Unassociated Document
U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-SB
GENERAL
FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS
ISSUERS
UNDER
SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
file number ______
Innovative
Acquisitions Corp.
(Name
of
Small Business Issuer in its charter)
Delaware
|
|
77-0683487
|
(State
or other jurisdiction of
incorporation
or formation)
|
|
(I.R.S.
employer
identification
number)
|
|
|
|
c/o
Faraaz Siddiqi
12
Georgiana Drive
Cumberland,
RI
|
|
02864
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Issuer's
telephone number: (401) 334-3242
facsimile
number: (401) 334-3242
Copies
to:
David
N.
Feldman, Esq.
Feldman
Weinstein & Smith LLP
420
Lexington Avenue, Suite 2620
New
York,
NY 10170
(212)
869-7000
Securities
to be registered under Section 12(b) of the Act: none
Securities
to be registered under Section 12(g) of the Exchange Act:
Title
of each class
|
|
Name
of Exchange on which to be so
registered
each class is to be registered
|
|
|
|
Common
Stock, $.0001
|
|
N/A
|
ITEM
1.
DESCRIPTION OF BUSINESS.
(a)
Business Development
Innovative
Acquisitions Corp. (“we”, “us”, “our”, the "Company" or the "Registrant") was
incorporated in the State of Delaware on April 27, 2007. Since inception, the
Company has been engaged in organizational efforts and obtaining initial
financing. The Company was formed as a vehicle to pursue a business combination
and has made no efforts to identify a possible business combination. As a
result, the Company has not conducted negotiations or entered into a letter
of
intent concerning any target business. The business purpose of the Company
is to
seek the acquisition of or merger with, an existing company. The Company
selected December 31 as its fiscal year end.
(b)
Business of Issuer
The
Company, based on proposed business activities, is a "blank check" company.
The
U.S. Securities and Exchange Commission (the “SEC”) defines those companies as
"any development stage company that is issuing a penny stock, within the meaning
of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and that has no specific business plan or purpose, or has
indicated that its business plan is to merge with an unidentified company or
companies." Under SEC Rule 12b-2 under the Securities Act of 1933, as amended
(the “Securities Act”), the Company also qualifies as a “shell company,” because
it has no or nominal assets (other than cash) and no or nominal operations.
Many
states have enacted statutes, rules and regulations limiting the sale of
securities of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a market to develop
in our securities, either debt or equity, until we have successfully concluded
a
business combination. The Company intends to comply with the periodic reporting
requirements of the Exchange Act for so long as we are subject to those
requirements.
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. The Company’s principal business objective
for the next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict its potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.
The
analysis of new business opportunities will be undertaken by or under the
supervision of Robert Johnson, Faraaz Siddiqi and Kapil Munjal, the officers
and
directors of the Registrant. As of this date the Company has not entered into
any definitive agreement with any party, nor have there been any specific
discussions with any potential business combination candidate regarding business
opportunities for the Company. The Registrant has unrestricted flexibility
in
seeking, analyzing and participating in potential business opportunities. In
its
efforts to analyze potential acquisition targets, the Registrant will consider
the following kinds of factors:
(a)
Potential
for growth, indicated by new technology, anticipated market expansion or new
products;
(b) Competitive
position as compared to other firms of similar size and experience within the
industry segment as well as within the industry as a whole;
(c)
Strength
and diversity of management, either in place or scheduled for
recruitment;
(d)
Capital
requirements and anticipated availability of required funds, to be provided
by
the Registrant or from operations, through the sale of additional securities,
through joint ventures or similar arrangements or from other
sources;
(e)
The
cost
of participation by the Registrant as compared to the perceived tangible and
intangible values and potentials;
(f)
The
extent to which the business opportunity can be advanced;
(g)
The
accessibility of required management expertise, personnel, raw materials,
services, professional assistance and other required items; and
(h)
Other
relevant factors.
In
applying the foregoing criteria, no one of which will be controlling, management
will attempt to analyze all factors and circumstances and make a determination
based upon reasonable investigative measures and available data. Potentially
available business opportunities may occur in many different industries, and
at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Due to the Registrant's limited capital available for
investigation, the Registrant may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.
FORM
OF
ACQUISITION
The
manner in which the Registrant participates in an opportunity will depend upon
the nature of the opportunity, the respective needs and desires of the
Registrant and the promoters of the opportunity, and the relative negotiating
strength of the Registrant and such promoters.
It
is
likely that the Registrant will acquire its participation in a business
opportunity through the issuance of common stock or other securities of the
Registrant. Although the terms of any such transaction cannot be predicted,
it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code")
depends upon whether the owners of the acquired business own 80% or more of
the
voting stock of the surviving entity. If a transaction were structured to take
advantage of these provisions rather than other "tax free" provisions provided
under the Code, all prior stockholders would in such circumstances retain 20%
or
less of the total issued and outstanding shares of the surviving entity. Under
other circumstances, depending upon the relative negotiating strength of the
parties, prior stockholders may retain substantially less than 20% of the total
issued and outstanding shares of the surviving entity. This could result in
substantial additional dilution to the equity of those who were stockholders
of
the Registrant prior to such reorganization.
The
present stockholders of the Registrant will likely not have control of a
majority of the voting securities of the Registrant following a reorganization
transaction. As part of such a transaction, all or a majority of the
Registrant's directors may resign and new directors may be appointed without
any
vote by stockholders.
In
the
case of an acquisition, the transaction may be accomplished upon the sole
determination of management without any vote or approval by stockholders. In
the
case of a statutory merger or consolidation directly involving the Company,
it
will likely be necessary to call a stockholders' meeting and obtain the approval
of the holders of a majority of the outstanding securities. The necessity to
obtain such stockholder approval may result in delay and additional expense
in
the consummation of any proposed transaction and will also give rise to certain
appraisal rights to dissenting stockholders. Most likely, management will seek
to structure any such transaction so as not to require stockholder
approval.
It
is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention
and
substantial cost for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs theretofore
incurred in the related investigation might not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in the loss
to the Registrant of the related costs incurred.
