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

FORM 10-Q

(Mark One)

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act Of 1934

For the quarterly period ended September 30, 2012

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act Of 1934

For the transition period from __________ to __________

Commission File Number:    000-08301

WHITEMARK HOMES, INC.
(Exact name of registrant as specified in its charter)
                                                                                                                       
Colorado 25-1302097 
(State or other jurisdiction of incorporation or organization)
                              (I.R.S. Employer Identification No.)
 
7350 S. Tamiami Trail, Suite 64
Sarasota, FL    34231
 (Address of principal executive offices, including Zip Code)
 
(941) 952-5885
(Issuer’s telephone number, including area code)

 (Former name or former address if changed since last report)
 
Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes o    No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  o    No   x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer          o Accelerated filer           o
Non-accelerated filer          o   Smaller reporting company        x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes x    No o
 
State the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date: 97,962,131 shares of common stock as of October 26, 2012.
 

 
 
 
 

 
WHITEMARK HOMES, INC.
FORM 10-Q
September 30, 2012



TABLE OF CONTENTS
 
 
    Page No.
 
PART I. - FINANCIAL INFORMATION
 
Item 1.
Financial Statements.
 
 
Consolidated Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011
 3
 
Consolidated Statements of Operations -
    For the Three and Nine Months Ended September 30, 2012 and 2011 (unaudited)
 4
 
Consolidated Statements of Cash Flows -
    For the Three and Nine Months Ended September 30, 2012 and 2011 (unaudited)
 5
 
Notes to Unaudited Consolidated Financial Statements.
 6
     
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations.
 14
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
 14
Item 4.
Controls and Procedures.
 14
     
 
PART II - OTHER INFORMATION
 
Item 1.
Legal Proceedings
 15
Item 1A.
Risk Factors
 15
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 15
Item 3.
Defaults Upon Senior Securities
 15
Item 4.
Mine Safety Disclosures
 15
Item 5.
Other Information.
 15
Item 6.
Exhibits.
 15
     
SIGNATURES
 16
 

 
 
2

 
PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


WHITEMARK HOMES, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
 
             
   
September 30,
   
December 31,
 
   
2012
   
2011
 
   
(Unaudited)
       
ASSETS
           
Current Assets:
           
  Cash
  $ 2,625     $ 5,380  
                 
     Total Current Assets
    2,625       5,380  
                 
     Total Assets
  $ 2,625     $ 5,380  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
Current Liabilities:
               
  Convertible notes payable, net
  $ 306,959     $ 207,492  
  Notes payable
    63,894       63,894  
  Accounts payable
    154,109       190,360  
  Accrued salaries
    256,310       211,310  
  Accrued expenses
    78,572       56,083  
                 
     Total Current Liabilities
    859,844       729,139  
                 
     Total Liabilities
    859,844       729,139  
                 
Stockholders' Deficit:
               
  Common stock $.001 par value; 100,000,000 shares authorized;
               
  97,962,131 and 97,962,131 shares issued and outstanding at
               
  September 30, 2012 and December 31, 2011, respectively
    97,962       97,962  
  Additional paid-in capital
    27,236,990       27,236,990  
  Accumulated deficit
    (28,192,171 )     (28,058,711 )
                 
     Total Stockholders' Deficit
    (857,219 )     (723,759 )
                 
     Total Liabilities and Stockholders' Deficit
  $ 2,625     $ 5,380  
 
See accompanying notes to the unaudited consolidated financial statements.
 
 
3

 
 
 
WHITEMARK HOMES, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
                         
   
For the Three Months Ended
   
For the Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                         
REVENUES
  $ -     $ -     $ -     $ -  
                                 
OPERATING EXPENSES:
                               
  Compensation and related benefits
    15,000       15,000       45,000       45,000  
  Professional fees
    22,303       25,647       55,979       77,041  
  Other general and administrative
    -       -       2,015       -  
                                 
     Total Operating Expenses
    37,303       40,647       102,994       122,041  
                                 
LOSS FROM OPERATIONS
    (37,303 )     (40,647 )     (102,994 )     (122,041 )
                                 
OTHER INCOME (EXPENSES):
                               
  Interest expense
    (9,347 )     (13,909 )     (30,466 )     (41,598 )
                                 
     Total Other Income (Expenses)
    (9,347 )     (13,909 )     (30,466 )     (41,598 )
                                 
NET LOSS
  $ (46,650 )   $ (54,556 )   $ (133,460 )   $ (163,639 )
                                 
Net Loss per Common Share:
                               
Basic and diluted
  $ -     $ -     $ -     $ -  
                                 
Weighted Average Shares Outstanding:
                               
Basic and diluted
    97,962,131       97,962,131       97,962,131       97,962,131  
                                 


See accompanying notes to the unaudited consolidated financial statements.
 
