News Column


June 5, 2014


Inner Systems, Inc. (the "Company") was incorporated under the laws of the State of New York on September 16, 1997. On August 7, 1998, Inner System Industries, Inc., a Texas corporation and the owner and operator of a food service and vending machine business, was merged with and into the Company. Thereafter, we owned and operated a food cafeteria, catering business and vending machine business from offices located in Commack, New York. On May 21, 1999, the Company filed a voluntary petition for reorganization pursuant to Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of New York. We continued to operate our business as a debtor-in-possession. However, on or about August 25, 1999, we sold our assets to Culinart, Inc. Then, on August 9, 2000, the Bankruptcy Court approved our plan of reorganization (the "Plan"). The Plan stipulated payments of $395,000, the net proceeds from the sale of the assets, and the issuance of 1,000,000 shares to the holders of various claims. The interests of the pre-petition shareholders were extinguished and the 3,198,948 shares of common stock issued to the pre-petition shareholders were cancelled. The Company's current business plan is to seek, investigate, and, if warranted, acquire one or more properties or businesses, and to pursue other related activities intended to enhance shareholder value. The acquisition of a business opportunity may be made by purchase, merger, exchange of stock, or otherwise, and may encompass assets or a business entity, such as a corporation, joint venture, or partnership. The Company has limited capital, and it is unlikely that the Company will be able to take advantage of more than one such business opportunity. The Company intends to seek opportunities demonstrating the potential of long-term growth as opposed to short-term earnings. 9 Results of Operations This discussion and analysis should be read in conjunction with our financial statements and accompanying notes included elsewhere in this Annual Report. This discussion includes forward-looking statements that involve risks and uncertainties.


In the year ended December 31, 2012, we financed operations primarily through the sale of Notes and accrual of accounts and interest payable. As of December 31, 2012, there was $262,994 of Notes outstanding. The Notes carry interest at 6% and are due at the earliest of December 31, 2013 or a change of control transaction. There is no assurance that we will be able to continue generating funds from loans by investors. We are seeking to acquire business entities that will generate cash from operations. For the year ending December 31, 2013, we anticipate incurring a loss as a result of continued expenses associated with compliance with the reporting requirements of the Exchange Act, and expenses associated with locating and evaluating acquisition candidates. We anticipate that until a business combination is completed with an acquisition candidate, it will not generate revenues. It may also continue to operate at a loss after completing a business combination, depending upon the performance of the acquired business.


During the year ending December 31, 2013, we plan to continue with efforts to seek, investigate, and, if warranted, acquire one or more properties or businesses. We also plan to file all required periodic reports and to maintain our status as a fully-reporting company under the Exchange Act. In order to proceed with its plans for the next year, it is anticipated that we will require additional capital in order to meet its cash needs. These include the costs of compliance with the continuing reporting requirements of the Exchange Act as well as any costs we may incur in seeking business opportunities. Based upon the company's current cash reserves, the Company does not have adequate resource to meet its short term or long-term cash requirements. No specific commitments to provide additional funds have been made by management, the principal stockholders or other stockholders, and we have no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the location of a merger or acquisition candidate. Accordingly, there can be no assurance that any additional funds will be available to us to allow us to cover our expenses. As a result, these conditions raise substantial doubt about our ability to continue as a going concern.

Year Ended December 31, 2012 Compared to December 31, 2011

The following table summarizes the results of our operations during the years ended December 31, 2012 and 2011, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current

year to the year period: Percentage 12/31/12 12/31/11 Increase Increase Line Item (audited) (audited) (Decrease) (Decrease) Revenues - - - - Operating expenses 18,938 17,785 1,153 6.5 % Net loss 33,073 31,319 1,754 5.6 %

Loss per share of common stock $ (0.03 )$ (0.03 )

- - We recorded a net loss of $33,073 for the year ended December 31, 2012 as compared with a net loss of $31,319 for the year ended December 31, 2011. The increase in net loss was primarily attributable to an increase in general and administrative expenses, an increase in professional fees and interest expense. 10

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that are material to an investor

in our securities. Seasonality

Our operating results are not affected by seasonality.


Our business and operating results are not affected in any material way by inflation.

Critical Accounting Policies Development Stage Company We are presented as a development stage company. Activities during the development stage include organizing the business and raising capital. We are a development stage company with no revenues and no profits. The Company has not commenced significant operations and, in accordance with Accounting Standards Codification ("ASC") Topic 915 "Development Stage Entities", is considered a development stage company.

Deferred Taxes and Valuation Allowances

The Company records a valuation allowance to reduce its deferred tax assets to an amount that is more likely than not to be recoverable. The Company considers future operations, market conditions, forecasted earnings and future taxable income in determining the need for a valuation allowance. In the event the Company was to determine that it would not be able to recover any portion of the Company's net deferred tax assets in the future, the unrecoverable portion of the deferred tax assets would be charged to earnings during the period in which such determination is made. Likewise, if the Company were to later determine that it is more likely than not that the net deferred tax assets would be recoverable, the previously recorded valuation allowance would be reversed.

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Source: Edgar Glimpses

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