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EX-31.1 - SECTION 302 CERTIFICATION - Guar Global Ltd.ex31-1.txt
EX-32.1 - SECTION 906 CERTIFICATION - Guar Global Ltd.ex32-1.txt

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               AMENDMENT NO. 2 TO
                                    FORM 10-K

(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                     For the fiscal year ended July 31, 2010

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

        For the transition period from ______________ to________________

                        Commission file number 333-147250


                              ERE MANAGEMENT, INC.
             (Exact name of registrant as specified in its charter)

           Nevada                                                98-0540833
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

8275 Southern Eastern Avenue, Suite 200, Las Vegas, NV             89123
    (Address of principal executive offices)                     (Zip Code)

        Registrant's telephone number, including area code (702) 990-8402

              Securities registered under Section 12(b) of the Act:

       None                                                N/A
Title of each class                    Name of each exchange on which registered

              Securities registered under Section 12(g) of the Act:

                         Common Stock, $0.001 par value
                                (Title of class)

Indicate by checkmark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by checkmark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Act. Yes [ ] No [X]

Indicate by checkmark whether the registrant has (1) 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 [ ]

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

Indicate by checkmark 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" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]                        Accelerated filer [ ]
Non-accelerated filer [ ]                          Smaller reporting company [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [X] No [ ]

The aggregate market value of voting and non-voting common equity held by
non-affiliates as of November 15, 2010 was approximately $42,000 based upon
840,000 shares held by non-affiliates and a closing market price of $0.05 per
share on January 31, 2010.

As of September 8, 2011, there were 2,440,000 shares of common stock issued and
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Exhibits incorporated by reference are referred to in Part IV.

