U.S. 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 May 31, 2014
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ____________
Commission File No. 333-187855
CME REALTY, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 46-2084743
(State or other jurisdiction of (I.R.S. Employer
incorporation Or organization) Identification No.)
10300 W. Charleston Blvd., Suite 213, Las Vegas, Nevada 89135
(Address of Principal Executive Offices)
(702) 683-3334
(Issuer's telephone number)
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the issuer was required to file such reports), and (2)
has been subject to such filing requirements 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 large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
[ ] Large accelerated filer [ ] Accelerated filer
[ ] Non-accelerated filer [X] Smaller reporting company
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 7, 2014: 14,000,000 shares of common stock.
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act): YES [X] NO [ ]
Transitional Small Business Disclosure Format (Check One) YES [ ] NO [X]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Item 4. Control and Procedures 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 1A. Risk Factors 13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Mine Safety Disclosures 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURE 14
2
ITEM 1. FINANCIAL STATEMENTS
CME REALTY, INC.
Financial Statements
Page
----
FINANCIAL STATEMENTS:
Condensed Balance Sheets, May 31, 2014 (unaudited) and
February 28, 2014 (audited) 4
Condensed Statements of Operations (unaudited), for the three month
period ended May 31, 2014, the three month period ended May 31, 201,
and for the period August 10, 2012 (date of inception) to May 31, 2014 5
Condensed Statements of Changes in Stockholders' Equity (Deficit),
for the period August 10, 2012 (date of inception) to May 31, 2014
(unaudited) 6
Condensed Statements of Cash Flows (unaudited), for the three months
period ended May 31, 2014, the three month period ended May 31, 201,
and for the period August 10, 2012 (date of inception) to May 31, 2014 7
Notes to Financial Statements (unaudited) 8
3
CME REALTY INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
May 31, 2014 February 28, 2014
------------ -----------------
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash $ 5,343 $ 9,404
-------- --------
TOTAL CURRENT ASSETS $ 5,343 $ 9,404
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 13,988 $ 13,551
Due to related party 6,060 6,060
-------- --------
TOTAL CURRENT LIABILITIES 20,048 19,611
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT)
Capital stock
Authorized
75,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
14,000,000 and 14,000,000 shares at May 31, 2014 &
February 28, 2014, respectively 14,000 14,000
Additional Paid in Capital 36,000 36,000
Deficit accumulated during the development stage (64,705) (60,207)
-------- --------
TOTAL STOCKHOLDERS' EQUITY/(DEFICIT) (14,705) (10,207)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT) $ 5,343 $ 9,404
======== ========
The auditors' report and accompanying notes are an
integral part of these financial statements
4
CME REALTY INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
3 Months Ended 3 Months Ended
May 31, 2014 May 31, 2013
------------ ------------
REVENUE
Revenues $ -- $ --
------------ ------------
TOTAL REVENUES -- --
------------ ------------
EXPENSES
General & Administration 1,098 102
Professional Fees 3,400 6,610
------------ ------------
TOTAL EXPENSES 4,498 6,712
------------ ------------
Provision for Income Taxes -- --
------------ ------------
NET LOSS $ (4,498) $ (6,712)
============ ============
BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 14,000,000 10,000,000
============ ============
The auditors' report and accompanying notes are an
integral part of these financial statements
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CME REALTY INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
From inception (August 10, 2012) to May 31, 2014
Deficit
Common Stock accumulated
----------------------- Additional during the
Number of Paid-In development
shares Amount Capital stage Total
------ ------ ------- ----- -----
BALANCE, FEBRUARY 28, 2013 10,000,000 $10,000 $ -- $ (8,556) $ 1,444
Common Stock issued for cash at $0.01
per share on Jan 14, 2014 4,000,000 4,000 36,000 -- 40,000
Net loss for the year ended
February 28, 2014 -- -- -- (51,651) (51,651)
---------- ------- ------- -------- --------
BALANCE, FEBRUARY 28, 2014 14,000,000 14,000 36,000 (60,207) (10,207)
Net loss for the period ended
May 31, 2014 (unaudited) -- -- -- (4,498) (4,498)
---------- ------- ------- -------- --------
BALANCE, MAY 31, 2014 14,000,000 $14,000 $36,000 $(64,705) $(14,705)
========== ======= ======= ======== ========
The auditors' report and accompanying notes are an
integral part of these financial statements.
6
CME REALTY INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
-------------------------------
May 31, 2014 May 31, 2013
------------ ------------
OPERATING ACTIVITIES
Net loss $ (4,498) $ (6,712)
Adjustment to reconcile net loss to net
cash used in operating activities:
Increase (decrease) in A/P and accrued expenses 437 (1,095)
-------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES ((4,061) ((7,807)
-------- --------
FINANCING ACTIVITIES
Proceeds from sale of common stock -- --
Shareholder loan -- 5,060
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES -- 5,060
-------- --------
NET INCREASE (DECREASE) IN CASH (4,061) (2,747)
CASH, BEGINNING OF PERIOD 9,404 5,000
-------- --------
CASH, END OF PERIOD $ 5,343 $ 2,253
======== ========
Supplemental cash flow information:
Cash paid for:
Interest Expense $ -- $ --
======== ========
Income Taxes $ -- $ --
======== ========
The auditors' report and accompanying notes are an
integral part of these financial statements.
