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

FORM 10-K
 
x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the fiscal year ended July 31, 2013
   
o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
   
For the transition period from _________ to ________
   
Commission file number: 333-162597
 
PRIME ESTATES AND DEVELOPMENTS, INC.
(Exact name of registrant as specified in its charter)
 
Nevada
 
 27-0611758
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
     
200 South Wacker Drive, Suite 3100, Chicago, 60606, IL.
 
60606
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number: (312) 674.4529
 
Securities registered under Section 12(b) of the Exchange Act:
 
Title of each class
 
Name of each exchange on which registered
     
None
 
not applicable
 
Securities registered under Section 12(g) of the Exchange Act:
 
Title of each class
 
Name of each exchange on which registered
     
Common Stock, par value $0.001
 
not applicable
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o  No x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes x   No o
 
Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 x   No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o  No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 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. 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 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
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 o  No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $3,468,400 as of January 31, 2013.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 25,585,532 as of September 13, 2013.
 


 
 

 
TABLE OF CONTENTS
 
PART I
      3  
           
Item 1.
Business
    3  
Item 2.
Properties
    6  
Item 3.
Legal Proceedings
    6  
Item 4.
Mine Safety Disclosures
    6  
           
PART II
      7  
           
Item 5.
Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
    7  
Item 6.
Selected Financial Data
    8  
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    8  
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
    13  
Item 8.
Financial Statements and Supplementary Data
    14  
Item 9.
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
    14  
Item 9A(T).
Controls and Procedures
    14  
Item 9B.
Other Information
    15  
           
PART III
      16  
           
Item 10.
Directors, Executive Officers and Corporate Governance
    16  
Item 11.
Executive Compensation
    18  
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    22  
Item 13.
Certain Relationships and Related Transactions, and Director Independence
    23  
Item 14.
Principal Accounting Fees and Services
    23  
           
PART IV
         
           
Item 15.
Exhibits, Financial Statements Schedules
    24  
Item 15.
Exhibits
    41  
           
SIGNATURES
    42  
 
 
2

 
 
PART I
 
Item 1.   Business
 
Company Overview

Prime Estates and Developments, Inc. (“Prime Estates”, “The Company”, “we”, or “us”) was incorporated in the State of Nevada on July 21, 2009 for the purpose of acquiring and operating commercial real estate and real estate related assets.  Our principal office is located at 200 South Wacker Drive, Suite 3100, Chicago, Illinois 60606. Telephone: 312.674.4529.

Our Business

We intend to acquire and operate commercial real estate and real estate related-assets in Greece, Bulgaria, Romania and the United States. We intend to focus on acquiring commercial properties such as those requiring development, redevelopment or repositioning, those located in markets and submarkets with what we believe to be high growth potential and those available from sellers who are distressed or face time-sensitive deadlines.

In addition, given current economic circumstances in the real estate industry, our investment strategy may also include investments in real estate-related assets that we believe present opportunities for significant current income. Such investments may also have what we believe to be opportunities for capital gain, whether as a result of a discount purchase or related equity participations.

We may acquire a wide variety of commercial properties, including office, industrial, retail, hospitality, recreation and leisure, single-tenant, multifamily and other real properties such as forests. These properties may be existing, income-producing properties, newly constructed properties or properties under development or construction and may include multifamily properties purchased for conversion into condominiums and single-tenant properties that may be converted for multifamily use.

Assuming we raise sufficient funding, our investment strategy is designed to provide investors with a diversified portfolio of real estate assets.  Although we have reviewed the real estate markets in the countries in which we intend to acquire properties, we have no contract, agreement or commitment to acquire any property as of the date of this filing.

Specifically, we have taken the following steps in furtherance of our business plan:

We have enriched our knowledge in the real estate market in Greece, Bulgaria, Romania and the United States by studying the existing statistics on this market and by having extensive discussions with many experts of the market as follows:

·
Overall we have reviewed over 50 properties or development projects in two countries, the USA and Greece.
 
·
The types of properties we have reviewed are residential and commercial.
 
·
Overall we have met with many real estate agents in two countries, the USA and Greece.
 
·
We have contacted two appraisers, one in the U.S. and another one in Greece. The appraiser we contacted in Greece is able to make appraisals also in Bulgaria and in Romania. In his team he also includes other scientists such as architects, engineers, topographers and seismologists.
 
·
We have signed Consulting Agreements with consultants that will assist the company in Management, Public Relations, Investor Relations, Strategic Planning, Corporate organization & structure, estimation, due diligence, acquisition, development, renovation, sale, and management of Real Estate properties, locating proper Real Estate, management of Real Estate, and locating and introducing buyers for Real Estate that the company wishes to lease or sell.
 
·
In July 2010 we signed a Joint Venture Agreement with Madison Realty Advisors, LLC (“Madison”). Madison has extensive experience in the business of acquiring, financing, managing and selling commercial real estate properties for itself and third parties. Madison will actively seek commercial real estate properties for acquisition. In connection therewith, Madison will negotiate the acquisition, perform due diligence on the properties, arrange financing and close the properties. Then perform property management, asset management and be responsible for the ultimate disposition of the properties. All property acquisitions shall be subject to the approval of Prime. In June 2013 we canceled the Joint Venture Agreement with Madison due to inactivity.
 
 
3

 
 
In December 2010 we started to examine the possibility of adding forests, or signing joint venture agreements with companies or individuals that own management rights of forests, in order to take advantage of the economic benefits that can derive from these forests, including the so called “carbon credits”. A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one ton of carbon dioxide or carbon dioxide equivalent.  We could sell carbon credits that derive from forestry to commercial and individual customers who are interested in lowering their carbon footprint.

Our discussions with various individuals concerning these properties and projects has included general discussions of acquiring properties directly either ourselves or in a joint venture with others or of developing properties either ourselves or in a joint venture with others, as described above.  As of the date of this filing, all such discussions have been general and we have no specific plan as to whether we will acquire or develop ourselves or jointly any specific properties or projects.
 
On February 17, 2011, we entered into an agreement with GreenEra, Ltd., a company formed under the laws of the Cyprus Republic, to acquire the rights of exploitation of a 60,000 hectares (approximately 150,000 acres) of forest land in Novo Aripuana, State of Amazonas, Brazil.  This property can be developed and can probably produce carbon credits that when sold could produce profits. Any profits that will be gained from the development of this property or through the sale of the carbon credits will be shared 50-50 between PMLT and the owner of the forest land.

The parties agree that:
 
·
Prime Estates will pay GreenEra $5,000 per month for approximately 34 years beginning in April 1, 2011.
 
·
Prime Estates will obtain financing sufficient to pay for all costs associated with obtaining the carbon credits, but not to exceed $1.2 million.
 
·
GreenEra will be the developer responsible for performing all actions necessary to obtain the credits.
 
GreenEra acquired the exclusive rights to develop and to obtain these carbon credits when it contracted with the landowner on December 28, 2009.  Therefore, Prime Estates & Developments Inc. has inherited the rights and obligations of that agreement which stipulates, in part:
 
·
The landowner has the right to veto sales of any credits under $2.00.
 
·
If GreenEra is unable to receive a carbon credit certification until December 31, 2013, or cannot sell, convey, assign, lend or sublet, carbon credits or any other rights or products the contract is voided.
 
Our Director, Mr. Panagiotis Drakopoulos is also a shareholder but not a director or officer of GreenEra Ltd.
 
Since the inception of the agreement with GreenEra, we have taken the following steps to implement our business plan:

·
We have researched the potential of the carbon credit business, especially for carbon credits that could derive from the preservation of forests.
 
·
We track and analyze the carbon credit market on a daily basis in order to develop a sound understanding of the potential for generating income and the associated risks of the market.
 
·
We have contacted companies specializing in the field of forest development and carbon credit issuance, in order conduct Project Development Design (PDD) studies.
 
·
We are regularly engaged in efforts to receive debt or equity financing for this project.
 
·
We continue to seek out relationships with other companies in order to develop collaborations that may minimize risk in our forestland project and/or will provide our company with income.
 
