UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 30, 2012
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______ to _______
333-147250
(Commission File Number)
ERE Management, Inc.
(Exact name of registrant as specified in charter)
Nevada 98-0540833
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
8275 Southern Eastern Avenue, Suite 200
Las Vegas, Nevada, 89123
(Address of principal executive offices)
(702) 990-8402
(Registrant's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirement for
the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). YES [X] NO [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
As of June 13, 2012, 73,200,000 shares of the issuer's common stock, $0.0001 par
value, were outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
INDEX
Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Item 2. Management's Discussion and Analysis or Plan of Operation 15
Item 3. Quantitative and Qualitative Disclosures About Market Risk 17
Item 4. Controls and Procedures 17
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Mine Safety Disclosures 18
Item 5. Other Information 18
Item 6. Exhibits 18
2
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
ERE Management, Inc.
(A Development Stage Company)
Balance Sheets
April 30, 2012 July 31, 2011
-------------- -------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 8,842 $ 2,426
---------- ----------
TOTAL CURRENT ASSETS 8,842 2,426
---------- ----------
TOTAL ASSETS $ 8,842 $ 2,426
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 585 $ 823
Accrued expenses 8,317 10,217
Advances from stockholder 66,835 36,835
---------- ----------
TOTAL CURRENT LIABILITIES 75,737 47,875
---------- ----------
TOTAL LIABILITIES 75,737 47,875
---------- ----------
STOCKHOLDERS' DEFICIT
Preferred stock: $0.0001 par value: 25,000,000 shares
authorized; none issued or outstanding -- --
Common stock: $0.0001 par value: 300,000,000 shares
authorized; 73,200,000 shares issued and outstanding 7,320 7,320
Additional paid-in capital 41,180 41,180
Deficit accumulated during the development stage (115,395) (93,949)
---------- ----------
TOTAL STOCKHOLDERS' DEFICIT (66,895) (45,449)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 8,842 $ 2,426
========== ==========
See accompanying notes to the financial statements.
3
ERE Management, Inc.
(A Development Stage Company)
Statements of Operations
For the
Period from
For the For the May 29, 2007
Nine Months Nine Months (inception)
Ended Ended through
April 30, 2012 April 30, 2011 April 30, 2012
-------------- -------------- --------------
(Unaudited) (Unaudited) (Unaudited)
Revenues $ -- $ -- $ --
---------- ---------- ----------
Operating expenses
Accounting 7,750 3,750 44,200
Legal 8,725 -- 28,520
Transfer agent fees 723 300 16,473
Filing fees 2,830 1,225 11,366
Rent 1,394 1,304 9,003
Amortization -- 495 5,950
General and administrative 24 -- 7,333
---------- ---------- ----------
Total operating expenses 21,446 7,074 122,845
---------- ---------- ----------
Loss from operations (21,446) (7,074) (122,845)
---------- ---------- ----------
Other income (expense) -- -- 7,450
---------- ---------- ----------
Loss before taxes (21,446) (7,074) (115,395)
Income tax provision -- -- --
---------- ---------- ----------
Net loss $ (21,446) $ (7,074) $ (115,395)
========== ========== ==========
Net loss per common share:
- Basic and diluted $ (0.00) $ (0.00)
========== ==========
Weighted average common shares outstanding
- basic and diluted 73,200,000 73,200,000
========== ==========
See accompanying notes to the financial statements.
4
ERE Management, Inc.
(A Development Stage Company)
Statements of Operations
For the For the
Three Months Three Months
Ended Ended
April 30, 2012 April 30, 2011
---------- ----------
(Unaudited) (Unaudited)
Revenues $ -- $ --
---------- ----------
Operating expenses
Accounting 750 1,250
Legal 5,175 --
Transfer agent fees 120 --
Filing fees 240 560
Rent 467 466
General and administrative -- --
---------- ----------
Total operating expenses 6,752 2,276
---------- ----------
Loss before taxes (6,752) (2,276)
Income tax provision -- --
---------- ----------
Net loss $ (6,752) $ (2,276)
========== ==========
Net loss per common share:
- Basic and diluted $ (0.00) $ (0.00)
========== ==========
Weighted average common shares outstanding
- basic and diluted 73,200,000 73,200,000
========== ==========
See accompanying notes to the financial statements.
5
ERE Management, Inc.
