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, 2015
[ ] 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.)
2690 Weston Road, Suite 200, Weston, FL 33331
(Address of Principal Executive Offices)
(954) 458-9996
(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 July 15, 2015: 70,000,000 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 10
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, May 31, 2015 (unaudited) and
February 28, 2015 (audited) 4
Condensed Statements of Operations (unaudited), for the three month
periods ended May 31, 2015 and 2014 5
Condensed Statements of Cash Flows (unaudited), for the three month
periods ended May 31, 2015 and 2014 6
Notes to Financial Statements (unaudited) 7
3
CME REALTY INC.
CONDENSED BALANCE SHEETS
May 31, 2015 February 28, 2015
------------ -----------------
(Unaudited) (Audited)
ASSETS
Current Assets
Cash $ -- $ --
---------- ----------
Total Current Assets -- --
---------- ----------
TOTAL ASSETS $ -- $ --
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Bank overdraft $ 165 $ --
A/P & accrued expenses 129,747 6,000
Due to related party 9,275 --
---------- ----------
Total Current Liabilities 139,187 6,000
---------- ----------
TOTAL LIABILITIES 139,187 6,000
---------- ----------
STOCKHOLDERS' DEFICIT
Common Stock, $0.001 Par Value
Authorized Common Stock
75,000,000 shares at $0.001
Issued and Outstanding
70,000,000 Common Shares at May 31, 2015 & 70,000,000
at February 28, 2015 (post-split) 70,000 70,000
Additional paid in capital 7,202 7,202
Accumulated deficit (216,389) (83,202)
---------- ----------
TOTAL STOCKHOLDERS' DEFICIT (139,187) (6,000)
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ -- $ --
========== ==========
The accompanying notes are an integral part of
these condensed financial statements
4
CME REALTY INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months For the three months
ended ended
May 31, 2015 May 31, 2014
------------ ------------
REVENUE
Revenues $ -- $ --
------------ ------------
Total Revenues -- --
------------ ------------
EXPENSES
G & A expense 17,900 1,098
Professional fee 100,287 3,400
Officer salary 15,000 --
------------ ------------
Total Expenses 133,187 4,498
------------ ------------
Provision for income taxes -- --
------------ ------------
NET LOSS $ (133,187) $ (4,498)
============ ============
Basic and diluted loss per common share $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 70,000,000 70,000,000
============ ============
The accompanying notes are an integral part of
these condensed financial statements
5
CME REALTY INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months For the three months
ended ended
May 31, 2015 May 31, 2014
------------ ------------
OPERATING ACTIVITIES
Net loss $ (133,187) $ (4,498)
Adjustments to reconcile Net Income to net
cash provided by operations:
AP & accrued expenses 121,912 437
---------- ----------
Net cash used in operating activities (11,275) (4,061)
---------- ----------
FINANCING ACTIVITIES
Issuance of common stock 2,000 --
Loans from Shareholders 9,275 --
---------- ----------
Net cash provided by financing activities 11,275
---------- ----------
Net increase/decrease in cash for period -- (4,061)
Cash at beginning of period -- (9,404)
---------- ----------
Cash at end of period $ -- $ 5,343
========== ==========
The accompanying notes are an integral part of
these condensed financial statements
6
CME REALTY INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
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.
The Company's initial plan of operations was to engage in providing real estate
services for the Las Vegas residential market. The Company was unable to
implement this plan of operations for a number of reasons, including without
limitation, the inability to raise sufficient capital.
In light of the foregoing, on February 13, 2015, Carlos Espinosa, the principal
shareholder and sole director and executive officer of CME, sold 50,000,000
shares of the Company's common stock held by him (the "CME Shares") to Kenneth
McLeod for $252,000. The CME Shares represented 74.13% of the Company's issued
and outstanding common stock. Contemporaneously therewith, Mr. Espinosa resigned
as an officer of the Company and appointed Mr. McLeod as a director, President
and Secretary-Treasurer of the Company. Subsequently, Mr. Espinosa resigned as a
director of CME. As a result of the foregoing, a "Change in Control" of CME was
deemed to have taken place.