We
presently have no employees apart from our management. All of our officers
and
directors are engaged in outside business activities and anticipate that they
will devote to our business very limited time until the acquisition of a
successful business opportunity has been identified. We expect no significant
changes in the number of our employees other than such changes, if any, incident
to a business combination.
(c)
Reports to security holders.
(1)
The
Company is not required to deliver an annual report to security holders and
at
this time does not anticipate the distribution of such a report.
(2)
The
Company will file reports with the SEC. The Company will be a reporting company
and will comply with the requirements of the Exchange Act.
(3)
The
public may read and copy any materials the Company files with the SEC in the
SEC's Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC, which can be found at http://www.sec.gov.
ITEM
2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. Our principal business objective for
the
next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict our potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.
The
Company does not currently engage in any business activities that provide cash
flow. The costs of investigating and analyzing business combinations for the
next 12 months and beyond such time will be paid with money in our treasury
or
with additional amounts, as necessary, to be loaned to or invested in us by
our
stockholders, management or other investors.
During
the next 12 months we anticipate incurring costs related to:
|
(i)
|
filing
of Exchange Act reports, and
|
|
(ii)
|
consummating
an acquisition.
|
We
believe we will be able to meet these costs through use of funds in our treasury
and additional amounts, as necessary, to be loaned by or invested in us by
our
stockholders, management or other investors.
The
Company may consider a business which has recently commenced operations, is
a
developing company in need of additional funds for expansion into new products
or markets, is seeking to develop a new product or service, or is an established
business which may be experiencing financial or operating difficulties and
is in
need of additional capital. In the alternative, a business combination may
involve the acquisition of, or merger with, a company which does not need
substantial additional capital, but which desires to establish a public trading
market for its shares, while avoiding, among other things, the time delays,
significant expense, and loss of voting control which may occur in a public
offering.
Our
officers and directors have not had any preliminary contact or discussions
with
any representative of any other entity regarding a business combination with
us.
Any target business that is selected may be a financially unstable company
or an
entity in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be subject
to
numerous risks inherent in the business and operations of financially unstable
and early stage or potential emerging growth companies. In addition, we may
effect a business combination with an entity in an industry characterized by
a
high level of risk, and, although our management will endeavor to evaluate
the
risks inherent in a particular target business, there can be no assurance that
we will properly ascertain or assess all significant risks.
Our
management anticipates that it will likely be able to effect only one business
combination, due primarily to our limited financing and the dilution of interest
for present and prospective stockholders, which is likely to occur as a result
of our management’s plan to offer a controlling interest to a target business in
order to achieve a tax-free reorganization. This lack of diversification should
be considered a substantial risk in investing in us, because it will not permit
us to offset potential losses from one venture against gains from
another.
The
Company anticipates that the selection of a business combination will be complex
and extremely risky. Because of general economic conditions, rapid technological
advances being made in some industries and shortages of available capital,
our
management believes that there are numerous firms seeking even the limited
additional capital which we will have and/or the perceived benefits of becoming
a publicly traded corporation. Such perceived benefits of becoming a publicly
traded corporation include, among other things, facilitating or improving the
terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for
providing incentive stock options or similar benefits to key employees, and
offering greater flexibility in structuring acquisitions, joint ventures and
the
like through the issuance of stock. Potentially available business combinations
may occur in many different industries and at various stages of development,
all
of which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
RISK
FACTORS
There
may be conflicts of interest between our management and the non-management
stockholders of the Company.
Conflicts
of interest create the risk that management may have an incentive to act
adversely to the interests of the stockholders of the Company. A conflict
of interest may arise between our management's personal pecuniary interest
and
its fiduciary duty to our stockholders.
Our
business is difficult to evaluate because we have no operating
history.
As
the
Company has no operating history or revenue and only minimal assets, there
is a
risk that we will be unable to continue as a going concern and consummate a
business combination. The Company has had no recent operating history nor any
revenues or earnings from operations since inception. We have no significant
assets or financial resources. We will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the consummation of
a
business combination. This may result in our incurring a net operating loss
that
will increase continuously until we can consummate a business combination with
a
profitable business opportunity. We cannot assure you that we can identify
a
suitable business opportunity and consummate a business
combination.
There
is competition for those private companies suitable for a merger transaction
of
the type contemplated by management.
The
Company is in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. We are and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have significantly greater
financial resources, technical expertise and managerial capabilities than we
do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination.
These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.
We
are a development stage company, and our future success is highly dependent
on
the ability of management to locate and attract a suitable
acquisition.
We
were
incorporated in April 2007 and are considered to be in the development stage.
The nature of our operations is highly speculative, and there is a consequent
risk of loss of your investment. The success of our plan of operation will
depend to a great extent on the operations, financial condition and management
of the identified business opportunity. While management intends to seek
business combination(s) with entities having established operating histories,
we
cannot assure you that we will be successful in locating candidates meeting
that
criterion. In the event we complete a business combination, the success of
our
operations may be dependent upon management of the successor firm or venture
partner firm and numerous other factors beyond our control.
The
Company has no existing agreement for a business combination or other
transaction.
We
have
no arrangement, agreement or understanding with respect to engaging in a merger
with, joint venture with or acquisition of, a private or public entity. No
assurances can be given that we will successfully identify and evaluate suitable
business opportunities or that we will conclude a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluation. We cannot guarantee that we will be able
to
negotiate a business combination on favorable terms, and there is consequently
a
risk that funds allocated to the purchase of our shares will not be invested
in
a company with active business operations.
Management
intends to devote only a limited amount of time to seeking a target company
which may adversely impact our ability to identify a suitable acquisition
candidate.
While
seeking a business combination, management anticipates devoting very limited
time to the Company's affairs. Our officers have not entered into written
employment agreements with us and are not expected to do so in the foreseeable
future. This limited commitment may adversely impact our ability to identify
and
consummate a successful business combination.
The
time and cost of preparing a private company to become a public reporting
company may preclude us from entering into a merger or acquisition with the
most
attractive private companies.
