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 November 30, 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. 001-36549
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 January 6, 2015: 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 [ ] NO [X]
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
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ITEM 1. FINANCIAL STATEMENTS
CME REALTY, INC.
Financial Statements
Page
----
Financial Statements:
Condensed Balance Sheets, November 30, 2014 (unaudited) and
February 28, 2014 (audited) 4
Condensed Statements of Operations (unaudited), for the three month
period ended November 30, 2014 and 2013, the nine month period ended
November 30, 2014 and 2013 5
Condensed Statements of Cash Flows (unaudited), for the three months
period ended November 30, 2014, the nine month period ended
November 30, 2014 6
Notes to Financial Statements (unaudited) 7
3
CME REALTY INC.
CONDENSED BALANCE SHEETS
November 30, February 28,
2014 2014
-------- --------
(Audited)
ASSETS
CURRENT ASSETS
Cash $ 364 $ 9,404
Total Current Assets 364 9,404
-------- --------
TOTAL ASSETS $ 364 $ 9,404
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
A/P & Accrued Expenses $ 9,728 $ 13,551
Due to Related Party 16,010 6,060
-------- --------
Total Current Liabilities 25,738 19,611
-------- --------
TOTAL LIABILITIES 25,738 19,611
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, $0.001 Par Value
Authorized Common Stock
75,000,000 shares at $0.001
Issued and Outstanding
14,000,000 Common Shares at November 30, 2014 & February 28, 2014 14,000 14,000
Additional Paid In Capital 36,000 36,000
Deficit Accumulated During the Development Stage (75,374) (60,207)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (25,374) (10,207)
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 364 $ 9,404
======== ========
The accompanying notes are an integral part of these financial statements
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CME REALTY INC.
CONDENSED STATEMENTS OF OPERATIONS
3-months 3-months 9-months 9-months
ended ended ended ended
November 30, November 30, November 30, November 30,
2014 2013 2014 2013
----------- ----------- ----------- -----------
REVENUE
Revenues $ -- $ -- $ -- $ --
----------- ----------- ----------- -----------
Total Revenues -- -- -- --
----------- ----------- ----------- -----------
EXPENSES
General & Admin 1,034 25 2,557 311
Professional Fees 4,240 3,125 12,610 11,775
----------- ----------- ----------- -----------
Total Expenses 5,274 3,150 15,167 12,086
----------- ----------- ----------- -----------
Provision for Income Taxes -- -- -- --
----------- ----------- ----------- -----------
NET LOSS $ (5,274) $ (3,150) $ (15,167) $ (12,086)
=========== =========== =========== ===========
BASIC AND DILUTED LOSS PER
COMMON SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 14,000,000 10,000,000 14,000,000 10,000,000
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
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CME REALTY INC.
CONDENSED STATEMENTS OF CASH FLOWS
9-months 9-months
ended ended
November 30, November 30,
2014 2013
-------- --------
OPERATING ACTIVITIES
Net Income $(15,167) $(12,086)
Adjustments to reconcile Net Income to net
cash provided by operations:
Increase (decrease) in AP & Accrued Expenses (3,823) 1,375
Expenses paid on behalf of Company by Related Party -- (306)
-------- --------
Net cash provided by Operating Activities (18,990) (11,017)
-------- --------
FINANCING ACTIVITIES
Loans from Shareholders 9,950 6,060
-------- --------
Net cash provided by Financing Activities 9,950 6,060
-------- --------
Net increase/decrease in Cash for period (9,040) (4,957)
Cash at beginning of period 9,404 5,000
-------- --------
Cash at end of period $ 364 $ 43
======== ========
The accompanying notes are an integral part of these financial statements.
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CME REALTY INC.
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
November 30, 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 November 30,
2014, the Company had no operations. As of November 30, 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 November 30, 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.
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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.
ADVERTISING
Advertising costs are expensed as incurred. As of November 30, 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
INCOME TAXES
The Company follows the liability method of accounting for income taxes.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances. Deferred tax assets and liabilities are measured using enacted or
substantially enacted tax rates expected to apply to the taxable income in the
years in which those differences are expected to be recovered or settled.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the date of enactment or substantive enactment.
