Inelco Corp - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - Inelco Corp	Financial_Report.xls
EX-32.1 - CERTIFICATION - Inelco Corp	ontc_ex321.htm
EX-31.1 - CERTIFICATION - Inelco Corp	ontc_ex311.htm
EX-32.2 - CERTIFICATION - Inelco Corp	ontc_ex322.htm
EX-31.2 - CERTIFICATION - Inelco Corp	ontc_ex312.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2013

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 Number: 000-53104

INELCO CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		90-0335743
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

2450 Hollywood Blvd. Suite 708 Hollywood, FL		33020
(Address of principal executive offices)		(Zip Code)

(786) 664-8881

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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

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

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

As of as of May 19, 2013 the registrant had 889,191 shares of its Common Stock, $0.001 par value, outstanding.

INELCO CORPORATION AND SUBSIDIARIES

FORM 10-Q

MARCH 31, 2013

INDEX

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1
	Consolidated Balance Sheets as of March 31, 2013 (unaudited) and December 31, 2012	F-1
	Consolidated Statements of Operations for the Three Months Ended March 31, 2013 and 2012 and for the period December 31, 2007 (Inception) to March 31, 2013 (unaudited)	F-2
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012 and for the period December 31, 2007 (Inception) to March 31, 2013 (unaudited)	F-3
	Notes to Consolidated Financial Statements (unaudited)	F-4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3	Quantitative and Qualitative Disclosures About Market Risk	8
Item 4.	Controls and Procedures	8

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	9
Item 1.A.	Risk Factors	9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3.	Defaults Upon Senior Securities	9
Item 4.	Mine Safety Disclosures	9
Item 5.	Other Information	9
Item 6.	Exhibits	10

SIGNATURES		11

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

INELCO CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets

	March 31,			December 31,
	2013			2012
	(unaudited)

ASSETS

Current assets:
Cash in banks	$	502		$	14
Due from NexPhase Lighting		991,687			991,687
Loan to officer		8,960			8,960
Other current assets		4,200			4,200
Assets attributable to discontinued operations		3,151,554			3,148,833

Total current assets		4,156,903			4,153,694

Fixed assets:
Property and equipment, net		6,522			6,522

Other assets:
Intangible assets		71,531			71,531
Goodwill		451,792			451,792
Security deposits		8,439			8,439

Total other assets		531,762			531,762

Total assets	$	4,695,187		$	4,691,978

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts payable	$	41,692		$	36,575
Accrued interest		108,991			85,706
Accrued employee compensation		-			-
Advances from non-affiliated related parties		24,290			23,990
Advances from third parties		2,782			2,781
Notes payable, non-affiliated related parties		674,790			662,818
Notes payable, third parties		538,997			432,433
Liabilities attributable to discontinued operations		1,309,344			1,294,265
Total current liabilities		2,700,886			2,538,568

Other liabilities		-			-

Total liabilities		2,700,886			2,538,568

Commitments and contingencies (Note 9)		-			-

Stockholders' equity (deficit):
Preferred stock $.001 par value 10,000,000 and 100,000,000 shares authorized,
Series A preferred stock, 150,000 shares issued and outstanding
at March 31, 2013 and December 31, 2012, respectively		150			150
Series B preferred stock, 1,000,000 shares issued and outstanding
at March 31, 2013 and December 31, 2012, respectively		1,000			1,000
Common stock $.001 par value 5,000,000,000 shares authorized,
808,356 and 699,706 shares issued and outstanding
at March 31, 2013 and December 31, 2012, respectively		808			700
Additional paid-in capital		7,306,130			7,273,730
Treasury stock, at cost (244 shares)		(61,000	)		(61,000	)
Deficit accumulated during the exploration stage		(5,252,787	)		(5,061,170	)
Total stockholders' equity (deficit)		1,994,301			2,153,410

Total liabilities and stockholders' equity (deficit)	$	4,695,187		$	4,691,978

F-1

INELCO CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Operations

(unaudited)

							For the Period
							December 31, 2007
	For the Three						(Inception) to
	Months Ended March 31,						March 31,
	2013			2012			2013

Revenue	$	-		$	-		$	380,216

Cost of goods sold		-			-			187,762

Gross profit		-			-			192,454

Operating expenses:
General and administrative		18,793			10,951			333,005
Investor relations		-			-			145,512
Occupancy - Headquarters		1,425			10,757			80,756
Officer compensation		1,950			45,000			616,576
Professional fees		14,961			6,200			179,877
Staff compensation		-			22,768			421,648
Stock-based compensation		-			-			405,205
Depreciation		-			7,928			9,869
Total operating expenses		37,129			103,604			2,192,448

Loss from operations		(37,129	)		(103,604	)		(1,999,994	)

Other expenses:
Loss on dispotion of assets		-						567
Loss on settlement of debt (Note 8)		-			551,000			-
Interest expense		141,931			135,491			918,891
Write-off of project development costs					-			27,600
Write-off of amount due from other					-			1,000
Total other expenses		141,931			686,491			948,058

Net loss from continuing operations	$	(179,060	)	$	(790,095	)	$	(2,948,052	)

Net loss from discontinued operations		(12,558	)		(190,233	)		(979,062	)

Net loss		(191,618	)		(980,328	)		(3,927,114	)

Net loss per share - Basic and diluted	$	(0.00	)	$	(0.01	)

Weighted average number of shares oustanding during the period - Basic and diluted		53,085,217			53,085,217

See accompanying notes to consolidated financial statements.

F-2

ONTECO CORPORATION AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Cash Flows
(unaudited)

							For the Period
							December 31, 2007
	For the Three						(Inception) to
	Months Ended March 31,						March 31,
	2013			2012			2013

Cash flows used in operating activities:
Net loss	$	(191,618	)	$	(981,156	)	$	(3,927,114	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		-			7,982			9,869
Loss on settlement of debt		-			551,000			551,000
Stock-based compensation		-			-			170,055
Stock issued for services		-			-			315,834
Cancellation of stock issued for services		-			-			(84,000	)
Write-off of project development costs		-			-			27,600
Write-off of amounts due to others		-			-			-
Loss on disposition of software		-			-			567
Interest accrued on notes payable, non-affiliated related parties		46,124			16,407			189,003
Interest accrued on notes payable, third parties		-			2,095			12,352
Accretion of beneficial conversion feature as interest expense		105,565			242,219			651,779
Changes in operating assets and liabilities:
Due from NexPhase Lighting		-			-			-
Accounts Receivable		-			2,251			(2,251	)
Inventories		-			(4,398	)		(74,947	)
Prepaid expenses		-			-			-
Security deposits		-			-			(7,589	)
Accounts payable		5,117			(55,929	)		116,614
Accrued expenses		-			-			-
Sales tax payable		-			-			2,678
Accrued compensation		-			45,000			538,000
Net cash used in operating activities		(34,812	)		(174,529	)		(1,510,550	)

