SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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| þ | | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2008
OR
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| 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 000-52822
CORPORATE EQUITY INVESTMENTS, INC.
(Exact name of small business issuer as specified in its charter)
| Florida | | 20-8090735 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) |
5775 Blue Lagoon Drive Suite 100 Miami, Florida | | 33126 |
| (Address of principal executive offices) | | (Zip Code) |
(786) 888-4567
(Issuer’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 Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o | | Accelerated filer o | | Non-accelerated filer o | | Smaller reporting company þ |
| | | | | (Do not check if a smaller reporting company) | | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
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| Class | | Outstanding at June 30, 2008 |
| Common Stock, $.001 par value per share | | 4,060,000 shares |
CORPORATE EQUITY INVESTMENTS, INC.
TABLE OF CONTENTS
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Corporate Equity Investments, Inc.
(A Development Stage Company)
Financial Statements
June 30, 2008
(Unaudited)
CONTENTS
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| Financial Statements: | |
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| Corporate Equity Investments, Inc. | |
| (A Development Stage Company) | |
| |
| | | | | | | |
| | | June 30, 2008 | | | December 31, 2007 | |
| | | (Unaudited) | | | (Audited) | |
| | | | | | | |
| Assets | | | | | | |
| | | | | | | |
| Current Assets | | | | | | |
| Cash | | $ | 35 | | | $ | 1,150 | |
| Deposit on hand | | $ | - | | | | 250 | |
| Total Current Assets | | | 35 | | | | 1,400 | |
| | | | | | | | | |
| Total Assets | | $ | 35 | | | $ | 1,400 | |
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| Liabilities and Stockholders’ Deficit | | | | | | | | |
| | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts Payable | | $ | 2,865 | | | $ | - | |
| Due to related parties | | | 21,856 | | | | 11,687 | |
| Deposit on unissued stock | | | - | | | | 250 | |
| Total Current Liabilities | | | 24,721 | | | | 11,937 | |
| | | | | | | | | |
| Stockholders’ Deficit | | | | | | | | |
| Preferred stock ( no par value, 5,000,000 shares authorized, | | | | | | | | |
| none issued and outstanding) | | | - | | | | - | |
| Common stock ($0.001 par value, 100,000,000 shares authorized, | | | | | | | | |
| 4,060,000 shares issued and outstanding at June 30, 2008 and | | | | | | | | |
| 4,000,000 shares issued and outstanding at December 31, 2007) | | | 4,060 | | | | 4,000 | |
| Additional paid in capital | | | 2,119 | | | | 680 | |
| Deficit accumulated during development stage | | | (30,865 | ) | | | (15,217 | ) |
| Total Stockholders’ Deficit | | | (24,686 | ) | | | (10,537 | ) |
| | | | | | | | | |
| Total Liabilities and Stockholders’ Deficit | | $ | 35 | | | $ | 1,400 | |
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| Corporate Equity Investments, Inc. | |
| (A Development Stage Company) | |
| |
| (Unaudited) | |
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended June 30, | | | For the Six Months Ended June 30, | | | For the Period from December 22, 2006 (inception) to | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | | | June 30, 2008 | |
| | | | | | | | | | | | | | | | |
| Revenues | | $ | - | | | $ | - | | | - | | | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | | | | | | | |
| General and administrative | | | 5,866 | | | | 490 | | | | 15,649 | | | | 935 | | | | 30,865 | |
| Total operating expenses | | | 5,866 | | | | 490 | | | | 15,649 | | | | 935 | | | | 30,865 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loss from operations | | | (5,866 | ) | | | (490 | ) | | | (15,649 | ) | | | (935 | ) | | | (30,865 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss | | $ | (5,866 | ) | | $ | (490 | ) | | $ | (15,649 | ) | | $ | (935 | ) | | $ | (30,865 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss per share - basic and diluted | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average number of shares outstanding | | | | | | | | | | | | | | | | | | | | |
| during the year - basic | | | 4,060,000 | | | | 2,000,000 | | | | 4,042,762 | | | | 2,000,000 | | | | 3,218,957 | |
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| Corporate Equity Investments, Inc. | |
| (A Development Stage Company) | |
| |
| (Unaudited) | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | For the Six Months Ended June 30, | | | For the period from December 22, 2006 ( Inception ) to | |
| | | 2008 | | | 2007 | | | June 30, 2008 | |
| | | | | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| Net loss | | $ | (15,649 | ) | | $ | (935 | ) | | $ | (30,865 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | |
| Contributed services - related party | | | - | | | | - | | | | 679 | |
| Increase in: | | | | | | | | | | | | |
| Accounts Payable | | | 2,865 | | | | - | | | | 2,865 | |
| Due to related party | | | 10,169 | | | | 610 | | | | 21,856 | |
| Net Cash Used In Operating Activities | | | (2,615 | ) | | | (325 | ) | | | (5,465 | ) |
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| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | |
| Proceeds from sale of common stock | | | 1,500 | | | | - | | | | 5,500 | |
| Net Cash Provided By Financing Activities | | | 1,500 | | | | - | | | | 5,500 | |
| | | | | | | | | | | | | |
| Net increase (decrease) in cash | | | (1,115 | ) | | | (325 | ) | | | 35 | |
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| Cash - beginning of period | | | 1,150 | | | | 2,000 | | | | - | |
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| Cash - end of period | | $ | 35 | | | $ | 1,675 | | | $ | 35 | |
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| Supplemental Disclosure of Cash Flow Information | | | | | | | | | | | | |
| Cash paid during the period for: | | | | | | | | | | | | |
| Income taxes | | $ | - | | | $ | - | | | $ | - | |
| Interest | | $ | - | | | $ | - | | | $ | - | |
Corporate Equity Investments, Inc.