 
4

 
 
Until the day of this filing there have been no other developments concerning the agreement with GreenEra Ltd.

In August 18, 2011, we signed a JV with Pelion Exclusive. Pelion Exclusive will actively seek and propose investment opportunities especially in the area of distressed residential and commercial real estate properties for merger and/or acquisition. Pelion Exclusive may also assist Prime in the financing and development of real estate projects. It may also perform property management, asset management and propose possible buyers for the ultimate disposition of the properties. On the 17th of August 2013 the JV with Pelion Exclusive expired.

During the first three months of 2012, we had been involved in discussions with Mave Sa, a Greek logistics company that holds real estate assets, concerning a potential business combination. In May 2013 we decided to terminate all discussion concerning any business combination with Mave SA.

Since November 2012 we have focused on locating real estate opportunities in the Chicago metropolitan area. We examined many possible investments. We selected 2 residential and 7 commercial properties as the focus of our efforts.
 
The value of these real estate assets ranges from $282,000 to $3,750,000. Most of these properties are already leased to credible tenants and, if acquired, would provide us with a relatively stable stream of revenue and cash flow. To facilitate acquisition of these real estate assets we took the following steps:
 
·
We contacted accredited investors and funds for equity financing;
 
·
We contacted financial institutions in order to secure debt financing
 
Until the day of this filing we have not been able to raise funds toward acquisition of these properties, but we continue to work on securing the funds to do so.

On April 22, 2013, we entered into an agreement with Greenbase Ltd. (“Greenbase”), a company organized under the laws of Cyprus, and with the sellers individually, to acquire all of the issued and outstanding stock of Greenbase in exchange for 100,000,000 shares of our common stock. On the 28th of May 2013 we terminated the agreement with Greenbase Ltd.
 
There is no limitation in the amount of funds we may invest in either property acquisition or property development. There is no limitation on the percentage allocation of funds or assets between property acquisition and property development or between 100% ownership or joint venture ownership.
 
We are currently involved in active discussions with a company located in Cyprus for a potential merger or business combination. As of the date of this filing, there is no binding contract, commitment or agreement with this candidate and there is no assurance that there will ever be one or that any such acquisition or combination will occur.

Competition

We face significant competition both in acquiring properties, repositioning properties and in attracting renters. Our market area is highly competitive, and we will face direct competition from a significant number of real estate investors, many with a local, state-wide or regional presence and, in some cases, a national presence. Many of these investors are significantly larger and have greater financial resources than we do. We have significantly less capital, assets, revenues, employees and other resources than our local, regional and/or national and international competition.

We will compete based upon the following factors:  We intend to blend best-in-class, sell-side fundamental research with an established quantitative construction process. The team’s systematic approach strives to add excess return while targeting volatility and tracking error to help control risk.  The quantitative approach efficiently processes large volumes of information, analyzes complex interactions and removes behavioral biases from investment decisions. The research is provided by analysts that are selected by the team based on their quality of research, demonstrated record of success, breadth and consistency of coverage.
 
 
5

 

Intellectual Property

At present, we do not have any patents, trademarks, licenses, franchises, concessions, and royalty agreements, labor contracts or other proprietary interests.

Employees

We have no employees.  The Company officers and directors are currently fulfilling their roles via consulting agreements.

Research and Development Expenditures

We have not incurred any research or development expenditures since our incorporation.

Subsidiaries

We do not have any subsidiaries.
 
Item 2.   Properties
 
Besides our leased office space, we do not presently lease or own any real property.
 
We rent the following property as our U.S. corporate office:

Address: City/State/Zip:  200 South Wacker Drive, Suite 3100, Chicago, Illinois 60606
 
Name of Landlord:  Regus
 
Term of Lease: One year commencing October 1, 2012
 
Monthly Rental: $294
 
Adequate for current needs: Yes
 
Item 3.   Legal Proceedings
 
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
 
Item 4.   Mine Safety Disclosures
 
None
 
 
6

 
 
PART II
 
Item 5.    Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
 
Market Information
 
Our common stock is quoted on the Over-The-Counter Markets under the symbol “PMLT.”  The following table of high and low stock prices are based on actual trades.
 
Bid Information*
 
Quarter Ended
 
High
   
Low
 
             
October 31, 2011
  $ 1.20     $ 0.22  
January 31, 2012
    0.75       0.10  
April 30, 2012
    0.51       0.25  
July 31, 2012
    0.39       0.08  
                 
October 31, 2012
  $ 0.39     $ 0.10  
January 31, 2013
    0.40       0.12  
April 30, 2013
    0.60       0.15  
July 31, 2013
    0.60       0.25  

* The quotation do not reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Penny Stock

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.
 
 
7

 

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
 
These disclosure requirements may have the effect of reducing the trading activity for our common stock should our stock ever be traded on a public market. Therefore, stockholders may have difficulty selling our securities.

Holders of Our Common Stock

As of July 31, 2013, we had 25,305,532 shares of our common stock issued and outstanding, held by approximately 84 persons, not including those shares held in street names.

Dividends

We have not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of our business.

Securities Authorized for Issuance under Equity Compensation Plans

We do not have any equity compensation plans.
 
Item 6.   Selected Financial Data
 
A smaller reporting company is not required to provide the information required by this Item.
 
Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
 
 
8

 
 
Plan of Operation in the Next Twelve Months

Our activities currently consist of website creation, and establishing additional cooperation agreements with real estate agents to establish the flow of real estate opportunities.  We do not intend to activate a website until we acquire properties and do not intend to put investor info on the site once activated. Although we shall do our best to secure additional financing, we have not completed any closings that would result in revenue to date and there can be no assurances that any future closings will result in revenue.
 
Specifically, our plan of operations for the next 12 months is as follows:

· 
From today until the end of November, 2013 we plan to raise additional funds in order to be able to cover our operational expenses and have the needed financing to acquire our first pieces of real estate. We believe that current cash will satisfy our cash requirements only until we finish our efforts for additional financing at the end of November, 2013. If we are not be able to raise any additional funds by the end of November, 2013 we do not anticipate having the ability to continue our operations. We may need to obtain debt financing to implement our business plan. However, we initially contemplate pursuing equity financing only to cover our expenses and finance our first acquisitions of real estate properties. Of course, there is no assurance that we will be able to raise any future capital in any amount and if we fail to do so investors could lose their entire investment.  We estimate the cost of this equity financing if we are able to secure it to be about $6,000, primarily legal and accounting costs and filing fees associated with such an offering.
 
· 
By the end of December, 2013 we plan to focus our efforts in order to locate the proper properties for acquisition and do a full estimation and due diligence on them. We also plan to collaborate with existing real estate agents in order to be able to locate more properties and receive offers from properties that are getting sold at opportunistic prices. We also plan to create collaborations with freelancers who will have specific experience and knowledge in certain specialized real estate areas such as appraisers, engineers, archeologists, etc. The freelancers will be used in case-by-case scenario whenever there is a need for their specialty. We wish to create such collaborations with freelancers in order to have accurate real estate estimations and development plans, and in order to have these services at discount prices. The cost that we estimate to have in order to locate the freelancers will be about $2,000.
 
· 
Moreover, by the end of December, 2013 we believe that we will be able to locate enough real estate opportunities and do a full estimation and due diligence on them so that we will be able to take our first decision to acquire our first property. We estimate that the cost in order to locate a property at an opportunistic price and the cost of the needed due diligence for the first property will be about $3,000.
 
 
·  
In addition, by the end of December 2013, assuming that funding has been secured and due diligence on the property has been completed, we believe that we will be able to close our first deal, do the necessary paperwork and therefore acquire our first property. Moreover, in order to have a diversified portfolio of properties we plan to locate and acquire at least three more properties by the end of July 2014. The estimated due diligence cost for the acquisition of these additional three properties is about $9,000. Among the properties that we intend to buy are those that generate or will within a period of three months generate income from rent. Overall we plan to spend about 80% of the capital that we will have raised in order to acquire real estate properties in the next twelve months. Assuming that we will manage to raise about $10,000,000 until the end of 2013, we will invest about $8,000,000 in real estate assets. Specifically, we plan to invest a portion of these funds, no more than $1,200,000, in order to possibly develop the forest that we have acquired its rights in the Amazonas, Brazil. Moreover, we plan to invest up to 5% of our raised funds in more liquid types of assets such as real estate related securities, primarily such as bonds backed by real estate. We plan to keep the rest of our funds in cash. We estimate that the rest of our cash position will be enough to cover all operational expenses of the company at least until the end of July 2014.
 