AVAILABLE INFORMATION Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports that we file with the Securities and Exchange Commission, or SEC, are available at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding reporting companies. TABLE OF CONTENTS Page ---- PART I ITEM 1. Business 4 ITEM 1A. Risk Factors 6 ITEM 2. Properties 8 ITEM 3. Legal Proceedings 9 ITEM 4. Submission of Matters to a Vote of Security Holders 9 PART II ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 9 ITEM 6. Selected Financial Data 10 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 14 ITEM 8. Financial Statements and Supplementary Data 15 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 30 ITEM 9A. Controls and Procedures 28 ITEM 9B. Other Information 30 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 30 ITEM 11. Executive Compensation 30 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 32 ITEM 13. Certain Relationships and Related Transactions, and Director Independence 33 ITEM 14. Principal Accountant Fees and Services 33 ITEM 15. Exhibits Financial Statement Schedules 34 Signatures 35 2
EXPLANATORY NOTE This Form 10-K Amendment No. 2 is being filed to include the financial statements for the fiscal year ending July 31, 2010 that have been re-audited by our current Independent Registered Public Accounting Firm due to the discovery that the license of our former Independent Registered Public Accounting Firm, Davis Accounting Group P.C. of Cedar City Utah, had lapsed at the time that the audit report was rendered. PART I FORWARD LOOKING STATEMENTS. This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" and the risks set out below, any of which may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation: * the uncertainty that we will not be able to successfully identify and evaluate a suitable business opportunity; * risks related to the large number of established and well-financed entities that are actively seeking suitable business opportunities; * risks related to the failure to successfully manage or achieve growth of a new business opportunity; and * other risks and uncertainties related to our business strategy. This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock. As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under the Private Securities Litigation Reform Act of 1995 are unavailable to us. Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to the common shares in our capital stock. As used in this annual report, the terms "we", "us", "our" and "ERE" mean ERE Management, Inc., unless otherwise indicated. 3
ITEM 1. BUSINESS ERE Management, Inc. (the "Company" or "ERE") is a development stage company that was incorporated on May 29, 2007. We have commenced only limited operations, primarily focused on developing our CMS software product. We have not generated any revenue to date. Our Director has reserved a domain name for us and has also acquired web and email hosting. We have developed a website for our services. We have also developed a basic version of our software. We have developed our initial CMS software product (basic version) that enables real estate agents with no technical knowledge to easily build a website to showcase their listings. There is a demo version available online. However, we do not currently have sufficient capital to operate our business, and we will require additional funding in the future to sustain our operations. There is no assurance that we will have revenue in the future or that we will be able to secure the necessary funding to develop our business. Currently, our Directors are operating the business without remuneration. They intend to continue to try to develop the business. Our software product is designed to enable real estate agents to build and maintain websites without the need to employ a full-time web developer to create and maintain the website. In contrast to traditional methods of operation, we believe that our software product provides real estate agents with the ability to bring real estate listings to the market faster, to reach larger audiences, and to track and follow up with leads generated by their websites. Our software product is designed to include an administration page that allows the entry of mega tags and keywords to enhance search engine hits, and a set of tools to enhance websites by enabling the creation of various website sections, such as a "contact us" contact information page, an "our team" description of agents page, and a mortgage calculator. We will initially focus our marketing and sales efforts in North America, since this market represents a significant opportunity in terms of sales potential. The North American market is sophisticated, software savvy, and educated in terms of the need to increase productivity and time efficiency. Our offices are currently located at 8275 Southern Eastern Avenue, Suite 200, Las Vegas, Nevada, 89123. Our telephone number is (702) 990-8402. Our website is www.eremanagement.com. OUR CMS SOFTWARE PRODUCT Our CMS software product will be available for download over the internet. The CMS software product will also include ASP source code and MySql database so it can be integrated with other products, such as customer relationship management databases. By following the easy-to-use installation guide, the user will be able to install and copy the application files to the web hosting server. Our CMS software program requires very limited time and technical expertise, while maintaining a high level of presentation. We plan to offer additional installation services for an additional fee to customers to assist with the installation of the our CMS software program on their web hosting server if they are unable to do so on their own after reading the installation guide. Our goal is to enable real-estate agents using our CMS software product to add/edit/delete property listings, including images, on their websites independently, without the need for technical assistance. MARKETING & SALES STRATEGY We plan to implement an aggressive marketing strategy. We intend to focus on real estate agents in North America who do not have a website, or who are outsourcing their current web needs. The target audience is comprised of independent and company real estate agents. Our strategy consists of building strategic alliances with complementary products and industry alliances, a strong web presence, targeted e-mail campaigns, and cold calls by a knowledgeable sales force. We expect that this strategy will build revenues and establish our brand and our CMS software product. SALES AND DISTRIBUTION Our website will be an important factor in driving sales. We also plan to conduct e-mail campaigns and distribute our software through third party websites of complementary software programs. Marketing affiliates will be compensated via a commission for their sales. 4
OUR COMPETITION There are currently other providers of similar CMS software products for real estate agents. Content management systems, include those to build websites, is a large and growing industry in North America. Competitive pressures and customer demand fuel the growth in this industry. Many of the competitors in this industry are located in the United States. While there are many competitors; the industry supports a large number of competitors as demand is significant and growing. We see this competition as a benefit to us, as we have analyzed our competitors' products and have looked for ways to improve and distinguish our product from the competition. SOURCES AND AVAILABILITY OF PRODUCTS AND SUPPLIES There are no constraints on the sources or availability of products and supplies related to our business. We will be producing our own product, and the distribution of our product will be over the internet. DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS The nature of our software product does not mandate any dependence on one or a few major customers. PATENT, TRADEMARK, LICENSE & FRANCHISE RESTRICTIONS AND CONTRACTUAL OBLIGATIONS & CONCESSIONS We have not entered into any franchise agreements or other contracts that have given, or could give rise to obligations or concessions. We have developed a software product and intend to protect our software product with copyright and trade secrecy laws. Beyond our trade name and our software product, we do not hold any other intellectual property. EXISTING OR PROBABLE GOVERNMENT REGULATIONS There are no existing government regulations, nor are we aware of any regulations being contemplated that would adversely affect our ability to operate. Due to the increasing popularity and use of the internet, it is possible that a number of laws and regulations may be adopted with respect to the internet