 
4

 



WHITEMARK HOMES, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
             
   
For the Nine Months
 
   
Ended September 30,
 
   
2012
   
2011
 
   
(Unaudited)
   
(Unaudited)
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
  $ (133,460 )   $ (163,639 )
Adjustments to reconcile net loss to net cash used in
               
  operating activities:
               
     Non-cash professional fee
    -       30,000  
     Interest expense
    4,445       30,000  
Changes in assets and liabilities:
               
     Accounts payable
    (36,251 )     45,820  
     Accrued salaries
    45,000       45,000  
     Accrued expenses
    22,489       12,819  
                 
NET CASH USED IN OPERATING ACTIVITIES
    (97,777 )     -  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
  Proceeds from convertible notes payable
    95,022       -  
                 
NET CASH PROVIDED BY FINANCING ACTIVITIES
    95,022       -  
                 
Net Decrease in Cash
    (2,755 )     -  
                 
Cash, Beginning of period
    5,380       5,380  
                 
Cash, End of Period
  $ 2,625     $ 5,380  
                 
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
               
  Cash paid for interest
  $ -     $ -  
  Cash paid for income taxes
  $ -     $ -  

 
See accompanying notes to the unaudited consolidated financial statements.
 
 
5

 
 
WHITEMARK HOMES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
September 30, 2012
 
 
 
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company

Whitemark Homes, Inc. (“Whitemark” or the “Company”) was incorporated on July 30, 1975 under the laws of the State of Colorado. On April 1, 2000, Whitemark disposed of its prior business operations and acquired Whitemark Homes, Inc. (“Whitemark Florida”) along with certain related entities (the “Whitemark Group”) in a transaction accounted for as a reverse acquisition. Whitemark Florida changed its name to Whitemark Homes of Florida, Inc. and the Company changed its name to Whitemark Homes, Inc. Effective September 30, 2007, the Company discontinued its real estate development operations.

Basis of Presentation and Going Concern

Management acknowledges its responsibility for the preparation of the accompanying interim consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the results of its operations for the interim period presented. These consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to consolidated financial statements included in the Company’s Form 10-K annual report for the year ended December 31, 2011.  The accompanying unaudited consolidated financial statements for Whitemark Homes and Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S.”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America.  The consolidated financial statements include the Company and its wholly-owned inactive subsidiaries, Whitemark Homes of Florida, Inc., a Florida corporation, which wholly owns Home Funding, Inc, a Florida corporation.  White Homes of Florida, Inc. also holds a 99% interest in two inactive Florida limited liability partnerships; Whitemark at Fox Glen, Ltd. and Sheeler Hills Ltd. and a wholly-owned interest in four limited liability companies; Whitemark at Oak Park, LLC, Whitemark at Corner Lake, LLC, Whitemark at Glenbrook, LLC, and Whitemark at Little Creek. LLC. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements.

As reflected in the accompanying consolidated financial statements, the Company had a net loss and net cash used in operations of $133,460 and $97,777, respectively, for the nine months ended September 30, 2012 and a working capital deficiency, accumulated deficit, and a stockholders’ deficit of $857,219, $28,192,171, and $857,219, respectively, at September 30, 2012. In addition, the Company was inactive as of September 30, 2012, currently has no operations or sources of revenue and is in default on certain promissory notes. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan which involves identifying a merger with an operating company, raise additional capital, and generate revenues. Currently, management is seeking capital to implement its business plan.   Management believes that the actions presently being taken provide the opportunity for the Company to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.



 
6

 
 
WHITEMARK HOMES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
September 30, 2012
 
 
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in the 2012 and 2011 periods include the valuation of deferred tax assets and the valuation of the beneficial conversion features on convertible debt.

Fair Value of Financial Instruments

The Company adopted ASC Topic 820, Fair Value Measurements. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

·  
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
·  
Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
·  
Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the balance sheets for cash, accounts payable, accrued expenses, notes payable, and amounts due to related parties approximate their fair market value based on the short-term maturity of these instruments. The Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with ASC Topic 820.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents at September 30, 2012 and December 31, 2011.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash. The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk.  The Company maintains its cash in accounts with major financial institutions in the United States. Deposits in these banks may exceed the amounts of insurance provided on such deposits.  As of September 30, 2012 and December 31, 2011, there was $2,625 and $5,380, respectively, held in an escrow account maintained by the Company’s attorney and bank deposits did not exceed federally insured limits.  Historically, the Company has not experienced any losses on its deposits of cash.
 