· 
As soon as we succeed with the above-mentioned targets we intend to continue our business with more efforts to raise additional funds in order to be able to acquire more real estate assets.
 
 
9

 
 
· 
In the following 12 months we estimate that we will need to raise at least $190,000 in order to be able to cover our operational expenses. Overall the estimated operational expenses for the coming 12 months are $190,000. This amount is the result of the following estimated costs: Private Placement $6,000, freelancers $2,000, due diligence on our first property $3,000, due diligence on the next three properties $9,000, staying public $50,000, salaries $60,000 and costs associated with the agreement with GreenEra $60,000.  We anticipate raising additional funds by selling shares of our company.
 
· 
So far, we have tried to raise via Private Placements the needed funds to implement our business plan but we have succeeded to raise only a small portion of our target. These funds were able to pay some of our operational expenses; the rest was covered by loans from our directors. We plan to arrange more meetings with broker/dealer firms and more accredited investors and funds in order to increase our chances of fund raising via equity financing.
 
· 
Moreover, the last six months we contacted two banks and other funds trying to receive debt financing. So far we have not managed to receive a loan. However, we are currently in discussions with various funds that are offering debt financing and we will do our best to secure it. In addition, in January 2013 we hired a new CFO, who we believe will enhance our efforts for financing. We plan to locate more funds that are willing to offer financing to companies similar to our profile.
 
· 
On April 22, 2013, we entered into an agreement with Greenbase Ltd. (“Greenbase”), a company organized under the laws of Cyprus, and with the sellers individually, to acquire all of the issued and outstanding stock of Greenbase in exchange for 100,000,000 shares of our common stock. On the 28th of May 2013 we terminated the agreement with Greenbase Ltd.
 
· 
We are currently involved in active discussions with a company located in Cyprus for a potential merger or business combination.  As of the date of this filing, there is no binding contract, commitment or agreement with this candidate and there is no assurance that there will ever be one or that any such acquisition or combination will occur.
 
Significant Equipment
 
We do not intend to purchase any significant equipment for the next twelve months.

Employees

We do not have plans to change the number of our employees during the next twelve months.

Results of Operations for the year ended July 31, 2013 versus 2012

We have not earned any revenues since our inception on July 21, 2009 aside from a de minimus amount of interest income.  We do not anticipate earning revenues until such a time that we will be able to close our first real estate transaction.

We incurred general and administrative expenses in the amount of $326,860 for the year ended July 31, 2012 versus $336,789 for the same period in 2013.  Much of these costs are non-cash ($87,900 in non-cash compensation for the year ended July 31, 2012 versus $113,351 for the same period in 2013).  Some areas of cost increased, while others decreased.  The most prominent area of increase was director and officer salaries (due to an increase in the number over the previous year).  The most prominent areas of decrease were legal expenses (a drop of about $43,000) and consulting.
 
 
10

 

Interest expense is $3,729 for the year ended July 31, 2012 versus $7,754 for the same period in 2013.  This is due to increases in debt owed to related parties upon which we impute interest.

We anticipate our operating expenses will increase as we more fully implement our business plan. The increase will be attributable to expenses to operating our business, and the professional fees to be incurred in connection with our reporting obligations as a public company as our business activity increases.
 
Liquidity and Capital Resources

As of July 31, 2013, we had $18,836 of cash and a working capital deficit of $339,831.  We currently do not engage nor intend to engage in any business activities that provide cash flow until we enter into our first real estate transaction.

We will need to secure a minimum of $140,000 in funds to finance our business in the next 12 months, in addition to the funds which will be used to stay public, which funds will be used as set forth below. However in order to become profitable we may still need to secure additional debt or equity funding. We hope to be able to raise additional funds from an offering of our stock in the future. However, this offering may not occur, or if it occurs, may not raise the required funding. We do not have any plans or specific agreements for new sources of funding, except for the anticipated loans from management as described below. We plan to acquire real estate assets or companies that own real estate assets and could offer liquidity to our company but until the date of this filing we have not completed any such transaction and we are not sure that there will ever close such an acquisition. We are also involved in preliminary discussions concerning joint venture or similar agreements to become involved in solar parks in Europe but we are not sure if we will ever conclude to a closing agreement with these parties. Our independent auditor’s report expresses substantial doubt about our ability to continue as a going concern.  At July 31, 2013, we had only $18,836 in cash in our bank account.  We anticipate our monthly burn rate for the next 12 months to be approximately $16,000 per month, including the maximum estimated $50,000 costs of staying public as described herein.
 
Until we generate operating revenues or receive other financing, all our costs, which we will incur irrespective of our business development activities, including bank service fees and those costs associated with SEC requirements associated with staying public, estimated to be less than $ 50,000 annually, will be funded as a loan from our officers and directors with no interest, to the extent that funds are available to do so. Our Officers and Directors are not obligated to provide these or any other funds although they have indicated that they currently intend to do so and that they have sufficient liquid assets to meet all of these anticipated future obligations if we do not generate operating revenues or secure other funding. There is no dollar limit to the amount they have agreed to provide.
 
Additionally, since our inception, we have raised $296,229 for operations through the sale of our stock under transactions exempt from registration under Regulation S.
 
If we fail to meet these requirements, we may lose the qualification and our securities would no longer trade on the Over The Counter Market that we trade. Further, if we fail to meet these obligations and as a consequence we fail to satisfy our SEC reporting obligations, investors will now own stock in a company that does not provide the disclosure available in quarterly and annual reports filed with the SEC and investors may have increased difficulty in selling their stock as we will be non-reporting.
 
Off Balance Sheet Arrangements

As of July 31, 2013, there were no off balance sheet arrangements.
 
 
11

 

Going Concern

Our financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have had no operating revenues and have generated no operations.
 
In order to continue as a going concern and achieve a profitable level of operation, we will need, among other things, additional capital resources and to develop a consistent source of revenues. Management's plans include seeking capital to acquire operating real estate that should provide cash flows from operations.
 
Our ability to continue as a going concern is dependent upon our ability to successfully accomplish our goals and eventually attain profitable operations. The accompanying financial statements in this report do not include any adjustments that might be necessary if we are unable to continue as a going concern.
 
Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Recently Issued Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

·
Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
 
·
Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
 
The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.
 
 
12

 

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In October 2012, the FASB issued Accounting Standards Update ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.
 
In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 has not had a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 has not had a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.
 
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk
 
A smaller reporting company is not required to provide the information required by this Item.
 
13

 
 
Item 8.   Financial Statements and Supplementary Data
 
See the financial statements annexed to this annual report.
 
Item 9.   Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
 
None.
 
Item 9A(T).  Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures
 
The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
 
The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective.
 
Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:
 
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions;
 
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures 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 our assets that could have a material effect on the financial statements.
 
 
14

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, 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.

With the participation of the Chief Executive Officer and the Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting.   Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of July 31, 2013, as the result of a material weakness.   The material weakness results from significant deficiencies in internal control that collectively constitute a material weakness.

A significant deficiency is a deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the registrant’s financial reporting. We had the following significant deficiencies at July 31, 2013:

We have only one consultant to oversee bank reconciliations, posting payables, and so forth, so there are no checks and balances on internal controls.

Remediation of Material Weakness

We are unable to remedy the material weakness in our internal controls until we are able to hire additional employees, so that we may then introduce checks and balances on internal controls.

Limitations on the Effectiveness of Internal Controls

Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or all fraud. Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements, due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns may occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risk.
 
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.
 
Item 9B.   Other Information
 
None
 
 
15

 
 
PART III
 
Item 10.  Directors, Executive Officers and Corporate Governance
 
The following information sets forth the name of our sole executive officers and directors and their ages as of July 31, 2013 and their present positions.