generally, covering issues such as user privacy, pricing, and characteristics and quality of products and services. Similarly, the growth and development of the market for internet commerce may prompt calls for more stringent consumer protection laws that may impose additional burdens on those companies conducting business over the Internet. The adoption of any such laws or regulations may decrease the growth of commerce over the Internet, increase our cost of doing business, or otherwise have a harmful effect on our business. To date, governmental regulations have not materially restricted the use or expansion of the internet. However, the legal and regulatory environment that pertains to the Internet is uncertain and may change. New laws may cover issues that include: * Sales and other taxes; * User privacy; * Pricing controls; * Characteristics and quality of products and services; * Consumer protection; * Libel and defamation; * Copyright, trademark and patent infringement; and/or * Other claims based on the nature and content of internet materials. These new laws may have an impact on our ability to market our products and services in accordance with our business plan. RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS We have incurred costs to date and, subject to obtaining financing, have plans to undertake additional research and development activities during the next 12 months of operation. For a detailed description of our plans, see "Plan of Operation" in Item 7 below. 5
EMPLOYEES As of November 15, 2010, we have no employees as we have been unable to secure sufficient financing to hire full time or part time staff. Our sole officer and Director provides services to us on an as-needed basis. ITEM 1A. RISK FACTORS RISK FACTORS RELATED TO OUR BUSINESS 1. WE HAVE A GOING CONCERN OPINION FROM OUR AUDITORS, INDICATING THE POSSIBILITY THAT WE MAY NOT BE ABLE TO CONTINUE TO OPERATE. The Company has incurred a net loss of $77,259 for the period from May 29, 2007 (date of inception) through July 31, 2010. We anticipate generating losses for the next 12 months. Therefore, we may be unable to continue operations in the future as a going concern. No adjustment has been made in the accompanying financial statements to the amounts and classification of assets and liabilities which could result should we be unable to continue as a going concern. If we cannot continue as a viable entity, our stockholders may lose some or all of their investment in the Company. In addition, our independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. As a result, we may not be able to obtain additional necessary funding. There can be no assurance that we will ever achieve any revenues or profitability. The revenue and income potential of our proposed business and operations are unproven, and the lack of operating history makes it difficult to evaluate the future prospects of our business. 2. OUR BUSINESS PLAN MAY BE UNSUCCESSFUL. The success of our business plan is dependent on our marketing our CMS software product to real estate agents and on our continuously upgrading our product and developing new products. Our ability to market and sell our products is unproven, and the lack of an operating history makes it difficult to validate our business plan. In addition, the success of our business plan is dependent upon the market acceptance of our CMS software product. Should our product be too narrowly focused or should real estate agents not be as responsive as we anticipate, we will not have in place alternate products or services that we may offer to ensure our continuing as a going concern. 3. WE HAVE NO OPERATING HISTORY AND HAVE MAINTAINED LOSSES SINCE INCEPTION, WHICH WE EXPECT TO CONTINUE IN THE FUTURE. We expect to continue to incur operating losses in future periods. These losses will occur because we do not yet have any revenues to offset the expenses associated with the continuing development of our CMS software product and with the marketing and sale of our CMS software product. We cannot guarantee that we will ever be successful in generating revenues in the future. We recognize that if we are unable to generate revenues, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail. 4. OUR SOLE EXECUTIVE OFFICER AND DIRECTOR HAS SIGNIFICANT VOTING POWER AND MAY TAKE ACTIONS THAT MAY BE DIFFERENT THAN ACTIONS SOUGHT BY OUR OTHER STOCKHOLDERS. Our sole officer and Director is able to exercise significant influence over all matters requiring stockholder approval. This influence over our affairs might be adverse to the interest of our other stockholders. In addition, this concentration of ownership could delay or prevent a change in control and might have an adverse effect on the market price of our common stock. 5. SINCE OUR SOLE OFFICER AND DIRECTOR MAY CONTINUE TO WORK OR CONSULT FOR OTHER COMPANIES, HIS OTHER ACTIVITIES COULD SLOW DOWN OUR OPERATIONS. 6
Our sole officer and Director is not required to work exclusively for us and does not devote all of his time to our operations. Presently, our sole officer and Director allocates only a portion of his time to the operation our business. Since our sole officer and Director is currently employed full-time elsewhere, he is able to commit to us only up to 10 to 15 hours a week. Therefore, it is possible that his pursuit of other activities may slow our operations and reduce our financial results because of the slow down in operations. 6. OUR SOLE OFFICER AND DIRECTOR IS LOCATED IN THE PHILIPPINES. Since our sole officer and Director is located in the Philippines, any attempts to enforce liabilities upon such individual under the United States securities and bankruptcy laws may be difficult. 7. INTERNET BASED SOFTWARE PRODUCTS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE. Our business is in an emerging market that is characterized by rapid changes in customer requirements, frequent introductions of new and enhanced products and services, and continuing and rapid technological advancement. To compete successfully in the internet software product market, we must continue to design, develop, and sell new and enhanced products and services that provide increasingly higher levels of performance and reliability at lower cost. These new and enhanced products and services must take advantage of technological advancements and changes, and respond to new customer requirements. Our success in designing, developing, and selling such products and services will depend on a variety of factors, including: * Identifying and responding to real estate agents' demands for new products and services; * Keeping abreast of technological changes; * Timely developing and implementing new product offerings and features; * Maintaining performance quality; * Providing cost-effective service and support; and * Promoting our products and services and expanding our market share. If we are unable, due to resource constraints or technological or other reasons, to develop and introduce new or enhanced products or services in a timely manner, if such new or enhanced products or services do not achieve sufficient market acceptance, or if such new or enhanced product introductions decrease demand for our existing products or services, our operating results would decline and our business would not grow. 8. WE ARE A SMALL COMPANY WITH LIMITED RESOURCES COMPARED TO SOME OF OUR CURRENT AND POTENTIAL COMPETITORS AND WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AND INCREASE MARKET SHARE. Most of our current and potential competitors, such as Moneymaker4agents.com, and Realtystar.com, have longer operating histories, significantly greater resources and name recognition, and a larger base of customers than we have. As a result, these competitors have greater name credibility with our potential customers. Our competitors also may be able to adopt more aggressive pricing policies and devote greater resources to the development, promotion, and sale of their products and services than we can to ours. To be competitive, we must continue to invest significant resources in research and development, sales and marketing, and customer support. We may not have sufficient resources to make these investments or to develop the technological advances necessary to be competitive, which in turn will cause our business to suffer and restrict our profitability potential 9. WE NEED TO RETAIN KEY PERSONNEL TO SUPPORT OUR PRODUCTS AND ONGOING OPERATIONS. The development and marketing of our products will continue to place a significant strain on our limited personnel, management, and other resources. Our future success depends upon the continued services of our sole officer and Director and other key employees and contractors who have critical technological knowledge, industry experience, and relationships that we rely on to implement our business plan. The loss of the services of our sole officer and Director or the lack of availability of other skilled personnel would negatively impact our ability to develop, market, and sell our products, which could adversely affect our financial results and impair our growth. 10. OUR SUCCESS DEPENDS ON THIRD PARTY DISTRIBUTION CHANNELS. We intend to sell our products ourselves and through a series of resellers and distributors. Our future revenue growth will depend in large part on sales of our products through these relationships. We may not be successful in developing distribution relationships. Entities that distribute our products may compete with us. In addition, these distributors may not dedicate sufficient resources 7
