Quarterly Report (10-q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
_______________
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2013
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to______.
REAL ESTATE CONTACTS, INC.
(Exact name of registrant as specified in charter)
Florida
000-54845
593800845
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)
(I.R.S Employer Identification No.)
240 Windsor Ridge #36
New Castle, Pennsylvania 16105
(Address of principal executive offices)
_______________
(724) 656-8886
(Registrant’s telephone number, including area code)
_______________
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
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 (§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 o
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 definition of “ large accelerated filer, ” “ accelerated filer ” and “ smaller reporting company ” in Rule 12b-2 of the Exchange Act.
Large accelerated filer. o
Accelerated filer. o
Non-accelerated filer. o
(Do not check if a smaller reporting company)
Smaller reporting company. x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x
As of November 7, 2013 there are 1,059,706,211 shares par value $0.00001 of the issuer’s common stock issued and outstanding.
1
REAL ESTATE CONTACTS, INC.
QUARTERLY REPORT ON FORM 10-Q
September 30, 2013
TABLE OF CONTENTS
PAGE
PART 1 - FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited)
4
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
13
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 1A.
Risk Factors
17
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
17
Item 3.
Defaults Upon Senior Securities
17
Item 4.
Mine Safety Disclosures
17
Item 5.
Other Information
17
Item 6.
Exhibits
17
SIGNATURES
17
2
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
CERTAIN TERMS USED IN THIS REPORT
When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Real Estate Contacts, Inc. “SEC” refers to the Securities and Exchange Commission.
3
PART I—FINANCIAL INFORMATION
Item 1.
Financial Statements.
Index to Financial Statements
Real Estate Contacts, Inc.
Contents
Financial Statements:
Page Number
Balance Sheets, as of September 30, 2013 (unaudited) and December 31, 2012 (audited)
5
Statements of Operations for the three and nine months ended September 30, 2013 and 2012 (unaudited)
6
Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 (unaudited)
7
Notes to Financial Statements (unaudited)
8
4
Real Estate Contacts, Inc.
Balance Sheets
September 30,
December 31,
2013
2012
(unaudited)
(audited)
Assets
Current assets
Cash
$
206,723
$
25,418
Total current assets
206,723
25,418
Website development costs,
net of accumulated amortization of$7,033 and $2,833, respectively
54,009
7,167
Total assets
$
260,732
$
32,585
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable
$
14,592
$
18,147
Accrued expenses
83,801
73,247
Deferred revenue
1,202
1,771
Derivative liability
967,213
234,599
Due to shareholder
145,926
188,796
Notes payable
5,000
7,500
Convertible note payable
69,468
27,336
Total current liabilities
1,287,202
551,396
Notes payable
-
-
Total liabilities
1,287,202
551,396
Stockholders' Deficit
Preferred Stock A $.0001 par value, 10,000,000 shares authorized;
none issued and outstanding
-
-
Preferred Stock B $.001 par value, 90,000,000 shares authorized;
none issued and outstanding
-
-
Common Stock, $0.00001 par value, 2,900,000,000 shares authorized;
585,493,327 and 190,681,078 shares issued and outstanding, respectively
5,855
1,907
Additional paid-in capital
6,248,969
2595,493
Accumulated deficit
(7,281,294)
(3,116,211)
Total stockholders' deficit
(1,026,470)
(518,811)
Total Liabilities and Stockholders' Deficit
$
260,732
$
32,585
The accompanying notes are an integral part of these financial statements.
5
Real Estate Contacts, Inc.
Statements of Operations
(unaudited)
For the Three Months Ended
For the Nine Months Ended
September 30,
September 30,
2013
2012
2013
2012
Revenues
$
866
$
1,162
$
3,506
$
3,379
Operating expenses:
Selling expenses
781
926
10,318
1,984
Compensation
31,170
16,170
52,909
57,829
Professional
5,500
6,926
18,095
21,316
Rents and overhead
300
300
900
900
General and administrative
3,506
(7,198)
9,732
7,336
Stock-based compensation
-
8,000
3,091,500
306,250
Amortization
1,907
250
4,200
750
Total operating expenses
43,164
25,374
3,187,654
396,365
Net loss from operations
(42,298)
(24,212)
(3,184,148)
(392,986)
Other expense
Interest expense
(698)
(1,434)
(3,640)
(4,504)
Financing costs
(38,921)
(26,277)
(181,923)
(26,277)
Change in derivatives
(365,074)
(76,961)
(732,614)
(76,961)
Gain (loss) on extinguishment of debt
-
3,060
(62,758)
(603,190)
Net loss before provision for income taxes
(446,991)
(125,824)
(4,165,083)
(1,103,918)
Provision for income taxes
-
-
-
-
Net loss
$
(446,991)
$
(125,824)
$
(4,165,083)
$
(1,103,918)
Loss per share, primary and dilutive
$
(0.00)
$
(0.00)
$
(0.01)
$
(0.01)
Weighted average shares outstanding, primary and dilutive
545,403,443
183,496,517
387,798,181
164,885,065
The accompanying notes are an integral part of these financial statements.