Name
 
Age
 
Position Held with the Company
         
Panagiotis Drakopoulos
 
41
 
Principal Executive Officer and Director
         
Konstantinos Vassilopoulos
 
29
 
Principal Financial Officer and Director

Set forth below is a brief description of the background and business experience of our executive officers and directors.
 
Konstantinos Vassilopoulos

From May 2012 to date, he has served as a Financial Analyst/Senior Administrator in Physicians Cooperative, a multi-specialty Medical Group (Oak Forest, Illinois, USA). From December 2009 to date, he has worked as a Marketing Consultant in BMP Consulting focusing on Business, Marketing and Printing Consulting.

Mr.  Vassilopoulos holds a B.A. (2005) and M.B.A (2006) from American Intercontinental University, both in Finance and Accounting.
 
Mr. Vassilopoulos contributes to the Board his financial, marketing, and operation management expertise. His duties, while he was employed in the financial, marketing, and operation management sector in the USA, mainly included operations management of companies with 30 – 100 employees, financial analysis, budgeting, and forecasting, and marketing campaign development.

Panagiotis Drakopoulos
 
Panagiotis Drakopoulos joined us as Secretary and Director upon formation.  Since June 2006, he has been Director and President of Dynamic Investments Ltd., a business consulting firm.  From June 2006 to July 2009 he was also Director of Sea Star Shipping SA, involved in the management of ships.  Prior to June 2006, he was unemployed.  Mr. Drakopoulos contributes to the Board his financial, marketing, and operation management expertise as well as knowledge of our business since inception.
 
Directors

Our bylaws authorize no less than one (1) and more than nine (9) directors.  As of July 31, 2013, we had two directors:  Konstantinos Vassilopoulos and Panagiotis Drakopoulos.
 
 
16

 

Term of Office

Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws.  Our officers are appointed by our board of directors and hold office until removed by the board.

Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
 
Legal Proceedings

No officer, director, or persons nominated for such positions, promoter or significant employee has been involved in the last ten years in any of the following:
 
·
Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time,
 
·
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses),
 
·
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities,
 
·
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
 
·
Having any government agency, administrative agency, or administrative court impose an administrative finding, order, decree, or sanction against them as a result of their involvement in any type of business, securities, or banking activity.
 
·
Being the subject of a pending administrative proceeding related to their involvement in any type of business, securities, or banking activity.
 
·
Having any administrative proceeding been threatened against you related to their involvement in any type of business, securities, or banking activity.
 
Audit Committee

We do not have a separately-designated standing audit committee. The entire Board of Directors performs the functions of an audit committee, but no written charter governs the actions of the Board when performing the functions of what would generally be performed by an audit committee, including approving the selection of our independent accountants.
 
 
17

 

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company.  Officers, directors and greater than ten percent beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.  To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended July 31, 2013, the following persons have failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended July 31, 2013:
 
Name and principal position
 
Number of late reports
   
Transactions not timely reported
   
Known failures to file a required form
 
                   
Panagiotis Drakopoulos, Principal Executive Officer and Director
    -       -       -  
                         
Konstantinos Vassilopoulos, Principal Financial Officer and Director
    -       -       -  
 
During February and May, 2013, Mr. Vasileios Mavrogiannis a beneficial owner and former officer and director of the Company was involved in the purchase and sale of 725,000 shares of our common stock within a period of less than six months which is in violation of Section 16b of the Securities Exchange Act of 1934 (the “Exchange Act”).  The profit on these shares was $15,408.  Section 16b of the Exchange Act prohibits such beneficial owners from profiting on the sale of the securities.  Upon notification, the beneficial owner agreed to repay the profits in the form of a reduction in liabilities the Company owes to him.  We therefore reduced $12,000 of related-party advances owed to him to zero and reduced unpaid salaries due to him for the difference, or $3,408.  We increased Additional Paid in Capital for the entire $15,408.
 
Code of Ethics

As of July 31, 2013, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
 
Item 11.  Executive Compensation
 
Summary Compensation Table

The table below summarizes all compensation awarded to, earned by, or paid to both to our officers and to our directors for all services rendered in all capacities to us for our fiscal year ended July 31, 2013 and 2012.
 
 
18

 
 
SUMMARY COMPENSATION TABLE
 
   
Name
 
YE
7/31
 
Salary
($)
   
Bonus
($)
   
Stock
Awards
($)
   
Option
Awards
($)
   
Non-Equity
Incentive Plan
Compensation
($)
   
Nonqualified
Deferred
Compensation
Earnings
($)
   
All Other
Compensation
($)
   
Total
($)
 
                                                                     
Vasileios
 
2013
    25,000       -       -       -       -       -       -       25,000  
Mavrogiannis1  
2012
    60,000       -       -       -       -       -       -       60,000  
                                                                     
Panagiotis
 
2013
    60,000       -       -       -       -       -       -       60,000  
Drakopoulos2  
2012
    60,000       -       -       -       -       -       -       60,000  
                                                                     
Panagiotis Tolis3
 
2013
    27,500       -       70,200       -       -       -       -       97,700  
                                                                     
Konstantinos Vassilopoulos
 
2013
    -       -       -       -       -       -       -       -  

1.  
Mr. Mavrogiannis resigned on January 5, 2013.  Although we accrued $25,000 in salary through the date of his resignation, as of the date of this report, this amount and amounts accrued but unpaid as of July 31, 2013, remain unpaid.  Mr. Mavrogiannis is due $76,592 as of July 31, 2013.
 
2.  
Mr. Drakopoulos is the Principal Executive Officer and Board Chairman.  Although we accrued $60,000 in salary during the year ended July 31, 2013, as of the date of this report, we made only one cash payment of $20,000 during that period.  Through July 31, 2013, we owe Mr. Drakopolous $95,000.
 
3.  
Mr. Tolis resigned on July 25, 2013.  Although we accrued $27,500 in salary through the date of his resignation, as of the date of this report, we made only one cash payment of $5,000 during that period.  Through July 31, 2013, we owe Mr. Tolis $22,500. Moreover the Company agreed to issue and pay Mr. Tolis 180,000 shares of common stock for Directors' annual services.
 
Narrative Disclosure to the Summary Compensation Table

On April 1, 2011, we entered into arrangements with Messrs. Mavrogiannis and Drakopoulos to provide compensation in the amount of $5,000 per month. On January 5, 2013, Mr. Mavrogiannis resigned. As of July 31, 2013, Messrs. Mavrogiannis and Drakopoulos are due $76,592 and $95,000, respectively, of accrued but unpaid compensation. The unpaid portion is included in “Accrued Expenses – Related Party” in the financial statements filed with this report on Form 10-K.

On September 1, 2012, we entered into arrangements with Panagiotis Tolis to provide compensation in the amount of $2,500 per month. Moreover, the Company agreed to issue and pay Mr. Tolis 180,000 shares of common stock for Directors’ annual services which we valued at $70,200 (see Note 4 to the financial statements). On July 25, 2013, Mr. Tolis resigned. As of July 31, 2013, Mr. Tolis is due $22,500, of accrued but unpaid compensation. The unpaid portion is included in “Accrued Expenses – Related Party” in the financial statements filed with this report on Form 10-K.
 
There are no arrangements or plans in which we provide pension, retirement or similar benefits for executive officers.
 
 
19

 

Outstanding Equity Awards at Fiscal Year-End

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of July 31, 2013.
 