or give sufficient priority to selling our products. Our failure to develop distribution channels, the loss of a distribution relationship, or a decline in the efforts of a material reseller or distributor could prevent us from generating sufficient revenues to become profitable. 11. FUTURE REGULATION OF THE INTERNET AND/OR OF USE OF THE INTERNET BY REAL ESTATE AGENTS COULD RESTRICT OUR BUSINESS, PREVENT US FROM OFFERING OUR PRODUCTS, OR INCREASE OUR COST OF DOING BUSINESS. At present there are few laws, regulations or rulings that specifically address access to or commerce on the internet, including the posting of real estate listings on the internet. We are unable to predict the impact, if any, that future legislation, legal decisions, or regulations concerning the internet may have on our business, financial condition, and results of operations. Regulation may be targeted towards, among other things, assessing access or settlement charges, imposing taxes related to internet communications, restricting content, imposing tariffs, or regulations based on encryption concerns or the characteristics and quality of products and services, any of which could restrict our business or increase our cost of doing business. The increasing growth of the internet heightens the risk that governments or other legislative bodies will seek to regulate internet services, which could have a material adverse effect on our business, financial condition, and operating results. 12. WE MAY LOSE CUSTOMERS IF WE EXPERIENCE SYSTEM FAILURES THAT SIGNIFICANTLY DISRUPT THE AVAILABILITY AND QUALITY OF THE PRODUCTS AND SERVICES THAT WE PROVIDE. Our ability to provide support services will depend on our ability to avoid and mitigate any interruptions in service or loss of data that we may face. Interruptions in service or performance problems, for whatever reason, including interruptions resulting from of our systems and data centers being vulnerable to natural disasters and other unexpected problems may hinder our ability to respond to customer needs and cause us to lose customers or make it more difficult to attract new ones. 13. IF A THIRD PARTY ASSERTS THAT WE INFRINGE UPON ITS PROPRIETARY RIGHTS, WE COULD BE REQUIRED TO REDESIGN OUR SOFTWARE, PAY SIGNIFICANT ROYALTIES, OR ENTER INTO LICENSE AGREEMENTS. Although presently we are not aware of any such claims, a third party may assert that our technology or third party technologies that we license violate its intellectual property rights. As the number of software products in our markets increases and the functionality of these software products further overlap, we believe that infringement claims may become more common. Any claims against us, regardless of their merit, could: * Be expensive and time consuming to defend; * Result in negative publicity; * Force us to stop selling our products that rely on the challenged intellectual property; * Require us to redesign our software products; * Divert management's attention and our other resources; and/or * Require us to enter into royalty or licensing agreements in order to obtain the right to use necessary technologies, which may not be available on terms acceptable to us, if at all. In addition, we believe that any successful challenge to our use of a trademark or domain name could substantially diminish our ability to conduct business in a particular market or jurisdiction and thus decrease our revenues and result in possible losses to our business. ITEM 2. PROPERTIES EXECUTIVE OFFICES At present, we do not own any property. We currently maintain our corporate office at 8275 Southern Eastern Avenue, Suite 200, Las Vegas, Nevada, 89123. We pay monthly rent for use of this space of $150. We believe that the condition of our lease property is satisfactory, suitable and adequate for our current needs. 8
ITEM 3. LEGAL PROCEEDINGS We know of no material, active or pending legal proceedings against our Company, nor of any proceedings that a governmental authority is contemplating against us. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders through the solicitation of proxies or otherwise during the fourth quarter of the fiscal year ended July 31, 2010. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET FOR SECURITIES Our Common Stock is traded on the over-the-counter market and quoted on the OTCBB under the symbol "EREM." As of July 31, 2010, the closing price for our Common Stock as reported on the OTCBB was unavailable as our Common Stock has not traded. The high and the low bid prices for our Common Stock is based on inter-dealer prices, without retail mark-up, markdown or commission, and may not represent actual transactions. The table below sets forth the range of high and low bid information for our Common Shares as quoted on the OTCBB for each of the quarters during the fiscal year ended July 31, 2010 (no quotes are available for the previous fiscal year as our stock has not traded): For the Fiscal Year Ended July 31, 2010 For the Quarter ended High Low --------------------- ---- --- October 31 N/A N/A January 31 N/A N/A April 30 N/A N/A July 31 N/A N/A HOLDERS OF OUR COMMON STOCK On November 15, 2010 the shareholders' list of our common stock showed 39 registered shareholder and 2,440,000 shares outstanding. DIVIDEND POLICY We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our future dividend policy will be determined from time to time by our board of directors. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS As of July 31, 2010, we had not adopted an equity compensation plan and had not granted any stock options. RECENT SALES OF UNREGISTERED SECURITIES During the fiscal year ended July 31, 2010 we have not sold any equity securities not registered under the Securities Act. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES During each month within the fourth quarter of the fiscal year ended July 31, 2009, neither we nor any "affiliated purchaser," as that term is defined in Rule 10b-18(a)(3) under the Exchange Act, repurchased any of our Common Stock or other securities. 9
ITEM 6. SELECTED FINANCIAL DATA Not Applicable. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report. Our consolidated financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. APPLICATION OF CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with United States generally accepted accounting principles 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. GENERAL ORGANIZATION AND BUSINESS ERE Management Inc. ("ERE" or the "Company") is a Nevada corporation in the development stage. The Company was incorporated under the laws of the State of Nevada on May 29, 2007. 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 easily build a website to showcase their listings. In addition, there are several opportunities ERE plans to consider for future developments to enhance the Real Estate CMS. The accompanying financial statements of ERE Management Inc. were prepared from the accounts of the Company under the accrual basis of accounting. In 2007, ERE commenced a capital formation activity to effect a Registration Statement on Form SB-2 with the Securities and Exchange Commission, and raise capital of up to $60,000 from a self-underwritten offering of 1,200,000 shares of newly issued common stock 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 an offering of its registered common stock as explained in Note 3. CASH AND CASH EQUIVALENTS For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid investments instruments purchased with a maturity of three months or less to be cash and cash equivalents. REVENUE RECOGNITION The Company is in the development stage and has yet to realize revenues from operations. It plans to realize revenues from product sales when the products are delivered to customers, and collection is reasonably assured. For product support and product software updates, ERE plans to realize revenues when completion of services have occurred, provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. 10