Target
companies that fail to comply with SEC reporting requirements may delay or
preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
reporting companies to provide certain information about significant
acquisitions, including certified financial statements for the company acquired,
covering one, two, or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by some target
entities to prepare these statements may significantly delay or essentially
preclude consummation of an acquisition. Otherwise suitable acquisition
prospects that do not have or are unable to obtain the required audited
statements may be inappropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
The
Company may be subject to further government regulation which would adversely
affect our operations.
Although
we will be subject to the reporting requirements under the Exchange Act,
management believes we will not be subject to regulation under the Investment
Company Act of 1940, as amended (the “Investment Company Act”), since we will
not be engaged in the business of investing or trading in securities. If we
engage in business combinations which result in our holding passive investment
interests in a number of entities, we could be subject to regulation under
the
Investment Company Act. If so, we would be required to register as an investment
company and could be expected to incur significant registration and compliance
costs. We have obtained no formal determination from the SEC as to our status
under the Investment Company Act and, consequently, violation of the Investment
Company Act could subject us to material adverse consequences.
Any
potential acquisition or merger with a foreign company may subject us to
additional risks.
If
we
enter into a business combination with a foreign company, we will be subject
to
risks inherent in business operations outside of the United States. These risks
include, for example, currency fluctuations, regulatory problems, punitive
tariffs, unstable local tax policies, trade embargoes, risks related to shipment
of raw materials and finished goods across national borders and cultural and
language differences. Foreign economies may differ favorably or unfavorably
from
the United States economy in growth of gross national product, rate of
inflation, market development, rate of savings, and capital investment, resource
self-sufficiency and balance of payments positions, and in other
respects.
There
is currently no trading market for our common stock, and liquidity of shares
of
our common stock is limited.
Our
shares of common stock are not registered under the securities laws of any
state
or other jurisdiction, and accordingly there is no public trading market for
our
common stock. Further, no public trading market is expected to develop in the
foreseeable future unless and until the Company completes a business combination
with an operating business and the Company thereafter files a registration
statement under the Securities Act. Therefore, outstanding shares of our common
stock cannot be offered, sold, pledged or otherwise transferred unless
subsequently registered pursuant to, or exempt from registration under, the
Securities Act and any other applicable federal or state securities laws or
regulations. Shares
of
our common stock cannot be sold under the exemptions from registration provided
by Rule 144 under or Section 4(1) of the Securities Act (“Rule 144”), in
accordance with the letter from Richard K. Wulff, Chief of the Office of Small
Business Policy of the Securities and Exchange Commission’s Division of
Corporation Finance, to Ken Worm of NASD Regulation, dated January 21, 2000
(the
“Wulff Letter”). The Wulff Letter provides that certain private transfers of the
shares of common stock also may be prohibited without registration under federal
securities laws. The SEC has proposed codifying certain aspects of the Wulff
Letter and adjusting some of its provisions. The proposed adjustments
include allowing stockholders of a company that was formerly a shell company
to
be able to utilize the exemption from registration under Rule 144 under certain
circumstances following such time as the company is no longer a shell company
and certain disclosures have been completed. There is no assurance that this
proposal will ultimately be adopted by the SEC in its current form or any other
form. This letter provides that certain private transfers of the shares of
common stock also may be prohibited without registration under federal
securities laws. Compliance with the criteria for securing exemptions under
federal securities laws and the securities laws of the various states is
extremely complex, especially in respect of those exemptions affording
flexibility and the elimination of trading restrictions in respect of securities
received in exempt transactions and subsequently disposed of without
registration under the Securities Act or state securities laws.
There
are issues impacting liquidity of our securities with respect to the SEC’s
review of a future resale registration statement.
Since
our
shares of common stock issued prior to a business combination or reverse merger
cannot currently, nor will they for a considerable period of time after we
complete a business combination, be available to be offered, sold, pledged
or
otherwise transferred without being registered pursuant to the Securities Act,
we will likely file a resale registration statement on Form SB-2 or Form S-1,
or
some other available form, to register for resale such shares of common stock.
We cannot control this future registration process in all respects as some
matters are outside our control. Even if we are successful in causing the
effectiveness of the resale registration statement, there can be no assurances
that the occurrence of subsequent events may not preclude our ability to
maintain the effectiveness of the registration statement. Any of the foregoing
items could have adverse effects on the liquidity of our shares of common stock.
In
addition, the SEC has recently disclosed that it has developed internal
guidelines concerning the use of a resale registration statement to register
the
securities issued to certain investors in private investment in public equity
(PIPE) transactions, where the issuer has a market capitalization of less than
$75 million and, in general, does not qualify to file a Registration Statement
on Form S-3 to register its securities. The SEC has taken the position that
these smaller issuers may not be able to rely on Rule 415 under the Securities
Act, which generally permits the offer and sale of securities on a continued
or
delayed basis over a period of time, but instead would require that the issuer
offer and sell such securities in a direct or "primary" public offering, at
a
fixed price, if the facts and circumstances are such that the SEC believes
the
investors seeking to have their shares registered are underwriters and/or
affiliates of the issuer. It appears that the SEC in most cases will permit
a
registration for resale of up to one third of the total number of shares of
common stock then currently owned by persons who are not affiliates of such
issuer and, in some cases, a larger percentage depending on the facts and
circumstances. Staff members also have indicated that an issuer in most cases
will have to wait until the later of six months after effectiveness of the
first
registration or such time as substantially all securities registered in the
first registration are sold before filing a subsequent registration on behalf
of
the same investors. Since, following a reverse merger or business combination,
we may have little or no tradable shares of common stock, it is unclear as
to
how many, if any, shares of common stock the SEC will permit us to register
for
resale, but SEC staff members have indicated a willingness to consider a higher
percentage in connection with registrations following reverse mergers with
shell
companies such as the Company. The SEC may require as a condition to the
declaration of effectiveness of a resale registration statement that we reduce
or “cut back” the number of shares of common stock to be registered in such
registration statement. The result of the foregoing is that a stockholder’s
liquidity in our common stock may be adversely affected in the event the SEC
requires a cut back of the securities as a condition to allow the Company to
rely on Rule 415 with respect to a resale registration statement, or, if the
SEC
requires us to file a primary registration statement.
