UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________

FORM 10-K

______________

 

 

For the fiscal year ended December 31, 2014

 

 

For the transition period from ______________ to ______________

 

Commission File No. 333-174905

REAL ESTATE CONTACTS, INC.

 (Exact name of small business issuer as specified in its charter)

 

Florida		59-3800845
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
8955 US Highway 301 N., No. 192 Parrish, Florida		34219
(Address of principal executive offices)		(Zip Code)
(Former name, former address, if changed since last report)
(724) 656-8886
(Issuer’s telephone number)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes þ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes þ No

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes o No

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  þ    No  o

Indicate by check 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. þ

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 (do not check if a smaller reporting company)	Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

o Yes þ No

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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, June 30, 2014: $ 96,000

Number of shares of the issuer’s Common Stock outstanding as of April 13, 2015:  6,090,837,528

Documents incorporated by reference: None.

Transitional Small Business Disclosure Format (Check One): Yes  o No þ

 

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TABLE OF CONTENTS

  

		Page
Part I
Item 1	Business	1
Item 1A	Risk Factors	2
Item 1B	Unresolved Staff Comments	6
Item 2	Properties	6
Item 3	Legal Proceedings	6
Item 4	Mine Safety Disclosures	6
Part II
Item 5	Market for Registrant’s Common Equity, 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 Operation	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	30
Item 9A	Controls and Procedures	30
Item 9B	Other Information	31
4art III
Item 10	Directors and Executive Officers and Corporate Governance.	32
Item 11	Executive Compensation	33
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	34
Item 13	Certain Relationships and Related Transactions, and Director Independence.	34
Item 14	Principal Accounting Fees and Services	35
Part IV
Item 15	Exhibits, Financial Statement Schedules	36
	Signatures	37

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PART I

 

ITEM 1.       BUSINESS

Background Information

Real Estate Contacts, Inc. ("The Company") was formed on March 10, 2005 as a Florida Corporation and is based in Parrish, Florida. The Company engages in the ownership and operation of three real estate advertising portal websites. Real Estate Contacts, Inc. provides a comprehensive online real estate search portal that consists of an advertising and marketing platform for real estate professionals. Our company also provides and sells video real estate websites to real estate professionals. The Company has developed a national online real estate video listings portal that provides consumers the opportunity to view real estate in their local markets all in a video format.

The company provides consumers the opportunity to view real estate listings and homes for sale in their local markets.

The company also provides real estate professionals the opportunity to reach consumers interested in buying or selling property in their respective geographic area and in most markets and cities throughout the United States.

We enable real estate professionals to better promote themselves and their listings and connect with transaction-ready consumers through our online websites and marketing website products. Our current real estate search website and our new real estate video website product enable real estate professionals to increase their visibility and promote their listings.

Business Operations

Real Estate Contacts, Inc. provides a service that enables real estate professionals to capture, cultivate, and convert leads which cater to prospective home buyers and sellers from our Real Estate Search Engine Website (www.realestatecontacts.com) and our Real Estate Video Listings Channel. (www.realestatevideochannels.com).

The Company’s business is conducted solely within the Internet and the Online Video arena. Our company matches buyers, sellers, and real brokers and agents anywhere in the world.

Products and Services

The Company currently operates a real estate search portal www.realestatecontacts.com that features real estate professional’s current listings and profiles in their service areas.  The company has developed and operates a national  online video listings channel www.realestatevideochannels.com   The National Online Real Estate Video Listing Channel will feature all real estate listings in a video and/or virtual tour format, along with video bios, video blogs of the real estate brokers, agents, or offices.   

The Company now offers Real Estate professionals the opportunity to own and operate their own real estate video listings website.  We have developed another website for the sales of our video websites to agents called: www.realestatevideowebsites.com  The real estate agents that operate their own video website will to be able to manage the publishing and display hundreds of video properties and virtual tours through one simple website giving real estate professionals exposure for their properties in less time.

We focus on providing a video advertising solution for Real Estate Professionals.  Our goal is to be a top real estate video portal leading with mobile on our video real estate portal, www.realestatevideochannels.com.  

We currently offer real estate agents, brokers, and offices the opportunity to become the exclusive real estate contact in the city that they serve on www.RealEstateContacts.com.  For a yearly fee, agents featured will also benefit by becoming a free member on www.realestatevideowebsites.com and have access to utilize 100 plus how to videos that we have created for them as well as how to receive their own real estate video responsive website.

We have also developed another real estate website named: www.RealEstateVideoBios.com. All real estate professionals and business owners will be able to publish and upload their own video bio for free.

We will soon introduce a new website called www.BusinessVideoWebsites.com .  We will develop online video websites for the enterprise market.  With our Video for Business, video becomes a serious business tool.  A corporate video website can be an incredibly powerful vehicle enabling small business owners the opportunity to communicate and reach their customers and potential customers.  We will produce a video product that will reflect the business owner’s values and their business.

The combination of our websites sets the stage to offer more real estate tools and services that empower consumers and drive more

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business for real estate professionals as well as small business owners.

 

Participating real estate brokers, offices and agents receive coverage in the cities, areas and territories that they service.  Consumers can find houses and foreclosures for sale in hundreds of U.S. cities and in their local market.

 

The company generates its revenue from selling advertising to real estate professionals on our real estate portal and selling video websites that will be included on our national real estate video listings channel.

 

Both of the company’s real estate portal websites currently receive thousands of unique visitors each month and these visitors are consumers interested in viewing real estate listings, homes for sale and foreclosure properties in their local area.

 

Consumers will and do continue to buy and sell homes in real estate markets throughout the United States.  The majority are going online to do so and will continue to contact and seek the advice of real estate professionals.

 

 Reports to Security Holders

We file reports and other information with the U.S. Securities and Exchange Commission (“SEC”).  You may read and copy any document that we file at the SEC's public reference facilities at 100 F. Street, N.E., Washington, D.C. 20549.  Please call the SEC at 1-800-732-0330 for more information about its public reference facilities.  Our SEC filings will be available to you free of charge at the SEC's web site at www.sec.gov.

At the request of a shareholder, we will send a copy of an annual report to include audited financial statements.  As a reporting company with the U.S. Securities and Exchange Commission (“SEC”), we file all necessary quarterly (Form 10-Q), annual (Form 10-K) and other reports as required.

ITEM 1A.       RISK FACTORS

 

The shares of our common stock being offered for resale by the selling security holders are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose the entire amount invested in the common stock. Before purchasing any of the shares of common stock, you should carefully consider the following factors relating to our business and prospects. If any of the following risks actually occurs, our business, financial condition or operating results could be materially adversely affected. In such case, you may lose all or part of your investment.  You should carefully consider the risks described below and the other information in this process before investing in our common stock.

Risks Related to Our Business

 

Our business is difficult to evaluate because we have a limited operating history.

 

Real Estate Contacts, Inc. was incorporated on March 10, 2005.  For the years ended December 31, 2014, and 2013, net losses were $6,464,490 and $5,417,722, respectively.   Although the Company has conducted its operations since March 2005, it nonetheless has a limited operating history.  Additionally, the Company has been unsuccessful in generating any significant revenues since its inception.  This limited operating history and lack of revenues may not serve as an adequate basis to judge the Company’s future prospects and results of operations.  The Company’s business and prospects must be considered in light of the risks and uncertainties frequently encountered by companies in their early stages of operations, including such companies that operate in the new and rapidly changing online advertising and marketing environment.  The Company cannot assure that it will ever be profitable or that it will not be subject to increasing accumulated losses in the foreseeable future.  The Company anticipates that its operating expenses will increase in concert with its planned operations.  Any significant failure to realize anticipated revenue growth could result in further losses.  The Company will continue to encounter risks and difficulties frequently experienced by companies at a similar stage of development, including its potential failure to:

·

Implement and/or adapt and modify the Company’s business model and strategy;

·

Develop and increase brand awareness, protect the Company’s reputation, and develop customer loyalty;

·

Efficiently manage the Company’s planned expansion of its operations and related expenses; and

·

Anticipate and adapt to changing conditions in markets in which the Company operates, such as the impact of any changes mergers and acquisitions involving the Company’s competitors, technological developments, and other significant competitive and market dynamics.

 

If the Company is unsuccessful in addressing any or all of these risks, its business and financial condition may be materially and adversely affected.

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We need additional capital to develop our business.  Without additional capital we may not be able to implement our business plan.