Cash flows used in investing activities:
Net cash received from acquisition		-			-			14,942
Purchase of property and equipment		-			(6,204	)		(80,262	)
Project development costs		-			-			(27,600	)
Net cash used in investing activities		-			(6,204	)		(92,920	)

Cash flows from financing activities:
Proceeds from issuance of note payable, non-affiliated related parties		32,400			82,650			1,292,960
Payments on notes payable, non-affiliated related parties		-			(4,000	)		(26,655	)
Proceeds from issuance of notes payable, third parties		-			51,500			328,100
Advances from non-affiliated related parties		2,900			12,590			4,000
Proceeds from sale of common stock		-			-			5,567
Net cash provided by financing activities		35,300			142,740			1,603,972

Net increase (decrease) in cash		488			(37,993	)		502

Cash at beginning of period		14			41,804			-

Cash at end of period	$	502		$	3,811		$	502

See accompanying notes to consolidated financial statements.

F-3

INELCO CORPORATION

f/k/a Onteco Corporation

(A Development Stage Company)

Notes to Consolidated Financial Statements

March 31, 2013

(unaudited)

Note 1 – Nature of Business, Presentation, and Going Concern

Organization

Inelco Corporation ("the Company") was organized under the laws of the State of Nevada on December 31, 2007 as InfoSpi Inc.. 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 0.284 shares of InfoSpi’s common stock which were distributed to Arrin’s general unsecured creditors.

At that time, management believed the Company lacked the resources to effectively market its services on its own and 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.

The Company was founded to develop innovative, practical and cost-effective solutions to some of the most significant environmental challenges facing industries and governments around the world. Additionally, these solutions must show promise of generating profits for the company. Specifically the company has determined that one industry that meets both of the above-mentioned prongs of criteria is the Energy Saving Lighting Industry.

Effective on February 14, 2011, the Board of Directors of the Company approved and authorized the execution of a definitive agreement dated February 14, 2011 (the “Agreement”) among the Company, NexPhase Lighting, Inc., a privately held Florida corporation (“NexPhase”)., and the shareholders of NexPhase (the “NexPhase Shareholders”). In accordance with the terms and provisions of the Agreement: (i) the Company acquired from the NexPhase Shareholders an aggregate 55,622,000 shares of common stock of NexPhase representing the total issued and outstanding shares of NexPhase; (ii) in exchange thereof, the Company issued to the NexPhase Shareholders an aggregate 33.75 shares of its restricted common stock generally in proportion to the equity holdings of the NexPhase Shareholders; (iii) NexPhase transferred and assigned to the Company 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) the Company assumed all other assets of NexPhase, including licenses, royalty rights, equipment, product designs, marketing and sale materials, logos, trademarks, copyrights and website; and (v) the Company further assumed all liabilities of NexPhase, including all trade and debt obligations. Therefore, as of the February 14, 2011, NexPhase has become a wholly-owned subsidiary of the Company.

NexPhase is in the business of designing, developing, manufacturing and marketing a high quality and high efficiency full line of LED intelligent lighting fixtures and control systems for commercial applications and projects involving both new construction and retrofits (the “LED Lighting Fixtures”), as well as licensing its technologies to territories outside of the United States.

On March 29, 2011, we filed a Certificate of Amendment with the Nevada Secretary of State in order to change our name from “InfoSpi Inc.” to “Onteco Corporation” (the “Name Change”). The Name Change was effective with the Nevada Secretary of State on March 29, 2011 when the Certificate of Amendment was filed. The Name Change was approved by our Board of Directors Pursuant to written consent resolutions dated March 15, 2011 and further approved by certain shareholders holding a majority of our total issued and outstanding shares of common stock pursuant to written consent resolutions dated March 16, 2011.

On April 1, 2013, we filed a Certificate of Amendment with the Nevada Secretary of State in order to change our name from “Onteco Corporation” to “Inelco Corporation” (the “Name Change”). The Name Change was effective with the Nevada Secretary of State on April 1, 2013 when the Certificate of Amendment was filed. The Name Change was approved by our Board of Directors pursuant to written consent resolutions dated January 14, 2013 and further approved by certain shareholders holding a majority of our total issued and outstanding shares of common stock pursuant to written consent resolutions dated January 14, 2013.

We filed the appropriate documentation with FINRA in order to effectuate the Name Change in the OTC Markets. The Name Change was affected on the OTC Markets April 11, 2011.

F-4

Therefore, as of April 11, 2011, our trading symbol is “ONTC”. Our management deemed it appropriate to change our name to Inelco Corporation in furtherance of and to better reflect the nature of our new business operations.

The Company’s Board of Directors has unanimously adopted a resolution, and has received shareholder approval, to authorize the Board to effectuate a Spin-Off of NexPhase upon receipt of all necessary regulatory approvals and the passage of all necessary waiting periods. The Board of Directors had determined that it would be in the Company’s best interest to effect the Spin-Off and has received the consent of holders of over 100% of the voting rights and power of the Company’s securities to authorize the Board of Directors to effect the Spin-Off. The Company will issue shares of NexPhase to the existing shareholders of the Company on a pro-rated basis on or about June 30, 2013. See Note 7 – Spin-Off of NexPhase Lighting.

Effective October 25, 2012, the Company’s Board of Directors approved and authorized the execution of a share exchange agreement (the “Share Exchange Agreement”) with Cyber Centers Worldwide Corporation, a private Florida corporation (“CCWC”), and the shareholders of CCWC (the "CCWC Shareholders"). In accordance with the terms and provisions of the Share Exchange Agreement, the Company will acquire approximately 150,000,000 shares of common stock of CCWC and 1,000,000 shares of Series B preferred stock of CCWC, which represents 100% of the total issued and outstanding shares held of record by the CCWC Shareholders. In exchange for the acquisition of the capital shares of CCWC, the Company shall issue to the CCWC Shareholders on a pro rata basis 75,000 restricted shares of common stock of the Company and 1,000,000 shares of Series B preferred stock of the Company. This resulted in CCWC becoming the wholly-owned subsidiary of the Company. Prior to this share exchange, CCWC changed its name from Cyber Centers International Corporation ("CCIC"). See Note 6 – Acquisition of Cyber Centers Worldwide Corporation.