OUTSTANDING EQUITY AWARDS AT YEAR END
 
   
Option Awards
   
Stock Awards
 
   
Number of Securities
Underlying Unexercised Options
(#)
   
Option
Exercise
   
Option
Expiration
   
No. of Shares or Units of Stock
that Have Not
   
Market Value of Shares or
Units of Stock
that Have Not
   
Equity Incentive Plan Awards: No. of Unearned Shares, Units or
Other Rights
That Have Not
 
Name
 
Exercisable
   
Un-exercisable
   
Price ($)
    Date     Vested (#)     Vested ($)     Vested  
                                             
Vasileios Mavrogiannis
    -       -       -     -       -       -       -  
Panagiotis Drakopoulos
    -       -       -     -       -       -       -  
Panagiotis Tolis
    -       -       -     -       -       -       -  
Konstantinos Vassilopoulos
    240,000       -     $ 0.10    
01/05/17
      -       -       -  

Stock Option Grants

On January 5, 2013, we granted 240,000 options to an incoming Director. The options have an exercise period of four years with an exercise price of $0.10. We valued the options using the Black Scholes Option Pricing Model with the following inputs: stock price on measurement date: $0.18; Exercise price: $0.10; Option term: 4 years; Computed volatility: 448%. The resulting Black Scholes value was $43,151 of which $24,472 had been earned as of July 31, 2013.
 
Director Compensation

The table below summarizes all compensation awarded to, earned by, or paid to our director for all services rendered in all capacities to us for the fiscal years ended July 31, 2013 and 2012.
 
 
20

 
 
DIRECTOR COMPENSATION
 
Name
 
Fees Earned
or
Paid in
Cash
($)
   
Stock
Awards
($)
   
Option
Awards
($)
   
Non-Equity
Incentive
Plan
Compensation
($)
   
Non-Qualified
Deferred
Compensation
Earnings
($)
   
All
Other
Compensation
($)
 
Total
($)
Vasileios Mavrogiannis
   
-
     
-
     
-
     
-
     
-
     
-
 
-
Panagiotis Drakopoulos
   
-
     
-
     
-
     
-
     
-
     
-
 
-
Panagiotis Tolis
   
-
     
-
     
-
     
-
     
-
     
-
 
-
Konstantinos Vassilopoulos
   
-
     
-
     
24,472
     
-
     
-
     
-
 
24,472

1.  
Mr. Vassilopoulos is the Principal Financial Officer and a Director.  He does not receive a cash salary but is due 240,000 options each year for services.  The awarding of 240,000 for the year ended July 31, 2013 resulted in a valuation of $43,151 of which $24,472 had been earned as of July 31, 2013 (See Note 4 to the financial statements).
 
2.  
Messrs. Mavrogiannis, Drakopoulos, Tolis and Vassilopoulos received compensation as executives, reported above in “Executive Compensation”.
 
Messrs. Mavrogiannis, Drakopoulos, Tolis and Vassilopoulos received compensation as executives, reported above in “Executive Compensation” on page 18.

Narrative Disclosure to the Director Compensation Table

Messrs. Mavrogiannis, Drakopoulos, Tolis and Vassilopoulos received compensation as executives, reported above in “Executive Compensation” on page 18.

Mr. Vassilopoulos joined the Company on January 5, 2013.  His agreement with the Company stipulates that he receive an annual retainer of 240,000 options, valid for four years, at $.10. In the event Director ceases to serve on the Board for any reason, Director shall be entitled to the pro rata portion of the annual fee for the number of months he has served on the Board in a given year.

We have not reimbursed our directors for expenses incurred in connection with attending board meetings nor have we paid any directors fees or other cash compensation for services rendered as a director for the period from inception (July 21, 2009) to July 31, 2013.

We have no formal plan for compensating our directors for their services in their capacity as directors.  In the future we may grant options to our directors to purchase shares of common stock as determined by our Board of Directors or a compensation committee that may be established.

Stock Option Plans

We did not have a stock option plan as of July 31, 2013.
 
 
21

 
 
Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
The following table sets forth certain information known to us with respect to the beneficial ownership of our Common Stock as of July 31, 2013, by (1) all persons who are beneficial owners of 5% or more of our voting securities, (2) each director, (3) each executive officer, and (4) all directors and executive officers as a group. The information regarding beneficial ownership of our common stock has been presented in accordance with the rules of the Securities and Exchange Commission. Under these rules, a person may be deemed to beneficially own any shares of capital stock as to which such person, directly or indirectly, has or shares voting power or investment power, and to beneficially own any shares of our capital stock as to which such person has the right to acquire voting or investment power within 60 days through the exercise of any stock option or other right. The percentage of beneficial ownership as to any person as of a particular date is calculated by dividing (a) (i) the number of shares beneficially owned by such person plus (ii) the number of shares as to which such person has the right to acquire voting or investment power within 60 days by (b) the total number of shares outstanding as of such date, plus any shares that such person has the right to acquire from us within 60 days. Including those shares in the tables does not, however, constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of capital stock listed as owned by that person or entity.
 
Except as otherwise indicated, all Shares are owned directly and the percentage shown is based on 25,305,532 shares of common stock issued and outstanding as of July 31, 2013.
 
 
Name and Address of Beneficial Owners of Common Stock1
 
 
Title of Class
 
Amount and Nature of
Beneficial Ownership
   
% of Common Stock2
 
                 
Panagiotis Drakopoulos [1]
               
200 South Wacker Drive, Suite 3100, Chicago, 60606, IL.
 
Common
    6,316,667       25.0 %
DIRECTORS AND OFFICERS – TOTAL
        6,316,667       25.0 %
                     
5% SHAREHOLDERS
                   
Dynamic Investments, Ltd.
 
Common
    2,441,894       9.6 %
Vasileios Mavrogiannis [1]
 
Common
    6,991,666       27.6 %
Total of 5% shareholders
        9,433,560       37.3 %
 
[1]
Mr. Drakopoulos and Mr. Mavrogiannis are officers and directors of Dynamic Investments, Ltd. Therefore they control the 2,441,894-share voting block above referenced. Attributing these shares to Mr. Drakopoulos gives him a voting block of 8,758,561 shares, or 34.6% of the issued and outstanding common stock of the Company at July 31, 2013.

Percentages are based on 25,305,532 shares outstanding at July 31, 2013.

Other than the shareholders listed above, we know of no other person who is the beneficial owner of more than five percent (5%) of our common stock.
 
 
22

 
 
Item 13.   Certain Relationships and Related Transactions, and Director Independence
 
On the date of our inception, we issued 20 million shares of our common stock to our three officers and directors which were recorded at no value (offsetting increases and decreases in Common Stock and Additional Paid in Capital).

For the period from inception (July 21, 2009) through July 31, 2013 certain shareholders made cash contributions and paid expenses on behalf of the company totaling $73,261.  Of this amount, the Company has reimbursed $73,261.
 
At July 31, 2013, we owed $140,000 to GreenEra, Ltd., a company in which our Chief Executive Officer and Director, Mr. Panagiotis Drakopoulos is a shareholders (see Note 6).
 
During the years ended July 31, 2013 and 2012, we imputed $7,754 and $3,729, respectively, on related-party debt, charging income with that amount and increasing Additional Paid in Capital.

We believe that all related party transactions were on terms at least as favorable as we would have secured in arm’s-length transactions with third parties.  Except as set forth above, we have not entered into any material transactions with any director, executive officer, and promoter, beneficial owner of five percent or more of our common stock, or family members of such persons.

Director Independence

Our board of directors has determined that we do not have a board member that qualifies as “independent” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.
 
Item 14.   Principal Accounting Fees and Services
 
Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended:

Financial Statements for the Year Ended July 31,
 
 
Audit Services
   
 
Audit Related Fees
   
 
Tax Fees
   
 
Other Fees
 
                         
2013
  $ 10,200     $ 0     $ 0     $ 0  
2012
  $ 9,450     $ 0     $ 0     $ 0  
 
 
23

 
 
PART IV
 
Item 15.   Exhibits, Financial Statements Schedules
 
Index to Financial Statements Required by Article 8 of Regulation S-X:
 
Audited Financial Statements:
 
F-1
 
Report of Independent Registered Public Accounting Firm
F-2
 
Consolidated Balance Sheets as of July 31, 2013 and 2012;
F-3
 
Statements of Operations for the year ended July 31, 2013 and 2012, and the periods from inception (July 21, 2009) to July 31, 2013;
F-4
 
Statement of Stockholders’ Deficit for period from inception to July 31, 2013;
F-5
 
Statements of Cash Flows for the year ended July 31, 2013 and 2012, and the periods from inception (July 21, 2009) to July 31, 2013;
F-6
 
Notes to Financial Statements
 
Exhibit No.
 