(A Development Stage Company)
Statements of Cash Flows
For the
Period from
For the For the May 29, 2007
Nine Months Nine Months (inception)
Ended Ended through
April 30, 2012 April 30, 2011 April 30, 2012
-------------- -------------- --------------
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (21,446) $ (7,074) $ (115,395)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization -- 495 5,950
Changes in operating assets and liabilities:
Accounts payable (238) 350 585
Accrued liabilities (1,900) 2,250 8,317
---------- ---------- ----------
Net cash used in operating activities (23,584) (3,979) (100,543)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Website development -- -- (5,950)
---------- ---------- ----------
Net cash used in investing activities -- -- (5,950)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from stockholder 30,000 15,000 66,835
Proceeds from sale of common stock -- -- 48,500
---------- ---------- ----------
Net cash provided by financing activities 30,000 15,000 115,335
---------- ---------- ----------
Net change in cash 6,416 11,021 8,842
Cash, beginning of period 2,426 308 --
---------- ---------- ----------
Cash, end of period $ 8,842 $ 11,329 $ 8,842
========== ========== ==========
Supplemental disclosure of cash flows information:
Interest aid $ -- $ -- $ --
========== ========== ==========
Income tax paid $ -- $ -- $ --
========== ========== ==========
See accompanying notes to the financial statements.
6
ERE Management, Inc.
(A Development Stage Company)
April 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
NOTE 1 - ORGANIZATION AND OPERATIONS
ERE MANAGEMENT, INC.
ERE Management, Inc. (a development stage company) ("ERE" or the "Company")
was incorporated under the laws of the State of Nevada on May 29, 2007. Initial
operations have included organization and incorporation, target market
identification, marketing plans, and capital formation. A substantial portion of
the Company's activities has involved developing a business plan and
establishing contacts and visibility in the marketplace. The Company has
generated no revenues since inception. The business plan of ERE is to develop
software, specializing in providing sales tool solutions for the real estate
industry. More specifically, ERE has developed an online Content Management
System ("CMS") that enables real estate agents to build a website to showcase
their listings.
AMENDMENT TO THE ARTICLES OF INCORPORATION
Effective March 14, 2012 the Board of Directors and the majority voting
stockholders adopted and approved a resolution to amend its Articles of
Incorporation to (a) increase the number of shares of authorized common stock
from 20,000,000 to 300,000,000; (b) create 25,000,000 shares of "blank check"
preferred stock, par value $0.0001, per share; (c) change the par value of each
share of common stock from $0.001 per share to $0.0001 per share; and (d)
effectuate a forward split of all issued and outstanding shares of common stock,
at a ratio of thirty-for-one (30:1) (the "Stock Split").
All shares and per share amounts in the financial statements have been
adjusted to give retroactive effect to the Stock Split.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - UNAUDITED INTERIM FINANCIAL INFORMATION
The accompanying unaudited interim financial statements and related notes
have been prepared in accordance with accounting principles generally accepted
in the United States of America ("U.S. GAAP") for the interim financial
information, and with the rules and regulations of the United States Securities
and Exchange Commission ("SEC") to Form 10-Q and Article 8 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by U.S. GAAP for complete financial statements. The unaudited interim financial
statements furnished reflect all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary to a fair statement
of the results for the interim period presented. Unaudited interim results are
not necessarily indicative of the results for the full fiscal year. These
financial statements should be read in conjunction with the audited financial
statements of the Company for the fiscal year ended July 31, 2011 and notes
thereto contained in the Company's Annual Report on Form 10-K filed with the SEC
on November 15, 2011.
DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by section 915-10-20
of the FASB Accounting Standards Codification. The Company is still devoting
substantially all of its efforts on establishing the business and its planned
principal operations have not commenced. All losses accumulated since inception
have been considered as part of the Company's development stage activities.
7
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with U.S. GAAP
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 reporting amounts of
revenues and expenses during the reporting period.
The Company's significant estimates and assumptions include the fair value
of financial instruments; income tax rate, income tax provision, deferred tax
assets and valuation allowance of deferred tax assets; the carrying value and
recoverability of long-lived assets, including the values assigned to an
estimated useful lives of website development costs and the assumption that the
Company will be a going concern. Those significant accounting estimates or
assumptions bear the risk of change due to the fact that there are uncertainties
attached to those estimates or assumptions, and certain estimates or assumptions
are difficult to measure or value.
Management bases its estimates on historical experience and on various
assumptions that are believed to be reasonable in relation to the financial
statements taken as a whole under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources.
