Attached files
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 October 31, 2010
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 SecuritiesExchange 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 is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of December 20, 2010, 2,440,000 shares of the issuer's common stock, $0.001
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 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
Item 4. Controls and Procedures 16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits 17
Signature 18
2
ITEM 1.
ERE MANAGEMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
OCTOBER 31, 2010, AND 2009
Financial Statements-
Balance Sheets as of October 31, 2010 (Unaudited), and July 31, 2010..... 3
Statements of Operations for the Three Months Ended
October 31, 2010, and 2009, and for the Period from
May 29, 2007 (Inception) through October 31, 2010 (Unaudited).......... 4
Statements of Cash Flows for the Three Months Ended October 31, 2010,
and 2009, and for the Period from May 29, 2007 (Inception) through
October 31, 2010 (Unaudited)........................................... 5
Notes to Financial Statements October 31, 2010, and 2009 (Unaudited)..... 6
3
ERE MANAGEMENT, INC.
(A Development Stage Company)
BALANCE SHEETS
October 31, July 31,
2010 2010
-------- --------
(Unaudited)
ASSETS
Current asset
Cash $ 153 $ 308
-------- --------
Total current assets 153 308
Website development costs 5,950 5,950
Less accumulated amortization (5,950) (5,455)
-------- --------
Total assets $ 153 $ 803
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable $ 2,028 $ 1,510
Accrued liabilities 7,467 6,217
Due to related party 21,835 21,835
-------- --------
Total current liabilities 31,330 29,562
-------- --------
Stockholders' deficit
Common stock: $0.001 par value; 20,000,000 shares authorized;
2,440,000 shares issued and outstanding 2,440 2,440
Additional paid-in capital 46,060 46,060
Deficit accumulated during the development stage (79,677) (77,259)
-------- --------
Total stockholders' deficit (31,177) (28,759)
-------- --------
Total liabilities and stockholders' deficit $ 153 $ 803
======== ========
See accompanying notes to the financial statements.
4
ERE MANAGEMENT, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the
Period from
May 29, 2007
Three Months Three Months (Inception)
Ended Ended through
October 31, October 31, October 31,
2010 2009 2010
---------- ---------- ----------
REVENUE $ -- $ -- $ --
---------- ---------- ----------
OPERATING EXPENSES
Accounting 1,259 2,250 28,450
Legal -- -- 17,470
Transfer agent fees 300 300 15,150
Filing fees -- -- 6,584
Rent 373 450 6,214
Amortization 495 496 5,950
General and administrative -- 70 7,309
---------- ---------- ----------
Total operating expenses 2,418 3,566 87,127
---------- ---------- ----------
Loss before income taxes (2,418) (3,566) (87,127)
Provision for income taxes -- -- --
---------- ---------- ----------
Net loss $ (2,418) $ (3,566) $ (87,127)
========== ========== ==========
Net loss per common share -
basic and diluted $ (0.00) $ (0.00)
========== ==========
Weighted Average Number of
Common Shares Outstanding -
basic and diluted 2,440,000 2,440,000
========== ==========
See accompanying notes to the financial statements.
5
ERE MANAGEMENT, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the
Period from
May 29, 2007
Three Months Three Months (Inception)
Ended Ended through
October 31, October 31, October 31,
2010 2009 2010
-------- -------- --------
CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss $ (2,418) $ (3,566) $(79,677)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 495 496 5,950
Changes in operating assets and liabilities:
Accounts payable 518 1,800 2,028
Accrued liabilities 1,250 (1,200) 7,467
-------- -------- --------
Net cash used in operating activities (155) (2,470) (64,232)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Website development -- -- 5,950
-------- -------- --------
Net cash used in investing activities -- -- (5,950)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Due to related party -- 4,000 21,835
Proceeds from sale of common stock -- -- 48,500
-------- -------- --------
Cash from financing activities -- -- 70,335
-------- -------- --------
Net change in cash (155) 1,530 153
Cash, beginning of the period 308 1,261 --
-------- -------- --------
Cash, end of the period $ 153 $ 2,791 $ 153
======== ======== ========
Supplemental disclosure of cash flows information:
Cash paid for income taxes $ -- $ -- $ --
======== ======== ========
Cash paid for interest $ -- $ -- $ --
======== ======== ========
See accompanying notes to the financial statements
6
ERE MANAGEMENT, INC.