The continued development of our services will require the commitment of substantial resources to implement our business plan. In addition, substantial expenditures will be required to enable us to manage properties in the future.  Currently, we have no established bank-financing arrangements.  Therefore, it is likely we would need to seek additional financing through a subsequent future private offering of our equity securities, or through strategic partnerships and other arrangements with corporate partners.

 

We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.  The sale of additional equity securities will result in dilution to our stockholders.  The occurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations.  If adequate additional financing is not available on acceptable terms, we may not be able to implement our business development plan or continue our business operations.

Our business is susceptible to fluctuation in the real estate market which may have an adverse effect on our ability to generate revenue.

Our business depends substantially on the conditions of the real estate market.  Demand for real estate has grown rapidly in the past decade but such growth is often accompanied by volatility in market conditions and fluctuations in real estate prices.  For example, following a period of rising real estate prices and transaction volumes in most major cities from 2003 to 2007, the industry experienced a downturn in 2008, with transaction volumes in many major cities declining significantly compared to 2007.  Fluctuations in the real estate market may negatively impact our ability to generate revenue through the advertising of real estate professionals on our website.  If we are unable to generate revenue through advertising on our website we may have to cease operations.

 

We are subject to general real estate risks and our revenue may fluctuate.

 

Our primary revenue is generated from advertisements by real estate professionals, such as real estate offices, real estate brokerages, real estate agents, and the sales of real estate video websites which subjects our business to a variety of risks.  The revenue available from these advertisements and websites will depend on the current real estate market. If the advertisements on our websites and the sales of video websites do not generate sufficient income to meet operating expenses our cash flow and ability to operate will be adversely affected.

 

Our future success is dependent, in part, on the performance and continued service of Robert DeAngelis, President and Director.  Without his continued service, we may be forced to interrupt or eventually cease our operations.

 

We are presently dependent to a great extent upon the experience, abilities and continued services of Robert DeAngelis, President and Director.  The loss of the service of Mr. DeAngelis could have a material adverse effect on our business, financial condition or results of operation.

We may incur significant costs to be a public company to ensure compliance with U.S. corporate governance and accounting requirements and we may not be able to absorb such costs.

 

We may incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission.  We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.  We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.  As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers.  We are currently evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.  In addition, we may not be able to absorb these costs of being a public company which will negatively affect our business operations.

 

The lack of public company experience of our management team could adversely impact our ability to comply with the reporting requirements of U.S. Securities Laws.  

 

Our   management team lacks public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002.  Our senior management has never had responsibility for managing a publicly traded company.  Such responsibilities include complying with federal securities laws and making required

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disclosures on a timely basis.  Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including the establishing and maintaining of internal controls over financial reporting.  Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of 1934 which is necessary to maintain our public company status.  If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company.  

 

We may issue additional shares that could dilute your potential ownership interest and limit the ability of a third party to obtain voting control.

 

Some events over which investors in the Company have no control could result in the issuance of additional shares of our Common Stock or issuances of preferred stock (of which none is currently outstanding), which would dilute the ownership percentage of current shareholders.  We may issue additional shares of Common Stock:

·

to raise additional capital or finance acquisitions;

·

upon the exercise or conversion of outstanding warrants or convertible notes;

·

in lieu of cash payment of interest on our outstanding convertible subordinated notes; or

·

to vendors in exchange for products or services

 

We have not filed for trademark protection with the United States Patent and Trademark office which may adversely impact our ability to generate revenue.

 

We have not filed for trademark protection with the United States Patent and Trademark Office regarding the use of the Company’s name, Real Estate Contacts, Inc.  Should we fail to file for protection of the Company’s name, we may be unable to adequately protect the use of our name, which would negatively affect the Company’s brand name and its ability to generate revenues.

 

The Company’s officer and director has significant control over shareholder matters and the minority shareholders will have little or no control over the company’s affairs.

 

The Company’s officer/director currently owns approximately 5,000,100,265 (82%), as of March 31, 2015, of the Company’s outstanding Common Stock and has significant control over shareholder matters, such as election of the Company's directors, amendments to its Articles of Incorporation, and approval of significant corporate transactions; as a result, the Company’ minority shareholders will have little or no control over its affairs.

 

The company may become dependent upon only a few customers for a significant portion of its revenue.  If these customers no longer require our service it will have an adverse effect on our business operations.

The Company may become dependent upon only a few customers for a significant portion of its revenues. Should the Company be successful in obtaining those customers, but those customers no longer require the Company’s services or terminate the use of its services, the Company’s revenues and operations will be negatively affected.

 

The real estate market is very competitive which may have a negative effect on our ability to generate revenue and continue our business operations.

 

The Real Estate Advertising/Marketing services market is becoming increasingly competitive and the barriers to entry regarding such services are low.  Many of the Company’s existing and potential competitors have longer operating histories in the Real Estate Advertising Marketing and website business, greater name recognition, larger client base, greater Internet traffic, and greater financial, technical and marketing resources than the Company does.  The Real Estate Advertising Marketing business and the sales of real estate websites is subject to intense competition; should the Company be unable to overcome such competitive forces, its operations will be negatively affected and it will be unable to expand its business.

 

If the company fails to promote its brand cost effectively it may have a negative impact on our business operations.

 

If the Company fails to promote and maintain its brand successfully, or the Company incurs significant expenses pertaining to promotion of its brand without corresponding revenue increases, the Company’s business may be adversely affected.

 

Our business is subject to various risks associated with conducting business online.

 

The Company’s business  is conducted solely within the Internet arena and is subject to various risks associated with conducting business online, including: (a) the Company’s target clients, real estate professionals, offices, brokers, agents, may operate their own

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Internet portal and websites for advertising and marketing purposes, and have no need for the Company’s advertising, marketing and website services; and (b) consumer traffic to the Company’s website and its advertising/marketing revenues are based on consumer and real estate professional’s acceptance and/or continued acceptance of online marketing and advertising, which there is no assurance will continue to be an acceptable mode of marketing and advertising.

 

Risk Related To Our Capital Stock

 

We may never pay any dividends to shareholders.

 

We have never declared or paid any cash dividends or distributions on our capital stock.  We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

 

The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant.  There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.

 

You will experience dilution of your ownership interest because of the future issuance of additional shares of our common stock and our preferred stock.

 

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders.  We are currently authorized to issue an aggregate of 15,000,000,000 shares of capital stock consisting of 14,999,900,000 shares of common stock, par value $.00001 per share, and 10,000 shares of preferred stock, series A, par value $.0001 per share and 90,000 preferred stock series B, par value $.001 per share, as amended on March 12, 2015.

We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes.

 

Our common stock is considered a penny stock, which may be subject to restrictions on marketability, so you may not be able to sell your shares.

 

If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks.  These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their securities.

 

Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system).  Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account.  The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.  These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules.  The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities.  These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

 

If we fail to maintain an effective system of internal control over financial reporting and disclosure controls and procedures, we may be unable to accurately report our financial results and comply with the reporting requirements under the Exchange Act.

We intend to prepare an internal plan of action for compliance with the requirements of Section 404. As a result, we cannot guarantee that we will not have any “significant deficiencies” or “material weaknesses” within our processes. Compliance with the requirements of Section 404 is expected to be expensive and time-consuming.  If we fail to complete this evaluation in a timely manner, we could be subject to regulatory scrutiny and a loss of public confidence in our internal control over financial reporting.  In addition, any failure to establish an effective system of disclosure controls and procedures could cause our current and potential stockholders and

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customers to lose confidence in our financial reporting and disclosure required under the Exchange Act, which could adversely affect our business.

 

Our Common Stock has a very limited trading market.

 

Our Common Stock is traded on the over-the-counter market (OTCBB) electronic quotation service, an inter-dealer quotation system that provides significantly less liquidity than the NASDAQ stock market or any other national securities exchange.  In addition, trading in our Common Stock has historically been extremely limited.  This limited trading adversely affects the liquidity of our Common Stock, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and reduction in security analysts’ and the media’s coverage of us.  As a result, there could be a larger spread between the bid and ask prices of our Common Stock and you may not be able to sell shares of our Common Stock when or at prices you desire.

 

Our bylaws provide for our indemnification of our officers and directors.

 

Our directors and officers are indemnified as provided by the Florida corporate law and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933.  Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction.  We will then be governed by the court’s decision.

ITEM 1B.       UNRESOLVED STAFF COMMENTS

There is no reporting requirement under this item for a smaller reporting company.

ITEM 2.       PROPERTIES

Our principal executive office is located at 8955 US Highway 301 N., No. 192 Parrish, Florida 34219 and our telephone number is (724) 656-8886.  Office space is provided by our Chief Executive Officer at no charge.