Management regularly evaluates the key factors and assumptions used to
develop the estimates utilizing currently available information, changes in
facts and circumstances, historical experience and reasonable assumptions. After
such evaluations, if deemed appropriate, those estimates are adjusted
accordingly.
Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
Codification for disclosures about fair value of its financial instruments and
has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification
("Paragraph 820-10-35-37") to measure the fair value of its financial
instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards
Codification establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value
measurements. To increase consistency and comparability in fair value
measurements and related disclosures, paragraph 820-10-35-37 of the FASB
Accounting Standards Codification establishes a fair value hierarchy which
prioritizes the inputs to valuation techniques used to measure fair value into
three (3) broad levels. The fair value hierarchy gives the highest priority to
quoted prices (unadjusted) in active markets for identical assets or liabilities
and the lowest priority to unobservable inputs. The three (3) levels of fair
value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting
Standards Codification are described below:
Level 1 Quoted market prices available in active markets for identical assets
or liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the
reporting date.
Level 3 Pricing inputs that are generally observable inputs and not
corroborated by market data.
Financial assets are considered Level 3 when their fair values are
determined using pricing models, discounted cash flow methodologies or similar
techniques and at least one significant model assumption or input is
unobservable.
The fair value hierarchy gives the highest priority to quoted prices
(unadjusted) in active markets for identical assets or liabilities and the
lowest priority to unobservable inputs. If the inputs used to measure the
financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant
to the fair value measurement of the instrument.
8
The carrying amounts of the Company's financial assets and liabilities,
such as cash, accounts payable and accrued expenses, approximate their fair
values because of the short maturity of these instruments.
Transactions involving related parties cannot be presumed to be carried out
on an arm's-length basis, as the requisite conditions of competitive,
free-market dealings may not exist. Representations about transactions with
related parties, if made, shall not imply that the related party transactions
were consummated on terms equivalent to those that prevail in arm's-length
transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of advances from
stockholders due to their related party nature.
FISCAL YEAR-END
The Company elected July 31 as its fiscal year ending date.
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of
three months or less at the time of purchase to be cash equivalents.
RELATED PARTIES
The Company follows subtopic 850-10 of the FASB Accounting Standards
Codification for the identification of related parties and disclosure of related
party transactions.
Pursuant to section 850-10-20 the related parties include a) affiliates of
the Company; b) entities for which investments in their equity securities would
be required, absent the election of the fair value option under the Fair Value
Option Subsection of section 825-10-15, to be accounted for by the equity method
by the investing entity; c) trusts for the benefit of employees, such as pension
and profit-sharing trusts that are managed by or under the trusteeship of
management; d) principal owners of the Company; e) management of the Company; f)
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests; and g. other parties that can significantly
influence the management or operating policies of the transacting parties or
that have an ownership interest in one of the transacting parties and can
significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.
The financial statements shall include disclosures of material related
party transactions, other than compensation arrangements, expense allowances,
and other similar items in the ordinary course of business. However, disclosure
of transactions that are eliminated in the preparation of consolidated or
combined financial statements is not required in those statements. The
disclosures shall include: a) the nature of the relationship(s) involved; b) a
description of the transactions, including transactions to which no amounts or
nominal amounts were ascribed, for each of the periods for which income
statements are presented, and such other information deemed necessary to an
understanding of the effects of the transactions on the financial statements; c)
the dollar amounts of transactions for each of the periods for which income
statements are presented and the effects of any change in the method of
establishing the terms from that used in the preceding period; and d. amounts
due from or to related parties as of the date of each balance sheet presented
and, if not otherwise apparent, the terms and manner of settlement.
COMMITMENTS AND CONTINGENCIES
The Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Certain conditions may
exist as of the date the consolidated financial statements are issued, which may
result in a loss to the Company but which will only be resolved when one or more
future events occur or fail to occur. The Company assesses such contingent
liabilities, and such assessment inherently involves an exercise of judgment. In
assessing loss contingencies related to legal proceedings that are pending
9
against the Company or unasserted claims that may result in such proceedings,
the Company evaluates the perceived merits of any legal proceedings or
unasserted claims as well as the perceived merits of the amount of relief sought
or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a
material loss has been incurred and the amount of the liability can be
estimated, then the estimated liability would be accrued in the Company's
consolidated financial statements. If the assessment indicates that a
potentially material loss contingency is not probable but is reasonably
possible, or is probable but cannot be estimated, then the nature of the
contingent liability, and an estimate of the range of possible losses, if
determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless
they involve guarantees, in which case the guarantees would be disclosed.