We
have never paid dividends on our common stock.
We
have
never paid dividends on our common stock and do not presently intend to pay
any
dividends in the foreseeable future. We anticipate that any funds available
for
payment of dividends will be re-invested into the Company to further its
business strategy.
The
Company may be subject to certain tax consequences in our business, which may
increase our cost of doing business.
We
may
not be able to structure our acquisition to result in tax-free treatment for
the
companies or their stockholders, which could deter third parties from entering
into certain business combinations with us or result in being taxed on
consideration received in a transaction. Currently, a transaction may be
structured so as to result in tax-free treatment to both companies, as
prescribed by various federal and state tax provisions. We intend to structure
any business combination so as to minimize the federal and state tax
consequences to both us and the target entity; however, we cannot guarantee
that
the business combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free treatment
upon a transfer of stock or assets. A non-qualifying reorganization could result
in the imposition of both federal and state taxes that may have an adverse
effect on both parties to the transaction.
Our
business will have no revenues unless and until we merge with or acquire an
operating business.
We
are a
development stage company and have had no revenues from operations. We may
not
realize any revenues unless and until we successfully merge with or acquire
an
operating business.
The
Company intends to issue more shares in a merger or acquisition, which will
result in substantial dilution.
Our
Certificate of Incorporation authorizes the issuance of a maximum of
100,000,000 shares of common stock and a maximum of 10,000,000 shares of
preferred stock. Any merger or acquisition effected by us may result in the
issuance of additional securities without stockholder approval and may result
in
substantial dilution in the percentage of our common stock held by our then
existing stockholders. Moreover, the common stock issued in any such merger
or
acquisition transaction may be valued on an arbitrary or non-arm’s-length basis
by our management, resulting in an additional reduction in the percentage of
common stock held by our then existing stockholders. Our Board
of
Directors has the power to issue any or all of such authorized but unissued
shares without stockholder approval. To the extent that additional shares of
common stock or preferred stock are issued in connection with a business
combination or otherwise, dilution to the interests of our stockholders will
occur and the rights of the holders of common stock might be materially
adversely affected.
Our
principal stockholders may engage in a transaction to cause the Company to
repurchase their shares of common stock.
In
order
to provide an interest in the Company to third parties, our principal
stockholders may choose to cause the Company to sell Company securities to
one
or more third parties, with the proceeds of such sale(s) being utilized by
the
Company to repurchase shares of common stock held by the stockholders. As a
result of such transaction, our management, principal stockholders and Board
of
Directors may change.
The
Company has conducted no market research or identification of business
opportunities, which may affect our ability to identify a business to merge
with
or acquire.
The
Company has not conducted market research concerning prospective business
opportunities, nor have others made the results of such market research
available to the Company. Therefore, we have no assurances that market demand
exists for a merger or acquisition as contemplated by us. Our management has
not
identified any specific business combination or other transactions for formal
evaluation by us, such that it may be expected that any such target business
or
transaction will present such a level of risk that conventional private or
public offerings of securities or conventional bank financing will not be
available. There is no assurance that we will be able to acquire a business
opportunity on terms favorable to us. Decisions as to
which
business opportunity to participate in will be unilaterally made by our
management, which may act without the consent, vote or approval of our
stockholders.
Because
we may seek to complete a business combination through a “reverse merger”,
following such a transaction we may not be able to attract the attention of
major brokerage firms.
Additional
risks may exist since we will assist a privately held business to become public
through a “reverse merger.” Securities analysts of major brokerage firms may not
provide coverage of our Company since there is no incentive to brokerage firms
to recommend the purchase of our common stock. No assurance can be given that
brokerage firms will want to conduct any secondary offerings on behalf of our
post-merger company in the future.
We
cannot assure you that following a business combination with an operating
business, our common stock will be listed on NASDAQ or any other securities
exchange.
Following
a business combination, we may seek the listing of our common stock on NASDAQ
or
the American Stock Exchange. However, we cannot assure you that following such
a
transaction, we will be able to meet the initial listing standards of either
of
those or any other stock exchange, or that we will be able to maintain a listing
of our common stock on either of those or any other stock exchange. After
completing a business combination, until our common stock is listed on the
NASDAQ or another stock exchange, we expect that our common stock would be
eligible to trade on the OTC Bulletin Board, another over-the-counter quotation
system, or on the “pink sheets,” where our stockholders may find it more
difficult to dispose of shares or obtain accurate quotations as to the market
value of our common stock. In addition, we would be subject to an SEC rule
that,
if it failed to meet the criteria set forth in such rule, imposes various
practice requirements on broker-dealers who sell securities governed by the
rule
to persons other than established customers and accredited investors.
Consequently, such rule may deter broker-dealers from recommending or selling
our common stock, which may further affect its liquidity. This would also make
it more difficult for us to raise additional capital following a business
combination.
Authorization
of preferred stock.
Our
Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares
of preferred stock with designations, rights and preferences determined from
time to time by our Board of Directors. Accordingly, our Board of Directors
is
empowered, without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting, or other rights which could adversely affect
the voting power or other rights of the holders of the common stock. In the
event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change
in
control of the Company. Although we have no present intention to issue any
shares of its authorized preferred stock, there can be no assurance that the
Company will not do so in the future.
Control
by management.
Management
currently owns 100% of all the issued and outstanding common stock of the
Company. Consequently, management has the ability to influence control of the
operations of the Company and, acting together, has
the
ability to influence or control all matters submitted to stockholders for
approval, including:
|
·
|
Election
of the Board of Directors;
|
|
·
|
Amendment
to the Company’s certificate of incorporation or bylaws;
and
|
|
·
|
Adoption
of measures that could delay or prevent a change in control or
impede
a merger, takeover or other business
combination.
|
This
registration statement contains forward-looking statements and information
relating to us, our industry and to other businesses.
These
forward-looking statements are based on the beliefs of our management, as well
as assumptions made by and information currently available to our management.