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CME REALTY INC
(A Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
May 31, 2014
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
CME Realty, Inc. was formed in the state of Nevada on August 10, 2012 and its
year-end is February 28. We are a development stage company with a principle
business of real estate services for the residential market. We plan to hire a
team of professionals that will individually specialize in each of our services.
The services we initially plan to offer include listing and sales of residential
properties, short sales and foreclosures. Our goal is to become a partner with
our clients in the decision making process. We plan to provide all our
professionals with the latest market knowledge utilizing demographic and mapping
technology and micro and macro real estate statistics.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the period ended May 31, 2014, the
Company had no operations. As of May 31, 2014 the Company had not emerged from
the development stage. In view of these matters, the Company's ability to
continue as a going concern is dependent upon the Company's ability to begin
operations and to achieve a level of profitability. The Company intends on
financing its future development activities and its working capital needs
largely from the sale of public equity securities with some additional funding
from other traditional financing sources, including term notes until such time
that funds provided by operations are sufficient to fund working capital
requirements. The financial statements of the Company do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classifications of liabilities that might be
necessary should the Company be unable to continue as a going concern.
The sole officer/director has agreed to advance funds to the Company to meet its
obligations at his discretion.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's February 28,
2014 audited financial statements. The results of operations for the period
ended May 31, 2014 and the same period last year are not necessarily indicative
of the operating results for the full year.
In the opinion of management, all adjustments consisting of normal recurring
entries necessary for a fair statement of the periods presented for: (a) the
financial position; (b) the result of operations; and (c) cash flows, have been
made in order to make the financial statements presented not misleading. The
results of operations for such interim periods are not necessarily indicative of
operations for a full year.
The financial statements present the balance sheet, statement of operations,
stockholders' equity (deficit) and cash flows of the Company. These financial
statements are presented in United States dollars and have been prepared in
accordance with accounting principles generally accepted in the United States.
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ADVERTISING
Advertising costs are expensed as incurred. As of May 31, 2014 no advertising
costs have been incurred.
PROPERTY
The Company does not own or rent any property. The office space is provided by
the CEO at no charge.
NET LOSS PER SHARE
Basic loss per share includes no dilution and is computed by dividing loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Dilutive loss per share reflects the potential
dilution of securities that could share in the losses of the Company. Because
the Company does not have any potentially dilutive securities, the accompanying
presentation is only of basic loss per share.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2014, the Financial Accounting Standards Board issued Accounting
Standards Update No. 2014-10, which eliminated certain financial reporting
requirements of companies previously identified as "Development Stage Entities"
(Topic 915). The amendments in this ASU simplify accounting guidance by removing
all incremental financial reporting requirements for development stage entities.
The amendments also reduce data maintenance and, for those entities subject to
audit, audit costs by eliminating the requirement for development stage entities
to present inception-to-date information in the statements of income, cash
flows, and shareholder equity. Early application of each of the amendments is
permitted for any annual reporting period or interim period for which the
entity's financial statements have not yet been issued (public business
entities) or made available for issuance (other entities). Upon adoption,
entities will no longer present or disclose any information required by Topic
915. The Company has adopted this standard.
The company has evaluated all the recent accounting pronouncements and believes
that none of them will have a material effect on the company's financial
statement.
NOTE 4 - RELATED PARTY
As of May 31, 2014 and February 28, 2014, the President has loaned funds and
paid expenses on behalf of the Company in the amounts of $6,060 and $6,060,
respectively. The loans are payable on demand and carry no interest.
NOTE 5 - CAPITAL STOCK
The Company is authorized to issue an aggregate of 75,000,000 common shares with
a par value of $0.001 per share. No preferred shares have been authorized or
issued. At both May 31, 2014 and February 28, 2014, 14,000,000 common shares are
issued and outstanding.
On February 21, 2013, the Company issued 5,000,000 Founder's shares at $0.001
per share (par value) for total cash of $5,000.
On February 25, 2013, the Company issued 5,000,000 shares for services provided
since inception. These shares were issued at par value ($0.001 per share) for
services valued at $5,000.
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On January 14, 2014, the Company issued 4,000,000 shares for cash to multiple
investors, in accordance with their S-1 registration filing (closed). These
shares were issued at $0.01 per share for total cash proceeds of $40,000.
As of May 31, 2014, there are no warrants or options outstanding to acquire any
additional shares of common stock of the Company.
NOTE 7 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of filing with the
Securities and Exchange Commission, the date the financial statements were
available to be issued. Management is not aware of any significant events that
occurred subsequent to the balance sheet date that would have a material effect
on the financial statements thereby requiring adjustment or disclosure.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS
NOTE REGARDING FORWARD LOOKING STATEMENTS.