In accordance with the Share Exchange Agreement and anticipated consummation of the spin-off of the Company's wholly-owned subsidiary, NexPhase Lighting Inc., the operations of the Company will change from the business of designing, developing, manufacturing and marketing a high quality and high efficiency full line of LED intelligent lighting fixtures and control systems for commercial applications and projects involving both new construction and retrofits. The business operations of the Company will be conducted through its new wholly-owned subsidiary, CCWC, which involves interactive online gaming within the entertainment industry. Over the past years, the founders of CCIC have invested private capital, time and effort and innovative technology in its product development. CCWC today is capitalizing on the emerging trends in interactive gaming and social marketing with a vision to become the benchmark in the gaming industry with a reputation for customer safety, security and quality customer service, while also upholding the interests of shareholders.

Stock Splits

On November 2, 2011, the Company's Board of Directors declared a one for one-thousand reverse stock split of all outstanding shares of common stock. The total number of authorized common shares and the par value thereof was not changed by the split.

On January 14, 2013, the Company’s Board of Directors declared a one for two-thousand reverse stock split of all outstanding shares of common stock. All common shares and per common share data in these consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock splits for all periods presented prior to March 31, 2013. The total number of authorized common shares and the par value thereof was not changed by the split.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial statement presentation and in accordance with Form 10-Q. Accordingly, they do not include all of the information and footnotes required in annual financial statements. In the opinion of management, the unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position and results of operations and cash flows. All intercompany transactions and accounts have been eliminated in consolidation. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

These unaudited financial statements should be read in conjunction with our 2012 annual financial statements included in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on April 16, 2013.

F-5

Development Stage Enterprise

Since its formation of December 31, 2007, the Company became a “development stage company” as defined in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) ASC Topic 915 “Development Stage Entities”. To date, the Company's planned principal operations have not fully commenced.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $191,618 for the three months ended March 31, 2013 and has incurred cumulative losses since inception of $3,927,114. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate revenues, its ability to continue to raise investment capital, and to implement its business plan. No assurance can be given that the Company will be successful in these efforts.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

Note 2 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas of estimate include the estimates and assumptions related to its deferred income tax asset valuation and the inputs used in calculating stock compensation and transactions.

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.

Principles of Consolidation

The consolidated financial statements include the accounts of Inelco Corporation and its wholly-owned subsidiaries, NexPhase and CCWC. All significant inter-company balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At March 31, 2013 and December 31, 2012, respectively, the Company had no cash equivalents.

F-6

Property and Equipment

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from 5 years to 7 years. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. Leasehold improvements are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter.

Depreciation expense was $0 and $7,928 for the three months ended March 31, 2013 and 2012, respectively.

Impairment or Disposal of Long-Lived Assets

The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, other current assets, accounts payable and notes payable. The carrying amount of cash, other current assets, payables and notes payable approximates fair value because of the short-term nature of these items.

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.

Beneficial Conversion Feature of Convertible Notes Payable

The Company accounts for convertible notes payable in accordance with the guidelines established by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 470-20, “Debt with Conversion and Other Options”, Emerging Issues Task Force ("EITF") 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios and EITF 00-27, Application of Issue No 98-5 To Certain Convertible Instruments. The Beneficial Conversion Feature ("BCF") of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes.

The BCF of a convertible note is measured by allocating a portion of the note's proceeds to the warrants, if applicable, and as a reduction of the carrying amount of the convertible note equal to the intrinsic value of the conversion feature, both of which are credited to additional paid-in-capital. The Company calculates the fair value of warrants issued with the convertible note using the Black Scholes valuation model and uses the same assumptions for valuing employee options in accordance with ASC Topic 718 “Compensation – Stock Compensation”. The only difference is that the contractual life of the warrants is used.

The value of the proceeds received from a convertible note is then allocated between the conversion features and warrants on a relative fair value basis. The allocated fair value is recorded in the financial statements as a debt discount (premium) from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to interest expense.

F-7

Income Taxes

Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

The FASB has issued ASC 740 “Income Taxes”. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of December 31, 2012.

Stock Based Compensation

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in shareholders' equity/(deficit) over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

The Company issues stock to consultants for various services. The costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services.

During the three months March 31, 2013 and 2012, the Company granted no stock options to the Company's employees, directors and consultants.

Basic and Diluted Loss Per Share

The Company computes income (loss) per share in accordance with ASC 260, "Earnings per Share", which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential shares of common stock 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. There were no potentially dilutive shares as of March 31, 2013 and 2012.

F-8

Accounting for Obligations and Instruments Potentially to be settled in the Company’s Own Stock

We account for obligations and instruments potentially to be settled in the Company’s stock in accordance with ASC 815 “Accounting for Derivative Financial Instruments”. This issue addresses the initial balance sheet classification and measurement of contracts that are indexed to, and potentially settled in, the Company’s own stock.

Fair Value Accounting

On October 1, 2010, we adopted ASC 820, “Fair Value Measurements.” which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. ASC 820 does not require any new fair value measurements, and has been partially deferred for non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. The partial adoption of ASC 820 for financial assets and liabilities did not have a material impact on our financial position, results of operations or cash flow.

Revenue and Expense Recognition

Revenue is recognized when earned rather than when received. Sales are recognized when a product is delivered or shipped to the customer and all material conditions relating to the sale have been substantially performed. Expenses are charged to operations as incurred.

Accounting Standards Codification

The FASB’s Accounting Standards Codification (“ASC”) became effective on September 15, 2009. At that date, the ASC became the FASB’s officially recognized source of authoritative generally accepted accounting principles (“GAAP”) applicable to all public and non-public non-governmental entities, superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), Emerging Issues Task Force (“EITF”) and related literature. All other accounting literature is considered non-authoritative. The switch to the ASC affects the way companies refer to U.S. GAAP in financial statements and accounting policies. Citing particular content in the ASC involves specifying the unique numeric path to the content through the Topic, Subtopic, Section and Paragraph structure.

Effect of Recent Accounting Pronouncements

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to March 31, 2013 through the date these financial statements were issued.

Note 3 – Project Development Costs

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. On June 30, 2011, Management determined that although the critical reactor project was commercially feasible, it was in the best interest of the company to commit all future funding to the NexPhase Lighting subsidiary. Therefore, on June 30, 2011, the project development cost in the amount of $27,600 was written off.

F-9

Note 4 – Notes Payable – Non-affiliated Related Parties

The Company has outstanding debt to various non-affiliated related parties with interest rates from 0 to 18%, all with short term maturities. As of March 31, 2013 and December 31, 2012, the outstanding balances were as follows:

	March 31, 2013							December 31, 2012
						Principal,							Principal,
			Unamortized			net of				Unamortized			net of
	Principal		Discount			Discount		Principal		Discount			Discount

Continuing operations	$	674,790	$	-		$	674,790	$	674,790	$	(11,972	)	$	662,818

Discontinued operations	$	200,137	$	(36,207	)	$	163,930	$	200,137	$	(39,545	)	$	160,592

Note 5 – Notes Payable – Third Parties

The Company has outstanding debt to various third parties with interest rates from 0 to 18%, all with short term maturities. As of March 31, 2013 and December 31, 2012, the outstanding balances were as follows:

	March 31, 2013							December 31, 2012
						Principal,							Principal,
			Unamortized			net of				Unamortized			net of
	Principal		Discount			Discount		Principal		Discount			Discount

Continuing operations	$	637,575	$	(98,578	)	$	538,997	$	605,175	$	(172,742	)	$	432,433

Note 6 – Acquisition of Cyber Centers Worldwide Corporation

F-10

The following table summarizes the consideration given for CCWC and the fair values of the assets acquired and liabilities assumed recognized at the acquisition date.