Management does not believe, based upon information available at this time, that
these matters will have a material adverse effect on the Company's consolidated
financial position, results of operations or cash flows. However, there is no
assurance that such matters will not materially and adversely affect the
Company's business, financial position, and results of operations or cash flows.
REVENUE RECOGNITION
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company recognizes revenue when it is
realized or realizable and earned. The Company considers revenue realized or
realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the
services have been rendered to the customer, (iii) the sales price is fixed or
determinable, and (iv) collectability is reasonably assured.
INCOME TAX PROVISION
The Company adopted the provisions of paragraph 740-10-25-13 of the FASB
Accounting Standards Codification. Paragraph 740-10-25-13.addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under paragraph
740-10-25-13, the Company may recognize the tax benefit from an uncertain tax
position only if it is more likely than not that the tax position will be
sustained on examination by the taxing authorities, based on the technical
merits of the position. The tax benefits recognized in the financial statements
from such a position should be measured based on the largest benefit that has a
greater than fifty percent (50%) likelihood of being realized upon ultimate
settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition,
classification, interest and penalties on income taxes, accounting in interim
periods and requires increased disclosures. The Company had no material
adjustments to its liabilities for unrecognized income tax benefits according to
the provisions of paragraph 740-10-25-13.
The estimated future tax effects of temporary differences between the tax
basis of assets and liabilities are reported in the accompanying consolidated
balance sheets, as well as tax credit carry-backs and carry-forwards. The
Company periodically reviews the recoverability of deferred tax assets recorded
on its consolidated balance sheets and provides valuation allowances as
management deems necessary.
Management makes judgments as to the interpretation of the tax laws that
might be challenged upon an audit and cause changes to previous estimates of tax
liability. In addition, the Company operates within multiple taxing
jurisdictions and is subject to audit in these jurisdictions. In management's
opinion, adequate provisions for income taxes have been made for all years. If
actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversals of reserves may be necessary.
UNCERTAIN TAX POSITIONS
The Company did not take any uncertain tax positions and had no adjustments
to unrecognized income tax liabilities or benefits pursuant to the provisions of
Section 740-10-25 for the interim period ended April 30, 2012 or 2011.
10
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per common share is computed pursuant to section
260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss)
per common share is computed by dividing net income (loss) by the weighted
average number of shares of common stock outstanding during the period. Diluted
net income (loss) per common share is computed by dividing net income (loss) by
the weighted average number of shares of common stock and potentially
outstanding shares of common stock during the period to reflect the potential
dilution that could occur from common shares issuable through contingent shares
issuance arrangement, stock options or warrants.
There were no potentially outstanding dilutive shares for the interim
period ended April 30, 2012 or 2011.
CASH FLOWS REPORTING
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards
Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing
activities and provides definitions of each category, and uses the indirect or
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25
of the FASB Accounting Standards Codification to report net cash flow from
operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past
operating cash receipts and payments and all accruals of expected future
operating cash receipts and payments and (b) all items that are included in net
income that do not affect operating cash receipts and payments. The Company
reports the reporting currency equivalent of foreign currency cash flows, using
the current exchange rate at the time of the cash flows and the effect of
exchange rate changes on cash held in foreign currencies is reported as a
separate item in the reconciliation of beginning and ending balances of cash and
cash equivalents and separately provides information about investing and
financing activities not resulting in cash receipts or payments in the period
pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards
Codification.
SUBSEQUENT EVENTS
The Company follows the guidance in Section 855-10-50 of the FASB
Accounting Standards Codification for the disclosure of subsequent events. The
Company will evaluate subsequent events through the date when the financial
statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards
Codification, the Company as an SEC filer considers its financial statements
issued when they are widely distributed to users, such as through filing them on
EDGAR.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
FASB ACCOUNTING STANDARDS UPDATE NO. 2011-05
In June 2011, the FASB issued the FASB Accounting Standards Update No.