When used in this registration statement, the words "estimate," "project,"
"believe," "anticipate," "intend," "expect" and similar expressions are intended
to identify forward-looking statements. These statements reflect our current
views with respect to future events and are subject to risks and uncertainties
that may cause our actual results to differ materially from those contemplated
in our forward-looking statements. We caution you not to place undue reliance
on
these forward-looking statements, which speak only as of the date of this
registration statement. We do not undertake any obligation to publicly release
any revisions to these forward-looking statements to reflect events or
circumstances after the date of this registration statement or to reflect the
occurrence of unanticipated events.
ITEM
3.
DESCRIPTION OF PROPERTY.
The
Company neither rents nor owns any properties. The Company utilizes the office
space and equipment of its management at no cost. Management estimates such
amounts to be immaterial. The Company currently has no policy with respect
to
investments or interests in real estate, real estate mortgages or securities
of,
or interests in, persons primarily engaged in real estate
activities.
ITEM
4.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a)
Security ownership of certain beneficial owners.
The
following table sets forth, as of September 14, 2007, the number of shares
of
common stock owned of record and beneficially by executive officers, directors
and persons who beneficially own more than 5% of the outstanding shares of
common stock of the Company.
Name
and
Address
|
|
Amount and Nature of
Beneficial Ownership
|
|
Percentage
of Class
|
|
Robert
Johnson (1)
Innovative
Acquisitions Corp.
c/o
Faraaz Siddiqi
12
Georgiana Drive
Cumberland,
RI 02864
|
|
|
1,000,000
|
|
|
33
1/3%
|
|
|
|
|
|
|
|
|
|
Kapil
Munjal (2)
Innovative
Acquisitions Corp.
c/o
Faraaz Siddiqi
12 Georgiana
Drive
Cumberland,
RI 02864
|
|
|
1,000,000
|
|
|
33
1/3%
|
|
|
|
|
|
|
|
|
|
Faraaz
Siddiqi (3)
Innovative
Acquisitions Corp.
c/o
Faraaz Siddiqi
12 Georgiana
Drive
Cumberland,
RI 02864
|
|
|
1,000,000
|
|
|
33
1/3%
|
|
|
|
|
|
|
|
|
|
All
Officers and
Directors
as a group
(3
individuals)
|
|
|
3,000,000
|
|
|
100%
|
|
|
(1)
|
Robert
Johnson is President and a director of the
Company.
|
|
(2)
|
Kapil
Munjal is a director of the
Company.
|
|
(3)
|
Faraaz
Siddiqi is Secretary and a director of the
Company.
|
ITEM
5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
A.
Identification of Directors and Executive Officers.
Our
officers and directors and additional information concerning them are as
follows:
Name
|
|
Age
|
|
Position
|
Robert
Johnson
|
|
37
|
|
President
and Director
|
Faraaz
Siddiqi
|
|
36
|
|
Secretary
and Director
|
Kapil
Munjal
|
|
35
|
|
Director
|
Robert
Johnson
has
served as the Company’s President and director since inception. Mr. Johnson is
currently a Strategic and Developmental Consultant for PhD Productions, a film
production company, and has served as such since November 2004. Also, since
May
2003, he has been an entrepreneur in the in-home private education industry.
Previously, from September 1999 to April 2003, Mr. Johnson worked as an attorney
at the law firm of Ropes & Gray LLP in Boston, Massachusetts. At Ropes &
Gray LLP, he managed the initial public offerings of six closed-end municipal
bond funds ($3.3b, aggregate), advised publicly-traded companies in connection
with debt offerings and private placements, and counseled start-up companies
in
connection with initial rounds of financing. From 1993 to 1996, he worked at
Smith Barney, Inc. in New York City as an Associate in the Health Care Services
Research Group. As a member of the leading health care services research team
on
Wall Street, Mr. Johnson evaluated the investment potential of publicly-traded
health care services companies by analyzing their financials, business models,
and industry characteristics. Mr. Johnson graduated magna cum laude from
Princeton University in 1992, receiving an Artium Baccalaureus in Psychology;
he
is a member of Phi Beta Kappa. Mr. Johnson also holds a Juris Doctor, which
he
received from Harvard Law School in 1999.
Faraaz
Siddiqi
has
served as the Company’s Secretary and Director since inception. Since October
2006, Mr. Siddiqi has been self-employed as a freelance consultant. He provides
advice on various issues relating to international business and trade. From
April 2003 to October 2006, Mr. Siddiqi worked for the Office of the U.S. Trade
Representative in the Executive Office of the President (White House) where
he
attained the rank of Deputy Assistant U.S. Trade Representative. His
responsibilities included coordinating efforts to build the capacity of
developing countries to implement and enforce international trade obligations.
Mr. Siddiqi served as U.S. lead for trade capacity building discussions in
the
World Trade Organization Doha negotiations, the U.S.-Thailand Free Trade
Agreement negotiations, and the U.S.-Southern African Customs Union Free Trade
Agreement negotiations. He was also significantly involved in the Dominican
Republic-Central America-United States Free Trade Agreement, the African Growth
and Opportunity Act, and other initiatives. From January 2000 to April 2003,
Mr.
Siddiqi worked in the General Counsel’s Office of the U.S. Department of
Commerce as a senior attorney for the Commercial Law Development Program where
he managed a multi-million dollar project in the Middle East and Africa
promoting legal reform to improve the environment for business. Prior to this,
Mr. Siddiqi was an associate at the law firm of Robins, Kaplan, Miller &
Ciresi, LLP, in Boston, Massachusetts, where his practice focused on
intellectual property law, transactional law, and insurance law. He also worked
at the World Bank and coauthored one of the initial Bank working papers on
Child
Labor. Mr. Siddiqi received a Bachelor of Arts degree in Psychology from McGill
University in 1993 and a Juris Doctor degree from the Boston University School
of Law in 1997.
Kapil
Munjal has
served as a director of the Company since its inception.
Since
June 1999, Mr. Munjal has been an independent real estate investor, involved
in
all aspects of real property acquisition, management, and disposition. His
primary focus has been on building real estate portfolios comprised primarily
of
residential multi-family housing investments in the city of Los Angeles.
