Nevada		6510		27-1488943
(State or other Jurisdiction of Incorporation)		(Primary Standard Industrial Classification Code)		(IRS Employer Identification No.)

 

 

 

 

 

 

 

 

 

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

 

                                                                                                                                            

Employees

 

We currently have two employees: (1) Deborah Lovig, our President and Director, who works 30 hours per work as the general contractor; and (2) James Coker, our Secretary and Director, who works 2-3 hours per week. All repair and restoration work is completed with third-party contractors.

 

Business Development

 

We seek to develop mutually beneficial business relationships with real estate developers and hedge funds that are focused on acquiring below-market properties in highly desirable vacation areas of North and South Carolina. Our ability to fully implement this marketing program is dependent upon proper use of our financing proceeds. If we use our working capital faster than originally planned, we may be required to substantially curtail our business development efforts as well as face higher costs for renovating and managing properties. The implementation of a scaled-back program would slow our revenue growth.

 

Marketing and Sales

 

Our initial marketing efforts are geared toward developing mutually beneficial business relationships with developers and fund managers that own and continue to acquire distressed vacation properties. Once we have management contracts with the property owners, our efforts will extend to marketing and promoting the properties for rent.

 

 

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Competition

 

We face competition from renovators and rental agencies seeking to capitalize on the looming ARM-related foreclosure boom. See “RISK FACTORS” For more information. We will be able to compete based on different factors including price differentiation and marketing which will be dependent on any agreements we enter into with hedge funds and real estate developers . We believe, however, that the market for REO properties is growing rapidly enough to support the entry of numerous new players, including us.

 

Regulation and Litigation in the Real Estate Industry

 

We cannot predict the outcome of legislative and regulatory initiatives in the future.  Depending on these outcomes, there may be a materially adverse effect on the Company’s business prospects.  See “RISK FACTORS” for more information.

 

DESCRIPTION OF PROPERTY

 

Our principal executive office is located at 710 Wellingham Drive, Durham, NC 27713, and our telephone number is (919) 656-8646. Our president, Deborah Lovig, provides office space at no cost to us.

 

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.

 

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

There is presently no public market for our shares of common stock. We anticipate applying for quoting of our common stock on the OTCBB upon the effectiveness of the registration statement of which this prospectus forms apart. However, we can provide no assurance that our shares of common stock will be quoted on the OTCBB or, if quoted, that a public market will materialize.

 

Holders of Capital Stock

 

As of the date of this registration statement, we had a total of 45 holders of our common stock.

 

Rule 144 Shares

 

As of the date of this registration statement, we do not have any shares of our common stock that are currently available for sale to the public in accordance with the volume and trading limitations of Rule 144.

 

Stock Option Grants

 

We do not have any stock option plans.

 

Registration Rights

 

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

 

 

 

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REAL ESTATE RESTORATION AND RENTAL, INC.

(A DEVELOPMENT STAGE COMPANY)

 

 

 

CONTENTS

 

 

PAGE	F-1	REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PAGE	F-2	BALANCE SHEET AS OF JUNE 30, 2010.
PAGE	F-3	STATEMENT OF OPERATIONS FOR THE PERIOD FROM DECEMBER 15, 2009 (INCEPTION) TO JUNE 30, 2010.
PAGE	F-4	STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM DECEMBER 15, 2009 (INCEPTION) TO JUNE 30, 2010.
PAGE	F-5	STATEMENT OF CASH FLOWS FOR THE PERIOD FROM DECEMBER 15, 2009 (INCEPTION) TO JUNE 30, 2010.
PAGES	F-6 - F-10	NOTES TO FINANCIAL STATEMENTS.

 

 

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors of

Real Estate Restoration and Rental, Inc.

(A Development Stage Company)

 

We have audited the accompanying balance sheet of Real Estate Restoration and Rental, Inc. (a development stage company) (the “Company”) as of June 30, 2010 and the related statements of operations, changes in stockholders’ equity and cash flows for the period from December 15, 2009 (inception) to June 30, 2010.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our 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.  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 Restoration and Rental, Inc. (a development stage company) as of June 30, 2010 and the results of its operations and its cash flows for the period ending June 30, 2010 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 5 to the financial statements, the Company is in the development stage with limited operations, a net loss of $37,925 for the period ending June 30, 2010 and used cash in operations from inception of $29,725.  These factors raise substantial doubt about the Company's ability to continue as a going concern.  Management's plans concerning these matters are also described in Note 5.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

WEBB & COMPANY, P.A.