ITEM 3.       LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business.  However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.  We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 4.       MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5.       MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is quoted on the Over the Counter Bulletin Board (“OTCBB”) under the symbol “REAC” for the reporting period.  Although we are listed on the OTCBB, there can be no assurance that an active trading market for our stock will develop. Price quotations on the exchange will reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

Should a market develop for our shares, the trading price of the common stock is likely to be highly volatile and could be subject to wide fluctuations in response to factors such as actual or anticipated variations in quarterly operating results, announcements of technological innovations, new sales formats, or new services by us or our competitors, changes in financial estimates by securities analysts, conditions or trends in Internet or traditional retail markets, changes in the market valuations of other equipment and furniture leasing service providers or accounting related business services, announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments, additions or departures of key personnel, sales of common stock and other events or factors, many of which are beyond our control. In addition, the stock market in general, and the market for instant messaging business services in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. These broad market and industry factors may materially adversely affect the market price of the common stock, regardless of our operating performance.

Consequently, future announcements concerning us or our competitors, litigation, or public concerns as to the commercial value of one or more of our services may cause the market price of our common stock to fluctuate substantially for reasons which may be unrelated to operating results.  These fluctuations, as well as general economic, political and market conditions, may have a material adverse effect on the market price of our common stock. 

Cash dividends have not been paid since inception. In the near future, we intend to retain any earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. The declaration and payment of cash dividends by us are subject to the discretion of our board of directors. Any future determination to pay cash dividends will depend on our results of operations, financial condition, capital requirements, contractual restrictions and other factors deemed relevant at the time by the board of directors. We are not currently subject to any contractual arrangements that restrict our ability to pay cash dividends.

At the present time we have no outstanding options or warrants to purchase securities convertible into common stock.   

Price Range of Common Stock

 

Our Common Stock is to be quoted on the over-the-counter market (OTC: BB) electronic quotation service under the symbol “REAC.”   

	High*			Low*
Fiscal Year 2013
First quarter ended March 31, 2013	$	78.0000		$	1.5000
Second quarter ended June 30, 2013	$	46.0000		$	1.9000
Third quarter ended September 30, 2013	$	5.2000		$	1.1000
Fourth quarter ended December 31, 2013	$	2.3000		$	.1000
Fiscal Year 2014
First quarter ended March 31, 2014	$	1.0000		$	.1000
Second quarter ended June 30, 2014	$	0.5000		$	.1000
Third quarter ended September 30, 2014	$	0.0300		$	0.0022
Fourth quarter ended December 31, 2014	$	0.0030		$	0.0001

* Share quotations retroactively restated for reverse stock splits of 1,000:1, June 10, 2014 and 10:1 on January 21, 2015

Approximate Number of Equity Security Holders

 

 As of December 31, 2014, there were approximately 47 certificate holders of record of the Company’s common stock.

 

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Dividends

 

We have not declared or paid cash dividends on our common stock.

 Stock Option Grants

The Company, pursuant to its 2010 Equity Compensation Plan, which has been approved by the Company’s Board of Directors, as filed with the Securities and Exchange Commission on February 26, 2010, will issue up to 25,000,000 shares of common stock.   The 2010 Equity Compensation Plan is hoped to further provide a method whereby the Company’s current employees and officers and non-employee directors and consultants may be stimulated and allow the Company to secure and retain highly qualified employees, officers, directors and non-employee directors and consultants.  No stock options have been issued as of December 31, 2014.

Registration Rights

We have not granted registration rights to the selling shareholders or to any other persons.

 

ITEM 6.       SELECTED FINANCIAL DATA

 

We qualify as a smaller reporting company, as defined by Rule 229.10(f)(1), and are not required to prove the information required by this Item.

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Notice Regarding Forward Looking Statements

This section of this Form 10-K includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing.  Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements.  Factors which could cause or contribute to such differences include, but are not limited to, the risks to be discussed in our Annual Report on form 10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business.  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

 

Our Operating Strategy

 

Our websites allow real estate professionals and consumers to interact through the Internet as a business medium.  Our operating strategy is to feature real estate agents websites on the www.realestatecontacts.com portal website in the areas that they service and work enabling potential home buyers to view real estate listings and homes that are for sale and featured on the real estate agency’s website.  This format would be called a lead generation program for real estate professionals that are on the RealEstateContacts.com portal website.

We also have the technology to focus on online media, particularly video.  We provide an online Real Estate Listings Video Channel website www.realestatevideochannels.com that will include video and video tours of real estate.  We also offer and sell video real estate websites to real estate professionals on www.realestatevideowebsites.com

Real Estate Contacts, Inc. will offer video websites for local publishing of online real estate video channels in many areas, where our real estate partner can own their own video website, earn additional revenue opportunities, manage the publishing and display hundreds of video properties in a true video format through one simple tool giving real estate professionals exposure for their properties in less time and for less money.

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Our business strategy is an ease of use approach which allows the consumer to view listings of homes from the website of their local real estate office or agent.     

Our focus is driving high volumes of traffic to our advertisers putting the consumer with the most relevant and desired professional.  Thousands of unique visitors visit our websites, (RealEstateContacts.com), and (RealEstateVideoChannels.com)to view real estate listings and homes for sale.  We accomplish this through highly focused and well-designed SEO strategies that allow our advertisers to receive greater amount of sales without spending huge resources.  Our methodology and resource expenditures are invaluable tools to our advertisers.  We do the marketing and our advertisers get the leads.

Currently, while there are other real estate directories and portals on the Internet, only a select few feature real estate agents on an exclusive basis.  We believe this approach will be attractive to real estate professionals in each locale.

Both of our real estate search portal websites will also include local real estate offices, brokers and agents that want more traffic and exposure to their website for potential new clients. 

We believe the driving of internet traffic is the key to any online marketing company.  We intend to build our advertising campaign around all internet related marketing concepts, such as search engine optimization, pay per clicks advertising, banner advertising, email marketing, and linking up to other real estate portals and directories.

Our goal is to connect real estate professionals with consumers who are interested in buying or selling a home.  We believe that when a customer does research and knows which house he or she is interested in, the result is a more effective and time-efficient transaction for both buyer and seller.  

Plan of Operations

Our plan of operation is to operate the most definitive online real estate video listings website and search engine portal website for real estate.  We want to position our company as the first of its kind national real estate search engine/social community/media video network that matches buyers, sellers, brokers, and professionals anywhere in the world through rich and social media.

Our real estate search website allows real estate professionals and consumers to interact through the internet as a business medium.  The Company’s operating strategy is to feature real estate professional’s websites and current listings on the RealEstateContacts.com portal website in the areas that they service and work enabling potential home buyers to view real estate listings and homes that are for sale and featured on the real estate professionals’ website.  This format is called a lead generation program for real estate professionals that are on the RealEstateContacts.com portal website and the RealEstateVideoChannels.com video portal website.

Our company will offer and sell real estate video websites to offices, brokers, agents and all real estate professionals.

Our business strategy is an ease of use approach which allows the consumer to view listings of homes from of their local real estate office, broker or agent. This service is provided from our real estate search website: (www.realestatecontacts.com) and our video website channel: (www.realestatevideochannels.com).  In addition, our real estate search website will feature no more than five agents per territory.  This policy will eliminate a substantial amount of the competition for the real estate agent, broker and office.  For this reason we believe our concept will have a high level of interest from any real estate professional.

Currently while there are other real estate directories and portals on the internet only a select few feature real estate agents on an-exclusive basis.  We believe this approach will be attractive to real estate professionals in each locale.

We also have the technology to focus on online media, particularly video.  We provide an online National Real Estate Video Listings Website that will include listings in a video format from our real estate agents video website. All real estate agents will have their own new video website to display their listings in video.  Our company will design and sell individual video websites known as “channels” to real estate agents, brokers, offices and all real estate professionals and feature those websites on our new real estate video search portal.

Real Estate Contacts, Inc. will offer video real estate websites for local and national publishing in many areas, where our affiliate real estate partners can have their own video website channel, manage the publishing and display hundreds of video properties in a true television format through one simple tool giving real estate professionals exposure for their properties in less time and for less money.

The RealEstateContacts.com portal website will also feature local mortgage brokers and lenders that want more traffic and exposure to their website for potential new clients.  By featuring local mortgage brokers  our website allows the consumer to have access to any financial questions and can receive all the information they need quickly in their geographical area.   

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Our goal is to connect real estate professionals with consumers who are interested in buying or selling a home.  