(A Development Stage Company)
October 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS
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.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
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 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 periods 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 financial statements of the
Company for the year ended July 31, 2010 and notes thereto contained in the
information filed as part of the Company's Annual Report on Form 10-K, which was
filed with the SEC on November 15, 2010.
DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by section 810-10-20 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 exploration stage activities.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
FISCAL YEAR END
The Company elected July 31 as its fiscal year ending date.
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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.
WEBSITE DEVELOPMENT COSTS
Under FASB ASC350-50, WEBSITE DEVELOPMENT COSTS, costs and expenses incurred
during the planning and operating stages of the Company's website are expensed
as incurred. Under ASC 350-50, costs incurred in the website application and
infrastructure development stages are capitalized by the Company and amortized
to expense over the website's estimated useful life or period of benefit. As of
October 31, 2010, the Company had capitalized $5,950 related to its website cost
and recorded $5,950 in accumulated amortization.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards
Codification for its long-lived assets. The Company's long-lived assets, which
include website development costs, are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable.
The Company assesses the recoverability of its long-lived assets by comparing
the projected undiscounted net cash flows associated with the related long-lived
asset or group of long-lived assets over their remaining estimated useful lives
against their respective carrying amounts. Impairment, if any, is based on the
excess of the carrying amount over the fair value of those assets. Fair value is
generally determined using the asset's expected future discounted cash flows or
market value, if readily determinable. If long-lived assets are determined to be
recoverable, but the newly determined remaining estimated useful lives are
shorter than originally estimated, the net book values of the long-lived assets
are depreciated over the newly determined remaining estimated useful lives. The
Company determined that there were no impairments of long-lived assets as of
October 31, 2010 or 2009.
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
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 establishes a framework for measuring fair value in accounting
principles generally accepted in the United States of America (U.S. 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 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 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.
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The carrying amounts of the Company's financial assets and liabilities, such as
cash, accounts payable and accrued liabilities, approximate their fair values
because of the short maturity of these instruments.
The Company does not have any assets or liabilities measured at fair value on a
recurring or a non-recurring basis, consequently, the Company did not have any
fair value adjustments for assets and liabilities measured at fair value at
October 31, 2010 or 2009, nor gains or losses are reported in the statement of
operations that are attributable to the change in unrealized gains or losses
relating to those assets and liabilities still held at the reporting date for
the interim periods ended October 31, 2010 or 2009.
INCOME TAXES
The Company follows Section 740-10-30 of the FASB Accounting Standards
Codification, which requires recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred tax assets
and liabilities are based on the differences between the financial statement and
tax bases of assets and liabilities using enacted tax rates in effect for the
year in which the differences are expected to reverse. Deferred tax assets are
reduced by a valuation allowance to the extent management concludes it is more
likely than not that the assets will not be realized. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the Statements of Operations in the period
that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards
Codification ("Section 740-10-25"). Section 740-10-25.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 Section 740-10-25,
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.
Section 740-10-25 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
Section 740-10-25.
NET LOSS PER COMMON SHARE
Net loss per common share is computed pursuant to section 260-10-45 of the FASB
Accounting Standards Codification. Basic net loss per common share is computed
by dividing net loss by the weighted average number of shares of common stock
outstanding during the period. Diluted net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock and
potentially outstanding shares of common stock during the period. There were no
potentially dilutive shares outstanding as of October 31, 2010 or 2009.
COMMITMENTS AND CONTINGENCIES
The Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Liabilities for loss
contingencies arising from claims, assessments, litigation, fines and penalties
and other sources are recorded when it is probable that a liability has been
incurred and the amount of the assessment can be reasonably estimated.
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
9
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.