2011-05 "Comprehensive Income" ("ASU 2011-05"), which was the result of a joint
project with the IASB and amends the guidance in ASC 220, COMPREHENSIVE INCOME,
by eliminating the option to present components of other comprehensive income
(OCI) in the statement of stockholders' equity. Instead, the new guidance now
gives entities the option to present all non-owner changes in stockholders'
equity either as a single continuous statement of comprehensive income or as two
separate but consecutive statements. Regardless of whether an entity chooses to
present comprehensive income in a single continuous statement or in two separate
but consecutive statements, the amendments require entities to present all
reclassification adjustments from OCI to net income on the face of the statement
of comprehensive income.
The amendments in this Update should be applied retrospectively and are
effective for public entity for fiscal years, and interim periods within those
years, beginning after December 15, 2011.
FASB ACCOUNTING STANDARDS UPDATE NO. 2011-08
In September 2011, the FASB issued the FASB Accounting Standards Update No.
2011-08 "Intangibles--Goodwill and Other: TESTING GOODWILL FOR IMPAIRMENT" ("ASU
11
2011-08"). This Update is to simplify how public and nonpublic entities test
goodwill for impairment. The amendments permit an entity to first assess
qualitative factors to determine whether it is more likely than not that the
fair value of a reporting unit is less than its carrying amount as a basis for
determining whether it is necessary to perform the two-step goodwill impairment
test described in Topic 350. Under the amendments in this Update, an entity is
not required to calculate the fair value of a reporting unit unless the entity
determines that it is more likely than not that its fair value is less than its
carrying amount.
The guidance is effective for interim and annual periods beginning on or
after December 15, 2011. Early adoption is permitted.
FASB ACCOUNTING STANDARDS UPDATE NO. 2011-10
In December 2011, the FASB issued the FASB Accounting Standards Update No.
2011-10 "Property, Plant and Equipment: DERECOGNITION OF IN SUBSTANCE REAL
ESTATE-A SCOPE CLARIFICATION" ("ASU 2011-09"). This Update is to resolve the
diversity in practice as to how financial statements have been reflecting
circumstances when parent company reporting entities cease to have controlling
financial interests in subsidiaries that are in substance real estate, where the
situation arises as a result of default on nonrecourse debt of the subsidiaries.
The amended guidance is effective for annual reporting periods ending after
June 15, 2012 for public entities. Early adoption is permitted.
FASB ACCOUNTING STANDARDS UPDATE NO. 2011-11
In December 2011, the FASB issued the FASB Accounting Standards Update No.
2011-11 "Balance Sheet: Disclosures about OFFSETTING ASSETS AND LIABILITIES"
("ASU 2011-11"). This Update requires an entity to disclose information about
offsetting and related arrangements to enable users of its financial statements
to understand the effect of those arrangements on its financial position. The
objective of this disclosure is to facilitate comparison between those entities
that prepare their financial statements on the basis of U.S. GAAP and those
entities that prepare their financial statements on the basis of IFRS.
The amended guidance is effective for annual reporting periods beginning on
or after January 1, 2013, and interim periods within those annual periods.
FASB ACCOUNTING STANDARDS UPDATE NO. 2011-12
In December 2011, the FASB issued the FASB Accounting Standards Update No.
2011-12 "Comprehensive Income: Deferral of THE EFFECTIVE DATE FOR AMENDMENTS TO
THE PRESENTATION OF RECLASSIFICATIONS OF ITEMS OUT OF ACCUMULATED OTHER
COMPREHENSIVE INCOME IN ACCOUNTING STANDARDS UPDATE NO. 2011-05" ("ASU
2011-12"). This Update is a deferral of the effective date pertaining to
reclassification adjustments out of accumulated other comprehensive income in
ASU 2011-05. FASB is to going to reassess the costs and benefits of those
provisions in ASU 2011-05 related to reclassifications out of accumulated other
comprehensive income. Due to the time required to properly make such a
reassessment and to evaluate alternative presentation formats, the FASB decided
that it is necessary to reinstate the requirements for the presentation of
reclassifications out of accumulated other comprehensive income that were in
place before the issuance of Update 2011-05.
All other requirements in Update 2011-05 are not affected by this Update,
including the requirement to report comprehensive income either in a single
continuous financial statement or in two separate but consecutive financial
statements. Public entities should apply these requirements for fiscal years,
and interim periods within those years, beginning after December 15, 2011.
OTHER RECENTLY ISSUED, BUT NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS
Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying consolidated financial statements.
12
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates continuity of
operations, realization of assets, and liquidation of liabilities in the normal
course of business.