We generate revenues from the sales of real estate video websites and the advertising sales for real estate professionals on both of our current websites.

 We plan to grow revenues in the next 12 months by undertaking the following steps:

·

Devote greater resources to marketing and selling our services such as developing and creating a more productive advertising sales division within our company by the hiring of advertising sales account executives.

·

Focus to expand our network of advertisers and real estate professionals by increasing our online presence to include various marketing channels such as the major search engines, Google, Yahoo and Bing.

·

Expand our company’s public relations by creating more brand awareness on the internet.  An example would be to focus on other social media websites such as Facebook, Twitter, and LinkedIn.

·

Develop other marketing programs to efficiently increase our brand awareness such as email campaigns, newsletters, linking our website to other real estate business websites, real estate portals and directories.

·

We intend to continue, maintain and aggressively pursue to build our advertising campaign around all internet related marketing concepts, such as search engine optimization, pay per click advertising, banner advertising and social media networks to help manage and geographically target consumer traffic and lead volume.

·

Focus on driving more internet traffic and unique visitors to our websites by using these search engine marketing techniques.

·

We plan to increase our online Search Engine Marketing to create more unique users.  Measuring unique users is important to us because our advertising revenues depend in part on our ability to enable our consumers to connect with real estate professionals.  We define a unique user as a user who visits our website at least once during a calendar month, as measured by our analytical tools.

·

The number of real estate professionals (advertisers) on our websites is an important driver of revenue growth because each advertiser pays us a yearly fee to participate in the advertising of their services as well as a yearly membership fee for their own real estate video website.

Limited Operating History

We have generated a limited financial history and have not previously demonstrated that we will be able to expand our business through increased investment in marketing activities.  We cannot guarantee that the expansion efforts described in this Registration Statement will be successful.  The business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our business model and/or sales methods.

Future financing may not be available to us on acceptable terms.  If debt financing is not available or not available on satisfactory terms, we may be unable to continue expanding our operations.  Equity financing will result in a dilution to existing shareholders.

Results of Operations

For the years ended December 31, 2014 and 2013.

Revenues

For the years ended; December 31, 2014 and 2013, we generated revenues of $546, and $4,161, respectively.  Revenue was generated from annual subscription dues.   

Operating Expenses

Operating expenses were incurred in the amount of $4,816,801 and $3,864,074 for the years ended December 31, 2014 and 2013, respectively.  The increase was attributable to total compensation expenses of $3,551,000 attributable to increase in stock-based compensation to the sole executive and director ($4,162,400 in 2014, compared to $3,671,900 in 2013) and related payroll taxes, penalties and interest.  Stock based compensation was recognized as expense at the fair market value at the grant date.    We anticipate that our professional fees ($43,014 in 2014 vs $33,595 in 2013) will remain significant as we maintain our compliance with our public reporting requirements.  Additionally, we have begun to increase our selling and advertising expense, as we approach launch of our video web channel, which increased from $12,258 to $28,939 for the years ending December 31, 2013 and 2014, respectively.

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Net Loss

The Company recognized net losses of $6,464,490 and $5,417,722 for the years ended December 31, 2014 and 2013, respectively.  The increased loss is largely due to significant increases in stock based compensation, financing costs, and change in derivatives.  At this time, normal costs of public filing and increasing advertising efforts will continue and it is not known when significant revenues will occur to off-set these expenses.

 

Liquidity and Capital Resources

 

The Company is currently financing its operations primarily through loans, equity sales and advances from shareholders.  These advances are being made to supplement any cash generated by the operating revenue.  We believe we can currently satisfy our cash requirements for the next twelve months with our current expected increase in revenue, and the expected capital to be raised in private placement and sales of our common stock.  Additionally, we will begin to use our common stock as payment for certain obligations and secure work to be performed.  Management plans to increase revenue in order to sustain operations for at least the next twelve months. 

The Company has negative working capital, in the amount of $1,773,408 as of December 31, 2014 and has used cash from operations of $336,811.  Investing activities used $60,100, towards completion of the website portal.  The Company received $347,546 from financing activities, through the issuance of convertible debt, for cash.  The Company did not receive any proceeds from issuance of common stock.

At December 31, 2014 the Company has cash, in the amount of $71,378.  The Company anticipates increasing revenue, which will mitigate partial cash flow deficiencies, however at the present time our revenues will not cover our cash requirements.  Management does not believe that is has adequate cash resources to meet the requirements to develop certain aspects of our business plan, however, should be sufficient to meet our current obligations, as the amount represents approximately nine months to one year of our run rate of operating expenses.  In consideration of the potential shortfall in adequate resources, management has disclosed it’s going concern and our auditor has also expressed in their auditors’ report. Management believes that financial support from the majority shareholder to pay minimal and necessary incurred expense will allow the Company to benefit from advertising revenue streams, currently in-place, to produce the anticipated cash flow necessary to support operations.

We do believe we have enough cash to support our daily operations, at reduced levels of development, beyond the next 12 months while we are attempting to expand operations and produce revenues.  Although we believe we have adequate funds to maintain our current operations for the near term, we do not believe that we have the required funding to expand our product offering (web video channel and other possible alternative service offerings). We estimate the Company needs an additional $200,000 to fully implement its business plans over the next twelve months.  In addition, we anticipate we will need an additional minimum of $120,000 to cover operational and administrative expenses for the next twelve months.  The majority shareholder has committed to cover any cash shortfalls of the Company, although there is no written agreement or guarantee.  If we are unable to satisfy our cash requirements we may be unable to proceed with the Offering and our plan of operations.  

 

Future financing for our operations may not be available to us on acceptable terms.  To raise equity will require the sale of stock and the debt financing will require institutional or private lenders.  We do not have any institutional or private lending sources identified.  If debt financing is not available or not available on satisfactory terms, we may be unable to continue expanding our operations.  Equity financing will result in a dilution to existing shareholders.

 

The foregoing represents our best estimate of our cash needs based on current planning and business conditions.  In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services.  Should this occur, we will suspend or cease operations.

We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future.  Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

Management Consideration of Alternative Business Strategies

In order to continue to protect and increase shareholder value management believes that it may, from time to time, consider alternative management strategies to create value for the company or additional revenues.  Strategies to be reviewed may include acquisitions; roll-ups; strategic alliances; joint ventures on large projects; issuing common stock as compensation in lieu of cash; and/or mergers.

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Management will only consider these options where it believes the result would be to increase shareholder value while continuing the viability of the company.  At the current time, there have been no planned commitments to any independent considerations mentioned above.

Subsequent Events

The Company’s Board of Directors approved a reverse stock split of 10:1 (ten shares for one share) on January 21, 2015.  All shares have been retroactively restated for this reverse stock split.

On February 6, 2015, the Board of Directors recommended and the majority shareholder (holding 64% of the voting shares) voted in favor of increasing the authorized capital of the Company to Fifteen Billion (15,000,000,000) shares, to be effective February 10, 2015.  No change was made to the number of preferred shares authorized.  Accordingly, as of March 12, 2015, the total authorized capital of the Company is comprised of Fourteen Billion Nine-Hundred Ninety Nine Million Nine Hundred Thousand (14,999,900,000) shares of common stock, par value $0.00001 per share; 10,000 (ten thousand) shares of Preferred Stock, Series A, par value $0.0001 per share; and 90,000 (ninety thousand) shares of Preferred Stock, Series B, par value $0.001 per share.  The financial statements have retroactively presented the authorized shares, per this amendment.

Common Shares Issued for Repayment of Notes

Through February 20, 2015, the Company has issued 254,364,757 shares of common stock, with a fair market value of $116,538, in satisfaction of $24,640 of principal and $4,119 of interest on the convertible notes payable.  The Company will record the issuance at the fair market value, at the date of exchange, off-setting the notes payable, accrued interest and the recorded derivative liability.

Off-Balance Sheet Arrangements

Under the definition contained in Item 303(a)(4)(ii) of Regulation S-K, we do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Critical Accounting Policies

 

The Company’s significant accounting policies are presented in the Company’s notes to financial statements for the period ended December 31, 2014 and 2013, which are contained in this filing, the Company’s 2014 Annual Report on Form 10-K.  The significant accounting policies that are most critical and aid in fully understanding and evaluating the reported financial results include the following:

·

The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America.  These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.

·

The Company currently does not issue credit on services provided, therefore there are no accounts receivable.  No allowance for doubtful accounts is considered necessary to be established for amounts that may not be recoverable, since there has been no credit issued.  

·

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.