 
 
7

 
 
WHITEMARK HOMES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
September 30, 2012
 
 
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

The Company is governed by the tax laws of the United States. The Company utilizes ASC Topic 740, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.  Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in its financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of September 30, 2012 and December 31, 2011, management believes the Company had no material uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

Stock-based Compensation

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50.

Advertising

Advertising is expensed as incurred. For the nine months ended September 30, 2012 and 2011, the Company did not incur advertising expenses.

Research and Development

Research and development costs are expensed as incurred. For the nine months ended September 30, 2012 and 2011 the Company did not incur research and development costs.




 
8

 
 
WHITEMARK HOMES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
September 30, 2012
 



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Net Loss per Share of Common Stock
 
Basic net loss per common share is computed by dividing net loss available to common shareholders 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, common stock equivalents and potentially dilutive securities outstanding during each period.  Potentially dilutive common shares consist of common shares issuable upon the conversion of convertible promissory notes (using the if-converted method). All potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following:

   
Nine Months ended September 30,
 
   
2012
   
2011
 
Convertible notes
    161,183,572       130,213,913  
Total
    161,183,572       130,213,913  

These common stock equivalents may be dilutive in the future. The Company’s authorized number of shares of common stock is limited to 100,000,000 common shares and 97,962,131 common shares were outstanding at September 30, 2012; only 2,037,869 additional shares are authorized for issuance as of September 30, 2012.

Recent Accounting Pronouncements

Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

NOTE 2 – CONVERTIBLE PROMISSORY NOTES

Convertible Promissory Note and Related Consulting Agreement

On January 1, 2010, the Company entered into a 24-month consulting agreement (the “Consulting Agreement”) with a Consultant for business development services. In connection with the consulting agreement, the Company agreed to pay the Consultant an aggregate of $80,000 which payment is evidenced by a convertible promissory note (the “Convertible Note”) in the amount of $80,000. The Consulting Agreement terminated on December 31, 2011. The convertible promissory note is unsecured and was due on the earlier of a) the date the Company raised $80,000 in a private placement of its common stock or entry into alternative loan agreements or b) January 1, 2012. This Convertible Note did not accrue any interest during the term of this Note, and until 5 business days after the Maturity Date stated above. Since the Convertible Note was not paid in full by the end of the fifth day following the Maturity Date, the Convertible Note now bears interest at the rate of 15% per annum, which interest  began accruing after such fifth day following the Maturity Date, until the Note is paid in full. Interest is computed on the basis of a 360-day year. The Convertible Note (and any accrued and unpaid interest) is convertible into shares of the Company’s common stock from time to time, at the sole option of the Payee until such Note is paid in full, upon 5 days written notice from the Payee to the Company of the Payee's desire to convert the Convertible Note into shares of common stock at the rate of one share of the Company’s common stock for each $0.001 owed to Payee pursuant to the Convertible Note.
 
 
9

 
 
WHITEMARK HOMES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
September 30, 2012
 
 
 
NOTE 2 – CONVERTIBLE PROMISSORY NOTES (continued)

Convertible Promissory Note and Related Consulting Agreement (continued)

In connection with this Consulting Agreement, the Company recorded a prepaid expense of $80,000 which was amortized over the contract term. Accordingly, for the nine months ended September 30, 2012 and 2011, the Company recorded professional fees of $0 and $30,000, respectively.  Additionally, pursuant to ASC 470-20 and related topics, the Company evaluated whether a beneficial conversion feature exists by comparing the conversion price of the Convertible Note with the fair value of the common stock at the commitment date. In connection with the Convertible Note, the Company recorded a beneficial conversion since the conversion price was less than the fair market value of the common stock. The total beneficial conversion feature included in the $80,000 Convertible Note payable resulted in an initial debt discount of $80,000 to be amortized over the term of the notes with a credit to additional paid-in capital.  For the nine months ended September 30, 2012 and 2011, the Company recorded interest expense for the amortization of the debt discount of $0 and $30,000, respectively. As of the date of this report this loan was in default.