On March 17, 2015, we implemented a five-for-one split of our common stock in
the form of a stock dividend to shareholders or record at the close of business
on March 9. 2015. In connection therewith, shareholders as of such date received
four additional shares of CME common stock for each share held by them as of the
record date. Unless otherwise indicated, all share numbers and per share numbers
in this report have been retroactively adjusted to give effect to the March 2015
stock split.
On April 22, 2015, CME Realty, Inc. issued a press release regarding the Company
having entered into a letter of intent to acquire all the capital stock of Rock
N' Roll Imports, Inc., a California based alcoholic beverage development,
marketing, and distribution company, in exchange for 50,000,000 shares of the
Company's common stock. At May 31, 2015, the agreement has not been executed.
Consummation of the RNR Acquisition is subject to various terms and conditions,
including the drafting, negotiation and signing of definitive documentation and
completion of satisfactory due diligence among other matters. If the Company is
able to successfully complete the RNR Acquisition, RNR will become a
wholly-owned subsidiary of the Company and the Company's ongoing business
efforts will be focused on developing and expanding RNR's business. Moreover,
the Company intends to explore additional opportunities in the alcoholic
beverage market and accordingly, on July 14, 2015 announced that it was taking
the necessary steps to change its name to "South Beach Spirits, Inc."
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has a history of losses
and incurred a loss of $133,187 for the period ending May 31, 2015. Losses have
resulted in an accumulated deficit of $216,389. From inception through May 31,
2015, the Company has had no revenue producing operations and has not commenced
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its business plan. 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 and director has agreed to advance funds to the Company to meet
its obligations at his discretion. There is no written commitment to continue to
fund the obligations of the Company.
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, 2015 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.
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
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 ADOPTED
In August, 2014, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial
Statements - Going Concern (Subtopic 205 - 40), which now requires management to
8
evaluate whether there are conditions or events, considered in the aggregate,
that raise substantial doubt about the entity's ability to continue as a going
concern within one year after the date of financial statements are issued. If
conditions or events raise substantial doubt about an entity's ability to
continue as a going concern, and substantial doubt is not alleviated after
consideration of management's plans, additional disclosures are required. The
amendments in this update are effective for the annual period ending after
December 14, 2015, and for annual periods and interim periods thereafter. Early
application is permitted. These requirements were previously included within
auditing standards and federal securities law, but are now included within U.S.
GAAP. We have evaluated our disclosures regarding our ability to continue as a
going concern and concluded that we are in compliance with the disclosure
requirements.
There are no other recently issued accounting pronouncements that the Company
has yet to adopt that are expected to have a material effect on its financial
position, results of operations, or cash flows.
NOTE 4 - RELATED PARTY
At May 31, 2015 and February 28, 2015, a shareholder has paid expenses on behalf
of the Company in the amount of $9,275 and $0, respectively. The advances are
considered temporary in nature, payable on demand, and non-interest bearing.
On March 1, 2015, the Company approved compensation to the President at $1,250
per week ($5,000 per month) for services performed. At May 31, 2015 and February
28, 2015, the Company has accrued $15,000 and $0, respectively.
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, 2015 and February 28, 2015, 70,000,000 common shares are
issued and outstanding.
On February 21, 2013, the Company issued 25,000,000 Founder's shares at $0.0002
per share (par value $0.001) for total cash of $5,000.
On February 25, 2013, the Company issued 25,000,000 shares for services provided
since inception. These shares were issued at $0.0002 per share for services
valued at $5,000.
On January 14, 2014, the Company issued 20,000,000 shares for cash to multiple
investors. These shares were issued at $0.002 per share for total cash of
$40,000.
On February 23, 2015, the board of directors declared a five-for-one split of
the Company's stock in the form of a stock dividend to shareholders of record at
the close of business on March 9, 2015. Accordingly, shareholders of the Company
as of the record date will receive four additional shares of common stock for
each share then held. Certificates evidencing the additional shares were
distributed March 2015. All share presented have been retroactively restated for
the effects of the forward stock split.
As of May 31, 2015, there are no warrants or options outstanding to acquire any
additional shares of common stock of the Company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS
The terms "CME", the "Company", "we", "our", "us", or any derivative or similar
terms used herein, refer to CME Realty, Inc.
NOTE REGARDING FORWARD LOOKING STATEMENTS
This quarterly report on Form 10-Q of CME Realty, Inc. for the period ended May
31, 2015 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. Financial information provided in this Form 10-Q, for periods subsequent
to February 28, 2015 is preliminary and remains subject to audit. As such, this
information is not final or complete, and remains subject to change, possibly
materially.