·

The Company issues restricted stock to consultants for various services.  Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is measurable more reliably measurable.  The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for

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performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.  

Recent Accounting Pronouncements

The Financial Accounting Standards Board and other standard-setting bodies issued new or modifications to, or interpretations of, existing accounting standards during the year.  The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term.  These recently issued pronouncements have been addressed in the footnotes to the financial statements included in this filing.

 

ITEM 7A.       QUANTITATIVE AND QUALITIATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instrument assets and do not engage in any hedging activities.

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ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements

Real Estate Contacts, Inc.

As of December 31, 2014 and 2013

 

Contents

 

Financial Statements:
Reports of Independent Registered Public Accounting Firm	15-16
Balance Sheets	17
Statements of Operation	18
Statement of Changes in Stockholders’ Deficit	19
Statements of Cash Flows	20
Notes to Financial Statements	21

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

Real Estate Contacts, Inc.

We have audited the accompanying balance sheet of Real Estate Contacts, Inc. as of December 31, 2014 and the related statements of operations, changes in stockholders’ deficit, and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Real Estate Contacts, Inc. as of December 31, 2014 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred a net loss of approximately $6,500,000 and had cash used in operations of approximately $300,000 for the year ended December 31, 2014, and the Company had an accumulated deficit of approximately $15,000,000 and a working capital deficit of approximately $1,700,000 at December 31, 2014. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ D’Arelli Pruzansky, P.A.

Certified Public Accountants

Boca Raton, Florida

April 13, 2015

 

 

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		2451 N. McMullen Booth Road Suite.308 Clearwater, FL 33759 Toll fee: 855.334.0934 Fax: 800.581.1908

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

We have audited the accompanying balance sheet of  as of , and the related statement of operations, stockholders’ deficiency, and cash flows for the year then ended.  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 audit.  

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits 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, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of  as of , and the results of its operations and its cash flows for the year then ended 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 shown in the accompanying financial statements, the Company has significant net losses and cash flow deficiencies.  Those conditions raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans regarding those matters are described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ DKM Certified Public Accountants

DKM Certified Public Accountants

Clearwater, Florida

March 31, 2014

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Real Estate Contacts, Inc.

Balance Sheets

			December 31,			December 31,
			2014			2013
Assets
Current assets
	Cash	$	71,378		$	120,743
Total current assets			71,378			120,743
Website development costs, net of accumulated
	amortization of  $34,908 and $11,703, respectively		113,884			76,839
Total assets		$	185,262		$	197,582
Liabilities and Stockholders' Deficit
Current liabilities
	Accounts payable	$	45,806		$	26,592
	Accrued expenses		505,715			90,396
	Deferred revenue		-			546
	Derivative liability		1,016,112			1,092,030
	Due to principle shareholder, related party		-			111,426
	Notes payable		-			5,000
	Convertible note payable		277,153			199,816
Total current liabilities			1,844,786			1,525,806
Total liabilities			1,844,786			1,525,806
Commitments and Contingencies (Note 12)
Stockholders' Deficit
	Preferred Stock A $.0001 par value, 10,000 shares
	authorized; none issued and outstanding		-			-
	Preferred Stock B $.001 par value, 90,000 shares
	authorized; none issued and outstanding		-			-
	Common Stock, $0.00001 par value, 14,999,900,000 shares
	authorized; 246,509,673 and 233,655 shares*
	issued and outstanding, respectively		2,465			2
	Additional paid-in capital		13,336,434			7,205,707
	Accumulated deficit		(14,998,423)			(8,533,933)
Total stockholders' deficit			(1,659,524)			(1,328,224)
Total Liabilities and Stockholders' Deficit		$	185,262		$	197,582

* shares retroactively restated for reverse stock split of 1,000:1 on June 10, 2014 and 10:1 on January 21, 2015

The accompanying notes are an integral part of these financial statements.

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Real Estate Contacts, Inc.

Statements of Operations

		For the Year Ended
		December 31,
			2014				2013
Revenues		$	546			$	4,161
Operating expenses:
	Selling expenses		28,939				12,258
	Compensation		4,706,408				3,794,879
	Professional		43,014				33,595
	Rents and overhead		1,200				1,200
	General and administrative		14,185				13,272
	Amortization		23,055				8,870
	Total operating expenses		4,816,801				3,864,074
Net loss from operations			(4,816,255)				(3,859,913)
Other expense
	Interest expense		(566,918)				(414,835)
	Change in fair value of derivative liability		(1,053,288)				(857,431)
	Loss on extinguishment of debt		(28,029)				(285,543)
Net loss before provision for income taxes			(6,464,490)				(5,417,722)
	Provision for income taxes		-				-
Net loss		$	(6,464,490)			$	(5,417,722)
Loss per share, basic and dilutive		$	(0.32)			$	(89.88)
Weighted average shares outstanding
	basic and dilutive		20,297,810				60,277

* shares retroactively restated for reverse stock split of 1,000:1, June 10, 2014 and 10:1 on January 21, 2015

The accompanying notes are an integral part of these financial statements.

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Real Estate Contacts, Inc.

Statements of Changes in Stockholders’ Deficit

For the Years Ended December 31, 2014 and 2013

	Preferred				Common				Additional Paid in  Capital		Accumulated  Deficit		Stock-Holders' Deficit
	Shares		Par		Shares		Par
Balance at December 31, 2012	-		-		19,068		-		2,597,400		(3,116,211)		(518,811)
Common shares issued:
for cash					1,270		-		18,400				18,400
for services					122,224		1		3,671,899				3,671,900
exchange for convertible debt					90,413		1		843,475				843,476
exchange for accounts payable					667		-		73,333				73,333
fractional shares - reverse split					13		-						-
In kind contribution of rent									1,200				1,200
Net loss											(5,417,722)		(5,417,722)
Balance at December 31, 2013	-		-		233,655		2		7,205,707		(8,533,933)		(1,328,224)
Common shares issued:
for cash					-		-		-				-
for services					149,965,000		1,500		4,160,900				4,162,400
exchange for convertible debt					95,977,376		960		1,935,601				1,936,561
exchange for notes payable					333,626		3		33,026				33,029
fractional shares - reverse split					16		-						-
In kind contribution of rent									1,200				1,200
Net loss											(6,464,490)		(6,464,490)
Balance at December 31, 2014	-	$	-		246,509,673	$	2,465	$	$  13,336,434	$	(14,998,423)	$	(1,659,524)

* shares retroactively restated for reverse stock split of 1,000:1, June 10, 2014 and 10:1 on January 21, 2015

The accompanying notes are an integral part of these financial statements.

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Real Estate Contacts, Inc.

Statements of Cash Flows

The accompanying notes are an integral part of these financial statements.

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Real Estate Contacts, Inc.

Notes to the Financial Statements

For the years ended December 31, 2014 and 2013

1.

 Background Information

Real Estate Contacts, Inc. ("The Company") was formed on March 10, 2005 as a Florida Corporation and is based in Parrish, Florida.  The Company engages in the ownership and operation of two real estate advertising portal websites. Real Estate Contacts, Inc. provides a comprehensive online real estate search portal that consists of an advertising and marketing platform for real estate professionals. Our company also provides and sells video real estate websites to real estate professionals. The company has developed a national online real estate video listings portal that provides consumers the opportunity to view real estate in their local markets all in a video format.

The company provides consumers the opportunity to view real estate listings and homes for sale in their local markets.

The company provides real estate professionals the opportunity to reach consumers interested in buying or selling property in their respective geographic area and in most markets and cities throughout the United States.

We enable real estate professionals to better promote themselves and their listings and connect with transaction-ready consumers through our online websites and marketing website products. Our current real estate search website and our new real estate video website product enable real estate professionals to increase their visibility and promote their listings.

Business Operations

Real Estate Contacts, Inc. provides a service that enables real estate professionals to capture, cultivate, and convert leads which cater to prospective home buyers and sellers from our Real Estate Search engine website (www.realestatecontacts.com) and our Real Estate Video Listings Channel. (www.realestatevideochannels.com)

The Company’s business is conducted solely within the Internet and the Online Video arena. Our company matches buyers, sellers, and real brokers and agents anywhere in the world.

We enable real estate professionals to better promote themselves and their listings and connect with transaction-ready consumers through our online websites and marketing products. Our current real estate search website and our new real estate video website product enable real estate professionals to increase their visibility and promote their listings.

2.

Summary of Significant Accounting Policies

 

The significant accounting policies followed are:

 

Basis of Presentation

The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America.