(A Development Stage Company)
June 30, 2008
(Unaudited)
Note 1 Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, stockholders’ equity or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the full year.
The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the year ended December 31, 2007. The interim results for the period ended June 30, 2008 are not necessarily indicative of the results for the full fiscal year.
Note 2 Nature of Operations and Summary of Significant Accounting Policies
Nature of operations
Corporate Equity Investments, Inc. (the “Company”), was incorporated in Florida on December 22, 2006. The Company intends to serve as a vehicle to effect an asset acquisition, merger, or business combination with a domestic or foreign business.
Development Stage
The Company's financial statements are presented as those of a development stage enterprise. Activites during the development stage primarily include related party equity-based financing and development of the business plan. At June 30, 2008 the Company had not yet commenced operations.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.
For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. At June 30, 2008, the Company has no cash equivalents.
Corporate Equity Investments, Inc.
(A Development Stage Company)
June 30, 2008
(Unaudited)
Net loss per share
Basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted income per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. At June 30, 2008, the Company does not have any outstanding common stock equivalents; therefore, a separate computation of diluted loss per share is not presented.
Reclassifications
Certain amounts in the year 2007 financial statements have been reclassified to conform to the year 2008 presentation. The results of these reclassifications did not materially affect the Company’s financial position, results of operations or cash flows.
Recent Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing an asset or liability. It also defines fair value and established a hierarchy that prioritizes the information used to develop assumptions. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company does not expect SFAS No. 157 to have a material impact on its financial position, results of operations or cash flows.
In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115” (“SFAS 159”). This standard permits an entity to measure financial instruments and certain other items at estimated fair value. Most of the provisions of SFAS No. 159 are elective; however, the amendment to FASB No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” applies to all entities that own trading and available-for-sale securities. The fair value option created by SFAS 159 permits an entity to measure eligible items at fair value as of specified election dates. The fair value option (a) may generally be applied instrument by instrument, (b) is irrevocable unless a new election date occurs, and (c) must be applied to the entire instrument and not to only a portion of the instrument. SFAS 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity (i) makes that choice in the first 120 days of that year, (ii) has not yet issued financial statements for any interim period of such year, and (iii) elects to apply the provisions of FASB 157. Management is currently evaluating the impact of SFAS 159, if any, on the Company’s financial statements. The adoption of SFAS No. 159 is not expected to have a material effect on its financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, changes in a parent’s ownership of a noncontrolling interest, calculation and disclosure of the consolidated net income attributable to the parent and the noncontrolling interest, changes in a parent’s ownership interest while the parent retains its controlling financial interest and fair value measurement of any retained noncontrolling equity investment. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The adoption of SFAS No. 160 is not expected to have a material effect on its financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS 141R, “Business Combinations” (“SFAS 141R”), which replaces FASB SFAS 141, “Business Combinations”. This Statement retains the fundamental requirements in SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R will require an entity to record separately from the business combination the direct costs, where previously these costs were included in the total allocated cost of the acquisition. SFAS 141R will require an entity to recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, at their fair values as of that date. This compares to the cost allocation method previously required by SFAS No. 141. SFAS 141R will require an entity to recognize as an asset or liability at fair value for certain contingencies, either contractual or non-contractual, if certain criteria are met. Finally, SFAS 141R will require an entity to recognize contingent consideration at the date of acquisition, based on the fair value at that date. This Statement will be effective for business combinations completed on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption of this standard is not permitted and the standards are to be applied prospectively only. Upon adoption of this standard, there would be no impact to the Company’s results of operations and financial condition for acquisitions previously completed. The adoption of SFAS No. 141R is not expected to have a material effect on its financial position, results of operations or cash flows.