Consideration Given:

75,000 shares of Inelco Common Stock	$	60,000
1,000,000 shares of Inelco Series B Preferred Stock		400,000

Total Consideration	$	460,000

Fair value of identifiable assets acquired and liabilities assumed:

Cash	$	12,852
Other current assets		4,200
Property and equipment, net		1,472
Deposits		375
Accounts payable		(1,778	)
Accrued interest		(4,182	)
Advances from related parties		(4,731	)
Notes payable, related parties		(71,531	)
Identifiable intangible assets		71,531
Total identifiable net assets		8,208

Goodwill		451,792

	$	460,000

The 75,000 shares of Inelco common stock were valued at the market price of $0.80 per share on the date of acquisition. The 1,000,000 shares of Inelco Series B Preferred Stock were valued at the common stock equivalent market price of $0.40 per preferred share on the date of acquisition as the preferred shares are convertible to .5 common shares.

Intangible assets consisting of software in development were valued by management based on the fair value of software development costs incurred to date. As the software remains in development, definite lives have not yet been determined and no amortization has been recognized as of December 31, 2012.

CCWC produced no revenues and incurred no expenses in the quarters ended March 31, 2013 or 2012.

F-11

Note 7 – Spin-Off of NexPhase Lighting

Since the acquisition of NexPhase, the Company has provided working capital to NexPhase. Amounts due from NexPhase are $991,687 at March 31, 2013 and December 31, 2012, respectively.

Due to the transfer of the assets and liabilities of NexPhase to the shareholders, the accounting for NexPhase in this period and historically would be classified as a discontinued operation. Accordingly, the Company has excluded results for NexPhase from its continuing operations in the Consolidated Statement of Operations for all periods presented. The following table shows the results of NexPhase included in the loss from discontinued operations:

	Three Months Ended March 31,
	2013			2012

Revenue	$	-		$	-
Cost of goods sold					33,368
Gross profit					(33,368)

Operating expenses:
General and administrative		79			49,219
Investor relations		-
Occupancy - Headquarters		-			2,184
Professional fees		5,000
Staff compensation					13,600
Depreciation					7,603
Total operating expenses		5,079			72,606

Loss from discontinued operations		(5,079)			(105,974	)

Other expenses:
Interest expense		7,479			84,259

Net loss from discontinued operations	$	(12,558	)	$	(190,233	)

F-12

The major classes of assets and liabilities of discontinued operations on the balance sheet are as follows:

	March 31,		December 31,
	2013		2012
ASSETS
Current assets:
Cash in banks	$	2,552	$	31
Accounts receivable		-
Inventories		75,945		75,945
Total current assets		78,497		75,976

Property and equipment, net		79,588		79,588
Intellectual property		2,989,349		2,989,149
Security deposits		4,120		4,120

Total assets of discontinued operations	$	3,151,554	$	3,148,833

LIABILITIES
Current liabilities:
Accounts payable	$	101,177	$	96,177
Accrued interest		45,171		41,030
Sales tax payable		2,679		2,679
Due to Onteco		991,687		991,687
Advances from related parties		4,700		2,100
Notes payable, non-affiliated related parties		163,930		160,592

Total liabilities of discontinued operations	$	1,309,344	$	1,294,265

Note 8 – Licensing, Manufacturing and Distribution Agreement

Effective on April 30, 2012, the Board of Directors of Onteco Corporation, a Nevada corporation (the “Company”), approved and authorized the execution of a Licensing, Manufacturing and Distribution Agreement (the “Agreement”) with Jarlyn S.A., an Uruguayan corporation (“Jarlyn”). In accordance with the terms and provisions of the Agreement, Jarlyn shall be designated the exclusive licensee, manufacturer, distributor and re-seller of certain licensed technologies within the Oriental Republic of Uruguay (the “Territory”).

F-13

In accordance with the terms and provisions of the Agreement: (i) the Company shall grant to Jarlyn an exclusive license to the Licensed Technology Products, for the manufacturing and distribution of the Licensed Technologies, and for the use of the trademark in the Territory; (ii) the Company shall grant to Jarlyn exclusive distribution rights for the direct sale and resale to resellers or other channels of the Licensed Technology Products in the Territory; (iii) Jarlyn shall compensate the Company for the granting of the license and rights pertaining to the Licensed Technology Products by the transfer to the Company of 1,000,000 shares of common stock held of record by Jarlyn in a publicly traded company acceptable to the Company; (iv) Jarlyn shall further compensate the Company for the granting of the license and rights pertaining to the Licensed Technology Products by the payment of the sum of $200,000 U.S. Dollars as a one-time cash licensing fee; and (v) Jarlyn shall pay to the Company a royalty of ten percent (10%) of all gross revenues received by Jarlyn or its affiliates relating to sales, installation and services associated with the Licensed Technologies in the Territory. The agreement is for a period of seven (7) years.

On November 30, 2012, the Company and Jarlyn entered into a Cancellation Agreement, mutually cancelling the Licensing, Manufacturing and Distribution Agreement previously entered into on April 30, 2012. Accordingly, any and all amounts and transaction previously recorded in the Company’s financial statements have been reversed in their entirety.

Note 9 – 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 years ended December 31, 2011 and 2010, the Company recorded executive compensation expenses to the Company's chief executive officer; $180,000 and $180,000 respectively, resulting in an accrued employee compensation liability of $488,000 at December 31, 2011.

On November 25, 2010, effective with the change in control, the chief executive officer resigned. The executive compensation agreement remains in effect through December 31, 2013.

On January 8, 2012, the Company and its former Chief Executive Officer entered into an agreement to terminate the executive compensation agreement and the Company issued a convertible promissory note for the accrued compensation and interest thereon totaling $501,425. The note was due January 8, 2013, bears interest at 6.25% and is convertible at the lower of 1) a price of $2.00, or 2) a seventy-five percent discount to the previous day's closing bid price if the closing bid price is $3.00 per share or less.