 

Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Our significant estimates include valuation of derivative liabilities and deferred tax allowances. We evaluate our estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. Sales are reduced by the amount of these estimates.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation.  Our reclassifications were made to common stock and additional paid in capital, due to reverse splits in 2014 and 2015, which were retroactively adjusted to presentations of 2014 and 2013 balance sheets.  These reclassifications had no effect on reported losses.

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Financial Instruments

The Company’s balance sheets include the following financial instruments: cash, accounts payable, accrued expenses, deferred revenues and payables to a stockholder. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying values of the due to stockholder  approximates fair value based on borrowing rates currently available to the Company for instruments with similar terms and remaining maturities.  Convertible debt has been valued to fair market value in consideration of the fair value of the potential future consideration that may be required upon settlement.

FASB Accounting Standards Codification (ASC) topic, “Fair Value Measurements and Disclosures”, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

·

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities

·

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

·

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2014.  The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.   

Cash Flow Reporting

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.

Cash and Cash Equivalents

The majority of cash is maintained with a major financial institution in the United States.  As of December 31, 2014 and 2013, deposits with this bank may exceed the amount of insurance provided on such deposits.  Generally, these deposits may be redeemed on demand and, therefore, are considered by management to bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

The Company currently does not issue credit on services provided, therefore there are no accounts receivable.  No allowance for doubtful accounts is considered necessary to be established for amounts that may not be recoverable, since there has been no credit issued.  

Property and Equipment

Costs incurred in the planning stage of a website are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated five year life of the asset. In accordance with FASB ASC No. 350, Intangibles, Goodwill and Other, the Company requires that intangible assets with a finite life be amortized over their life and requires that goodwill and intangible assets be reviewed for impairment annually or more frequently if impairment indicators arise.

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with FASB ASC No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured.

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Consideration for future advertising services are made by customers in advance of those services being provided.   Advertising revenue is recognized ratably over the period that the services are subscribed, generally a one year period.  The unearned portion of the advertising revenue is deferred until future periods in which the subscription is earned.

 

The Company has not issued guarantees or other warrantees on the advertising subscription success or results.  The Company has not experienced any refund requests or committed to any adjustments for terminated subscriptions.  The Company does not believe that there is any required liability.

 

Share-based Compensation

In December 2004, the FASB issued FASB ASC No. 718, Compensation – Stock Compensation (“ASC 718”). Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively.

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB ASC 718. FASB ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”) defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC 505.

Advertising Costs

The costs of advertising are expensed as incurred.  Advertising expense was $11,362 and $6,365 for the years ended December 31, 2014 and 2013, respectively.

Income Taxes

The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

 

The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

 

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of December 31, 2014, tax years ended December 31, 2013, 2012, 2011 are still potentially subject to audit by the taxing authorities.

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Earnings (Loss) Per Share

Basic earnings (loss) per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, Earnings Per Share .

Diluted earnings (loss) per share include the dilutive effects of stock options, warrants, and stock equivalents.  To the extent stock options, stock equivalents and warrants are anti-dilutive they are excluded from the calculation of diluted income per share.  For the years ended December 31, 2014 and 2013 there was 10,126,578 and 1,132,710 (adjusted for two (2) reverse stock splits) potential common shares from a convertible note and no share equivalents, respectively.  For December 31, 2014 and 2013 the Company incurred net operating losses and, thus, anti-dilution issues are not presented.

Commitments and Contingencies

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.  

3.

Going Concern

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.

The Company incurred net losses of $6,464,490 and $5,417,722, accumulated deficits of $14,998,423 and $8,533,933, working capital deficiencies of $1,773,408 and $1,405,063 and negative operating cash flows of $336,811 and $226,833 for the years ended December 31, 2014 and 2013, respectively.  As of December 31, 2014 the Company had insufficient cash with which to satisfy its future obligations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company depends upon capital to be derived from future financing activities such as subsequent offerings of its common stock or debt financing in order to operate and grow the business.  There can be no assurance that the Company will be successful in raising such capital.  The key factors that are not within the Company's control and that may have a direct bearing on operating results include, but are not limited to, acceptance of the Company's business plan, the ability to raise capital in the future, the ability to expand its customer base, and the ability to hire key employees to build and maintain websites and to provide services and support to its customers and users.  There may be other risks and circumstances that management may be unable to predict.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

4.

Recently Issued Accounting Pronouncements

  

In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers.   The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition.  Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities.  The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however it believes that there will be no material effect on the financial statements.

In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.  A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved.  The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted.  Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the financial statements.  

In August 2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.    Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this

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presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events.  The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.  The Company will evaluate the going concern considerations in this ASU and future reports will include any additional disclosures required.

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

5.

 Website Development Costs

		December 31,
		2014				2013
Website Development Costs		$	148,792			$	88,542
Less accumulated amortization			(34,908)				(11,703)
Property and equipment, net		$	113,884			$	76,839

Amortization of website was $23,055 and $8,870 for the year ended December 31, 2014 and 2013, respectively.

6.

Accrued Liabilities

Accrued expenses, consist of:

		December 31,
		2014				2013
Accrued interest		$	26,148			$	25,687
Accrued payroll taxes			479,567				64,709
Total accrued expenses		$	505,715			$	90,396

The Company has paid or accrued compensation to its Chief Executive Officer totaling $4,706,408 and $3,794,879 during the years ended December 31, 2014 and 2013, respectively.  However, the Company has not paid the related payroll taxes, consisting primarily of Social Security and Medicare taxes.  As a result, the Company has established an accrued liability for the related taxes, along with the estimated interest and penalties of $479,567 and $64,709 at December 31, 2014 and 2013, respectively.

Deferred Revenue:

Deferred revenues are derived from the unearned portion of advertising subscriptions.  Advertising revenue is generated primarily from annual subscription transactions.  Revenue is earned ratably over the expired portion of the subscription term.  The unearned portion is deferred until earned through the passage of time based on the subscription term.

7.

 Notes Payable

The notes outstanding are summarized by their terms below:

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Schedule of Debt

	December 31,
	2014		2013
Notes payable, issued to an individual, maturing within one year, at interest rate of 12%	$    -		$    5,000
Convertible promissory notes, various lending institutions, maturing at variable dates ranging from 180 days to one year from origination date, 8-10% interest, convertible at discount to trading price (40-75%) based on various measurements of prior trading, at face value of remaining original note principal outstanding of $299,149, including delinquency penalties of $9,735, net of  unamortized debt discounts, attributable to embedded conversion option of convertible debt, and deferred financing costs in the amount of $31,731 and $171,684, respectively	277,153		199,816
Total	$  277,153		$        204,816

Summary of convertible note transactions:

Convertible notes, December 31, 2013	$      345,500
Additional notes, face value	372,750
Conversions of debt	(419,001)
Remaining notes, face value	299,149
Addition due to debt agreement default provisions	9,735
Unamortized financing costs, December 31, 2014	(2,256)
Unamortized debt discounts, December 31, 2014	(29,475)
Convertible notes, December 31, 2014	$     277,153

8.

Derivatives and Fair Value

The Company evaluated the terms of the convertible notes, in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability. The Company evaluated the conversion feature for the embedded conversion option. Since these notes contain conversion price adjustment provisions (i.e., down round, or ratchet provisions), the Company determined that the embedded conversion options met the definition of a derivative. The effective conversion price was compared to the market price on the date of the note and was deemed to be less than the market value of underlying common stock at the inception of the note. The Company recognized a debt discount on the notes as a reduction (contra-liability) to the Convertible Notes Payable. The debt discounts are being amortized over the life of the notes.  The Company recognized financing costs for charges by the lender for original issue discounts and other applicable administrative costs, normally withheld from proceeds, which are being amortized as finance cost over the life of the loan.