Corporate Equity Investments, Inc.
(A Development Stage Company)
June 30, 2008
(Unaudited)
In March 2008, the FASB issued SFAS No. 161 “Disclosures about Derivative Instruments and Hedging Activities—An Amendment of FASB Statement No. 133.” (“SFAS 161”). SFAS 161 establishes the disclosure requirements for derivative instruments and for hedging activities with the intent to provide financial statement users with an enhanced understanding of the entity’s use of derivative instruments, the accounting of derivative instruments and related hedged items under Statement 133 and its related interpretations, and the effects of these instruments on the entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2008. We do not expect its adoption will have a material impact on our financial position, results of operations or cash flows.
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board’s amendments to AU section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company is currently evaluating the impact of SFAS 162, but does not expect the adoption of this pronouncement will have a material impact on its financial position, results of operations or cash flows.
In May 2008, the Financial Accounting Standards Board issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60” (“SFAS 163”). SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of SFAS No. 163 is not expected to have a material effect on its financial position, results of operations or cash flows.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date and are not expected to have a material impact on the financial statements upon adoption.
Note 3 Related Party Transactions
The Company has a $21,856 note payable to related parties. The note is non-interest bearing with no set repayment date.
Note 4 Stockholders’ Equity
| (A) | Common Stock Issuance for Cash |
(1) Year ended December 31, 2006
On December 22, 2006, the Company issued 2,000,000 shares of common stock, par value $.001 per share, to its founding shareholders in exchange for $2,000 in cash.
(2) Year ended December 31, 2007
On July 31, 2007, the Company issued 2,000,000 shares of common stock, par value $.001 per share, to an individual in exchange for $2,000 in cash.
(3) Period ended June 30, 2008
On February 22, 2008, the Company issued 60,000 shares of common stock, par value $.001 per share, in exchange for $1,500 in cash.
| (B) | Contributed Capital – Related Party |
(1) Year ended December 31, 2006
During 2006, a related party of the Company’s president paid $70 for certain general and administrative expenses on behalf of the Company.
(2) Year ended December 31, 2007
During 2007, a related party of the Company’s President contributed professional services to the Company aggregating $400. The value of services was based upon the fair value of the services provided.
During 2007, a related party of the Company’s President paid $210 for certain general and administrative expenses on behalf of the Company.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information presented in Item 2 contains forward-looking statements. You should understand that forward-looking statements are only predictions reflecting our current beliefs and are based on information currently available to us. Although we believe that the assumptions reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
You can identify a forward-looking statement by our use of a word such as “may”, “will”, “should”, “could”, “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “predict”, “project”, “propose”, “potential” “continue” and similar terms and expressions, or the negative of these words or other variations on these words or comparable terminology.
In evaluating a forward-looking statement, you should understand that a forward looking statement involves known and unknown risks, uncertainties, contingencies, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement. Known risks related to an investment in our Company, risks related to our business, and risks related to our securities are identified in our Form 10-SB12G as amended and are incorporated herein by reference. You should also understand that we have no obligation and do not undertake to update or revise forward-looking statements made in this Report to reflect events or circumstances occurring after the date of this Report.
Background
Corporate Equity Investments, Inc. (the "Company", "our", "us" or "we") was incorporated under the laws of the State of Florida on December 22, 2006. We have been in the developmental stage since inception and have conducted virtually no business operations, other than organizational and administrative activities. We have no full-time employees and own no real estate or personal property. We were formed as a vehicle to pursue a business combination but have not entered into a letter of intent concerning any target business. Our business purpose is to seek the acquisition of, or merger with, an existing company. We have been seeking a suitable acquisition or merger candidate since November 21, 2007, the day after our Form 10-SB12G registration statement, as amended, went effective.
Our discussion of the proposed business under this caption and throughout this Form 10-Q is purposefully general and is not meant to restrict our virtually unlimited discretion to search for and enter into potential business opportunities.
Description of Business
Based on our business activities, we are a "blank check" company. The U.S. Securities and Exchange Commission (the "SEC") defines such 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"), we also qualify as a "shell company," because we have 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. No trading market currently exists for our securities, and Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, or to register any securities under the Securities Act or state blue sky laws or the regulations thereunder until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.