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
In January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-01 "EQUITY TOPIC 505 - ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS WITH
COMPONENTS OF STOCK AND CASH", which clarify that the stock portion of a
distribution to shareholders that allows them to elect to receive cash or stock
with a potential limitation on the total amount of cash that all shareholders
can elect to receive in the aggregate is considered a share issuance that is
reflected in EPS prospectively and is not a stock dividend for purposes of
applying Topics 505 and 260 (Equity and Earnings Per Share ("EPS")). Those
distributions should be accounted for and included in EPS calculations in
accordance with paragraphs 480-10-25- 14 and 260-10-45-45 through 45-47 of the
FASB Accounting Standards codification. The amendments in this Update also
provide a technical correction to the Accounting Standards Codification. The
correction moves guidance that was previously included in the Overview and
Background Section to the definition of a stock dividend in the Master Glossary.
That guidance indicates that a stock dividend takes nothing from the property of
the corporation and adds nothing to the interests of the stockholders. It also
indicates that the proportional interest of each shareholder remains the same,
and is a key factor to consider in determining whether a distribution is a stock
dividend.
In January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-02 "CONSOLIDATION TOPIC 810 - ACCOUNTING AND REPORTING FOR DECREASES IN
OWNERSHIP OF A SUBSIDIARY - A SCOPE CLARIFICATION", which provides amendments to
Subtopic 810-10 and related guidance within U.S. GAAP to clarify that the scope
of the decrease in ownership provisions of the Subtopic and related guidance
applies to the following:
1. A subsidiary or group of assets that is a business or nonprofit
activity
2. A subsidiary that is a business or nonprofit activity that is
transferred to an equity method investee or joint venture
3. An exchange of a group of assets that constitutes a business or
nonprofit activity for a noncontrolling interest in an entity
(including an equity method investee or joint venture).
The amendments in this Update also clarify that the decrease in ownership
guidance in Subtopic 810-10 does not apply to the following transactions even if
they involve businesses:
1. Sales of in substance real estate. Entities should apply the sale of
real estate guidance in Subtopics 360-20 (Property, Plant, and
Equipment) and 976-605 (Retail/Land) to such transactions.
2. Conveyances of oil and gas mineral rights. Entities should apply the
mineral property conveyance and related transactions guidance in
Subtopic 932-360 (Oil and Gas-Property, Plant, and Equipment) to such
transactions.
If a decrease in ownership occurs in a subsidiary that is not a business or
nonprofit activity, an entity first needs to consider whether the substance of
the transaction causing the decrease in ownership is addressed in other U.S.
GAAP, such as transfers of financial assets, revenue recognition, exchanges of
10
nonmonetary assets, sales of in substance real estate, or conveyances of oil and
gas mineral rights, and apply that guidance as applicable. If no other guidance
exists, an entity should apply the guidance in Subtopic 810-10.
In January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-06 "FAIR VALUE MEASUREMENTS AND DISCLOSURES (TOPIC 820) IMPROVING
DISCLOSURES ABOUT FAIR VALUE MEASUREMENTS", which provides amendments to
Subtopic 820-10 that require new disclosures as follows:
1. Transfers in and out of Levels 1 and 2. A reporting entity should
disclose separately the amounts of significant transfers in and out of
Level 1 and Level 2 fair value measurements and describe the reasons
for the transfers.
2. Activity in Level 3 fair value measurements. In the reconciliation for
fair value measurements using significant unobservable inputs (Level
3), a reporting entity should present separately information about
purchases, sales, issuances, and settlements (that is, on a gross
basis rather than as one net number).
This Update provides amendments to Subtopic 820-10 that clarify existing
disclosures as follows:
1. Level of disaggregation. A reporting entity should provide fair value
measurement disclosures for each class of assets and liabilities. A
class is often a subset of assets or liabilities within a line item in
the statement of financial position. A reporting entity needs to use
judgment in determining the appropriate classes of assets and
liabilities.