A derivative liability, in the amount of $1,016,112 and $1,092,030 has been recorded, as of December 31, 2014 and 2013, respectively, related to the above notes.  The derivative value was calculated using the Black-Scholes method.  Assumptions used in the derivative valuation were as follows:

		December 31,
		2014	2013
Weighted Average:
Dividend rate		0.00%	0.0%
Risk-free interest rate		0.12%	.10%
Expected lives (years)		0.563	.451
Expected price volatility		254.8%	487.3%
Forfeiture Rate		0.00%	0.0%

ASC 825-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 825-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 describes three levels of inputs that may be used to measure fair value:  Level 1  – Quoted prices in active markets for identical assets or liabilities;  Level 2 – Observable inputs

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other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and  Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company’s Level 3 liabilities consist of the derivative liabilities associated with the convertible notes.  At December 31, 2014, all of the Company’s derivative liabilities were categorized as Level 3 fair value liabilities. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Level 3 Valuation Techniques

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.  Level 3 financial liabilities consist of the derivative liabilities for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation.  At the date of the original transaction, we valued the convertible note that contains down round provisions using a Black-Scholes model, with the assistance of a valuation consultant, for which management understands the methodologies. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior.  Using assumptions, consistent with the original valuation, the Company has subsequently used the Black-Scholes model for calculating the fair value, as of December 31, 2014:  

	As of December 31, 2014
	Carrying Value	Level 1	Level 2	Level 3	Total
Derivative Liabilities	$     1,016,112	$	$	$     1,016,112	$     1,016,112
Total Derivative Liabilities	$     1,016,112	$	$	$     1,016,112	$     1,016,112

The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the twelve months of fiscal year 2014:

	Fair Value Measurements using inputs
Balance, December 31, 2013	$        1,092,030
Total losses realized and included in net loss	1,053,288
Purchases, issuances and settlements	(1,129,206)
Transfers in (out)	--
Balance, December 31, 2014	$       1,016,112

 

9.

Income Tax

The Company accounts for income taxes under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

	December 31,
	2014			2013
Income tax provision (benefit) at statutory rate	$	(2,262,000)		$	(2,021,000)
State taxes, net of federal benefit		(226,000)			-
Nondeductible items		2,171,100			1,370,000
Subtotal		(316,900)			(651,000)
Change in valuation allowance		316,900			651,000
Income Tax Expense	$	-		$	-
Net deferred tax assets and liabilities were comprised of the following:
Net Operating Losses	$	1,183,000		$	866,100
Valuation allowance		(1,183,000)			(866,100)
Deferred tax asset, net	$	-		$	-

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As of December 31, 2014, the Company has estimated tax net operating loss carryforwards of approximately $3.1 million, which can be utilized or expire through tax year 2034.  Utilization of these losses may be limited in accordance with IRC Section 382 in the event of certain ownership shifts. The change in the valuation allowance for the years ended December 31, 2014 and 2013 was $316,900 and $651,000, respectively.

10.

Equity

The Company amended its Articles of Incorporation, most recently, on March 12, 2015. The total number of shares this corporation is authorized to issue is 15,000,000,000 (fifteen billion), allocated as follows among these classes and series of stock:

 

Designation		Par value			Shares
Common		$	0.00001		14,999,900,000
Preferred Stock Class, Series A		$	0.0001		10,000
Preferred Stock Class, Series B		$	0.001		90,000

No preferred shares have been issued; rights and preferences have not been designated by the Board of Directors.

The Company’s Board of Directors approved reverse stock splits of 1,000:1 on June 10, 2014 and 10:1 on January 21, 2015.  All shares have been retroactively restated for these reverse stock splits.

The Company has issued -0- and 1,270 common shares for cash proceeds of $-0- and $18,400 for the year ended December 31, 2014 and 2013, respectively.

The Company issued -0- and 1,509 shares of common stock, at a fair market value of $-0- and $291,850 to non-employee consultants for services during the year ended December 31, 2014 and 2013, respectively.  

The Company has issued 149,965,000 and 120,715 common shares to the majority shareholder as compensation during the years ending December 31, 2014 and 2013, respectively.  These shares are valued at $4,162,400 and $3,380,050, the fair market value of common shares at last traded transaction on the OTC exchange on the date of the stock grant.

The Company has issued common stock in satisfaction of obligations to its lenders and creditors.  For the year ending December 31, 2014, the Company has issued 95,977,376, at a fair market value of $1,936,561, in exchange for convertible notes payable of $395,702 and accrued interest of $28,653.   For the year ending December 31, 2013, the Company has issued 90,413, at a fair market value of $843,476, in exchange for convertible notes payable of $291,210 and accrued interest of $1,300.

For the year ended December 31, 2013 the Company issued 667 common shares in settlement of $10,575 of accounts payable.  The fair value of the shares based on the quoted market price at the date of exchange, was $73,333, resulting in a loss on exchange of $62,758.  

For the year ended December 31, 2014 the Company issued 3,336,260 common shares in exchange for a note payable of $5,000.  The fair value of the shares, based on the quoted market price at the date of exchange, was $33,029, resulting in a loss on exchange of $28,029.

During the year ended December 31, 2014 and 2013 the Company recorded in-kind contributions for rent expense in the amount of $1,200 and $1,200, respectively.

11.

Related Party Transactions

On March 4, 2013, we amended an employment agreement with Robert DeAngelis, our Chief Executive Officer.  The employment agreement is for a period of three years and can be cancelled upon written notice by either employee or employer (if certain employee acts of misconduct are committed).  The total minimum aggregate annual amount due under the employment agreement is approximately $120,000 plus bonuses which will be determined and paid in accordance with policies set from time to time by the Board, at their discretion.  The employment agreement also stipulates that the employer (the Company) shall issue stock to the employee to maintain majority control.

The majority shareholder has advanced funds or deferred contractual salaries since inception, for the purpose of financing working capital and product development.  There are no repayment terms to these advances and deferrals; however, the Company repaid the

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balance due at December 31, 2013 of $111,426 during 2014.  In the absence of a formal agreement or stated interest rate, the Company had accrued interest at a minimal variable rate, currently 2%.  Management will periodically adjust this rate following guidelines of applicable federal rates.

The Company has minimal needs for facilities and operates from office space provided by the majority shareholder.  There are no lease terms.  For the year ended December 31, 2014 and 2013, rent has been calculated based on the limited needs at a fair market value of the space provided.  Rent expense was $1,200 and $1,200 for the years ended December 31, 2014 and 2013, respectively. The rental value provided has been recognized as an operating expense and treated as a contribution to capital.  

The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.

12.

Commitments and Contingencies

 

From time to time the Company may be a party to litigation matters involving claims against the Company.   Management believes that there are no known or potential matters that would have a material effect on the Company’s financial position or results of operations.

The Company’s operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure.

There were no operating or capital lease commitments as of December 31, 2014 and 2013.

13.

 Subsequent Events

The Company’s Board of Directors approved a reverse stock split of 10:1 (ten shares for one share) on January 21, 2015.  All shares have been retroactively restated for this reverse stock split.

On February 6, 2015, the Board of Directors recommended and the majority shareholder (holding 64% of the voting shares) voted in favor of increasing the authorized capital of the Company to Fifteen Billion (15,000,000,000) shares, to be effective February 10, 2015.  No change was made to the number of preferred shares authorized.  Accordingly, as of March 12, 2015, the total authorized capital of the Company is comprised of Fourteen Billion Nine-Hundred Ninety Nine Million Nine Hundred Thousand (14,999,900,000) shares of common stock, par value $0.00001 per share; 10,000 (ten thousand) shares of Preferred Stock, Series A, par value $0.0001 per share; and 90,000 (ninety thousand) shares of Preferred Stock, Series B, par value $0.001 per share.  The financial statements have retroactively presented the authorized shares, per this amendment.

Through February 20, 2015, the Company has issued 916,747,743 shares of common stock, with a fair market value of $247,592, in satisfaction of $76,349 of principal and $4,689 of interest on the convertible notes payable.  The Company will record the issuance at the fair market value, at the date of exchange, off-setting the convertible notes payable, accrued interest and the recorded derivative liability.

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ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On July 9, 2014, the Company was informed that our registered independent public accountant, DKM Certified Public Accountants, of Clearwater Florida (“DKM”) declined to stand for re-appointment and engaged D’Arelli Pruzansky, P.A. (“DP”) of Boca Raton, FL, as its new registered independent public accountant..  

We had not had any disagreements with DKM on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, in connection with their report.

ITEM 9A.       CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures 

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and acting Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. 

 

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 Rules 13a-15(f) and 15d-15(f) of the Exchange Act) of the Company.  Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

 

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

 

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

 

Management, under the supervision of the Company’s Chief Executive Officer and acting Chief Financial Officer, conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2014 under the criteria set forth in the in Internal Control—Integrated Framework.

 

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.  Management has determined that material weaknesses exist due to a lack of segregation of duties, resulting from the Company's limited resources.

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-K.

 

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Changes in Internal Control over Financial Reporting

 

No change in the Company’s internal control over financial reporting occurred during the year ended December 31, 2014, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

ITEM 9B.       OTHER INFORMATION

None.