Note 10 – Stockholders’ Equity (Deficit) and Common Stock

On April 3, 2012, 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 “2012 Amendment”). The 2012 Amendment was filed with the Nevada Secretary of State on April 3, 2012 reducing our authorized capital from 2,000,000,000 shares of common stock to 300,000,000 shares of common stock, par value $0.001, and reducing the authorized capital of preferred stock from 100,000,000 to 10,000,000 shares, par value $0.001.

On January 4, 2012, the Board of Directors approved the issuance of 18,422 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated April 28, 2011 in the amount of $3,500. In accordance with the terms of the note, the shares were issued at $0.19 per share.

On January 4, 2012, the Board of Directors approved the issuance of 40,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 26, 2011 in the amount of $6,000. In accordance with the terms of the note, the shares were issued at $0.15 per share.

On January 24, 2012, the Board of Directors authorized the issuance of an aggregate 50,000,000 shares of its restricted common stock at a per share price of $0.001. Of the 50,000,000 shares of restricted common stock issued, an aggregate 30,000,000 shares were issued to Dror Svorai, the President/Chief Executive Officer of the Company, in recognition of his outstanding services, loyalty and dedication to the Company during the period of November 23, 2011 through January 23, 2011. Of the 50,000,000 shares of restricted common stock issued, an aggregate 20,000,000 shares were issued to Jon Cooper, the President of NexPhase Lighting Inc., in recognition of his business accomplishments to the Company during fiscal year 2011.

F-14

On January 17, 2012, the Board of Directors approved the issuance of 45,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 26, 2011 in the amount of $1,350. In accordance with the terms of the note, the shares were issued at $0.03 per share.

On January 25, 2012, the Board of Directors approved the issuance of 2,357,951 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 23, 2011 in the amount of $23,600. In accordance with the terms of the note, the shares were issued at $0.01 per share.

On January 25, 2012, the Board of Directors approved the issuance of 107,767 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated April 18, 2011 in the amount of $1,078. In accordance with the terms of the note, the shares were issued at $0.01 per share.

On January 25, 2012, the Board of Directors approved the issuance of 34,282 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated April 21, 2011 in the amount of $343. In accordance with the terms of the note, the shares were issued at $0.01 per share.

On January 27, 2012, the Board of Directors approved the issuance of 214,286 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated April 28, 2011 in the amount of $12,000. In accordance with the terms of the note, the shares were issued at $0.056 per share.

On January 30, 2012, the Board of Directors approved the issuance of 2,700,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 29, 2010 in the amount of $27,000. In accordance with the terms of the note, the shares were issued at $0.01 per share.

On January 30, 2012, the Board of Directors approved the issuance of 227,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated December 5, 2011 in the amount of $18,200. In accordance with the terms of the note, the shares were issued at $0.08 per share.

On February 1, 2012, the Board of Directors approved the issuance of 2,800,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated November 15, 2010 in the amount of $28,000. In accordance with the terms of the note, the shares were issued at $0.01 per share.

On February 2, 2012, the Board of Directors approved the issuance of 67,115 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 26, 2011 in the amount of $5,000. In accordance with the terms of the note, the shares were issued at $0.0745 per share.

On February 15, 2012, the Board of Directors approved the issuance of 148,148 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 20, 2011 in the amount of $10,000. In accordance with the terms of the note, the shares were issued at $0.0675 per share.

On February 15, 2012, the Board of Directors approved the issuance of 107,259 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated April 28, 2011 in the amount of $7,240. In accordance with the terms of the note, the shares were issued at $0.0675 per share.

On February 17, 2012, the Board of Directors approved the issuance of 274,726 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 26, 2011 in the amount of $12,500. In accordance with the terms of the note, the shares were issued at $0.0455 per share.

F-15

On February 21, 2012, the Board of Directors approved the issuance of 277,778 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 20, 2011 in the amount of $15,000. In accordance with the terms of the note, the shares were issued at $0.054 per share.

On February 21, 2012, the Board of Directors approved the issuance of 2,500,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 15, 2012 in the amount of $25,000. In accordance with the terms of the note, the shares were issued at $0.01 per share.

On February 27, 2012, the Board of Directors approved the issuance of 3,000,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated May 24, 2011 in the amount of $30,000. In accordance with the terms of the note, the shares were issued at $0.01 per share.

On March 1, 2012, the Board of Directors approved the issuance of 3,400,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 4, 2011 in the amount of $3,400. In accordance with the terms of the note, the shares were issued at $0.001 per share.

On March 1, 2012, the Board of Directors approved the issuance of 3,600,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 4, 2011 in the amount of $3,600. In accordance with the terms of the note, the shares were issued at $0.001 per share.

On March 1, 2012, the Board of Directors approved the issuance of 3,800,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 4, 2011 in the amount of $3,800. In accordance with the terms of the note, the shares were issued at $0.001 per share.

On March 1, 2012, the Board of Directors approved the issuance of 4,000,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 4, 2011 in the amount of $4,000. In accordance with the terms of the note, the shares were issued at $0.001 per share.

On March 8, 2012, the Board of Directors approved the issuance of 434,783 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 20, 2011 in the amount of $12,000. In accordance with the terms of the note, the shares were issued at $0.0276 per share.

On March 14, 2012, the Board of Directors approved the issuance of 434,783 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 20, 2011 in the amount of $10,000. In accordance with the terms of the note, the shares were issued at $0.023 per share.

On March 15, 2012, the Board of Directors approved the issuance of 1,000,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated September 2, 2010 in the amount of $10,000. In accordance with the terms of the note, the shares were issued at $0.01 per share.

On March 20, 2012, the Board of Directors approved the issuance of 2,200,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 23, 2011 in the amount of $11,000. In accordance with the terms of the note, the shares were issued at $0.005 per share.

On March 20, 2012, the Board of Directors approved the issuance of 1,800,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 4, 2011 in the amount of $9,000. In accordance with the terms of the note, the shares were issued at $0.005 per share.

On March 22, 2012, the Board of Directors approved the issuance of 426,394 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 26, 2011 in the amount of $6,395. In accordance with the terms of the note, the shares were issued at $0.015 per share.

F-16

On March 27, 2012, the Board of Directors approved the issuance of 469,364 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 20, 2011 in the amount of $8,120. In accordance with the terms of the note, the shares were issued at $0.0173 per share.

On March 29, 2012, the Board of Directors approved the issuance of 5,000,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 9, 2010 in the amount of $5,000. In accordance with the terms of the note, the shares were issued at $0.001 per share.

On March 30, 2012, the Board of Directors approved the issuance of 1,357,302 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 26, 2011 in the amount of $10,180. In accordance with the terms of the note, the shares were issued at $0.0745 per share.

On April 9, 2012, the Board of Directors approved the issuance of 1,350 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated March 31, 2011 in the amount of $5,600. In accordance with the terms of the note, the shares were issued at $4.20 per share.