As reflected in the accompanying financial statements, the Company had a
deficit accumulated during the development stage at April 30, 2012, and a net
loss and net cash used in operating activities for the interim period then
ended, respectively, with no revenues earned since inception. These factors
raise substantial doubt about the Company's ability to continue as a going
concern.
While the Company is attempting to commence operations and generate
revenues, the Company's cash position may not be significant enough to support
the Company's daily operations. Management intends to raise additional funds by
way of a public or private offering. Management believes that the actions
presently being taken to further implement its business plan and generate
revenues provide the opportunity for the Company to continue as a going concern.
While the Company believes in the viability of its strategy to increase revenues
and in its ability to raise additional funds, there can be no assurances to that
effect. The ability of the Company to continue as a going concern is dependent
upon the Company's ability to further implement its business plan and generate
revenues.
The financial statements do not include any adjustments related to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
NOTE 4 - RELATED PARTY TRANSACTIONS
FREE OFFICE SPACE
The Company has been provided office space by its Chief Executive Officer
at no cost. The management determined that such cost is nominal and did not
recognize the rent expense in its financial statement.
ADVANCES FROM STOCKHOLDER
From time to time, stockholders of the Company advance funds to the Company
for working capital purpose. Those advances are unsecured, non-interest bearing
and due on demand.
NOTE 5 - STOCKHOLDERS' EQUITY
SHARES AUTHORIZED
Upon formation the total number of shares of common stock which the Company
is authorized to issue is Twenty Million (20,000,000) shares, par value $0.001
per share.
On March 14, 2012 the Board of Directors and the consenting stockholders
adopted and approved a resolution to effect an amendment to our Articles of
Incorporation to increase the number of shares of authorized common stock from
20,000,000 to 300,000,000. The par value of each such common stock shall be
decreased from $0.001 per share to $0.0001 per share.
COMMON STOCK
On July 16, 2007, the Company issued 48,000,000 shares of its common stock
to Mr. Imperial for cash proceeds of $20,000. On July 17, 2007, Mr. Imperial was
elected to the Board of Directors, and became the President, Secretary, and
Treasurer of the Company.
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On January 24, 2008, the Company completed and closed an offering by
selling 25,200,000 shares, of the 36,000,000 registered shares, of its common
stock, par value of $0.0001 per share, at an offering price of $0.0017 per share
for gross proceeds of $42,000. Costs associated with this offering were $13,500.
NOTE 6 - SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet
date through the date when the financial statements were issued to determine if
they must be reported. The Management of the Company determined that there were
no reportable subsequent events to be disclosed.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Report on Form 10-Q contains forward-looking statements that involve risks
and uncertainties. You should not place undue reliance on these forward-looking
statements. Our actual results could differ materially from those anticipated in
the forward-looking statements for many reasons, including the risks described
in this report, our Registration Statement on Form SB-2 and other filings we
make from time to time with the Securities and Exchange Commission. Although we
believe the expectations reflected in the forward-looking statements are
reasonable, they relate only to events as of the date on which the statements
are made. We do not intend to update any of the forward-looking statements after
the date of this report to conform these statements to actual results or to
changes in our expectations, except as required by law.
This discussion and analysis should be read in conjunction with the unaudited
interim financial statements and notes thereto included in this Report and the
audited financials in our Annual Report on Form 10-K for the year ended July 31,
2011, filed with the Securities and Exchange Commission.
OVERVIEW
We are a development stage company with limited operations and no revenues from
our business activities. Our registered independent auditors have issued a going
concern opinion. This means that our registered independent auditors believe
there is substantial doubt that we can continue as an on-going business for the
next 12 months. We do not anticipate that we will generate significant revenues
until we have implemented our marketing plan to generate customers. Accordingly,
we must raise cash from sources other than our operations in order to implement
our marketing plan.
In our management's opinion, there is a need for software that allows real
estate agents with no technical knowledge to build websites and post their
listings and to maintain and update the websites with new product listings
easily and quickly. We are focused on developing such CMS software products and
offering them to independent and non-independent real estate agents.
As of January 24, 2008, we completed the sale of 25,200,000 (post 30:1 split)
shares of our common stock pursuant to the terms of the SB-2 Registration
Statement that went effective on November 21, 2007, and we generated $42,000 in
gross proceeds. We believe that this capital formation activity will allow us to
continue our product development, market our software product, and remain in
business until the end of the 2012 fiscal year. If we are unable to generate
revenues after 12 months for any reason, or if we are unable to make a
reasonable profit after 12 months, we may have to suspend or cease operations.