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PART III

ITEM 10.       DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Directors and Executive Officers

 

Name		Position		Period		Age
Robert DeAngelis 240 Windsor Ridge #36 New Castle, PA 16105		President, Chief Executive Officer, Chief Accounting Officer, Treasurer and Director		March 2005 - Present		58

Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years.

 

Management Team

 

Robert DeAngelis, President, Chief Executive Officer, Age 58

 

Robert DeAngelis is the Founder, President and Chief Executive Officer of Real Estate Contacts,   Inc., and has been since the company’s inception in 2005.  Mr. DeAngelis brings to the company over 20 years of successful business development and management experience along with a strong diverse background of sales, financial and internet experience.  Mr. DeAngelis is responsible for running the overall day to day management operations of the companies’ administrative functions, corporate filings, strategic evolution direction of the business, the overall vision as well as the sales and marketing for the company.

From 1997-2005 Mr. DeAngelis developed a company named The Privilege Club, Inc.  This company was a print and internet advertising company for upper scale retailers and business owners.  Prior to developing The Privilege Club, between 1987 through 1997 he developed a print and newspaper advertising company named Shopping Center Promotions and Marketing, Inc.  In this capacity, Mr. DeAngelis planned successful marketing and advertising strategies working with shopping center owners and management owners in the South Florida area.  From 1979 through 1985, Mr. DeAngelis managed several branch real estate offices in Ft. Lauderdale, Florida consisting of Century 21, ERA and Realty World Franchises.

In 1974, Mr. DeAngelis received his Associate’s Degree in Applied Business and his Bachelor of Science in Business Administration in 1977 from Youngstown University, Youngstown, Ohio.

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.

 

Code of Ethics

 

We have adopted a code of ethics since the final quarter of 2011 that applies to our principal executive officer, principal financial officer, and principal accounting officer as well as our employees.  Our standards are in writing and are to be posted on our website at a future time.  The following is a summation of the key points of the Code of Ethics we adopted:

 

·

Honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

·

Full, fair, accurate, timely, and understandable disclosure reports and documents that a small business issuer files with, or submits to, the Commission and in other public communications made by our Company;

·

Full compliance with applicable government laws, rules and regulations;

·

The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and

·

Accountability for adherence to the code

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Corporate Governance

 

We are a small reporting company, not subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act respecting any director.  We have conducted special Board of Director meetings almost every month since inception.  Each of our directors has attended all meetings either in person or via telephone conference.  We have no standing committees regarding audit, compensation or other nominating committees.  In addition to the contact information in private placement memorandum, each shareholder will be given specific information on how he/she can direct communications to the officers and directors of the corporation at our annual shareholders meetings.  All communications from shareholders are relayed to the members of the Board of Directors. 

 

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Exchange Act, our directors and certain of our officers, and persons holding more than 10 percent of our common stock are required to file forms reporting their beneficial ownership of our common stock and subsequent changes in that ownership with the United States Securities and Exchange Commission.  Such persons are also required to furnish Coastline Corporate Services, Inc. with copies of all forms so filed.

Based solely upon a review of copies of such forms filed on Forms 3, 4, and 5, and amendments thereto furnished to us, we believe that as of the date of this report, our executive officers, directors and greater than 10 percent beneficial owners complied on a timely basis with all Section 16(a) filing requirements.

ITEM 11.       EXECUTIVE COMPENSATION

The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the fiscal years ended December 31, 2014 and 2013.

  

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the years ended December 31, 2014 and 2013 in all capacities for the accounts of our executives, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

Name and principal position(1)	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Comp ($)		Non-Qualified Deferred Comp Earnings ($)		All Other Comp ($)		Total ($)
Robert DeAngelis, President, CEO  and CFO		2014 2013 2012	$ $ $	129,1501 10,000 60,000		-0- -0- -0-	$ $ $	4,162,400 3,380,050 282,500		-0- -0- -0-		-0- -0- -0-		-0- -0- -0-		-0- -0- -0-	$ $ $	4,291,550 3,490,050 342,500
(1)   There is an employment contract with the Executive at this time. There is no employment contract with the Directors at this time. Nor are there any agreements for compensation in the future. A salary and stock options and/or warrants program may be developed in the future.

Executive Compensation

 

No other officer or director has received any compensation from us.  Until we achieve significant operational revenues, it is not anticipated that any officer or director will receive compensation from us.

 

As of December 31, 2014 we have one full time employee, and plan to employ more qualified employees in the near future.  On March 4, 2013 we renewed and amended the original three year employment agreement dated March 10, 2010, which had expired. We entered into a new three year employment agreement with Robert DeAngelis to serve as the President and Chief Executive Officer of the Company.  Mr. DeAngelis will be paid a minimum of $10,000 per month plus performance bonuses. The agreement also stipulated that the Company is to issue stock for the purpose of maintaining voting control of the Company.

 

Additional Compensation of Directors

 

We have no stock option, retirement, pension, or profit-sharing programs for the benefit of directors, officers or other employees.

 

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Board of Directors and Committees

 

Our board of directors appoints our executive officers to serve at the discretion of the board.  Our directors receive no compensation from us for serving on the board.  Until we achieve significant operational revenues, we do not intend to reimburse our officers or directors for travel and other expenses incurred in connection with attending the board meetings or for conducting business activities.

 

Employment Agreements

On March 10, 2010, renewed on March 4, 2013, we entered into an employment agreement with Robert DeAngelis, our Chief Executive Officer. The employment agreement is for a period of three years and can be cancelled upon written notice by either employee or employer (if certain employee acts of misconduct are committed). The total minimum aggregate annual amount due under the existing employment agreement is $120,000 plus bonuses. For the years ending December 31, 2014 and 2013, the Company awarded stock valued at $4,162,400 and $3,380,050 by the issuance of 149,965,000 and 1,207,150,000 common shares, respectively.

  

Director Compensation

 

We have provided no compensation to our directors for services provided as directors.

 

Stock Option Grants

 

We have not granted any stock options to our executive officers since our incorporation.

ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information concerning the beneficial ownership of shares of our common stock with respect to stockholders who were known by us to be beneficial owners of more than 5% of our common stock as of December 31, 2013, and our officers and directors, individually and as a group.  Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such shares of common stock.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission ("SEC") and generally includes voting or investment power with respect to securities.  In accordance with the SEC rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees, if applicable.

The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding common stock as of December 31, 2014, and by the officers and directors, individually and as a group.  All shares are owned directly.

Name	Position	Common Stock Owned	Percentage Owned*
Robert DeAngelis 240 Windsor Ridge #36 New Castle, PA 16105	President, Chief Executive Officer, Chief Accounting Officer, Treasurer and Director	1,501,002,650	61%

* based on 2,465,096,613 shares issued and outstanding as of December 31, 2014

ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

As of December 31, 2014, Mr. DeAngelis beneficially owns 1,501,002,650 shares of common stock.

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ITEM 14.       PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table shows the fees that were billed for the audit and other services for the two year period.  D'Ardelli Pruzansky, PA provided services for the year ended December 31, 2014.  DKM Certified Public Accountants performed audit services for our year ended December 31, 2013.

 

		2014		2013
Audit Fees	$	20,000		$	7,500
Audit-Related Fees		6,500			5,500
Tax Fees		-			-
All Other Fees		-			-
Total		26,500		$	13,000

 

Audit Fees  — This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

Audit-Related Fees — This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting.

Tax Fees — This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees — This category consists of fees for other miscellaneous items.

Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. The audit and review fees paid to the auditors with respect to 2013 were pre-approved by the entire Board of Directors.  There were no consultation or tax fees paid to our auditors.

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:

·

approved by our audit committee; or

·

entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.

We do not have an audit committee.  Our entire board of directors pre-approves all services provided by our independent auditors.

The pre-approval process has just been implemented in response to the new rules.  Therefore, our board of directors does not have records of what percentage of the above fees was pre-approved.  However, all of the above services and fees were reviewed and approved by the entire board of directors either before or after the respective services were rendered.

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PART IV

ITEM 15.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

*Pursuant to Item 601(32)(ii) of Regulation S-K, Exhibit 32 is not deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise  subject to liability under that section.

**Pursuant to Rule 406T of Regulation S-T, the interactive XBRL files contained in Exhibit 101 hereto are deemed “not filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under that section.

 

SIGNATURES

 

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, there unto duly authorized.

 

	Real Estate Contacts, Inc.
Dated:   April 15, 2015	By:	/s/  Robert DeAngelis
		Robert DeAngelis
		President
		Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director

In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.

 

Name	Title	Date
/s/ Robert DeAngelis	President	April 15, 2015
Robert DeAngelis	Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director

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