Description
     
3.1
 
Articles of Incorporation, as amended (1)
     
3.2
 
Bylaws, as amended (1)
     
31.1
 
Certification of Principal Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
31.2
 
Certification of Principal Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
32.1
 
Certification of Principal Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
32.2
 
Certification of Principal Financial Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
101.INS **
 
XBRL Instance Document
     
101.SCH **
 
XBRL Taxonomy Extension Schema Document
     
101.CAL **
 
XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF **
 
XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB **
 
XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE **
 
XBRL Taxonomy Extension Presentation Linkbase Document
 
1   Incorporated by reference to the Registration Statement on Form S-1 filed on October 20, 2009.
 
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
24

 
 
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


  Prime Estates and Developments, Inc.  
       
September 13, 2013
By:
/s/ Panagiotis Drakopoulos
 
 
 
Panagiotis Drakopoulos
 
 
 
Principal Executive Officer and Director
 

In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
 
 
September 13, 2013
By:
/s/ Konstantinos Vassilopoulos
 
 
 
Konstantinos Vassilopoulos
 
 
 
Principal Financial Officer and Director
 
 
 
25

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors
Prime Estates and Developments, Inc.
(A Development Stage Company)

We have audited the accompanying balance sheets of Prime Estates and Developments, Inc. (A Development Stage Company) as of July 31, 2013 and 2012 and the related statements of operations, changes in shareholders' equity (deficit) and cash flows for the periods then ended and from inception (July 21, 2009) through July 31, 2013. 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 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 audits provide 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 Prime Estates and Developments, Inc. as of July 31, 2013 and 2012, and the results of its operations and cash flows for the periods described above 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 statement, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those 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/ M&K CPAS, PLLC
   
     
www.mkacpas.com
Houston, Texas
September 13, 2013
   
 
 
26

 
 
PRIME ESTATES AND DEVELOPMENTS, INC.
(A Development Stage Company)
Balance Sheets
 
   
07/31/13
   
07/31/12
 
ASSETS
           
Cash and equivalents
  $ 18,836     $ 40  
Total current assets
    18,836       40  
                 
TOTAL ASSETS
    18,836       40  
                 
CURRENT LIABILITIES
               
Accounts payable and accrued expenses
  $ 24,575     $ 2,896  
Salaries payable
    194,092       110,000  
Accounts payable, related party
    140,000       100,266  
                 
TOTAL CURRENT LIABILITIES
    358,667       213,162  
                 
SHAREHOLDERS' EQUITY (DEFICIT)
               
Preferred stock, par value $0.001, authorized 100 million shares, none issued and outstanding.
    -       -  
Common stock, par value $0.001, authorized 200 million, 25,305,532 and 24,709,282 issued and outstanding at July 31, 2013 and 2012, respectively.
    25,305       24,709  
Additional paid-in capital
    4,272,070       4,048,332  
Common stock payable
    -       6,500  
Deficit accumulated during the development phase
    (4,637,206 )     (4,292,663 )
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)
    (339,831 )     (213,122 )
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
  $ 18,836     $ 40  
 
The accompanying notes are an integral part of these financial statements.
 
 
27

 
 
PRIME ESTATES AND DEVELOPMENTS, INC.
(A Development Stage Company)
Statements of Operations
 
   
Year Ended July 31,
    From Inception (7/21/09) to July 31,  
   
2013
   
2012
   
 2013
 
                   
Interest income
  $ -     $ -     $ 52  
                         
General and administrative expenses
    336,789       326,860       4,623,988  
Imputed interest expense - related parties
    7,754       3,729       13,270  
                         
Net operating loss
    (344,543 )     (330,589 )     (4,637,206 )
                         
NET LOSS
  $ (344,543 )   $ (330,589 )   $ (4,637,206 )
                         
Net loss per share, basic and fully diluted
  $ (0.01 )   $ (0.01 )     -  
Weighted average number of shares outstanding
    25,051,244       24,669,044       -  
 
The accompanying notes are an integral part of these financial statements.
 
 
28

 
 
PRIME ESTATES AND DEVELOPMENTS, INC.
(A Development Stage Company)
Statements of Shareholders' Equity (Deficit)
 
    Common Stock, Par Value $0.001    
Additional Paid In
   
Common Stock
   
Develop. Stage
   
Total Shareholders'
 
   
Date
 
Shares
   
Amount
    Capital     Payable     Deficit     Deficit  
                                         
                                         
Balances at inception
                                                 
Founders' shares
 
07/31/09
    20,000,000     $ 20,000     $ (20,000 )   $ -     $ -     $ -  
Net loss, 7/21/09 to 7/31/09
  -     -       -       -       -       (4,600 )     (4,600 )
                                                     
Balances, 7/31/09
  -     20,000,000       20,000       (20,000 )     -       (4,600 )     (4,600 )
                                                     
Shares issued for:
                                                   
Services
 
08/04/09
    101,960       102       10,094       -       -       10,196  
Cash
 
09/15/09
    392,000       392       38,808       -       -       39,200  
   
02/03/10
    15,000       15       14,985       -       -       15,000  
                                                     
Imputed interest on related-party debt
  -     -       -       952       -       -       952  
Shares issued for services
 
06/16/10
    3,710,000       3,710       3,706,290                       3,710,000  
Net loss, year ended 7/31/10
  -     -       -       -       -       (3,788,229 )     (3,788,229 )
                                                     
Balances, 7/31/10
  -     24,218,960       24,219       3,751,129       -       (3,792,829 )     (17,481 )
                                                     
Shares issued for:
                                                   
Services
 
04/28/11
    80,000       80       63,120       -       -       63,200  
Cash
 
10/30/10
    56,322       56       22,473       -       -       22,529  
   
03/16/11
    10,000       10       5,990       -       -       6,000  
   
03/18/11
    100,000       100       59,900       -       -       60,000  
   
03/31/11
    14,000       14       8,386       -       -       8,400  
   
04/01/11
    35,000       35       20,965       -       -       21,000  
Imputed interest on related-party debt
  -     -       -       835       -       -       835  
Net loss, year ended 7/31/11
  -     -       -       -       -       (169,245 )     (169,245 )
                                                     
Balances, 7/31/11
  -     24,514,282       24,514       3,932,798       -       (3,962,074 )     (4,762 )
 
 
29

 
 
PRIME ESTATES AND DEVELOPMENTS, INC.
(A Development Stage Company)
Statements of Shareholders' Equity (Deficit)
 
   
Common Stock, Par Value $0.001
   
Additional Paid In
   
Common Stock
   
Develop. Stage
   
Total Shareholders'
 
   
Date
 
Shares
   
Amount
    Capital     Payable     Deficit     Deficit  
                                         
Shares issued for:
                                       
Services
 
08/12/11
    100,000       100       59,900     -     -       60,000  
   
12/08/11
    46,500       46       27,854     -     -       27,900  
                                                 
Cash
 
08/09/11
    23,500       24       14,076     -     -       14,100  
   
03/06/12
    25,000       25       9,975     -     -       10,000  
                                                 
Cash received for stock payable
  -     -       -       -       6,500     -       6,500  
Imputed interest on related-party debt
  -     -       -       3,729       -     -       3,729  
Net loss, year ended 7/31/12
  -     -       -       -       -       (330,589 )     (330,589 )
                                                     
Balances, 7/31/12
  -     24,709,282     $ 24,709     $ 4,048,332     $ 6,500     $ (4,292,663 )   $ (213,122 )
                                                     
Shares issued for:
                                                   
Cash
 
02/28/13
    400,000       400       99,600       -       -       100,000  
                                                     
Reduction of common stock payable
 
08/28/12
    16,250       16       6,484       (6,500 )     -       -  
Director services
 
09/01/12
    180,000       180       70,020       -       -       70,200  
                                                  -  
Options issued for director services
  -     -       -       24,472       -       -       24,472  
Imputed interest on related-party debt
  -     -       -       7,754       -       -       7,754  
Recapture of profit on Section 16b violation
  -     -       -       15,408       -       -       15,408  
Net loss, year ended 7/31/13
  -     -       -       -       -       (344,543 )     (344,543 )
                                                     
Balances, 7/31/13
  -     25,305,532     $ 25,305     $ 4,272,070     $ -     $ (4,637,206 )   $ (339,831 )
 
The accompanying notes are an integral part of these financial statements.
 