Convertible Promissory Notes

During 2010, the Company entered into convertible promissory note agreements with 4 individuals and one third party company for an aggregate amount of $108,182. These convertible note are unsecured, bear interest at 9.0% per annum and are payable on demand. The Holders shall have the right, exercisable at any time from and after the date of issuance of these convertible promissory notes until the respective note is fully paid, to convert the entire outstanding and unpaid principal of these notes, in whole or in part, upon delivery of a notice of conversion into the Company's common stock at the conversion price which shall be the average of the lowest three trading prices for the Company’s common stock during the 20 trading day period ending one trading day prior to the conversion date, subject to adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Company’s common stock. These arrangements represent a fixed monetary conversion value of $108,182 based on the variable share quantity to be issued.

On April 15, 2010, the Company entered into a convertible promissory note agreement with the above Consultant for $7,310. This convertible note is unsecured, bears interest at 9.0% per annum and is payable on demand. The Holder shall has the right, exercisable at any time from and after the date of issuance of this convertible promissory note until the note is fully paid, to convert the entire outstanding and unpaid principal of this note, in whole or in part, upon delivery of a notice of conversion into the Company's common stock at the conversion price which shall be the average of the lowest three (3) trading prices for the Company’s common stock during the 20 trading day period ending one trading day prior to the conversion date, subject to adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Company’s common stock. This arrangement represents a fixed monetary conversion value of $7,310 based on the variable share quantity to be issued.



 
10

 
 
WHITEMARK HOMES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
September 30, 2012
 


NOTE 2 – CONVERTIBLE PROMISSORY NOTES (continued)

On December 9, 2011, the Company entered into a convertible promissory note agreement with an individual for $12,000.  This convertible note is unsecured, bears interest at 9.0% per annum and is payable on demand. The Holder shall have the right,  exercisable  at any time from and after the date of issuance of this convertible promissory note until this note is fully paid, to convert the entire outstanding  and  unpaid principal of this note, in whole or in part, upon delivery of a notice  of conversion  into the  Company's common stock at the conversion price which  shall be the  average of the lowest  three (3) trading prices for the Company's common stock during the 20 trading day period ending one trading day prior to the conversion date, subject to adjustment from time to time for stock splits, stock dividends,  combinations, capital reorganizations and similar events relating to the Company's common stock.  This arrangement represents a fixed monetary conversion value of $12,000 based on the variable share quantity to be issued.

In January and February 2012, the Company entered into 4 convertible promissory note agreements with 2 third party companies for an aggregate amount of $55,022. These convertible notes are unsecured, bear interest at 9.0% per annum and are payable on demand. The Holder shall have the right, exercisable at any time from and after the date of issuance of these convertible promissory notes until the notes are fully paid, to convert the entire outstanding and unpaid principal of these note, in whole or in part,  upon  delivery of a notice of conversion into the Company's common stock at the conversion price which shall be the average of the lowest three (3) trading prices for the Company's common stock during the 20 trading day period ending one trading day prior to the conversion date, subject to adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations  and similar events relating to the Company's common stock. These arrangements represent a fixed monetary conversion value of $55,022 based on the variable share quantity to be issued.

In October 2012, in order to properly memorialize certain demand loans received and previously disclosed, effective on March 9, 2012 and on June 21, 2012, the Company entered into two convertible promissory note agreements with a third parties company in the amount of $15,000 and $25,000, respectively. These convertible notes are unsecured, bear interest at 9.0% per annum and are payable on or before December 31, 2012. The Holders shall have the right, exercisable at any time from and after the date of issuance of these convertible promissory notes until the notes are fully paid, to convert the entire outstanding and unpaid principal of these note, in whole or in part,  upon  delivery of a notice of conversion into the Company's common stock at the conversion price which shall be 90% of the average of the lowest three (3) closing prices for the Company's common stock during the 20 trading day period ending one trading day prior to the conversion date. Pursuant to ASB Topic 470-20-525 (Debt with conversion and other options), since the promissory notes had a fixed conversion rate of 90% of the stock price, the Company determined it had a fixed maximum amount that can be settled for the debt. Accordingly, the Company accrued a put premium amount of $4,445 in this period since the debt is convertible at a fixed monetary amount of $44,445 and for the nine months ended September 30, 2012, the Company recorded interest expense for this premium of $4,445.


 
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WHITEMARK HOMES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
September 30, 2012
 
 
 
NOTE 2 – CONVERTIBLE PROMISSORY NOTES (continued)

At September 30, 2012 and December 31, 2011, convertible promissory notes consisted of the following:
 
   
September 30,
   
December 31,
 
   
2012
   
2011
 
Convertible notes
  $ 302,514     $ 207,492  
Fixed monetary conversion put premium
    4,445       -  
Convertible notes
  $ 306,959     $ 207,492  

NOTE 3 – NOTES PAYABLE

On October 15, 2009, the Company entered into a note agreement with a third party company for $63,360. The note is unsecured, bears interest at 8.0% and was due on March 31, 2010.  During the year ended December 31, 2009, the Company converted principal of $26,546 into 42,000,000 shares of the Company’s common stock. At September 30, 2012 and December 31, 2011, the principal amount due under this note amounted to $36,814 and $36,814, respectively. The note is currently in default.