This quarterly report on Form 10-Q of CME Realty, Inc. for the period ended May
31, 2014 contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby. To the extent that such statements are not
recitations of historical fact, such statements constitute forward-looking
statements which, by definition, involve risks and uncertainties. In particular,
statements under the Sections; Description of Business, Management's Discussion
and Analysis of Financial Condition and Results of Operations contain
forward-looking statements. Where, in any forward-looking statement, the Company
expresses an expectation or belief as to future results or events, such
expectation or belief is expressed in good faith and believed to have a
reasonable basis, but there can be no assurance that the statement of
expectation or belief will result or be achieved or accomplished.
The following are factors that could cause actual results or events to differ
materially from those anticipated, and include but are not limited to: general
economic, financial and business conditions; changes in and compliance with
governmental regulations; changes in tax laws; and the costs and effects of
legal proceedings.
You should not rely on forward-looking statements in this quarterly report. This
quarterly report contains forward-looking statements that involve risks and
uncertainties. We use words such as "anticipates," "believes," "plans,"
"expects," "future," "intends," and similar expressions to identify these
forward-looking statements. Prospective investors should not place undue
reliance on these forward-looking statements, which apply only as of the date of
this report. Our actual results could differ materially from those anticipated
in these forward-looking statements for many reasons, including the risks faced
by CME Realty, Inc. Financial information provided in this Form 10-Q, for
periods subsequent to May 31, 2014, is preliminary and remains subject to audit.
As such, this information is not final or complete, and remains subject to
change, possibly materially.
RESULTS OF OPERATIONS
THE THREE MONTH PERIOD ENDED MAY 31, 2014 AND 2013
The Company did not have any operating income for quarter ended May 31, 2014 and
2013. Operating expenses were comprised of costs mainly associated with legal,
accounting and office. Currently our operating expenses are kept at minimal
levels and primarily relate to expenses associated with our public filing
requirements. We anticipate that these expenses would remain consistent until
such time as we commence implementation of our business plan of operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its expenses and costs thus far through an equity
investment and funding by one of its shareholders. CME Realty, Inc.'s received a
Notice of Effectiveness on its filing Form S-1 from the Securities and Exchange
Commission on October 2, 2013 to offer on a best-efforts basis 4,000,000 shares
11
of its common stock at a fixed price of $0.01 per share. CME Realty, Inc. closed
its offering on January 10, 2014 and raised $40,000 by placing 4,000,000 through
its offering.
Management has been successful in raising $40,000 in funds from its offering and
which is budgeted to sustain operations for a twelve-month period. If we begin
to generate profits, we will increase our marketing and sales activity
accordingly.
The Company as a whole may continue to operate at a loss for an indeterminate
period thereafter, depending upon the performance of its business. In the
process of carrying out its business plan, the Company will continue to identify
new financial partners and investors. However, it may determine that it cannot
raise sufficient capital in the future to support its business on acceptable
terms, or at all. Accordingly, there can be no assurance that any additional
funds will be available on terms acceptable to the Company or at all. The
company is authorized to issue 75,000,000 shares of common stock.
OFF BALANCE SHEET ARRANGEMENTS
We have no known demands or commitments and are not aware of any events or
uncertainties as of July 14, 2014 that will result in or that are reasonably
likely to materially increase or decrease our current liquidity.
CRITICAL ACCOUNTING POLICIES
We prepare our financial statements in conformity with GAAP, which requires
management to make certain estimates and apply judgments. We base our estimates
and judgments on historical experience, current trends and other factors that
management believes to be important at the time the financial statements are
prepared. Due to the need to make estimates about the effect of matters that are
inherently uncertain, materially different amounts could be reported under
different conditions or using different assumptions. On a regular basis, we
review our critical accounting policies and how they are applied in the
preparation of our financial statements.
While we believe that the historical experience, current trends and other
factors considered support the preparation of our financial statements in
conformity with GAAP, actual results could differ from our estimates and such
differences could be material.
For a full description of our critical accounting policies, please refer to Item
7, "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in our 2014 Annual Report on Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we
are not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES: The Company's Chief Executive
Officer and Chief Financial Officer, after evaluating the effectiveness of the
design and operation of the Company's disclosure controls and procedures (as
defined in Securities Exchange Act Rules 13a-15 (f) and 15d-15(f)) as of May 31,
2014, have concluded that as of such date the Company's disclosure controls and
procedures are ineffective. Material weaknesses noted are lack of an audit
12
committee, lack of a majority of outside directors on the board of directors,
resulting in ineffective oversight in the establishment and monitoring of
required internal controls and procedures; and management is dominated by a
single individual, without adequate compensating controls.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING: There have been no changes
in our internal controls over financial reporting identified in connection with
the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15
or Rule 15d-15 that occurred in the three months ended May 31, 2014 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
The Company is a smaller reporting company and is not required to provide this
information.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31.1 Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002
31.2 Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002
101 Interactive Data files pursuant to Regulation S-T
(b) Reports on Form 8-K
None.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CME REALTY, INC.
Date: July 14, 2014
/s/ Carlos Espinosa
-----------------------------------
Carlos Espinosa
President, Chief Executive Officer,
Secretary, Chief Financial Officer,
Treasurer, Director
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