INTRODUCTION
CME was incorporated in the State of Nevada on August 10, 2012. CME has not
generated revenues and has accumulated losses of $216,389 from inception (August
10, 2012) to May 31, 2015 and accordingly, is still in the development stage.
The Company's initial plan of operations was to engage in providing real estate
services for the Las Vegas residential market. The Company was unable to
implement this plan of operations for a number of reasons, including without
limitation, the inability to raise sufficient capital.
In light of the foregoing, on February 13, 2015, Carlos Espinosa, the principal
shareholder and sole director and executive officer of CME, sold 50,000,000
shares of the Company's common stock held by him (the "CME Shares") to Kenneth
McLeod for $252,000. The CME Shares represented 74.13% of the Company's issued
and outstanding common stock. Contemporaneously therewith, Mr. Espinosa resigned
10
as an officer of the Company and appointed Mr. McLeod as a director, President
and Secretary-Treasurer of the Company. Subsequently, Mr. Espinosa resigned as a
director of CME. Mr. McLeod, 43, has approximately 15 years' experience in
marketing management and support. As a result of the foregoing, a "Change in
Control" of CME was deemed to have taken place.
On March 17, 2015, we implemented a five-for-one split of our common stock in
the form of a stock dividend to shareholders or record at the close of business
on March 9. 2015. In connection therewith, shareholders as of such date received
four additional shares of CME common stock for each share held by them as of the
record date. Unless otherwise indicated, all share numbers and per share numbers
in this report have been retroactively adjusted to give effect to the March 2015
stock split.
On April 22, 2015, CME entered into a letter of intent to acquire all of the
capital stock of Rock N' Roll Imports, Inc., a California corporation ("RNR")
engaged in alcoholic beverage development, marketing and distribution in
exchange for (a) the issuance of 50,000,000 shares of our common stock and (b)
the contemporaneous contribution to CME's capital of the CME Shares currently
held by Mr. McLeod (the "RNR Acquisition").
Consummation of the RNR Acquisition is subject to various terms and conditions,
including the drafting, negotiation and signing of definitive documentation and
completion of satisfactory due diligence among other matters. If the Company is
able to successfully complete the RNR Acquisition, RNR will become a
wholly-owned subsidiary of the Company and the Company's ongoing business
efforts will be focused on developing and expanding RNR's business. Moreover,
the Company intends to explore additional opportunities in the alcoholic
beverage market and accordingly, on July 14, 2014 announced that it was taking
the necessary steps to change its name to "South Beach Spirits, Inc."
RESULTS OF OPERATIONS
THE THREE MONTH PERIODS ENDED MAY 31, 2015 AND 2014
The Company did not have any operating income for quarters ended May 31, 2015
and 2014. 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 and the proposed RNR Acquisition. We anticipate that these
expenses will increase as we proceed with the RNR Acquisition and the
implementation of our business plan.
LIQUIDITY AND CAPITAL RESOURCES
The Company initially financed its expenses and costs thus far through an equity
investment and funding from its founder. CME received a Notice of Effectiveness
of its Registration Statement on Form S-1 from the Securities and Exchange
Commission on October 2, 2013, pursuant to which it sold 20,000,000 shares of
its common stock at a fixed price of $0.002 per share. The offering closed on
January 10, 2014 and generated $40,000 in gross proceeds for the Company.
The Company as a whole may continue to operate at a loss for an indeterminate
period thereafter, depending upon the implementation of its business plan and
the ongoing 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.
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OFF BALANCE SHEET ARRANGEMENTS
We have no known demands or commitments and are not aware of any events or
uncertainties as of May 31, 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 Annual Report on Form 10-K for the year ended February 28,
2015 (the "Fiscal 2014 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,
2015, has 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 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 May 31, 2015, that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
Reference is made to "Item 1A. Risk Factors" in the Fiscal 2014 Annual Report.
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 *
----------
* To be filed by amendment.
(b) Reports on Form 8-K
None.
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SIGNATURE
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 20, 2015 By: /s/ Kenneth McLeod
-----------------------------------
President and Secretary-Treasurer
(Principal Executive, Financial and
Accounting Officer)
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