 
30

 
 
PRIME ESTATES AND DEVELOPMENTS, INC.
(A Development Stage Company)
Statements of Cash Flows
 
    Year Ended July 31,    
From Inception (7/21/09) to July 31,
 
   
2013
   
2012
    2013  
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net loss
  $ (344,543 )   $ (330,589 )   $ (4,637,206 )
                         
Adjustments to reconcile net loss with cash used in operations:
                 
Stock based compensation
    70,200       87,900       3,941,496  
Options issued for director services
    24,472       -       24,472  
Imputed interest
    7,754       3,729       13,270  
                         
Change in operating assets and liabilities:
                       
Accounts payable and accrued expenses
    21,679       2,896       24,575  
Salaries payable
    87,500       110,000       197,500  
Accrued expenses, related-party
    60,000       60,000       140,000  
Net cash used in operating activities
    (72,938 )     (66,064 )     (295,893 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                 
                         
Net cash provided by / used in investing activities
    -       -       -  
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                 
Proceeds from related party note payable
    35,473       20,266       73,261  
Principal payments on related-party note payable
    (43,739 )     -       (61,261 )
Proceeds from the sale of common stock
    100,000       24,100       296,229  
Proceeds from stock payable
    -       6,500       6,500  
Net cash provided by financing activities
    91,734       50,866       314,729  
                         
NET INCREASE / (DECREASE) IN CASH
    18,796       (15,198 )     18,836  
Cash at beginning of period
    40       15,238       -  
Cash at end of period
  $ 18,836     $ 40     $ 18,836  
 
 
31

 
 
PRIME ESTATES AND DEVELOPMENTS, INC.
(A Development Stage Company)
Statements of Cash Flows
(Continued)
 
   
Year Ended July 31,
    From Inception (7/21/09) to July 31,  
   
2013
   
2012
   
2013
 
                   
SUPPLEMENTAL DISCLOSURES
                 
                         
Cash paid for interest
  $ -     $ -     $ -  
Cash paid for income taxes
    -       -       -  
                         
ADDITIONAL DISCLOSURES OF NON-CASH FINANCING ACTIVITY
         
                         
Stock issued for common stock payable
  $ 6,500     $ -     $ 25,336  
Salaries and debt settlement from Section 16b violation
    15,408       -       -  
 
The accompanying notes are an integral part of these financial statements.
 
 
32

 
 
PRIME ESTATES AND DEVELOPMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
July 31, 2013 and 2012
 
NOTE 1 – NATURE OF ORGANIZATION
 
Business and Organization
 
Prime Estates and Developments, Inc. (“Prime Estates”, “The Company”, “we”, or “us”) was incorporated in the State of Nevada on July 21, 2009 for the purpose of acquiring and operating commercial real estate and real estate related assets.  On the date of its inception, the Company issued 20 million shares of its common stock to three founders which were recorded at no value (offsetting increases and decreases in Common Stock and Additional Paid in Capital).

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company follows accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein.

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with a maturity of three months or less, when purchased, to be cash equivalents. There are no cash equivalents at July 31, 2013 nor 2012.

Revenue Recognition

We plan to recognize revenues from real estate sales under the full accrual method which requires that revenues be recognized when the sale is consummated; when the initial and continuing investments by the buyer in the property are sufficient; All the risks and rewards of ownership reside with buyer; There is no continuing duty or involvement by the seller post-sale (after closing); and, There is no future subordination of any buyer receivable (seller financing cases). The Company may also earn rental income and management fees.  The fees are recognized as they are earned.
 
 
33

 

Basic and Diluted Net Loss Per Share

The Company follows ASC No. 260, “Earnings Per Share” (ASC No. 260) that requires the reporting of both basic and diluted earnings (loss) per share.  Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares  outstanding for the period.  The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In accordance with ASC No. 260, any anti-dilutive effects on net earnings (loss) per share are excluded.  For the periods ended July 31, 2013 and 2012, there were no common stock equivalents.

As of the year ended July 31, 2013, the Company had 240,000 options outstanding which were granted to a Director for services.  These options were excluded from the calculations of net loss per share as their effect would be anti-dilutive.

Fair Value of Financial Instruments

Pursuant to ASC No. 820, “Fair Value Measurements and Disclosures”, the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of July 31, 2013. The Company’s financial instruments consist of cash, accounts payable and notes payable to a related party.  The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments.

Income Taxes

The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered.  The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets likely.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

·
Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
 
·
Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
 
 
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The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In October 2012, the FASB issued Accounting Standards Update ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 has not had a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 has not had a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.
 
 
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NOTE 3 - GOING CONCERN
 
The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has had no revenues and has not generated cash flows from operations.
 
In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources and developing a consistent source of operating revenues. Management's plans include seeking financing to acquire productive real estate properties.
 
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – CAPITAL STRUCTURE

Common Stock
 
The Company is authorized to issue 200 million common shares and had issued 24,514,282 as of July 31, 2011 and 25,305,532 as of July 31, 2013 for a two-year increase of 791,250 shares comprised of the following equity transactions:

Year ended July 31, 2012

On August 12, 2011, we issued 100,000 shares to a law firm for one year of legal services pertaining to our Exchange Act filings. We valued the shares at the closing price of $0.60 per share on the grant date and charged general and administrative expenses with $60,000.

On August 18, 2011, we entered into an agreement with a consulting firm to propose investment opportunities in the area of distressed residential and commercial real estate. We issued 46,500 shares of common stock, valuing them at the fair value at the grant date. We charged general and administrative expense with $27,900.

During the year ended July 31, 2012, we issued the following shares for cash:

Date
   
Price Per Share
   
No. of Shares
   
Proceeds
 
                           
10/31/11
    $ 0.60       23,500     $ 14,100  
03/06/12
      0.40       25,000       10,000  
05/14/12
      0.40       16,250       6,500 (1)
                64,750     $ 30,600  

1.
The $6,500 was received in May, 2012, but the shares were not issued until August, 2012.  At July 31, 2012, the value of the shares was included in Common Stock Payable.
 
 
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Year ended July 31, 2013

Beginning the year on August 1, 2012, we had 24,709,282 shares issued and outstanding and issued the following shares during the year ended July 31, 2013:

During the year ended July 31, 2013, we issued 180,000 shares to a Director for services. We valued the shares at the closing price on their grant date, charging general and administrative expenses with $70,200.

Also during the year ended July 31, 2013, we issued the following shares for cash:

Date
 
Price Per Share
   
No. of Shares
   
Proceeds
 
                         
02/28/13
    0.25       400,000       100,000  
              400,000     $ 100,000  
 
Other Equity Transactions

During the years ended July 31, 2013 and 2012, we increased Additional Paid in Capital by $7,754 and $3,729, respectively, by imputing interest on outstanding related-party loans.

During the year ended July 31, 2013, we issued 16,250 shares to an accredited investor for $6,500. The receipt of those funds occurred during May, 2012, and was included in Common Stock Payable on the Balance Sheet as of July 31, 2012. This is included above as “shares issued for cash”.  The issuance of these shares extinguished the balance in that category as of October 31, 2012. This accredited investor was enlisted to serve as a Director on September 1, 2012.

On January 5, 2013, we granted 240,000 options to an incoming Director. The options have an exercise period of four years with an exercise price of $0.10. In the event that the Director ceases to serve on the Board of Directors for any reason, the Director is entitled to a pro-rata portion of the annual options.  We valued the options using the Black Scholes Option Pricing Model with the following inputs: stock price on measurement date: $0.18; Exercise price: $0.10; Option term: 4 years; Computed volatility: 448%. The resulting Black Scholes value was $43,151.  We expensed the portion of these options vesting as of July 31, 2013 (approximately 57%) and included $24,472 in general and administrative expenses for the year ended July 31, 2013.  The remainder, or $18,679, will be expensed in future periods.