2. Disclosures about inputs and valuation techniques. A reporting entity
should provide disclosures about the valuation techniques and inputs
used to measure fair value for both recurring and nonrecurring fair
value measurements. Those disclosures are required for fair value
measurements that fall in either Level 2 or Level 3.
This Update also includes conforming amendments to the guidance on employers'
disclosures about postretirement benefit plan assets (Subtopic 715-20). The
conforming amendments to Subtopic 715-20 change the terminology from MAJOR
CATEGORIES of assets to CLASSES of assets and provide a cross reference to the
guidance in Subtopic 820-10 on how to determine appropriate classes to present
fair value disclosures. The new disclosures and clarifications of existing
disclosures are effective for interim and annual reporting periods beginning
after December 15, 2009, except for the disclosures about purchases, sales,
issuances, and settlements in the roll forward of activity in Level 3 fair value
measurements. Those disclosures are effective for fiscal years beginning after
December 15, 2010, and for interim periods within those fiscal years.
In February 2010, the FASB issued the FASB Accounting Standards Update No.
2010-09 "SUBSEQUENT EVENTS (TOPIC 855) AMENDMENTS TO CERTAIN RECOGNITION AND
DISCLOSURE REQUIREMENTS", which provides amendments to Subtopic 855-10 as
follows:
1. An entity that either (a) is an SEC filer or(b) is a conduit bond
obligor for conduit debt securities that are traded in a public market
(a domestic or foreign stock exchange or an over-the-counter market,
including local or regional markets) is required to evaluate
subsequent events through the date that the financial statements are
issued. If an entity meets neither of those criteria, then it should
evaluate subsequent events through the date the financial statements
are available to be issued.
2. An entity that is an SEC filer is not required to disclose the date
through which subsequent events have been evaluated. This change
alleviates potential conflicts between Subtopic 855-10 and the SEC's
requirements.
3. The scope of the reissuance disclosure requirements is refined to
include revised financial statements only. The term REVISED FINANCIAL
STATEMENTS is added to the glossary of Topic 855. Revised financial
statements include financial statements revised either as a result of
correction of an error or retrospective application of U.S. generally
accepted accounting principles.
All of the amendments in this Update are effective upon issuance of the final
Update, except for the use of the issued date for conduit debt obligors. That
amendment is effective for interim or annual periods ending after June 15, 2010.
11
In April 2010, the FASB issued the FASB Accounting Standards Update No. 2010-17
"REVENUE RECOGNITION -- MILESTONE METHOD (TOPIC 605) MILESTONE METHOD OF REVENUE
RECOGNITION", which provides guidance on the criteria that should be met for
determining whether the milestone method of revenue recognition is appropriate.
A vendor can recognize consideration that is contingent upon achievement of a
milestone in its entirety as revenue in the period in which the milestone is
achieved only if the milestone meets all criteria to be considered substantive.
Determining whether a milestone is substantive is a matter of judgment made at
the inception of the arrangement. The following criteria must be met for a
milestone to be considered substantive. The consideration earned by achieving
the milestone should:
1. Be commensurate with either of the following:
a. The vendor's performance to achieve the milestone
b. The enhancement of the value of the item delivered as a result of
a specific outcome resulting from the vendor's performance to
achieve the milestone
2. Relate solely to past performance
3. Be reasonable relative to all deliverables and payment terms in the
arrangement.
A milestone should be considered substantive in its entirety. An individual
milestone may not be bifurcated. An arrangement may include more than one
milestone, and each milestone should be evaluated separately to determine
whether the milestone is substantive. Accordingly, an arrangement may contain
both substantive and nonsubstantive milestones.
A vendor's decision to use the milestone method of revenue recognition for
transactions within the scope of the amendments in this Update is a policy
election. Other proportional revenue recognition methods also may be applied as
long as the application of those other methods does not result in the
recognition of consideration in its entirety in the period the milestone is
achieved.
A vendor that is affected by the amendments in this Update is required to
provide all of the following disclosures:
1. A description of the overall arrangement
2. A description of each milestone and related contingent consideration
3. A determination of whether each milestone is considered substantive
4. The factors that the entity considered in determining whether the
milestone or milestones are substantive
5. The amount of consideration recognized during the period for the
milestone or milestones.