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
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.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's balance sheet includes certain financial instruments, including
cash, accounts payable, accrued expenses and amounts payable to related party.
The carrying amounts of current assets and current liabilities approximate their
fair value because of the relatively short period of time between the
origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the
exchange price that would be received for an asset or paid to transfer a
liability (an exit price) in the principal or most advantageous market for the
asset or liability in an orderly transaction between market participants on the
measurement date. ASC 820 also establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and (2) an
entity's own assumptions about market participant assumptions developed based on
the best information available in the circumstances (unobservable inputs). The
fair value hierarchy consists of three broad levels, which gives the highest
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priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
The three levels of the fair value hierarchy are described below:
Level 1 Unadjusted quoted prices in active markets that are accessible at
the measurement date for identical, unrestricted assets or liabilities
Level 2 Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly,
including quoted prices for similar assets or liabilities in active
markets; quoted prices for identical or similar assets or liabilities in
markets that are not active; inputs other than quoted prices that are
observable for the asset or liability (e.g., interest rates); and inputs
that are derived principally from or corroborated by observable market data
by correlation or other means.
Level 3 Inputs that are both significant to the fair value measurement and
unobservable.
Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of November 30, 2014. The
respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values due to the short-term nature of these
instruments.
NOTE 4 - RELATED PARTY
In support of the Company's efforts and cash requirements, it has relied on
advances from the controlling shareholder, an officer and director, until such
time that the Company can support its operations through generating revenue or
attains adequate financing through sales of its equity or traditional debt
financing. The controlling shareholder has pledged his support to fund
continuing operations, however, there is no formal written commitment. Amounts
represent advances or amounts paid in satisfaction of liabilities. The advances
are considered temporary in nature and therefore are considered payable on
demand and non-interest bearing. At November 30, 2014 and February 28, 2014, the
President has paid expenses and advanced money on behalf of the Company in the
amount of $16,010 and $6,060, respectively.
The Company does not own or lease property or lease office space. The office
space used by the Company was arranged by the founder of the Company to use at
no charge.
The Company does not have employment contracts with its key employees, including
the controlling shareholder who is an officer of the Company.
The amounts and terms of the above transactions may not necessarily be
indicative of the amounts and terms that would have been incurred had comparable
transactions been entered into with independent third parties.
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 February 28, 2014 and 2013, 14,000,000 and 10,000,000 common shares
are issued and outstanding, respectively.
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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.
On January 14, 2014, the Company issued 4,000,000 shares for cash to multiple
investors. These shares were issued at $0.01 per share for total cash of
$40,000.
As of November 30, 2014, there are no warrants or options outstanding to acquire
any additional shares of common stock of the Company.
NOTE 6 - INCOME TAXES
We did not provide any current or deferred U.S. federal income tax provision or
benefit for any of the periods presented because we have experienced operating
losses since inception. Accounting for Uncertainty in Income Taxes when it is
more likely than not that a tax asset cannot be realized through future income
the Company must allow for this future tax benefit. We provided a full valuation
allowance on the net deferred tax asset, consisting of net operating loss carry
forwards, because management has determined that it is more likely than not that
we will not earn income sufficient to realize the deferred tax assets during the
carry forward period.
The net federal operating loss carry forward will begin to expire in 2034. This
carry forward may be limited upon the consummation of a business combination
under IRC Section 381.
NOTE 7- COMMITMENTS AND CONTINGENCIES
From time to time the Company may be a party to litigation matters involving
claims against the Company. Management believes that there are no current
matters that would have a material effect on the Company's financial position or
results of operations.
NOTE 8 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through 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
November 30, 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 November 30, 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 NOVEMBER 30, 2014 AND 2013
The Company did not have any operating income for quarter ended November 30,
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
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.
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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 January 6, 2015 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
November 30, 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 committee, lack of a majority of outside directors on the board of
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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 November 30, 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
32.1 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: January 6, 2015
/s/ Carlos Espinosa
-----------------------------------
Carlos Espinosa
President, Chief Executive Officer,
Secretary, Chief Financial Officer,
Treasurer, Director
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