On April 9, 2012, the Board of Directors approved the issuance of 2,250 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 4, 2011 in the amount of $9,000. In accordance with the terms of the note, the shares were issued at $4 per share.

On April 17, 2012, the Board of Directors approved the issuance of 1,079 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 24, 2011 in the amount of $10,000. In accordance with the terms of the note, the shares were issued at $9.20 per share.

On April 25, 2012, the Board of Directors approved the issuance of 2,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated September 2, 2010 in the amount of $5,000. In accordance with the terms of the note, the shares were issued at $2 per share.

On April 25, 2012, the Board of Directors approved the issuance of 2,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 20, 2011 in the amount of $5,000. In accordance with the terms of the note, the shares were issued at $2 per share.

On April 25, 2012, the Board of Directors approved the issuance of 2,250 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 7, 2011 in the amount of $5,000. In accordance with the terms of the note, the shares were issued at $2 per share.

On April 26, 2012, the Board of Directors approved the issuance of 3,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 20, 2011 in the amount of $6,000. In accordance with the terms of the note, the shares were issued at $2 per share.

On May 2, 2012, the Board of Directors approved the issuance of 799 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 24, 2011 in the amount of $5,000. In accordance with the terms of the note, the shares were issued at $9.20 per share.

On May 8, 2012, the Board of Directors approved the issuance of 2,750 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 7, 2011 in the amount of $5,500. In accordance with the terms of the note, the shares were issued at $2 per share.

On May 23, 2012, the Board of Directors approved the issuance of 2,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated September 2, 2010 in the amount of $5,000. In accordance with the terms of the note, the shares were issued at $2 per share.

F-17

On May 29, 2012, the Board of Directors approved the issuance of 1,817 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 26, 2011 in the amount of $12,000. In accordance with the terms of the note, the shares were issued at $7.80 per share.

On May 29, 2012, the Board of Directors approved the issuance of 2,800 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 20, 2011 in the amount of $5,600. In accordance with the terms of the note, the shares were issued at $2 per share.

On May 29, 2012, the Board of Directors approved the issuance of 3,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated March 31, 2011 in the amount of $6,000. In accordance with the terms of the note, the shares were issued at $2 per share.

On July 1, 2012, the Board of Directors approved the issuance of 4,250 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 1, 2011 in the amount of $8,500. In accordance with the terms of the note, the shares were issued at $2 per share.

On July 2, 2012, the Board of Directors approved the issuance of 2,900 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 1, 2011 in the amount of $5,800. In accordance with the terms of the note, the shares were issued at $2 per share.

On July 9, 2012, the Board of Directors approved the issuance of 2,750 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated November 8, 2010 in the amount of $5,500. In accordance with the terms of the note, the shares were issued at $2 per share.

On July 12, 2012, the Board of Directors approved the issuance of 4,250 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated November 8, 2010 in the amount of $8,500. In accordance with the terms of the note, the shares were issued at $2 per share.

On July 13, 2012, the Board of Directors approved the issuance of 4,250 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 20, 2011 in the amount of $8,500. In accordance with the terms of the note, the shares were issued at $2 per share.

On July 16, 2012, the Board of Directors approved the issuance of 4,250 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 1, 2011 in the amount of $8,500. In accordance with the terms of the note, the shares were issued at $2 per share.

On July 26, 2012, the Board of Directors approved the issuance of 5,115 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated November 30, 2010 in the amount of $10,230. In accordance with the terms of the note, the shares were issued at $2 per share.

On July 31, 2012, the Board of Directors approved the issuance of 5,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated July 12, 2012 in the amount of $5,000. In accordance with the terms of the note, the shares were issued at $1 per share.

On August 13, 2012, the Board of Directors approved the issuance of 5,556 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated July 12, 2012 in the amount of $5,000. In accordance with the terms of the note, the shares were issued at $0.80 per share.

On August 21, 2012, the Board of Directors approved the issuance of 5,288 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 7, 2012 in the amount of $5,500. In accordance with the terms of the note, the shares were issued at $1.04 per share.

On August 22, 2012, the Board of Directors approved the issuance of 5,600 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated July 12, 2012 in the amount of $4,480. In accordance with the terms of the note, the shares were issued at $0.80 per share.

F-18

On August 31, 2012, the Board of Directors authorized the issuance of 25,000 shares of its restricted common stock at a per share price of $2 to Jorge Schcolnik as partial compensation in connection with his appointment as the President and a Director of the Company. The shares were valued at $1, the market value of the shares on the date of issuance, for a total of $25,000.

On September 4, 2012, the Board of Directors approved the issuance of 7,070 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated July 12, 2012 in the amount of $3,535. In accordance with the terms of the note, the shares were issued at $0.60 per share.

On September 11, 2012, the Board of Directors approved the issuance of 75,000 unregistered common shares to the shareholders of CCWC as an initial deposit relating to the acquisition of CCWC. The shares were valued at $1.40, the market value per share on the date of issuance, for a total of $105,000.

On September 13, 2012, the Board of Directors approved the issuance of 5,357 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 7, 2012 in the amount of $3,000. In accordance with the terms of the note, the shares were issued at $0.60 per share.

On September 13, 2012, the Board of Directors approved the issuance of 3,973 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated August 15, 2012 in the amount of $2,225. In accordance with the terms of the note, the shares were issued at $0.60 per share.

On September 13, 2012, the Board of Directors approved the issuance of 11,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated July 12, 2012 in the amount of $6,900. In accordance with the terms of the note, the shares were issued at $0.60 per share.

On September 14, 2012, the Board of Directors approved the issuance of 11,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 23, 2011 in the amount of $3,067. In accordance with the terms of the note, the shares were issued at $0.27 per share.

On September 17, 2012, the Board of Directors approved the issuance of 12,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 11, 2011 in the amount of $3,200. In accordance with the terms of the note, the shares were issued at $0.27 per share.

On September 18, 2012, the Board of Directors approved the issuance of 12,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated March 02, 2011 in the amount of $3,542. In accordance with the terms of the note, the shares were issued at $0.28 per share.

On September 19, 2012, the Board of Directors approved the issuance of 12,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated June 23, 2011 in the amount of $3,750. In accordance with the terms of the note, the shares were issued at $0.30 per share.

On September 20, 2012, the Board of Directors approved the issuance of 11,429 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 7, 2012 in the amount of $6,400. In accordance with the terms of the note, the shares were issued at $0.56 per share.

On September 27, 2012, the Board of Directors approved the issuance of 11,429 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 7, 2012 in the amount of $6,400. In accordance with the terms of the note, the shares were issued at $0.56 per share.

On October 3, 2012, the Board of Directors approved the issuance of 11,429 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 7, 2012 in the amount of $6,400. In accordance with the terms of the note, the shares were issued at $0.56 per share.