During February and May, 2013, a beneficial owner and former officer and director of the Company sold 725,000 shares of our common stock after having purchased such shares from a relative in violation of Section 16b of the Securities Exchange Act of 1934 (the “Exchange Act”).  The profit on these shares was $15,408.  Section 16b of the Exchange Act prohibits such beneficial owners from profiting on the sale of the securities.  Upon notification, the beneficial owner agreed to repay the profits in the form of a reduction in liabilities the Company owes to him.  We therefore reduced $12,000 of related-party advances owed to him to zero and reduced unpaid salaries due to him for the difference, or $3,408.  We increased Additional Paid in Capital for the entire $15,408.

Preferred Stock

The Company is authorized to issue 100 million shares of preferred stock which has preferential liquidation rights over common stock and is non-voting.  As of July 31, 2013, no shares have been issued.
 
 
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Potentially Dilutive Securities

On January 5, 2013, we granted 240,000 options to an incoming Director under a one-year agreement to provide 240,000 options at $0.10.  The 240,000 options expire on January 5, 2017.

No options, warrants or other potentially dilutive securities other than those disclosed above have been issued as of July 31, 2013.
 
NOTE 5 – INCOME TAXES

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 39% to pretax income from continuing operations for the periods ended July 31, 2013 and 2012 due to the following:

 
 
2013
   
2012
 
             
Net operating loss carry-forwards
  $ 261,783     $ 164,333  
Valuation allowance
    (261,783 )     (164,333 )
Net deferred tax asset
  $ -     $ -  
 
At July 31, 2013, the Company had net operating loss forwards of approximately $671,238 that may be offset against future taxable income through 2026. No tax benefit has been reported in the July 31, 2013 or 2012 financial statements due to the uncertainty surrounding the realizability of the benefit. The potential tax benefit is offset by a valuation allowance of the same amount.

NOTE 6 – AGREEMENT WITH GREEN ERA LTD.

On February 17, 2011, we entered into an agreement with GreenEra, Ltd., a company formed under the laws of the Cyprus Republic, to acquire the rights of exploitation of a 60,000 hectares (approximately 150,000 acres) of forest land in Novo Aripuana, State of Amazones, Brazil. The property can be developed and can probably produce carbon credits that when sold could produce profits. Any profits that will be gained from the development or the sale of the carbon credits will be shared 50-50 between PMLT and the owner of the forest land. The parties agree that:

·
Prime Estates will pay GreenEra $5,000 per month for approximately 34 years beginning in April 1, 2011.  Prime Estates has the right to cancel the agreement.  Upon such cancellation, no future obligation to GreenEra would exist.
 
·
Prime Estates will obtain financing sufficient to pay for all costs associated with obtaining the carbon credits, but not to exceed $1.2 million.
 
·
GreenEra will be the developer responsible for performing all actions necessary to obtain the credits.
 
 
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GreenEra acquired the exclusive rights to develop and to obtain these carbon credits when it contracted with the landowner on December 28, 2009.  Therefore, Prime Estates & Developments Inc. has inherited the rights and obligations of that agreement which stipulates, in part:

·
The landowner has the right to veto sales of any credits under $2.00.
 
·
If GreenEra is unable to receive a carbon credit certification until December 31, 2013, or cannot sell, convey, assign, lend or sublet, carbon credits or any other rights or products the contract is voided.
 
Our Principal Executive Officer and Board Chairman, Mr. Panagiotis Drakopoulos, is also a shareholder but not a director or officer of GreenEra Ltd.

From inception of the agreement through July 31, 2013, we have accrued $140,000 of costs associated with this agreement and have paid none.
 
NOTE 7 – RELATED PARTY TRANSACTIONS

On the date of our inception, we issued 20 million shares of our common stock to our three officers and directors which were recorded at no value (offsetting increases and decreases in Common Stock and Additional Paid in Capital).

For the period from inception (July 21, 2009) through July 31, 2013 certain shareholders made cash contributions and paid expenses on behalf of the company totaling $73,261.  Of this amount, the Company has reimbursed $61,261, leaving $12,000 still owed.  In May, 2013, this amount was reduced to zero as a result of a violation of Section 16b of the Securities Exchange Act of 1934 by the contributing shareholder (See Note 4 and below).

At July 31, 2013, we owed $140,000 to GreenEra, Ltd., a company in which our Chief Executive Officer and Director, Mr. Panagiotis Drakopoulos is a shareholders (see Note 6).

During the years ended July 31, 2013 and 2012, we imputed $7,754 and $3,729, respectively, on related-party debt, charging income with that amount and increasing Additional Paid in Capital.

At July 31, 2013, our Chairman and Principal Executive Officer, Mr. Panagiotis Drakopoulos, is owed $95,000 in unpaid salaries.

Additionally, we owe $22,500 and 76,592 to Messrs. Tolis and Mavrogiannis, our former Secretary/Director and Chief Financial Officer, respectively.
 
During February and May, 2013, a beneficial owner and former officer and director of the Company was involved in the purchase and sale of 725,000 shares of our common stock within a period of less than six months which is in violation of Section 16b of the Securities Exchange Act of 1934 (the “Exchange Act”).  The profit on these shares was $15,408.  Section 16b of the Exchange Act prohibits such beneficial owners from profiting on the sale of the securities.  Upon notification, the beneficial owner agreed to repay the profits in the form of a reduction in liabilities the Company owes to him.  We therefore reduced $12,000 of related-party advances owed to him to zero and reduced unpaid salaries due to him for the difference, or $3,408.  We increased Additional Paid in Capital for the entire $15,408.
 
We believe that all related party transactions were on terms at least as favorable as we would have secured in arm’s-length transactions with third parties.  Except as set forth above, we have not entered into any material transactions with any director, executive officer, and promoter, beneficial owner of five percent or more of our common stock, or family members of such persons.
 
 
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NOTE 8 – LEASES

The Company conducts its operations from facilities located in Chicago, Illinois for which we paid approximately $1,400 per month through September, 2012. From October 1, 2012 we pay approximately $307 per month for our office in the same address. Rent expense for the years ended July 31, 2013 and 2012 were $18,748 and $1,599, respectively.

NOTE 9 – SUBSEQUENT EVENTS

Subsequent to July 31, 2013, we issued 280,000 shares of common stock in exchange for $70,000 in cash.

The Company has evaluated subsequent events through the date these financial statements were issued.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

On February 17, 2011, we entered into an agreement with GreenEra, Ltd. to acquire the rights of exploitation of a 60,000 hectares (approximately 150,000 acres) of forest land in Novo Aripuana, State of Amazones, Brazil (see Note 6).  This agreement obligates us to pay $5,000 per month for approximately 34 years.  We have accrued for 2 years and 3 months of this amount as of July 31, 2013.

Payout on this contract over the next five years is $60,000 per year.
 
 
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ITEM 15. EXHIBITS
 
Exhibit No.
 
Document Description
     
31.1
 
CERTIFICATION of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
 
 
 
31.2
 
CERTIFICATION of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
 
 
 
32.1
 
CERTIFICATION of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
 
 
 
32.2
 
CERTIFICATION of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
 
101.INS **
 
XBRL Instance Document
     
101.SCH **
 
XBRL Taxonomy Extension Schema Document
     
101.CAL **
 
XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF **
 
XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB **
 
XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE **
 
XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
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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.
 
  Prime Estates and Developments, Inc.  
       
Date: September 13, 2013
By:
/s/ Panagiotis Drakopoulos
 
 
 
Panagiotis Drakopoulos
 
 
 
Principal Executive Officer
 
 
In accordance with the Exchange Act, this report has been duly signed by the following persons on behalf of the Company and in the capacities and on the dates indicated.
 
Date: September 13, 2013 By:
/s/ Panagiotis Drakopoulos
 
   
Panagiotis Drakopoulos
 
   
Principal Executive Officer and Director
 
 
Date: September 13, 2013 By:
/s/ Konstantinos Vassilopoulos
 
   
Konstantinos Vassilopoulos
 
   
Principal Financial Officer and Director
 
 
 
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