We were 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. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
We have conducted no business operations to date and expect to conduct none in the future, other than our efforts to effectuate a business combination. We, therefore, can be characterized as a "shell" corporation. As a "shell" corporation, we face risks inherent in the investigation, acquisition, or involvement in a new business opportunity. Further, as a "development stage" or "start-up" company, we face all of the unforeseen costs, expenses, problems, and difficulties related to such companies, including whether we will continue to be a going concern entity for the foreseeable future.
We 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.
We do 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, if any, or with additional money contributed by our stockholders, or another source.
During the next 12 months, we anticipate incurring costs related to filing of Exchange Act reports and costs relating to 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 to or invested in us by our stockholders, management or other investors.
Since the effective date of our registration statement on Form 10-SB12G, as amended, we have had preliminary contact or discussions with representatives of several entities regarding a possible business combination with us. To date, we have not entered into a term sheet with any entity. 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.
We anticipate 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 that 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.
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.
Liquidity and Capital Resources
As of June 30, 2008, the Company had assets equal to $35 comprised exclusively of cash and cash equivalents. This compares with assets of $1,150, comprised exclusively of cash and cash equivalents, as of December 31, 2007. The Company’s current liabilities as of June 30, 2008 totaled $24,721, comprised of accounts payable and related party loans. This compares to the Company’s current liabilities as of December 31, 2007 of $11,687. The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.
The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities:
| | | | | | Cumulative Period From December 22, 2006 (Inception) to June 30, 2008 | |
| | | Six months Ended June 30, | | | |
| | | 2008 | | | 2007 | | | |
| | | | | | | | | | |
| Net cash used in operating activities | | $ | (2,615) | | | $ | (325) | | | $ | (5,465) | |
| Net cash used in investing activities | | | 0 | | | | 0 | | | | 0 | |
| Net cash provided by financing activities | | | 1,500 | | | | 0 | | | | 5,500 | |
| Net effect on cash | | | (1,115) | | | | (325) | | | | 35 | |
The Company has nominal assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investments or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. Recurring expenses, which include accounting, auditing, legal, and administrative expenses, have averaged $1,715 per month since December 22, 2006, are expected to continue for until such time as we execute our business plan to acquire or merge with a private operating company. In addition, the Company is dependent upon its largest shareholders and new investors to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.
Results of Operations
The Company has not conducted any active operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company from December 22, 2006 (Inception) to June 30, 2008. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management's assertion that these circumstances may hinder the Company's ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.
For the six months ending June 30, 2008, the Company had a net loss of approximately $15,649, consisting of legal, accounting, audit and other professional service fees incurred in relation to the filing on March 12, 2008 of the Company’s annual report on Form 10-KSB for the fiscal year ended December 31, 2007. This compares with a net loss of approximately $935 for the six months ending June 30, 2007 comprised mostly of legal, accounting, audit and other professional service fees of $445 incurred in relation to the filing of the Company’s registration statement on Form 10-SB12G filed in September 2007 and its one amendment.
For the period from December 22, 2006 (Inception) to June 30, 2008, the Company had a net loss of $30,865, comprised mostly of legal, accounting, audit and other professional service fees incurred in relation to the filing of the Company’s registration statement on Form 10-SB12G in September 2007 and its one amendment and the filing of the Company’s annual report on Form 10-KSB.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Contractual Obligations
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 4T. Controls.
The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Our sole officer and director has reviewed the effectiveness of the Company’s disclosure controls and procedures and have concluded that the disclosure controls and procedures, as of June 30, 2008, are effective in timely alerting her to material information relating to the Company that is required to be included in its periodic filings with the Commission.
In connection with its evaluation during the quarterly period ended June 30, 2008, the Company has made no change in the Company’s internal controls over financial reporting that has materially affected or is reasonably likely to materially affect the Company’s internal controls over financial reporting. There also were no significant deficiencies or material weaknesses identified for which corrective action needed to be taken.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the prior reporting period, the Company sold 60,000 shares of common stock at $0.025 per share for a total amount raised of $1,500. The Company applied the proceeds to its ongoing administrative expenses.
Item 6. Exhibits
(a) Exhibits
Description
Pursuant to the requirements 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.
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| | CORPORATE EQUITY INVESTMENTS, INC. |
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| Date: August 11, 2008 | By: | /s/ Luz M. Weigel |
| | Luz M. Weigel |
| | President, Secretary and Treasurer (Principal Accounting Officer and Authorized Officer) |