F-19

On October 3, 2012, the Board of Directors approved the issuance of 16,748 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated May 16, 2011 in the amount of $6,978. In accordance with the terms of the note, the shares were issued at $0.42 per share.

On October 3, 2012, the Board of Directors approved the issuance of 11,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated July 12, 2012 in the amount of $6,900. In accordance with the terms of the note, the shares were issued at $0.60 per share.

On October 4, 2012, the Board of Directors approved the issuance of 17,500 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated April 2, 2012 in the amount of $7,292. In accordance with the terms of the note, the shares were issued at $0.42 per share.

On October 5, 2012, the Board of Directors approved the issuance of 18,000 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated January 20, 2012 in the amount of $12,900. In accordance with the terms of the note, the shares were issued at $0.72 per share.

On October 10, 2012, the Board of Directors approved the issuance of 19,250 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated January 10, 2011 in the amount of $13,796. In accordance with the terms of the note, the shares were issued at $0.72 per share.

On October 18, 2012, the Board of Directors approved the issuance of 10,893 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated February 7, 2012 in the amount of $6,100. In accordance with the terms of the note, the shares were issued at $0.56 per share.

On October 18, 2012, the Board of Directors approved the issuance of 21,937 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated May 16, 2011 in the amount of $5,850. In accordance with the terms of the note, the shares were issued at $0.27 per share.

On November 5, 2012, the Board of Directors approved the issuance of 23,750 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 18, 2012 in the amount of $3,563. In accordance with the terms of the note, the shares were issued at $0.15 per share.

On November 8, 2012, the Board of Directors approved the issuance of 11,471 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated April 3, 2012 in the amount of $3,900. In accordance with the terms of the note, the shares were issued at $0.34 per share.

F-20

On November 9, 2012, the Board of Directors approved the issuance of 27,375 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated May 16, 2011 in the amount of $3,650. In accordance with the terms of the note, the shares were issued at $0.13 per share.

On November 12 2012, the Board of Directors approved the issuance of 28,725 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated April 2, 2012 in the amount of $3,351. In accordance with the terms of the note, the shares were issued at $0.12 per share.

On November 14 2012, the Board of Directors approved the issuance of 30,125 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated March 2, 2011 in the amount of $3,013. In accordance with the terms of the note, the shares were issued at $0.10 per share.

On November 20, 2012, the Board of Directors approved the issuance of 31,625 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated January 10, 2011 in the amount of $2,109. In accordance with the terms of the note, the shares were issued at $0.07 per share.

On November 23 2012, the Board of Directors approved the issuance of 31,739 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 18, 2012 in the amount of $1,587. In accordance with the terms of the note, the shares were issued at $0.05 per share.

On December 3 2012, the Board of Directors approved the issuance of 30,125 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated April 2, 2012 in the amount of $1,506. In accordance with the terms of the note, the shares were issued at $0.05 per share.

On December 17, 2012, the Board of Directors approved the issuance of 33,319 unregistered common shares in accordance with the convertibility provisions contained in a promissory note dated October 18, 2012 in the amount of $1,666. In accordance with the terms of the note, the shares were issued at $0.05 per share.

Note 11– Related Party Transactions

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.

See Note 3 – Notes Payable – Non-affiliated Related Parties and Note 6 – Stockholders’ Equity (Deficit) and Common Stock for additional related party disclosures.

F-21

Note 12 – Loss on Settlement of Debt

During the three months ended March 31, 2012, the Company issued 8,800,000 shares of common stock to a related party in conversion of $43,000 of notes payable in accordance with the terms of the notes. The fair value of the common stock issued was $594,000 at the date of the conversions, resulting in a loss on the settlements of $551,000.

Note 13 – Commitments and Contingencies

As of the date of this 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.

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. Future annual lease payments over the term of the lease are as follows:

Remainder of 2012	$	36,198
2013	$	48,264
2014	$	3,794

Note 14 – Subsequent Events

On January 14, 2013, the Board of Directors further authorized and approved a reverse stock split of one for two thousand (1:2,000) of the Corporation's total issued and outstanding shares of common stock (the “Stock Split”). The Board of Directors considered further factors regarding approval of the Stock Split including, but not limited to: (i) current trading price of the Corporation’s shares of common stock on the OTC BB Market and potential to increase the marketability and liquidity of the Corporation’s common stock; (ii) possible reluctance of brokerage firms and institutional investors to recommend lower-priced stocks to their clients or to hold in their own portfolios; (iii) desire to meet future requirements of per-share price and net tangible assets and shareholders’ equity relating to admission for trading on other markets; and (iv) posturing the Corporation and its structure in favorable position in order to effectively negotiate with potential acquisition candidates.

The Stock Split was effectuated on May 10, 2013 upon filing the appropriate documentation with FINRA. The Stock Split decreased the Corporation's total issued and outstanding shares of common stock from 1,616,319,537 to 808,160 shares of common stock. The common stock will continue to be $0.001 par value. The trading symbol of the Corporation will have a "D" placed on the ticker symbol for twenty business days from the effective date of October 1, 2012 of the Stock Split. After twenty business days has passed, the Corporation's new trading symbol will be "INLC" based upon the Name Change. The new cusip number is 45672G106.

F-22

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

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” ”will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

Company Overview

Inelco Corporation (the "Company", “Inelco”, “we”, “us” or “our”) is a holding company with two wholly-owned subsidiaries, NexPhase Lighting Inc., a Florida corporation, (“NexPhase”) and Cyber Centers Worldwide Corporation, a Florida corporation (“CCWC”).

Effective on April 30, 2012, the Board of Directors approved and authorized the execution of a licensing, manufacturing and distribution agreement (the “Agreement”) with Jarlyn S.A., an Uruguayan corporation (“Jarlyn”). In accordance with the terms and provisions of the Agreement, Jarlyn shall be designated the exclusive licensee, manufacturer, distributor and re-seller of certain licensed technologies within the Oriental Republic of Uruguay (the “Territory”).

In anticipation of the spin-off of NexPhase, the operations of the Company will change from the business of designing, developing, manufacturing and marketing a high quality and high efficiency full line of LED intelligent lighting fixtures and control systems for commercial applications and projects involving both new construction and retrofits.

The business operations of the Company will be conducted through its new wholly-owned subsidiary, CCWC, which involves interactive online gaming within the entertainment industry. Over the past years, the founders of CCIC have invested private capital, time and effort and innovative technology in its product development. CCWC today is capitalizing on the emerging trends in interactive gaming and social marketing with a vision to become the benchmark in the gaming industry with a reputation for customer safety, security and quality customer service, while also upholding the interests of shareholders.