6
Real Estate Contacts, Inc.
Statements of Cash Flows
(unaudited)
For the Nine Months Ended
September 30,
2013
2012
Cash Flows from Operating Activities:
Net loss
$
(4,165,083)
$
(1,103,918)
Adjustment to reconcile net loss to net cash provided by operations:
Depreciation and amortization
4,200
750
Stock based compensation
3,091,500
306,250
In kind contribution of rent
900
900
Amortization of debt discounts and financing costs
181,923
26,277
Change in derivative liability
732,614
76,961
Loss on extinguishment of debt
62,758
607,750
Changes in assets and liabilities:
Accounts payable
7,020
(3,059)
Accrued expenses
10,554
15,569
Deferred revenue
(569)
1,071
Shareholder advances
(42,870)
1,411
Net Cash Used by Operating Activities
(117,053)
(70,038)
Cash Flows from Investing Activities:
Website development costs
(51,042)
(15,000)
Net Cash Used by Investing Activities
(51,042)
(15,000)
Cash Flows from Financing Activities:
Proceeds from notes payable, shareholders
-
30,500
Proceeds from convertible notes payable
331,000
45,000
Proceeds from issuance of equity
18,400
30,250
Net Cash Provided by Financing Activities
349,400
105,750
Net increase (decrease) in cash
181,305
20,712
Cash at beginning of period
25,418
1,151
Cash at end of period
$
206,723
$
21,863
Supplemental cash flow information:
Interest paid
$
-
$
-
Taxes paid
$
-
$
-
Non-cash disclosures:
Settlement of payables in exchange for common shares
$
10,575
$
25,000
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
_______________
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2013
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to______.
REAL ESTATE CONTACTS, INC.
(Exact name of registrant as specified in charter)
Florida
000-54845
593800845
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)
(I.R.S Employer Identification No.)
240 Windsor Ridge #36
New Castle, Pennsylvania 16105
(Address of principal executive offices)
_______________
(724) 656-8886
(Registrant’s telephone number, including area code)
_______________
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
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 (§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 o
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 definition of “ large accelerated filer, ” “ accelerated filer ” and “ smaller reporting company ” in Rule 12b-2 of the Exchange Act.
Large accelerated filer. o
Accelerated filer. o
Non-accelerated filer. o
(Do not check if a smaller reporting company)
Smaller reporting company. x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x
As of November 7, 2013 there are 1,059,706,211 shares par value $0.00001 of the issuer’s common stock issued and outstanding.
1
REAL ESTATE CONTACTS, INC.
QUARTERLY REPORT ON FORM 10-Q
September 30, 2013
TABLE OF CONTENTS
PAGE
PART 1 - FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited)
4
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
13
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 1A.
Risk Factors
17
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
17
Item 3.
Defaults Upon Senior Securities
17
Item 4.
Mine Safety Disclosures
17
Item 5.
Other Information
17
Item 6.
Exhibits
17
SIGNATURES
17
2
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
CERTAIN TERMS USED IN THIS REPORT
When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Real Estate Contacts, Inc. “SEC” refers to the Securities and Exchange Commission.
3
PART I—FINANCIAL INFORMATION
Item 1.
Financial Statements.
Index to Financial Statements
Real Estate Contacts, Inc.
Contents
Financial Statements:
Page Number
Balance Sheets, as of September 30, 2013 (unaudited) and December 31, 2012 (audited)
5
Statements of Operations for the three and nine months ended September 30, 2013 and 2012 (unaudited)
6
Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 (unaudited)
7
Notes to Financial Statements (unaudited)
8
4
Real Estate Contacts, Inc.