At the present time, we have not made any arrangements to raise additional cash.
We may seek to obtain additional funds through a second public offering, private
placement of securities, or loans. Other than as described in this paragraph, we
have no other financing plans at this time.
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PLAN OF OPERATION
Our specific goal is to develop our software product and to execute our
marketing plan. Initially, we plan to commence marketing of our software product
via direct distribution channels. We are currently devising our marketing
strategy which we plan to begin to implement in the coming fiscal quarters.
We will also distribute our software products through our website and
third-party websites that sell complementary software programs. Third-party
websites will be compensated via a commission for their sales.
RESULTS OF OPERATIONS
REVENUES
We had no revenues for the period from May 29, 2007 (date of inception), through
April 30, 2012.
EXPENSES
Our expenses for the three months ended April 30, 2012 and 2011, were $6,752 and
$2,276, respectively. Our expenses for the nine months ended April 30, 2012 and
2011, were $21,446 and $7,074, respectively and for the period from May 29, 2007
(date of inception), through April 30, 2012 were $115,395. These expenses were
comprised primarily of legal fees, transfer agent fees, accounting and audit
fees, filing fees, and consulting fees.
NET INCOME (LOSS)
Our net (loss) for the three months ended April 30, 2012 and 2011 were $6,752
and $2,276, respectively. Our new (loss) for the nine months ended April 30,
2012 and 2011, were $21,446 and $7,074, respectively and for the period from May
29, 2007 (date of inception), through April 30, 2012 were $115,395.
PURCHASE OR SALE OF EQUIPMENT
We do not expect to purchase or sell any plant or significant equipment. We
anticipate purchasing some office equipment up to a maximum of $2,500.
LIQUIDITY AND CAPITAL RESOURCES
Our balance sheet as of April 30, 2012, reflects assets of $8,842 in the form of
cash. Since inception, we have sold 73,200,000 shares of common stock with gross
proceeds of $48,500. However, cash resources provided from our capital formation
activities have, from inception, been insufficient to provide the working
capital necessary to operate our Company.
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We anticipate generating losses in the near term, and therefore, may be unable
to continue operations in the future. If we require additional capital, we would
have to issue debt or equity or enter into a strategic arrangement with a third
party. There can be no assurance that additional capital will be available to
us. We currently have no agreements, arrangements, or understandings with any
person to obtain funds through bank loans, lines of credit, or any other
sources.
GOING CONCERN CONSIDERATION
In their report on our financial statements as of July 31, 2011, our registered
independent auditors included a paragraph regarding our ability as a Company to
continue as a going concern. We have also included a note to the accompanying
unaudited financial statements as of April 30, 2012, that describes the
circumstances that pertain to this matter.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None
ITEM 4. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the SECURITIES
EXCHANGE ACT OF 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to our management, including our president (our principal executive
officer and our principal financial officer and principle accounting officer) to
allow for timely decisions regarding required disclosure.
As of April 30, 2012, the end of our quarter covered by this Report, we carried
out an evaluation, under the supervision and with the participation of our
president (our principal executive officer and our principal financial officer
and principle accounting officer), of the effectiveness of the design and
operation of our disclosure controls and procedures. Based on the foregoing, our
president (our principal executive officer and our principal financial officer
and principle accounting officer) concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this Quarterly
Report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal controls over financial reporting
that occurred during the quarter ended April 30, 2012, that have materially or
are reasonably likely to materially affect, our internal controls over financial
reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We may be involved from time to time in ordinary litigation, negotiation, and
settlement matters that will not have a material effect on our operations or
finances. We are not aware of any pending or threatened litigation against us or
our officers and Directors in their capacity as such that could have a material
impact on our operations or finances.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation (included as Exhibit 3.1 to the Form SB-2
filed November 9, 2007, and incorporated herein by reference).
3.2 Bylaws (included as Exhibit 3.2 to the Form SB-2 filed November 9,
2007, and incorporated herein by reference).
31.1 Certification of the Chief Executive and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Officers pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 Interactive data files pursuant to Rule 405 of Regulation S-T.
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SIGNATURE
In accordance with the requirements of the Securities Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ERE MANAGEMENT INC
Date: June 13, 2012 By: /s/ Joselito Christopher G. Imperial
------------------------------------------
Joselito Christopher G. Imperial
President and Chief Executive and
Chief Financial Officer
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