The amendments in this Update are effective on a prospective basis for
milestones achieved in fiscal years, and interim periods within those years,
beginning on or after June 15, 2010. Early adoption is permitted. If a vendor
elects early adoption and the period of adoption is not the beginning of the
entity's fiscal year, the entity should apply the amendments retrospectively
from the beginning of the year of adoption. Additionally, a vendor electing
early adoption should disclose the following information at a minimum for all
previously reported interim periods in the fiscal year of adoption:
1. Revenue
2. Income before income taxes
3. Net income
4. Earnings per share
5. The effect of the change for the captions presented.
12
A vendor may elect, but is not required, to adopt the amendments in this Update
retrospectively for all prior periods.
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
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As reflected in the accompanying
financial statements, the Company had a deficit accumulated during the
development stage of $79,677 at October 31, 2010, a net loss from operations of
$2,418 and net cash used in operating activities of $155 for the interim period
then ended, respectively with no revenues earned since inception.
While the Company is attempting to generate sufficient revenues, the Company's
cash position may not be 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 sufficient 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 sufficient
revenues.
The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
NOTE 4 - DUE TO RELATED PARTY
The amount due to related party is unsecured, non-interest bearing and is
payable on demand.
NOTE 5 - STOCKHOLDERS' DEFICIT
The Company is authorized to issue 20,000,000 shares of $0.001 par value common
stock. All shares of common stock have equal voting rights, are non-assessable,
and have one vote per share. Voting rights are not cumulative and, therefore,
the holders of more than 50 percent of the common stock could, if they choose to
do so, elect all of the Directors of the Company.
On July 16, 2007, the Company issued 1,600,000 shares of its common stock to Mr.
Imperial for $20,000 in cash. On July 17, 2007, Mr. Imperial was elected to the
Board of Directors, and became the President, Secretary, and Treasurer of the
Company.
In addition, in 2007, ERE commenced a capital formation activity to effect a
Registration Statement on Form SB-2 with the SEC, and raise capital of up to
$60,000 from a self-underwritten offering of 1,200,000 shares of newly issued
common stock at $0.05 per share in the public markets. The Registration
Statement on Form SB-2 was filed with the SEC on November 9, 2007, and declared
effective on November 21, 2007. On January 24, 2008, the Company completed and
closed the offering by selling 840,000 shares, of the 1,200,000 registered
shares, of its common stock, at $0.05 per share for $42,000 in cash.
NOTE 6 - SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date
through the date these financial statements were issued. The Management of the
Company determined that there were no reportable events to be disclosed or
recorded.
13
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,
2010, 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 840,000 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. If
we are unable to generate revenues after the 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 nearing the final stages in 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
October 31, 2010.
EXPENSES
Our expenses for the three months ended October 31, 2010, and 2009, were $2,424
and $3,566, respectively and for the period from May 29, 2007 (date of
inception), through October 31, 2010 were $87,127. 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 October 31, 2010 and 2009 was $2,424 and
$3,566, respectively and during the period from May 29, 2007 (date of
inception), through October 31, 2010, we incurred a net loss of $79,677. This
loss consisted primarily of legal fees, transfer agent fees, accounting and
audit fees, filing fees, and consulting fees.
PURCHASE OR SALE OF EQUIPMENT
We do not expect to purchase or sell any plant or significant equipment. We
anticipate to purchase some office equipment up to a maximum of $2,500.
LIQUIDITY AND CAPITAL RESOURCES
Our balance sheet as of October 31, 2010, reflects assets of $153 in the form of
cash. Since inception, we have sold 2,440,000 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.
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
15
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, 2010, 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 October 31, 2010, 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 October 31, 2010, 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 October 31, 2010, 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. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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.
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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: December 20, 2010 By: /s/ Joselito Christopher G. Imperial
----------------------------------------------
Joselito Christopher G. Imperial
President and Chief Executive and
Chief Financial Officer
1