On December 8, 2009, the Company entered into a note agreement with an individual for $27,080 which was made to convert accounts payable to a note. The note is unsecured, bears interest at 8.0% and was due on March 31, 2010. At September 30, 2012 and December 31, 2011, the principal amount due under this note amounted to $27,080 and $27,080, respectively.  The note is currently in default.

NOTE 4 – STOCKHOLDERS’ DEFICIT

Common Stock

At September 30, 2012 and December 31, 2011, there were not enough authorized shares to cover the conversion of outstanding convertible promissory notes into the Company’s common stock. (see Note 1 under “Net Loss per Share of Common Stock”.

NOTE 5 – MATERIAL CONTRACTS

On October 2, 2008, the Company entered into a 36-month consulting agreement with a consultant to provide management services to the Company.  For services rendered, the Company agreed to pay the consultant $60,000 per year. For the nine months ended September 30, 2012 and 2011, the Company recorded professional fees of $0 and $45,000, respectively. At September 30, 2012 and December 31, 2011, amounts due to this consultant amounted to $109,934 and $119,794, respectively, and are included in accounts payable.


 
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WHITEMARK HOMES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
September 30, 2012
 
 
NOTE 6 - COMMITMENT

On January 4, 2012, the Company entered into an employment agreement with its chief executive officer (“CEO”). The agreement is deemed to have begun on January 1, 2010 and shall continue until terminated.  This agreement shall terminate at any time, with or without cause. The Company shall pay to CEO an annual salary of $60,000. Pursuant to the agreement, the CEO shall have the right exercisable at any time from and after the date of this employment agreement until all accrued salary is fully paid, to convert the entire accrued and unpaid salary, in whole or in part, upon delivery of a notice of conversion into fully paid and non-assessable shares of the Company's common stock, at the conversion price equal to the average of the lowest three (3) trading prices for the Company’s common stock during the 20 trading day period ending one trading day prior to the conversion date, subject to adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Company’s common stock. This arrangement represents a fixed monetary conversion value based on the variable share quantity to be issued.





 
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Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operation

The Company has been inactive for the past several years.  The Company has no means to generate any revenue. The Company is pursuing business opportunities, including merger opportunities with other businesses which may result in a reverse-take-over of the Company.  However, there is no guarantee that the Company will be successful in these endeavors.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable to smaller reporting companies.

Item 4.  Controls and Procedures.
 
     (a) The Company  maintains a system of controls and procedures  designed to ensure that  information  required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended ("1934 Act"), is recorded, processed, summarized and reported,  within time periods specified in the SEC's rules and forms and to ensure that information  required to be disclosed by the Company  in the  reports  that it files or submits under the 1934 Act, is accumulated and communicated to the Company's management, including its Principal  Executive and Financial  Officers, as appropriate  to allow timely decisions regarding required disclosure. As of September 30, 2012, the Company's Principal Executive and Financial Officers evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures.  Based on that evaluation, the Principal Executive and Financial Officers concluded that the Company's disclosure controls and procedures were effective

     (b) Changes in Internal Controls.  There were no changes in the Company's internal control over financial reporting during the quarter ended June 30, 2012, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

 
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PART II

Item 1.       Legal Proceedings
 
    None
 
Item 1A.   Rick Factors
 
    Not applicable to smaller reporting companies.

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds
 
    None

Item 3.      Defaults Upon Senior Security
 
    We are in default on our convertible debt and notes payable as described elsewhere herein.

Item 4.      Mines Safety Disclosures
 
    Not applicable.

Item 5.      Other Information
 
    None
 
Item 6.      Exhibits.

Exhibits

  31.1 
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  31.2 
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  32 
Certification pursuant to Section 906 of the Sarbanes-Oxley Act.
  101
Interactive Data Files

 
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SIGNATURES

Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the registrant  has duly  caused  this  report  to be  signed  on its  behalf by the undersigned thereunto duly authorized.


  WHITEMARK HOMES, INC.  
       
October 26, 2012
By:
/s/ Barry Reese  
    Barry Reese, President and Principal Executive and Financial Officer  
       
       
             
 
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