Currently, Mr. Munjal manages over 220 apartment units, worth in excess of
$60
million. Additionally, he has partnered with major financial institutions such
as Fannie Mae, Freddie Mac, Citibank, Washington Mutual and Prudential Financial
to secure favorable, low-interest financing for his real estate transactions.
From 1997-1999, Mr. Munjal served as an Assistant District Attorney for the
Bronx County in the city of New York where he was a member of the Criminal
Courts Bureau. Mr. Munjal has also held positions at the Los Angeles County
District Attorney’s Office and the Administrative Office of the United States
Courts. Mr. Munjal received a Bachelor of Arts degree in Political
Science/Rhetoric from the University of California at Berkeley in 1993 and
a
Juris Doctor degree from the Boston University School of Law in
1997.
B.
Significant Employees. None.
C.
Family
Relationships. None.
D.
Involvement in Certain Legal Proceedings. There have been no events under any
bankruptcy act, no criminal proceedings and no judgments, injunctions, orders
or
decrees material to the evaluation of the ability and integrity of any director,
executive officer, promoter or control person of Registrant during the past
five
years.
E.
The
Board of Directors acts as the Audit Committee, and the Board has no separate
committees. The Company has no qualified financial expert at this time because
it has not been able to hire a qualified candidate. Further, the Company
believes that it has inadequate financial resources at this time to hire such
an
expert. The Company intends to continue to search for a qualified individual
for
hire.
Prior
Blank Check Company Experience
The
members of our management do not currently serve, nor have they ever served,
as
officers or directors of any other blank check or shell company.
ITEM
6.
EXECUTIVE COMPENSATION.
The
Company’s officers and directors have not received any cash remuneration since
inception. Our officers will not receive any remuneration upon completion of
the
offering until the consummation of an acquisition. No remuneration of any nature
has been paid for on account of services rendered by a director in such
capacity. Our officers and directors intend to devote very limited time to
our
affairs.
It
is
possible that, after the Company successfully consummates a business combination
with an unaffiliated entity, that entity may desire to employ or retain one
or a
number of members of our management for the purposes of providing services
to
the surviving entity. However, the Company has adopted a policy whereby the
offer of any post-transaction employment to members of management will not
be a
consideration in our decision whether to undertake any proposed transaction.
No
retirement, pension, profit sharing, stock option or insurance programs or
other
similar programs have been adopted by the Company for the benefit of its
employees.
There
are
no understandings or agreements regarding compensation our management will
receive after a business combination that is required to be included in this
table, or otherwise.
ITEM
7.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Except
as
otherwise indicated herein, there have been no related party transactions,
or
any other transactions or relationships required to be disclosed pursuant to
Item 404 of Regulation S-B.
ITEM
8.
DESCRIPTION OF SECURITIES.
(a)
Common and Preferred Stock.
The
Company is authorized by its Certificate of Incorporation to issue an aggregate
of 110,000,000 shares of capital stock, of which 100,000,000 are shares of
common stock, par value $.0001 per share (the "Common Stock") and 10,000,000
are
shares of preferred stock, par value $.0001 per share (the “Preferred Stock”).
As of September 14, 2007, 3,000,000 shares of Common Stock and zero shares
of
Preferred Stock were issued and outstanding.
Common
Stock
All
outstanding shares of Common Stock are of the same class and have equal rights
and attributes. The holders of Common Stock are entitled to one vote per share
on all matters submitted to a vote of stockholders of the Company. All
stockholders are entitled to share equally in dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available. In the event of liquidation, the holders of Common Stock are entitled
to share ratably in all assets remaining after payment of all liabilities.
The
stockholders do not have cumulative or preemptive rights.
Preferred
Stock
Our
Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares
of Preferred Stock with designations, rights and preferences determined from
time to time by its Board of Directors. Accordingly, our Board of Directors
is
empowered, without stockholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting, or other rights which could adversely affect
the voting power or other rights of the holders of the Common Stock. In the
event of issuance, the Preferred Stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change
in
control of the Company. Although we have no present intention to issue any
shares of its authorized Preferred Stock, there can be no assurance that the
Company will not do so in the future.
The
description of certain matters relating to the securities of the Company is
a
summary and is qualified in its entirety by the provisions of the Company's
Certificate of Incorporation and By-Laws, copies of which have been filed as
exhibits to this Form 10-SB.
(b)
Debt
Securities.
None.
(c)
Other
Securities To Be Registered.
None.
PART
II
ITEM
1.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a)
Market Information.
The
Common Stock is not trading on any stock exchange. The Company is not aware
of
any market activity in its Common Stock since its inception through the date
of
this filing.
(b)
Holders.
As
of
September 14, 2007, there were three record holders of an aggregate of 3,000,000
shares of the Common Stock issued and outstanding.
(c)
Dividends.
The
Registrant has not paid any cash dividends to date and does not anticipate
or
contemplate paying dividends in the foreseeable future. It is the present
intention of management to utilize all available funds for the development
of
the Registrant's business.
ITEM
2.
LEGAL PROCEEDINGS.
Presently,
there are not any material pending legal proceedings to which the Registrant
is
a party or as to which any of its property is subject, and no such proceedings
are known to the Registrant to be threatened or contemplated against
it.
ITEM
3.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
There
are
not and have not been any disagreements between the Registrant and its
accountants on any matter of accounting principles, practices or financial
statement disclosure.
ITEM
4.
RECENT SALES OF UNREGISTERED SECURITIES.
On
April
27, 2007, the Registrant sold 1,000,000 shares of Common Stock to each of Robert
Johnson, Faraaz Siddiqi and Kapil Munjal for aggregate cash consideration of
$12,000. Mr. Munjal is a director of the Registrant and Messrs. Johnson and
Siddiqi are officers and directors of the Registrant. The Registrant sold these
shares of Common Stock under the exemption from registration provided by Section
4(2) of the Securities Act.
No
securities have been issued for services. Neither the Registrant nor any person
acting on its behalf offered or sold the securities by means of any form of
general solicitation or general advertising. No services were performed by
any
purchaser as consideration for the shares issued.
