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INSPIRED BUILDERS, INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations.(Edgar Glimpses Via Acquire Media NewsEdge) The following discussion and analysis summarizes the significant factors affecting our condensed results of operations, financial condition and liquidity position for the three months ended March 31, 2014. These financial statements should be read in conjunction with the financial statements of the Company for the year ended September 30, 2013 and notes thereto contained in the information filed as part of the Company's Annual Report on Form 10-K, which was filed with the Commission on March 6, 2014. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Forward-Looking Statements Forward-looking statements in this Quarterly Report on Form 10-Q, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to manage growth and competition; and (iii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission ("SEC"). In some cases, you can identify forward-looking statements by terminology such as ''may,'' ''will,'' ''should,'' ''could,'' ''expects,'' ''plans,'' ''intends,'' ''anticipates,'' ''believes,'' ''estimates,'' ''predicts,'' ''potential,'' or ''continue'' or the negative of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update any of the forward-looking statements after the date of this Report. The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions. Plan of Operations We have commenced limited operations and we will require outside capital to implement our business model. Inspired Builders, Inc., a Nevada Corporation, was located in Boston, Massachusetts. On January 13, 2012, pursuant to the change of control transaction, we relocated to Santa Monica, California. Until the change of control transaction, we focused on repairing and providing home improvements for the homeowners. Going forward, we expect to redirect the Company's focus to acquiring, investing in, developing and managing real estate properties and related investments. Any such efforts will require substantial financial and management resources, which the Company does not currently possess. Therefore, while we will seek to acquire these resources as a part of our business plans, there can be no assurance of our success, and therefore, in our ability to enter the real estate investment or any other market. Limited Operating History We have generated no independent financial history and have not previously demonstrated that we will be able to expand our business. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our business model and/or sales methods. 10 Results of Operations for the Second Quarter and First Six Months of Fiscal Years 2014 and 2013 For the Three Months Ended March 31, For the Six Months Ended March 31, 2014 2013 2014 2013 OPERATING EXPENSES General and administrative 104,458 35,482 $ 143,202 $ 51,486 Total operating expenses 104,458 35,482 143,202 51,486 LOSS BEFORE PROVISION FOR INCOME TAXES (104,458 ) (35,482 ) (143,202 ) (51,486 ) Other expenses Interest expense 14,392 6,962 28,490 13,660 Net Loss before provision for income taxes (118,850 ) (42,444 ) (171,692 ) (65,146 ) Provision for income taxes - - - - NET LOSS $ (118,850 ) $ (42,444 ) $ (171,692 ) $ (65,146 ) Net loss per share - basic and diluted $ - $ - $ - $ (0.01 ) Weighted average number of shares outstanding during the period - basic and diluted 11,125,000 11,025,000 11,125,000 11,025,000 11 Construction Revenue We had no construction revenue for both the six months ended March 31, 2013 and March 31, 2014. The lack of revenue is primarily attributable to the decrease in business and operations resulting from the Company's sole officer and director withdrawing his full-time attention to the Company's business and the change of controltransaction. Operating Expenses Our total operating expenses increased from $51,486 for the six months ended March 31, 2013 to $143,202 for the six months ended March 31, 2014, an increase of $91,716 or 178%. The increase in operating expenses is primarily attributable to the increased activity and costs associated with professional fees. Net Loss Net loss increased to a net loss of $171,692 for the six months ended March 31, 2014 from a net loss of $65,146 for the six months ended March 31, 2013, an increase in net loss of $106,546. The increase in net loss was primarily due to the increased operating expenses and costs associated with increased professional fees. Liquidity and Capital Resources Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. We have been funding our operations through the sale of our common stock. Our net revenues are not sufficient to fund our operating expenses. At March 31, 2014, we had a cash balance of $514. We currently have no material commitments for capital expenditures. We may be required to raise additional funds, particularly if we are unable to generate positive cash flow as a result of our operations. We estimate that based on current plans and assumptions, that our available cash will not be sufficient to satisfy our cash requirements under our present operating expectations, without further financing, for up to 12 months. Other than cash, we presently have no other alternative source of working capital. We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. We will need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. We do not anticipate that we will be profitable in 2014. Therefore our future operations will be dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing and development plans and possibly cease our operations. 12 We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern. Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. Critical Accounting Policies and Estimates We believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis. Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad debts, recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements. Revenue recognition The Company records revenue for services rendered when all of the following have occurred: (i) persuasive evidence of an arrangement exists, (ii) the product/service is delivered, (iii) the sales price to the customer is fixed or determinable, and (iv) collectability of the related customer receivable isreasonably assured. Stock-based compensation We account for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. There were no options outstanding as of March 31, 2014. We account for non-employee share-based awards in accordance withASC Topic 505-50. 13 Recent Accounting Pronouncements Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC, did not, or are not believed by management, to have a material impact on the Company's present or future financial statements. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements. |