INTERNAL WEBSITE DEVELOPMENT COSTS Under FASB ASC 350-50, 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 July 31, 2010, the Company had capitalized $5,950 (July 31, 2009 - $5,950) related to its website cost and recorded $5,455 (July 31, 2009 - $3,471) in accumulated amortization. COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE Under ASC 350-40, INTERNAL USE SOFTWARE, the Company capitalizes external direct costs of materials and services consumed in developing or obtained internal-use computer software, payroll, and payroll-related costs for employees who are directly associated with and who devote time to internal-use computer software project; and, interest costs related to loans incurred for the development of internal-use software. As of July 31, 2010, and 2009, the Company had not undertaken any project related to the development of internal-use software. COSTS OF COMPUTER SOFTWARE TO BE SOLD OR OTHERWISE MARKETED Under ASC 985-20, COST OF SOFTWARE TO BE SOLD, LEASED OR MARKETED, the Company capitalizes costs associated with the development of certain software products held for sale when technological feasibility is established. Capitalized computer software costs of products held for sale are amortized over the useful life of the products from the software release date. IMPAIRMENT OF LONG-LIVED ASSETS The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives at each balance sheet date. ERE records an impairment or change in useful life whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. For the years ended July 31, 2010, and 2009, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required. LOSS PER COMMON SHARE Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the years ended July 31, 2010, and 2009. DEFERRED OFFERING COSTS The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated. As of July 31, 2008, ERE reclassified deferred offering costs of $13,500 to additional paid-in capital. INCOME TAXES Income taxes are provided in accordance with FASB ASC 740, INCOME TAXES. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. The Company maintains a valuation allowance with respect to deferred tax assets. ERE establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company's financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws. 11
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts ERE could realize in a current market exchange. As of July 31, 2010, and 2009, the carrying value of financial instruments approximated fair value due to the short-term nature and maturity of these instruments. CONCENTRATION OF RISK As of July 31, 2010, and 2009, the Company maintained its cash account at one commercial bank. The balance in the account was subject to FDIC coverage. ESTIMATES The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of July 31, 2010, and 2009, and expenses for the years ended July 31, 2010, and 2009, and cumulative from inception. Actual results could differ from those estimates made by management. EXECUTIVE OVERVIEW We are a development stage company with limited operations and no revenues from our business operations. 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. We used these proceeds to fund our operations in our last fiscal year. If we are unable to generate revenues going forward , or if we are unable to make a reasonable profit , 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. RECENT DEVELOPMENTS During the previous twelve months, the company completed the development of its website. PLAN OF OPERATION Over the next twelve months, subject to obtain financing, we plan to: * Commence marketing of our software product via direct distribution channels; * Generate sales of our product; * If we commence a successful sales campaign, we will continue to develop and update the website and we will hire a sales and marketing person to increase our sales; * Initiate discussions with third party websites to sell complementary software programs; and * If we are unable to raise additional financing through a private placement, we will approach our Directors to provide us with a loan. 12
Due to a lack of financing, the Company has not been able continue with any research and product development activities. OFF BALANCE SHEET TRANSACTIONS We have had no off balance sheet transactions. SIGNIFICANT EQUIPMENT We do not intend to purchase any significant equipment for the next twelve months. RESULTS OF OPERATIONS REVENUES We had no revenues for the period from May 29, 2007 (date of inception), through July 31, 2010. EXPENSES Our expenses for the twelve month period ended July 31, 2010 and 2009 were $17,496 and $21,813, respectively. During the period from May 29, 2007 (date of inception), through July 31, 2010, we incurred expenses of $84,709. These expenses were comprised primarily of office rent, legal expenses, accounting expenses, SEC filing fees, transfer agent fees, as well as bank fees. NET INCOME (LOSS) Our net loss for the twelve-month period ended July 31, 2010 and 2009 was $10,046 and $21,813, respectively. During the period from May 29, 2007 (date of inception), through July 31, 2010, we incurred a net loss of $77,259. This loss consisted of office rent, legal expenses, accounting expenses, SEC filing fees, transfer agent fees, as well as bank fees. Since inception, we have sold 2,440,000 shares of common stock. PURCHASE OR SALE OF EQUIPMENT We do not expect to purchase or sell any plant or significant equipment. LIQUIDITY AND CAPITAL RESOURCES Our balance sheet as of July 31, 2010 reflects assets of $308 in the form of cash and cash equivalents. Since inception, we have sold 2,440,000 shares of common stock with gross proceeds of $62,000. 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. We require additional capital, and we may have to issue debt or equity or enter into a strategic arrangement with a third party to obtain such capital. 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 Our registered independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our registered independent auditors. Due to this doubt about our ability to continue as a going concern, management is open to new business opportunities which may prove more profitable to the shareholders of ERE Management, Inc. In the past, we have been able to raise a limited amount of capital through private placements of our equity stock, but we are uncertain about our continued ability to raise funds privately. Further, we believe that our company may have difficulties raising capital unless we locate 13
a prospective new business opportunity through which we can pursue a new plan of operation. If we are unable to secure adequate capital to implement our current business plan or to continue our efforts to acquire a new business opportunity, our business may fail and our stockholders may lose some or all of their investment. Should our original business plan fail, we anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes that there are numerous firms in various industries seeking the perceived benefits of being a publicly registered corporation. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We can provide no assurance that we will be able to locate compatible business opportunities. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. 14
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ERE MANAGEMENT, INC. (A Development Stage Company) July 31, 2010 and 2009 Index to Financial Statements Contents Page(s) -------- ------- Report of Independent Registered Public Accounting Firm................. 16 Balance Sheets at July 31, 2010 and 2009................................ 17 Statements of Operations for the Fiscal Years Ended July 31, 2011 and 2010 and for the Period from May 29, 2007 (Inception) through July 31, 2010 ......................................................... 18 Statement of Stockholders' Equity (Deficit) for the Period from May 29, 2007 (Inception) through July 31, 2010......................... 19 Statements of Cash Flows for the Fiscal Years Ended July 31, 2011 and 2010 and for the Period from May 29, 2007 (Inception) through July 31, 2010.......................................................... 20 Notes to the Financial Statements....................................... 21 15