All
purchasers represented in writing that they acquired the securities for their
own accounts. A legend was placed on the stock certificates stating that the
securities have not been registered under the Securities Act and cannot be
sold
or otherwise transferred without an effective registration or an exemption
therefrom, but may not be sold pursuant to the exemptions provided by Section
4(1) of the Securities Act or Rule 144 under the Securities Act, in accordance
with the Wulff Letter. The SEC has proposed codifying certain aspects of the
Wulff Letter and adjusting some of its provisions. The proposed adjustments
include allowing stockholders of a company that was formerly a shell company
to
be able to utilize the exemption from registration under Rule 144 under certain
circumstances following such time as the company is no longer a shell company
and certain disclosures have been completed. There is no assurance that this
proposal will ultimately be adopted by the SEC in its current form or any other
form.
ITEM
5.
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145
of the Delaware General Corporation Law provides that a corporation may
indemnify directors and officers as well as other employees and individuals
against expenses including attorneys' fees, judgments, fines and amounts paid
in
settlement in connection with various actions, suits or proceedings, whether
civil, criminal, administrative or investigative other than an action by or
in
the right of the corporation, a derivative action, if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, if they had no reasonable cause to believe their conduct was
unlawful. A similar standard is applicable in the case of derivative actions,
except that indemnification only extends to expenses including attorneys' fees
incurred in connection with the defense or settlement of such actions, and
the
statute requires court approval before there can be any indemnification where
the person seeking indemnification has been found liable to the corporation.
The
statute provides that it is not exclusive of other indemnification that may
be
granted by a corporation's certificate of incorporation, bylaws, agreement,
a
vote of stockholders or disinterested directors or otherwise.
The
Company’s Certificate of Incorporation provides that it will indemnify and hold
harmless, to the fullest extent permitted by Section 145 of the Delaware General
Corporation Law, as amended from time to time, each person that such section
grants us the power to indemnify.
The
Delaware General Corporation Law permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability for:
|
·
|
any
breach of the director's duty of loyalty to the corporation or its
stockholders;
|
|
·
|
acts
or omissions not in good faith or which involve intentional misconduct
or
a knowing violation of law;
|
|
·
|
payments
of unlawful dividends or unlawful stock repurchases or redemptions;
or
|
|
·
|
any
transaction from which the director derived an improper personal
benefit.
|
The
Company’s Certificate of Incorporation provides that, to the fullest extent
permitted by applicable law, none of our directors will be personally liable
to
us or our stockholders for monetary damages for breach of fiduciary duty as
a
director. Any repeal or modification of this provision will be prospective
only
and will not adversely affect any limitation, right or protection of a director
of our company existing at the time of such repeal or modification.
PART
F/S
INNOVATIVE
ACQUISITIONS CORP.
(A
Development Stage Company)
JUNE
30,
2007
-
TABLE
OF CONTENTS -
|
|
Page
|
|
|
|
|
|
Financial
Statements:
|
|
|
|
|
|
|
|
|
|
Report
of Independent Registered Public Accounting Firm
|
|
|
F
- 1
|
|
|
|
|
|
|
Balance
Sheet as of June 30, 2007
|
|
|
F
- 2
|
|
|
|
|
|
|
Statement
of Expenses from April 27, 2007 (Inception) through June 30,
2007
|
|
|
F
- 3
|
|
|
|
|
|
|
Statement
of Stockholders’ Equity from April 27, 2007 (Inception) through June 30,
2007
|
|
|
F
- 4
|
|
|
|
|
|
|
Statement
of Cash Flows from April 27, 2007 (Inception) through June 30,
2007
|
|
|
F
- 5
|
|
|
|
|
|
|
Notes
to Financial Statements
|
|
|
F
- 6
|
|
REPORT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors
Innovative
Acquisitions Corp.
(A
Development Stage Company)
Cumberland,
Rhode Island
We
have
audited the accompanying balance sheet of Innovative Acquisitions Corp.(a
development stage company) as of June 30, 2007 and the related statements
of
expenses, stockholders’ equity, and cash flows for the period from inception
(April 27, 2007) through June 30, 2007. These financial statements are the
responsibility of Innovative Acquisition’s management. Our responsibility is to
express an opinion on these financial statements based on our
audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Innovative Acquisitions Corp.
for
the periods described in conformity with accounting principles generally
accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that Innovative
Acquisitions Corp. will continue as a going concern. As discussed in Note
2 to
the financial statements, Innovative Acquisitions Corp. has no operations,
which
raises substantial doubt about its ability to continue as a going concern.
Management’s plans regarding those matters also are described in Note 2. The
financial statements do not include any adjustments that might result from
the
outcome of this uncertainty.
/s/
Malone & Bailey, P.C.
Malone
& Bailey, P.C.
www.malone-bailey.com
Houston,
TX
September
11, 2007
INNOVATIVE
ACQUISITIONS CORP.
(A
Development Stage Company)
BALANCE
SHEET
|
|
June 30,
2007
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash
|
|
$
|
11,327
|
|
Total
Current Assets
|
|
$
|
11,327
|
|
Liabilities
and Stockholders’ Equity
|
|
|
|
|
Current
Liabilities
|
|
$
|
-
|
|
Total
Liabilities
|
|
|
-
|
|
Stockholders'
Equity:
|
|
|
|
|
Preferred
stock, $0.0001 par, 10,000,000 shares authorized, no shares issued
or
outstanding
|
|
|
-
|
|
Common
Stock, $0.0001 par, 100,000,000 authorized; 3,000,000 issued and
outstanding.
|
|
|
300
|
|
Additional
paid in capital
|
|
|
11,700
|
|
Deficit
accumulated during development stage
|
|
|
(673
|
)
|
Total
stockholders' equity
|
|
|
11,327
|
|
|
|
|
|
|
TOTAL
LIABILITIES & STOCKHOLDERS' EQUITY
|
|
$
|
11,327
|
|
See
Summary of Significant Accounting Policies and Notes to Financial
Statements
INNOVATIVE
ACQUISITIONS CORP.
