financing to fund operations. The Company will require significant additional financings in order to pursue exploration of any properties acquired. There is no assurance that the Company will be able to obtain the necessary financings to complete its objectives.


2.

Summary of Significant Accounting Policies


a)

Basis of Presentation


These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company’s fiscal year end is March 31.  


b)

Use of Estimates


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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the 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.



7



Harbor Island Development Corp.

 (A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

(unaudited)



2.

Summary of Significant Accounting Policies (continued)


d)

Financial Instruments


Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:


Level 1


Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.


Level 2


Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.


Level 3


Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.


The Company’s financial instruments consist principally of cash, accounts payable, accrued liabilities, amounts due to related parties, and notes payable.  Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.


e)

Loss Per Share


The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.


f)

Comprehensive Income


ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at September 30, 2011 and March 31, 2011, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.



8



Harbor Island Development Corp.

 (A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

(unaudited)



2.

Summary of Significant Accounting Policies (continued)


g)

Foreign Currency Translation


Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into United States dollars at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in income.


h)

Stock-based Compensation


The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.


i)

Recent Accounting Pronouncements


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 did not have a significant impact on the Company’s financial statements.  


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.  The adoption of this standard did not have a significant impact on the Company’s financial statements.  


The Company has implemented all new accounting pronouncements that are in effect.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


3.

Notes Payable


a)

As of September 30, 2011, the Company had an outstanding note payable of $8,100 (March 31, 2011 - $8,100) to a non-related party.  Under the terms of the note, the amount owing is unsecured, due interest at 10% per annum and due on demand.  As at September 30, 2011, accrued interest of $1,267 (March 31, 2011 - $861) has been recorded in accrued liabilities.


b)

As of September 30, 2011, the Company had outstanding note payables of $64,301 (March 31, 2011 - $53,551) to related parties.  Under the terms of the notes, the amounts owing are unsecured, due interest at 10% per annum and due on demand.  As at September 30, 2011, accrued interest of $6,702 (March 31, 2011 - $3,784) has been recorded in accrued liabilities.



9



Harbor Island Development Corp.

 (A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

(unaudited)



4.

Related Party Transactions


a)

As at September 30, 2011, the Company owes $42,500 (March 31, 2011 - $27,500) to the President and Director of the Company for management fees.  The amounts owing are unsecured, non-interest bearing, and due on demand.  


b)

During the period ended September 30, 2011, the Company incurred $15,000 (2010 - $5,000) of management fees to the President and Director of the Company.  


5.

Subsequent Events


As at the date of this filing, there were no materially disclosable events that occurred after September 30, 2011.





10





ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION


FORWARD-LOOKING STATEMENTS


This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.


RESULTS OF OPERATIONS


Working Capital


  

September 30,

March 31,

  

2011

2011

Current Assets

$1,927

$242

Current Liabilities

$155,355

$105,796

Working Capital (Deficit)

$(153,428)

$(105,554)


Cash Flows


  

Six months ended September 30,

2011

Six months ended September 30,

2010

Cash Flows from (used in) Operating Activities

$(9,065)

$(45,125)

Cash Flows from (used in) Financing Activities

$10,750

$45,488

Net Increase (decrease) in Cash During Period

$1,685

$363


Operating Revenues


During the period ended September 30, 2011, the Company did not recognize any operating revenues.  


Operating Expenses and Net Loss


During the six months ended September 30, 2011, the Company recorded operating expenses of $44,550 compared with $62,090 for the six months ended September 30, 2010.  The decrease in operating expenses were attributed to lower professional fees of $10,450 as the Company incurred additional costs in prior year for its SEC registration process, and decrease of $9,590 for general operating expenses as the Company did not incur similar consulting fees and incorporation costs from prior year.    


During the six months ended September 30, 2011, the Company incurred interest expense of $3,324 compared with interest expense of $1,458 during the six months ended September 30, 2010.  The increase in interest expense is attributed to the fact that the there was an increase in the amount of notes payable, due interest at 10% per annum, from $61,651 at March 31, 2011 to $72,401 at September 30, 2011.  



11





Net loss for the six months ended September 30, 2011 was $47,874 compared with $63,548 for the six months ended September 30, 2010.  The net loss per share was $0.01 for the six months ended September 30, 2011 and 2010.    


Liquidity and Capital Resources


As at September 30, 2011, the Company’s cash and total asset balance was $1,927 compared to $242 as at March 31, 2011. The increase in total assets was attributed to the receipt in financing of $10,750 from the issuance of a 10% unsecured notes payable during the current year.    


As at September 30, 2011, the Company had total liabilities of $ 155,355 compared with total liabilities of $105,796 as at March 31, 2011. The increase in total liabilities was attributed to an increase in accounts payable and accrued liabilities of $23, 809 as the Company incurred obligations from its day-to-day operations but did not have enough financing to settle the outstanding obligations, an increase of $15,000 for amounts due to related parties attributed to management fees of $2,500 per month to the President and Director of the Company, and increase of $10,750 in notes payable to reflect the new notes payable issued during the six months period ended September 30, 2011.


As at September 30, 2011, the Company had a working capital deficit of $ 153,428 compared with a working capital deficit of $105,554 as at March 31, 2011.  The increase in working capital deficit was attributed to increase in unpaid day-to-day expenses.