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of ERE Management, Inc. (A Development Stage Company) Las Vegas, Nevada We have audited the accompanying balance sheets of ERE Management, Inc., a development stage company, (the "Company") as of July 31, 2010 and 2009 and the related statements of operations, stockholders' deficit and cash flows for the fiscal years then ended, and for the period from May 29, 2007 (inception) through July 31, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 31, 2010 and 2009 and the results of its operations and its cash flows for the fiscal years then ended, and for the period from May 29, 2007 (inception) through July 31, 2010 in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company had a deficit accumulated during the development stage at July 31, 2010 and had a net loss and net cash used in operating activities for the fiscal year then ended, with no revenues earned since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Li & Company, PC ------------------------------ Li & Company, PC Skillman, New Jersey September 8, 2011 16
ERE MANAGEMENT, INC. (A Development Stage Company) BALANCE SHEETS July 31, July 31, 2010 2009 -------- -------- ASSETS Current assets Cash $ 308 $ 1,261 -------- -------- Total current assets 308 1,261 -------- -------- Website development costs Website development costs 5,950 5,950 Accumulated amortization (5,455) (3,471) -------- -------- Website development cost, net 495 2,479 -------- -------- Total assets $ 803 $ 3,740 ======== ======== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable $ 1,510 $ 7,450 Accrued expenses 6,217 5,018 Advances from related party 21,835 9,985 -------- -------- Total current liabilities 29,562 22,453 -------- -------- Total liabilities 29,562 22,453 -------- -------- 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 (77,259) (67,213) -------- -------- Total stockholders' deficit (28,759) (18,713) -------- -------- Total liabilities and stockholders' deficit $ 803 $ 3,740 ======== ======== See accompanying notes to the financial statements. 17
ERE MANAGEMENT, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS From May 29, 2007 Fiscal Year Fiscal Year (Inception) Ended Ended through July 31, July 31, July 31, 2010 2009 2010 ---------- ---------- ---------- REVENUE $ -- $ -- $ -- ---------- ---------- ---------- OPERATING EXPENSES Accounting 9,750 9,450 27,200 Legal 1,710 3,260 17,969 Transfer agent fees 1,277 900 14,850 Filing fees 485 4,017 6,584 Rent 1,851 1,811 5,841 Amortization 1,984 1,984 5,455 General and administrative 439 391 6,810 ---------- ---------- ---------- Total operating expenses 17,496 21,813 84,709 Loss from operations (17,496) (21,813) (84,709) Other (income) expense (7,450) -- (7,450) Loss before income taxes (10,046) (21,813) (77,259) Provision for income taxes -- -- -- ---------- ---------- ---------- Net loss $ (10,046) $ (21,813) $ (77,259) ========== ========== ========== Net loss per common share - basic and diluted $ (0.00) $ (0.01) ========== ========== Weighted average number of common shares outstanding - Basic and diluted 2,440,000 2,440,000 ========== ========== See accompanying notes to the financial statements. 18
ERE MANAGEMENT, INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) For the period from May 29, 2007 (Inception) through July 31, 2010 Deficit Accumulated Total Common Stock Additional During the Stockholders' ------------------- Paid in Development Equity Shares Amount Capital Stage (Deficit) ------ ------ ------- ----- --------- Inception, May 29, 2007 -- $ -- $ -- $ -- $ -- Common stock issued on July 16, 2007 at $0.0125 per share to the Company's President 1,600,000 1,600 18,400 -- 20,000 Net loss (1,999) (1,999) --------- ------- -------- --------- --------- Balance, July 31, 2007 1,600,000 1,600 18,400 (1,999) 18,001 Shares issued at $0.05 per share on January 24, 2008, net of costs ($13,500) 840,000 840 27,660 -- 28,500 Net loss (43,401) (43,401) --------- ------- -------- --------- --------- Balance, July 31, 2008 2,440,000 2,440 46,060 (45,400) 3,100 Net loss (21,813) (21,813) --------- ------- -------- --------- --------- Balance, July 31, 2009 2,440,000 2,440 46,060 (67,213) (18,713) Net loss (10,046) (10,046) --------- ------- -------- --------- --------- Balance, July 31, 2010 2,440,000 $ 2,440 $ 46,060 $ (77,259) $ (28,759) ========= ======= ======== ========= ========= See accompanying notes to the financial statements. 19
ERE MANAGEMENT, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS From May 29, 2007 Fiscal Year Fiscal Year (Inception) Ended Ended through July 31, July 31, July 31, 2010 2009 2010 -------- -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(10,046) $(21,813) $(77,259) Adjustments to reconcile net loss to net cash used in operating activities: Amortization 1,984 1,984 5,455 Changes in operating assets and liabilities Accounts payable (5,940) (1,448) 1,510 Accrued expenses 1,199 1,352 6,217 -------- -------- -------- Net cash used in operating activities (12,803) (19,925) (64,077) -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Website development -- -- (5,950) -------- -------- -------- Net cash used in investing activities -- -- (5,950) -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Increase in due to related party 11,850 9,985 21,835 Proceeds from issuance of common stock (net of costs of $13,500) -- -- 48,500 -------- -------- -------- Net cash provided by financing activities 11,850 9,985 70,335 -------- -------- -------- Net change in cash (953) (9,940) 308 Cash, beginning of the period 1,261 11,201 -- -------- -------- -------- Cash, end of the period $ 308 $ 1,261 $ 308 ======== ======== ======== Supplemental disclosures of cash flow information Cash paid for: Interest $ -- $ -- $ -- ======== ======== ======== Income taxes $ -- $ -- $ -- ======== ======== ======== See accompanying notes to the financial statements. 20
ERE MANAGEMENT, INC. (A Development Stage Company) July 31, 2010 and 2009 NOTES TO THE FINANCIAL STATEMENTS 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 - SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). 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 Company's significant estimates include income taxes provision and valuation allowance of deferred tax assets, the fair value of financial instruments; the carrying value and recoverability of long-lived assets, including the values assigned to and estimated useful lives of website development costs and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Actual results could differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS MEASURED ON A RECURRING BASIS 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 generally accepted accounting principles (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value 21
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. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. 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. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company's financial assets and liabilities, such as cash, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not however, practical to determine the fair value of advances from stockholders due to their related party nature. CARRYING VALUE, RECOVERABILITY AND 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 July 31, 2010 and 2009. FISCAL YEAR END The Company elected July 31 as its fiscal year ending date. 22
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 July 31, 2010, the Company had capitalized $5,950 related to its website cost, all but $495 having been amortized. RELATED PARTIES The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d.principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involvedb. description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. mounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. COMMITMENT AND CONTINGENCIES The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. 23
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company's business, financial position, and results of operations or cash flows. REVENUE RECOGNITION The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement that the services have been rendered to the customer, the sales price is fixed or determinable, and collectability is reasonably assured. INCOME TAXES The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when 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. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management's opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. 24
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 July 31, 2011 or 2010. 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 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 disclose the date through which subsequent events have been evaluated and that date is the date when the financial statements were issued. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS 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 requires 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 25
measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-28 "INTANGIBLES--GOODWILL AND OTHER (TOPIC 350): WHEN TO PERFORM STEP 2 OF THE GOODWILL IMPAIRMENT TEST FOR REPORTING UNITS WITH ZERO OR NEGATIVE CARRYING AMOUNTS" ("ASU 2010-28").Under ASU 2010-28, if the carrying amount of a reporting unit is zero or negative, an entity must assess whether it is more likely than not that goodwill impairment exists. To make that determination, an entity should consider whether there are adverse qualitative factors that could impact the amount of goodwill, including those listed in ASC 350-20-35-30. As a result of the new guidance, an entity can no longer assert that a reporting unit is not required to perform the second step of the goodwill impairment test because the carrying amount of the reporting unit is zero or negative, despite the existence of qualitative factors that indicate goodwill is more likely than not impaired. ASU 2010-28 is effective for public entities for fiscal years, and for interim periods within those years, beginning after December 15, 2010, with early adoption prohibited. In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-29 "BUSINESS COMBINATIONS (TOPIC 805): DISCLOSURE OF SUPPLEMENTARY PRO FORMA INFORMATION FOR BUSINESS COMBINATIONS" ("ASU 2010-29"). ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this Update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amended guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. 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 $77,259 at July 31, 2010, a net loss of $10,046 and net cash used in operating activities of $12,803 for the fiscal year then ended 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 generate sufficient 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 - RELATED PARTY TRANSACTIONS FREE OFFICE SPACE The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements. ADVANCES FROM STOCKHOLDER The amount owing to a stockholder is unsecured, non-interest bearing and is due on demand. 26
NOTE 5 - STOCKHOLDERS' DEFICIT The Company is authorized to issue 20,000,000 shares of $0.001 par value common stock. On July 16, 2007, the Company issued 1,600,000 shares of its common stock to Mr. Imperial for cash proceeds of $20,000. On July 17, 2007, Mr. Imperial was elected to the Board of Directors, and became the President, Secretary, and Treasurer of the Company. On January 24, 2008, the Company completed and closed an offering by selling 840,000 shares, of the 1,200,000 registered shares, of its common stock, par value of $0.001 per share, at an offering price of $0.05 per share for gross proceeds of $42,000. Costs associated with this offering were $13,500. NOTE 6 - INCOME TAXES DEFERRED TAX ASSETS At July 31, 2010, the Company had net operating loss ("NOL") carry-forwards for Federal income tax purposes of $77,259 that may be offset against future taxable income through 2030. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company's net deferred tax assets of approximately $26,268 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $26,268. Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. The valuation allowance increased approximately $3,416 and $7,416 for the fiscal years ended July 31, 2010 and 2009, respectively. Components of deferred tax assets at July 31, 2011 and 2010 are as follows: July 31, July 31, 2010 2009 -------- -------- Net deferred tax assets - Non-current: Expected income tax benefit from NOL carry-forwards $ 26,268 $ 22,852 Less valuation allowance (26,268) (22,852) -------- -------- Deferred tax assets, net of valuation allowance $ -- $ -- ======== ======== INCOME TAXES IN THE STATEMENTS OF OPERATIONS A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows: For the For the Year Ended Year Ended July 31, July 31, 2010 2009 -------- -------- Federal statutory income tax rate 34.0% 34.0% Change in valuation allowance on net operating loss carry-forwards (34.0)% (34.0)% -------- -------- Effective income tax rate 0.0% 0.0% ======== ======== NOTE 7 - SUBSEQUENT EVENTS The Company has evaluated all events that occurred after the balance sheet through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent events to be disclosed. 27
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES. DISCLOSURE CONTROLS AND PROCEDURES Under the supervision of and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the July 31, 2010. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective for the reasons described below. The disclosure controls and procedures that our principal executive officer and principal financial officer considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our principal executive officer and principal financial officer in connection with the audit of our financial statements as of July 31, 2010. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a Company's annual or interim financial statements will not be prevented or detected on a timely basis. In addition, we entered into several complex financing transactions that resulted in accounting adjustments during our year-end audit and quarterly reviews. Because these material weaknesses as to internal control over financial reporting also bear upon our disclosure controls and procedures, our principal executive officer and principal financial officer were unable to conclude our disclosure controls and procedures were effective. Despite the conclusion that disclosure controls and procedures were not effective as of the end of the period covered by this report, our principal executive officer and principal financial officer believe that the consolidated financial statements and other information contained in this annual report present fairly, in all material respects, our business, financial condition and results of operations. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: - Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; - Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and - Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements. 28
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. As of July 31, 2010, our principal executive officer and principal financial officer assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, he concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses. Our principal executive officer and principal financial officer believes that the material weaknesses set forth above did not have an effect on our financial results. However, our principal executive officer and principal financial officer believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods. This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only the management's report in this annual report. MANAGEMENT'S REMEDIATION INITIATIVES In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures: We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us. Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board. We anticipate that these initiatives will be at least partially, if not fully, implemented by December 31, 2010. Additionally, we plan to test our updated controls and remediate our deficiencies by July 31, 2011. CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. 29
ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE EXECUTIVE OFFICER AND DIRECTORS Our officers and directors and their ages and positions are as follows: Name Age Position ---- --- -------- Joselito Christopher G. Imperial 42 President, Secretary, Treasurer and Director Mr. Joselito Christopher G. Imperial has served as our President, Secretary and Treasurer as well as our sole Director since July 17, 2007. He has four years of experience in asset management, working with leading companies in the Philippines. Since 2003, Mr. Imperial has been the business and asset manager for the Sterling Group of Companies in Makita City. Prior to this, he was the real estate asset manager for McDonald's in the Philippines. Mr. Imperial's past work experience includes service as the business development officer for Kenny Rogers, Roasters Philippines Incorporated, and the co-brand of Seattle's Best Coffee, Coffee Masters Incorporated. COMMITTEES OF THE BOARD OF DIRECTORS To date, our Board of Directors has not established a nominating and governance committee, a compensation committee, nor an audit committee CODE OF ETHICS We currently do not have a Code of Ethics. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers, and stockholders holding more than 10% of our outstanding common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in beneficial ownership of our common stock. Executive officers, directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on review of the copies of such reports furnished to us for the period ended July 31, 2009, no Section 16(a) reports required to be filed by our executive officers, directors and greater-than-10% stockholders were not filed on a timely basis. ITEM 11. EXECUTIVE COMPENSATION. The particulars of compensation paid to the following persons during the fiscal period ended July 31, 2010 are set out in the summary compensation table below: * our Chief Executive Officer (Principal Executive Officer); * our Chief Financial Officer (Principal Financial Officer); * each of our three most highly compensated executive officers, other than the Principal Executive Officer and the Principal Financial Officer, who were serving as executive officers at the end of the fiscal year ended July 31, 2010; and * up to two additional individuals for whom disclosure would have been provided under the item above but for the fact that the individual was not serving as our executive officer at the end of the fiscal year ended July 31, 2010; (collectively, the "Named Executive Officers"): 30