(A
Development Stage Company)
STATEMENT
OF EXPENSES
|
|
April 27, 2007 (inception)
through June 30, 2007
|
|
|
|
|
|
General
and administrative expenses
|
|
$
|
673
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(673
|
)
|
|
|
|
|
|
Net
loss per share –
basic and
diluted
|
|
$
|
(0.00
|
)
|
Weighted
average number of common shares outstanding
|
|
|
3,000,000
|
|
See
Summary of Significant Accounting Policies and Notes to Financial
Statements
INNOVATIVE
ACQUISITIONS CORP.
(A
Development Stage Company)
STATEMENT
OF STOCKHOLERS’ EQUITY
FROM
APRIL 27,2007 (INCEPTION) THROUGH JUNE 30, 2007
|
|
Common Shares
|
|
Amount
|
|
Additional Paid in Capital
|
|
Retained earnings
|
|
Total Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares issued for cash at inception @ $0.004 per share
|
|
|
3,000,000
|
|
$
|
300
|
|
$
|
11,700
|
|
$
|
-
|
|
$
|
12,000
|
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(673
|
)
|
|
(673
|
)
|
Balance,
June 30, 2007
|
|
|
3,000,000
|
|
$
|
300
|
|
$
|
11,700
|
|
$
|
(673
|
)
|
$
|
11,327
|
|
See
Summary of Significant Accounting Policies and Notes to Financial
Statements
INNOVATIVE
ACQUISITIONS CORP.
(A
Development Stage Company)
STATEMENT
OF CASH FLOWS
|
|
April 27, 2007 (inception) through June 30, 2007
|
|
|
|
|
|
Cash
Flows From Operating Activities
|
|
|
|
|
Net
income (Loss)
|
|
$
|
673
|
|
|
|
|
|
|
Net
Cash Used In Operating Activities
|
|
|
(673
|
)
|
|
|
|
|
|
Cash
Flow From Financing Activities
|
|
|
|
|
Proceeds
from sale of common shares
|
|
|
12,000
|
|
|
|
|
|
|
Net
Cash Provided By Financing Activities
|
|
|
12,000
|
|
|
|
|
|
|
Net
Increase (Decrease) in Cash
|
|
|
11,327
|
|
Cash
at beginning of period
|
|
|
-
|
|
Cash
at end of period
|
|
$
|
11,327
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
Cash
paid during the year for:
|
|
|
|
|
Interest
|
|
$
|
-
|
|
Income
taxes
|
|
$
|
-
|
|
See
Summary of Significant Accounting Policies and Notes to Financial
Statements
INNOVATIVE
ACQUISITIONS CORP.
(A
Development Stage Company)
NOTES
TO
FINANCIAL STATEMENTS
NOTE
1 – BASIS
OF
PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
and Business Operations
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to
make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Cash
and Cash Equivalents
Innovative
considers deposits that can be redeemed on demand and investments that have
original maturities of less than three months, when purchased, to be cash
equivalents.
Income
Taxes
Innovative
recognizes deferred tax assets and liabilities based on differences between
the
financial reporting and tax bases of assets and liabilities using the enacted
tax rates and laws that are expected to be in effect when the differences
are
expected to be recovered. Innovative provides a valuation allowance for deferred
tax assets for which it does not consider realization of such assets to be
more
likely than not.
Basic
and Diluted Net Loss per Share
Basic
and
diluted net loss per share calculations are presented in accordance with
Financial Accounting Standards Statement 128, and are calculated on the basis
of
the weighted average number of common shares outstanding during the year.
They
include the dilutive effect of common stock equivalents in years with net
income. Basic and diluted loss per share are the same due to the absence
of
common stock equivalents.
Recently
Issued Accounting Pronouncements
Innovative
does not expect the adoption of any recently issued accounting pronouncements
to
have a significant impact on their financial position, results of operations
or
cash flows.
Note
2 – Going
Concern
These
financial statements have been prepared on a going concern basis. Innovative
has
not generated any revenue since inception and is unlikely to generate revenue
in
the immediate or foreseeable future. The continuation of Innovative as a
going
concern is dependent upon financial support from its shareholders, the ability
to obtain necessary equity financing and the attainment of profitable
operations. These factors raise substantial doubt regarding Innovative’s ability
to continue as a going concern. These financial statements do not include
any
adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should Innovative
be
unable to continue as a going concern.
INNOVATIVE
ACQUISITIONS CORP.
(A
Development Stage Company)
NOTES
TO
FINANCIAL STATEMENTS
Note
3 – Income
Taxes
Innovative
uses the liability method, where deferred tax assets and liabilities are
determined based on the expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities for financial
and income tax reporting purposes. During fiscal 2007, Innovative incurred
net
losses and, therefore, has no tax liability. The net deferred tax asset
generated by the loss carry-forward has been fully reserved. The effective
tax
rate for fiscal 2007 is 15%. The cumulative net operating loss carry-forward
is
approximately $673 at June 30, 2007, and will expire in the years
2027.
At
June
30, 2007, deferred tax assets consisted of the following:
Deferred
tax assets
|
|
|
|
|
Net
operating losses
|
|
$
|
100
|
|
Less:
valuation allowance
|
|
|
(100
|
)
|
|
|
|
|
|
Net
deferred tax asset
|
|
$
|
0
|
|
Note
4 – Common Stock
From
inception (April 27, 2007) through June 30, 2007, Innovative issued 3,000,000
shares of its common stock to its directors at $0.004 per share for $12,000
cash.
Note
5 – Commitments
Innovative’s
principal office is located at 12 Georgiana Drive, Cumberland, RI 02864 pursuant
to a verbal agreement on a rent-free month-to-month basis.
PART
III
ITEM
1.
INDEX TO EXHIBITS.
|
|
Description
|
|
|
|
|
|
Certificate
of Incorporation
|
3.2
|
|
By-Laws
|
SIGNATURES
In
accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf
by the
undersigned, thereunto duly authorized.
|
|
|
Date:
September 14, 2007 |
INNOVATIVE
ACQUISITIONS CORP. |
|
|
|
|
By: |
/s/ Robert
Johnson |
|
Name:
Robert Johnson |
|
Title:
President |