Cashflow from Operating Activities


During the six months ended September 30, 2011, the Company used $9,065 of cash for operating activities compared to the use of $45,125 of cash for operating activities during the period ended September 30, 2010. The change in net cash used in operating activities is attributed to the fact that the Company had limited cash flow to repay operating activities whereas in the prior year, the Company had a larger cash balance and more cash financing to settle outstanding operating activities.   


Cashflow from Financing Activities


During the six months ended September 30, 2011, the Company received $10,750 of cash from financing activities compared to $45,488 for the period ended September 30, 2011.  The change in cash flows from financing activities is attributed to lower amounts of proceeds received from notes payable.

 

Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.


Off-Balance Sheet Arrangements


We have no significant 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 stockholders.


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.



12






Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. 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, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Recently Issued Accounting Pronouncements


In March 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-11 (“ASU No. 2010-11”), “Derivatives and Hedging (ASC Topic 815): Scope Exception Related to Embedded Credit Derivatives.” The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company’s adoption of provisions of ASU No. 2010-11 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In February 2010, the FASB issued ASU 2010-10 (“ASU No. 2010-10”), “Consolidation (Topic 810): Amendments for Certain Investment Funds.” The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU No. 2010-10 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In February 2010, the FASB issued ASU 2010-09 (“ASU No. 2010-09”), “Subsequent Events (ASC Topic 855): Amendments to Certain Recognition and Disclosure Requirements.”  ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The Company’s adoption of provisions of ASU No. 2010-09 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In January 2010, the FASB issued ASU 2010-06 (“ASU No. 2010-06”), “Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The Company’s adoption of provisions of ASU No. 2010-06 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In January 2010, the FASB issued an amendment to ASC Topic 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 Company’s adoption of the amendment to ASC Topic 505 did not have a material effect on the financial position, results of operations or cash flows of the Company.




13





In January 2010, the FASB issued an amendment to ASC Topic 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. The Company’s adoption of the amendment to ASC Topic 820 did not have a material effect on the financial position, results of operations or cash flows of the Company.


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 4. 

CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures


Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2011, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on July 14, 2011, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

 

Changes in Internal Control over Financial Reporting

 

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

 

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.


PART II - OTHER INFORMATION


ITEM 1. 

LEGAL PROCEEDINGS


We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


ITEM 1A.

RISK FACTORS


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.



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ITEM 2. 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


1.

Quarterly Issuances:


During the quarter, we did not issue any unregistered securities other than as previously disclosed.


2. 

Subsequent Issuances:


Subsequent to the quarter, we did not issue any unregistered securities other than as previously disclosed.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4.  

[REMOVED AND RESERVED]


ITEM 5.

OTHER INFORMATION


None.


ITEM 6.

EXHIBITS



Exhibit Number

Description of Exhibit

Filing

3.01

Articles of Incorporation

Filed with the SEC on May 5, 2010 as part of our Registration Statement on Form S-1.

3.02

Bylaws

Filed with the SEC on May 5, 2010 as part of our Registration Statement on Form S-1.

10.01

Management Agreement between the Company and Donald Ross dated April 26, 2010

Filed with the SEC on May 5, 2010 as part of our Registration Statement on Form S-1.

10.02

Non-Exclusive Distributor Agreement between the Company and Island Stuff USA dated March 12, 2010

Filed with the SEC on May 5, 2010 as part of our Registration Statement on Form S-1.

10.03

Promissory Note issued to Alpha Eagle Development Limited dated April 23, 2010

Filed with the SEC on May 5, 2010 as part of our Registration Statement on Form S-1.

10.04

Promissory Note issued to Steve Ross dated April 23, 2010

Filed with the SEC on May 5, 2010 as part of our Registration Statement on Form S-1.

10.05

Amended Non-Exclusive Distributor Agreement between the Company and Island Stuff USA dated July 27, 2010

Filed with the SEC on July 30, 2010 as part of our Amended Registration Statement on Form S-1/A.

10.06

Consulting Agreement between the Company and Voltaire Gomez dated September 23, 2010

Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.

10.07

Amended Management Agreement between the Company and Donald Ross dated November 3, 2010

Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.

10.08

Promissory Note issued to Steve Ross dated November 3, 2010

Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A

10.09

Promissory Note issued to Steve Ross dated November 3, 2010

Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.

10.10

Promissory Note issued to Steve Ross dated November 3, 2010

Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.

10.11

Amended Promissory Note issued to Steve Ross dated November 3, 2010

Filed with the SEC on November 30, 2010 as part of our Amended Registration Statement on Form S-1/A.



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31.01

Certification of Principal Executive Officer Pursuant to Rule 13a-14

Filed herewith.

31.02

Certification of Principal Financial Officer Pursuant to Rule 13a-14

Filed herewith.

32.01

CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

Filed herewith.

 101.INS*

XBRL Instance Document

Filed herewith.

101.SCH*

XBRL Taxonomy Extension Schema Document

Filed herewith.

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith.

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith.

101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document

Filed herewith.

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.


*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.





SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

 

 

  

  

HARBOR ISLAND DEVELOPMENT CORP.


Dated:     November 16, 2011

 


/s/ Donald Ross   

  

  

DONALD ROSS

  

  

Its:   President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer


In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

  


Dated:     November 16, 2011


/s/ Donald Ross   

  

By:  DONALD ROSS

Its:  Director




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