SUMMARY COMPENSATION TABLE Non-Equity Nonqualified Incentive Deferred Fiscal Year Stock Option Plan Compensation All Other Ended Salary Bonus Awards Awards Compensation Earnings Compensation Total Name July 31, ($) ($) ($) ($) ($) ($) ($) ($) ---- ----- ------ ----- ------ ------ ------------ -------- ------------ ----- Joselito Christopher 2010 0 0 0 0 0 0 0 0 G. Imperial (1) 2009 0 0 0 0 0 0 0 0 ---------- (1) Mr. Imperial has been our President, Secretary, and Treasurer (Principal Executive Officer and Principal Financial Officer), and Director since July 17, 2007. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END Option Awards Stock Awards ---------------------------------------------------------------- ----------------------------------------------- Equity Incentive Equity Plan Incentive Awards: Plan Market or Awards: Payout Equity Number of Value of Incentive Number Unearned Unearned Plan Awards; of Market Shares, Shares, Number of Number of Number of Shares Value of Units or Units or Securities Securities Securities or Units Shares or Other Other Underlying Underlying Underlying of Stock Units of Rights Rights Unexercised Unexercised Unexercised Option Option That Stock That That That Options Options Unearned Exercise Expiration Have Not Have Not Have Not Have Not Name Exercisable(#) Unexercisable(#) Options(#) Price($) Date Vested(#) Vested($) Vested(#) Vested($) ---- -------------- ---------------- ---------- ----- ---- --------- --------- --------- --------- Joselito -- -- -- -- -- -- -- -- -- Christopher G. Imperial, PEO OPTION GRANTS AND EXERCISES There were no option grants or exercises by any of the executive officers named in the Summary Compensation Table above. EMPLOYMENT AGREEMENTS We have not entered into employment and/or consultant agreements with our Directors and officers. COMPENSATION OF DIRECTORS All directors receive reimbursement for reasonable out-of-pocket expenses in attending board of directors meetings and for promoting our business. From time to time we may engage certain members of the board of directors to perform services on our behalf. In such cases, we compensate the members for their services at rates no more favorable than could be obtained from unaffiliated parties. Our directors have not received any compensation for the fiscal year ended July 31, 2010. 31
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The table below sets forth the number and percentage of shares of our common stock owned as of September 8, 2011, by the following persons: (i) stockholders known to us who own 5% or more of our outstanding shares, (ii) each of our Directors, and (iii) our officers and Directors as a group. Unless otherwise indicated, each of the stockholders has sole voting and investment power with respect to the shares beneficially owned. Name and Address of Amount and Nature Percentage of Title of Class Beneficial Owner (2) of Beneficial Ownership Class (1) -------------- -------------------- ----------------------- --------- Common Stock Joselito Christopher G. 1,600,000 65.5% Imperial, PEO All officers as a Group 2,440,000 65.5% ---------- (1) Based on 2,440,000 shares of our common stock outstanding. CHANGES IN CONTROL There are no existing arrangements that may result in a change in control of the Company. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS. The following table sets forth information regarding our equity compensation plans. Number of Securities to be Number of Securities Issued Upon Exercise of Weighted-Average Exercise Remaining Available for Outstanding Options, Price of Outstanding Options, Future Issuance Under Warrants and Rights Warrants and Rights Equity Compensation Plans Plan Category (a) (b) (excluding column (a)) ------------- ------------------- ------------------- ------------------------- Equity Compensation Plans -- -- -- Approved by Security Holders Equity Compensation Plans Not -- -- -- Approved by Security Holders Total -- -- -- 32
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Other than the transactions discussed below, we have not entered into any transaction since the last fiscal year nor are there any proposed transactions that exceed one percent of the average of our total assets at year end for the last three completed fiscal years in which any of our Directors, executive officers, stockholders or any member of the immediate family of any of the foregoing had or is to have a direct or indirect material interest. On July 16, 2007, we sold 1,600,000 shares of our common stock to Mr. Joselito Christopher G. Imperial, our President, Secretary, Treasurer and sole Director, for cash payment to us of $20,000. We believe this issuance was exempt under Regulation S of the Securities Act. No advertising or general solicitation was employed in offering the securities. The offering and sale were made only to Mr. Joselito Christopher G. Imperial who is a non-U.S. citizen, and transfer was restricted by us in accordance with the requirements of the Securities Act of 1933. On September 26, 2007, intellectual property rights were received from Mr. Joselito Christopher G. Imperial, our President, Secretary, Treasurer and sole Director, for nil value. ERE received intellectual property rights relating to the development of an online CMS software product for the real estate industry. On March 13, 2009, Mr. Joselito Christopher G. Imperial, our President, Secretary, Treasurer and sole Director, provided the Company with a working capital loan in the amount of $9,985 (2008-$0). The loan is non-interest bearing, unsecured, and has no specific terms of repayment. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES AUDIT FEES For the year ended July 31, 2010, Davis Accounting Group, P.C. billed us for $4,500 in audit fees. For the years ended July 31, 2010 and 2009, Li & Company, PC billed us for $7,500 in audit fees. REVIEW FEES Davis Accounting Group, P.C., billed us $6,000 for reviews of our quarterly financial statements in 2010 that are not reported under Audit Fees above. Li & Company, PC had no billing. TAX AND ALL OTHER FEES We did not pay any fees to Davis Accounting Group, P.C.for tax compliance, tax advice, tax planning or other work during our fiscal year ended July 31, 2010. Li & Company, PC had no billing. PRE-APPROVAL POLICIES AND PROCEDURES We have implemented pre-approval policies and procedures related to the provision of audit and non-audit services. Under these procedures, our board of directors pre-approves all services to be provided by Moore and Associates, Chartered and the estimated fees related to these services. 33
PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES Exhibit Description ------- ----------- 3.1 Articles of Incorporation. (Attached as an exhibit to our Registration Statement on Form SB-2 originally filed with the SEC on November 9, 2007 and incorporated herein by reference.) 3.2 Bylaws. (Attached as an exhibit to our Registration Statement on Form SB-2 originally filed with the SEC on November 13, 2007 and incorporated herein by reference.) 31.1 Certification of Joselito Christopher G. Imperial pursuant to Rule 13a-14(a). 32.1 Certification of Joselito Christopher G. Imperial pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 34
SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ERE MANAGEMENT, INC. September 8, 2011 By: /s/ Joselito Christopher G. Imperial ----------------------------------------------------- Joselito Christopher G. Imperial President, Treasurer, Secretary and Director (Principal Executive and Principal Financial Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated. Signatures Title Date ---------- ----- ---- /s/ Joselito Christopher G. Imperial President, Treasurer, Secretary, September 8, 2011 -------------------------------------------- and Director Joselito Christopher G. Imperial 3