Balance Sheets
September 30,
December 31,
2013
2012
(unaudited)
(audited)
Assets
Current assets
Cash
$
206,723
$
25,418
Total current assets
206,723
25,418
Website development costs,
net of accumulated amortization of$7,033 and $2,833, respectively
54,009
7,167
Total assets
$
260,732
$
32,585
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable
$
14,592
$
18,147
Accrued expenses
83,801
73,247
Deferred revenue
1,202
1,771
Derivative liability
967,213
234,599
Due to shareholder
145,926
188,796
Notes payable
5,000
7,500
Convertible note payable
69,468
27,336
Total current liabilities
1,287,202
551,396
Notes payable
-
-
Total liabilities
1,287,202
551,396
Stockholders' Deficit
Preferred Stock A $.0001 par value, 10,000,000 shares authorized;
none issued and outstanding
-
-
Preferred Stock B $.001 par value, 90,000,000 shares authorized;
none issued and outstanding
-
-
Common Stock, $0.00001 par value, 2,900,000,000 shares authorized;
585,493,327 and 190,681,078 shares issued and outstanding, respectively
5,855
1,907
Additional paid-in capital
6,248,969
2595,493
Accumulated deficit
(7,281,294)
(3,116,211)
Total stockholders' deficit
(1,026,470)
(518,811)
Total Liabilities and Stockholders' Deficit
$
260,732
$
32,585
The accompanying notes are an integral part of these financial statements.
5
Real Estate Contacts, Inc.
Statements of Operations
(unaudited)
For the Three Months Ended
For the Nine Months Ended
September 30,
September 30,
2013
2012
2013
2012
Revenues
$
866
$
1,162
$
3,506
$
3,379
Operating expenses:
Selling expenses
781
926
10,318
1,984
Compensation
31,170
16,170
52,909
57,829
Professional
5,500
6,926
18,095
21,316
Rents and overhead
300
300
900
900
General and administrative
3,506
(7,198)
9,732
7,336
Stock-based compensation
-
8,000
3,091,500
306,250
Amortization
1,907
250
4,200
750
Total operating expenses
43,164
25,374
3,187,654
396,365
Net loss from operations
(42,298)
(24,212)
(3,184,148)
(392,986)
Other expense
Interest expense
(698)
(1,434)
(3,640)
(4,504)
Financing costs
(38,921)
(26,277)
(181,923)
(26,277)
Change in derivatives
(365,074)
(76,961)
(732,614)
(76,961)
Gain (loss) on extinguishment of debt
-
3,060
(62,758)
(603,190)
Net loss before provision for income taxes
(446,991)
(125,824)
(4,165,083)
(1,103,918)
Provision for income taxes
-
-
-
-
Net loss
$
(446,991)
$
(125,824)
$
(4,165,083)
$
(1,103,918)
Loss per share, primary and dilutive
$
(0.00)
$
(0.00)
$
(0.01)
$
(0.01)
Weighted average shares outstanding, primary and dilutive
545,403,443
183,496,517
387,798,181
164,885,065
The accompanying notes are an integral part of these financial statements.
6
Real Estate Contacts, Inc.
Statements of Cash Flows
(unaudited)
For the Nine Months Ended
September 30,
2013
2012
Cash Flows from Operating Activities:
Net loss
$
(4,165,083)
$
(1,103,918)
Adjustment to reconcile net loss to net cash provided by operations:
Depreciation and amortization
4,200
750
Stock based compensation
3,091,500
306,250
In kind contribution of rent
900
900
Amortization of debt discounts and financing costs
181,923
26,277
Change in derivative liability
732,614
76,961
Loss on extinguishment of debt
62,758
607,750
Changes in assets and liabilities:
Accounts payable
7,020
(3,059)
Accrued expenses
10,554
15,569
Deferred revenue
(569)
1,071
Shareholder advances
(42,870)
1,411
Net Cash Used by Operating Activities
(117,053)
(70,038)
Cash Flows from Investing Activities:
Website development costs
(51,042)
(15,000)
Net Cash Used by Investing Activities
(51,042)
(15,000)
Cash Flows from Financing Activities:
Proceeds from notes payable, shareholders
-
30,500
Proceeds from convertible notes payable
331,000
45,000
Proceeds from issuance of equity
18,400
30,250
Net Cash Provided by Financing Activities
349,400
105,750
Net increase (decrease) in cash
181,305
20,712
Cash at beginning of period
25,418
1,151
Cash at end of period
$
206,723
$
21,863
Supplemental cash flow information:
Interest paid
$
-
$
-
Taxes paid
$
-
$
-
Non-cash disclosures:
Settlement of payables in exchange for common shares
$
10,575
$
25,000