Company History

Inelco Corporation was incorporated under the laws of the State of Nevada on December 31, 2007 as InfoSpi Inc. 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 0.284 shares of InfoSpi’s common stock which were distributed to Arrin’s general unsecured creditors.

On March 29, 2011, we filed a Certificate of Amendment with the Nevada Secretary of State in order to change our name from “InfoSpi Inc.” to “Onteco Corporation” (the “Name Change”). The Name Change was effective with the Nevada Secretary of State on March 29, 2011 when the Certificate of Amendment was filed. The Name Change was approved by our Board of Directors pursuant to written consent resolutions dated March 15, 2011 and further approved by certain shareholders holding a majority of our total issued and outstanding shares of common stock pursuant to written consent resolutions dated March 16, 2011.

We filed the appropriate documentation with FINRA in order to effectuate the Name Change in the OTC Markets. The Name Change was effected on the OTC Markets April 11, 2011.

We filed the appropriate documentation with FINRA in order to effectuate the Name Change in the OTC Markets. The Name Change was effected on the OTC Markets May 10, 2013. The new symbol on May 10, 2013 will be "ONTCD". The "D" will drop off the symbol after 20 business days. Thereafter, the new trading symbol will be "INLC".

Our Strategy

Management believes that the past years success of new social media platforms have changed the ways consumers approach media, circumventing traditional marketing channels such as television and print media in favor of social media sites that provide easy access to information, advice and recommendations. People go online to socialize and be entertained. During that process, these connected customers are actively building and refining their own trusted personal networks. People trust friends. Management believes that the opportunity is very clear. CCWC integrates social media deeply into its concept and will focus on succeeding in motivating its members to share with their networks, and thereby create a powerful channel for increasing the CCWC brand’s influence in the marketplace. Social media is all about the ability for the members to create personalized signals that they can plug into. When members find a new product or a great deal, they love to share it with others to obtain social status. CCWC has integrated basic social media sharing functions into its services and will also use third party specialists to fully capitalize on the useful aspects of the fast developing trends within the social marketing space. CCWC’s marketing will focus on a solution that allows creating social media campaigns that can be tracked measured and optimized to maximize reach and ROI. Understanding the hierarchy of social motivators that makes social marketing successful is also imperative to CCWC.

Results of Operations

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012 and For the Period December 31, 2007 (Inception) to March 31, 2013

Revenues

The Company had no revenue for the three months ended March 31, 2013 or 2012. We had no cost of goods sold for the three months ended March 31, 2013 or 2012.

For the period December 31, 2007 (inception) to March 31, 2013, the Company had revenue of $380,216, cost of goods sold of $187,762 and a gross profit of $192,424. All revenues and cost of goods sold are from the sale of our NexPhase lighting products. We were unable to generate sales in the three months ended March 31, 2013 and currently have no backlog.

Operating Expenses and Other Expenses

For the three months ended March 31, 2013 our total operating expenses were $37,129 compared to $103,604 for the three months ended March 31, 2012.

Other expenses consisted of a loss on the settlement of debt of $551,000 and interest expense (including beneficial conversion feature accretion) of $141,931 for the three months ended March 31, 2013 compared to $135,491 for the three months ended March 31, 2012.

For the period from December 31, 2007 (inception) to March 31, 2012, total operating expenses were $2,192,448 and other expenses were $948,058 resulting in a net loss of $3,927,114. Operating costs are composed of general and administrative expenses of $333,005, investor relations of $145,512, occupancy costs of $80,756, officer compensation of $616,576, professional fees of $179,877, staff compensation of $421,648, stock-based compensation of $405,205, and depreciation of $9,869. Other expenses are comprised of loss on disposal of assets of $567, loss on the settlement of debt of $551,000, interest expense (including beneficial conversion feature accretion of $779,888) of $918,891, the write-off of project development costs of $27,600 and the write-off of amount due from other of $1,000.

Liquidity and Capital Resources

Overview

For the three months ended March 31, 2013, we funded our operations through the issuance of notes payable and advances from our chief executive officer and a related party, while for the three months ended March 31, 2012 we funded our operations through financing activities consisting of the issuance of notes payable to related parties. Our principal use of funds during the three months ended March 31, 2013 has been for general operating expenses and working capital purposes.

Liquidity and Capital Resources during the three months ended March 31, 2012 compared to the three months ended March 31, 2011

As of March 31, 2013, we had cash of $502 and deficit in working capital exclusive of discontinued operations of $386,193. The Company generated a negative cash flow from operations of $34,812 for the three months ended March 31, 2013 compared to cash used in operations of $174,529 for the three months ended March 31, 2012. The negative cash flow from operating activities for the three months ended March 31, 2013 is primarily attributable to the Company's net loss from operations of $191,618.

Investing activities decreased $6,204 for the three months ended March 31, 2013 compared to 2012. The decrease is attributable to no purchases of equipment during the three months ended March 31, 2013.

Financing activities for the three months ended March 31, 2013 consisted of proceeds from the issuance of notes payable to third parties of $32,400.

We will require additional financing during the current fiscal year to meet our planned activities and debt obligations. We presently do not have sufficient financing to enable us to complete these activities and will require additional financing. We expect to 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.

Going Concern

Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the financial statements for the year ended December 31, 2011 regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Our unaudited financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our unaudited financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

There is no assurance that our operations will be profitable. The Company has conducted private placements of its common stock, which have generated funds to satisfy the initial cash requirements of its planned Nevada exploration ventures. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of 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. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2, “Summary of Significant Accounting Policies” in our audited consolidated financial statements for the year ended December 31, 2011, included in our Annual Report on Form 10-K as filed on April 16, 2012, for a discussion of our critical accounting policies and estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

Item 4. Controls and Procedures.

(a)	Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to chief executive and chief financial officers to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of such date.

(b)	Changes in Internal Control over Financial Reporting

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

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

The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

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

Item 3. Defaults Upon Senior Securities.

No report required.

Item 4. Mine Safety Disclosures.

This item is not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

Exhibit 31.1	Rule 13a-14(a) Certification by the Principal Executive Officer

Exhibit 31.2	Rule 13a-14(a) Certification by the Principal Financial Officer

Exhibit 32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 101.INS **	XBRL Instance Document

Exhibit 101.SCH **	XBRL Schema Document

Exhibit 101.CAL **	XBRL Calculation Linkbase Document

Exhibit 101.DEF **	XBRL Definition Linkbase Document

Exhibit 101.LAB **	XBRL Label Linkbase Document

Exhibit 101.PRE **	XBRL Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 20, 2013	By:	/s/ Jorge Schcolnik
		Jorge Schcolnik
		Chief Executive Officer (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer)

Inelco Corp - FORM 10-Q - May 21, 2013

Attached files

Inelco Corp Reports