Certified Public Accountants

 

 

Boynton Beach, Florida

September 24, 2010

 

 

F-1

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Table of Contents

 

Real Estate Restoration and Rental, Inc.
(A Development Stage Company)
Balance Sheet
ASSETS
		June 30, 2010
Current Assets
Cash		$	141,125
Prepaid Expense			2,500
Total Assets		$	143,625
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable		$	7,500
Total  Liabilities			7,500
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized,
none issued  and outstanding			-
Common stock, $0.0001 par value; 100,000,000 shares authorized, 6,782,500 shares
issued and outstanding			678
Additional paid-in capital			173,372
Deficit accumulated during the development stage			(37,925	)
Total Stockholders' Equity			136,125
Total Liabilities and Stockholders' Equity		$	143,625

 

See accompanying notes to financial statements

 

F-2

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Real Estate Restoration and Rental, Inc.
(A Development Stage Company)
Statement of Operations
		For the period from December 15, 2009
		(inception) to June 30, 2010
Operating Expenses
Professional fees		$	24,725
General and administrative			13,200
Total Operating Expenses			37,925
LOSS FROM OPERATIONS BEFORE INCOME TAXES			(37,925	)
Provision for Income Taxes			-
NET LOSS		$	(37,925	)
Net Loss Per Share  - Basic and Diluted		$	(0.01	)
Weighted average number of shares outstanding			5,879,084
during the period - Basic and Diluted

 

 

See accompanying notes to financial statements

 

F-3

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Real Estate Restoration and Rental, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the period from December 15, 2009 (Inception) to June 30, 2010
																						Deficit
		Preferred Stock								Common stock								Additional				accumulated during the				Total
																		paid-in				development				Stockholders'
		Shares				Amount				Shares				Amount				capital				stage				Equity
Balance December 15, 2009			-			$	-				-			$	-			$	-			$	-			$	-
Common stock issued for services to founder ($0.0001 per share)			-				-				4,000,000				400				-				-				400
Common stock issued for cash to founder ($0.0001 per share)											1,000,000				100				-				-				100
Common stock issued for cash ($0.10/ per share)			-				-				1,782,500				178				178,072				-				178,250
Stock Offering Costs			-				-				-				-				(7,500	)			-				(7,500	)
In kind contribution of services			-				-				-				-				2,800				-				2,800
Net loss for the period December 15, 2009 (inception) to June 30, 2010			-				-				-				-				-				(37,925	)			(37,925	)
Balance, June 30, 2010			-			$	-				6,782,500			$	678			$	173,372			$	(37,925	)		$	136,125

 

See accompanying notes to financial statements

 

F-4

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Real Estate Restoration and Rental, Inc.
(A Development Stage Company)
Statement of Cash Flows
		For the period from December 15, 2009
		(inception) to June 30, 2010
Cash Flows Used in Operating Activities:
Net Loss		$	(37,925	)
Adjustments to reconcile net loss to net cash used in operations
In-kind contribution of services			2,800
Shares issued to founder for services			400
Changes in operating assets and liabilities:
(Increase)/Decrease in prepaid expenses			(2,500	)
(Decrease) Increase in accounts payable and accrued expenses			7,500
Net Cash Used In Operating Activities			(29,725	)
Cash Flows From Financing Activities:
Proceeds from issuance of common stock, net of offering costs			170,850
Net Cash Provided by Financing Activities			170,850
Net Increase in Cash			141,125
Cash at Beginning of Period			-
Cash at End of Period		$	141,125
Supplemental disclosure of cash flow information:
Cash paid for interest		$	-
Cash paid for taxes		$	-

 

See accompanying notes to financial statements

 

F-5

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Table of Contents

 

REAL ESTATE RESTORATION AND RENTAL, INC.

 (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2010

 

 

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

(A) Organization

 

Real Estate Restoration and Rental, Inc. (a development stage company) (the "Company") was incorporated under the laws of the State of Nevada on December 15, 2009.  The Company will focus on providing renovation and management services to larger real estate developers and hedge funds that own and are acquiring additional vacation rental properties in North and South Carolina at below-market prices. The Company provides property management services ranging from completing necessary renovation work to marketing and renting the properties on a seasonal basis at a profit. The Company will also seek to acquire access to green and energy-saving solutions such as geothermal and Frigitek products that can be re-engineered for residential applications wi th the Company’s nonexclusive patent license agreement.

  

Activities during the development stage include developing the business plan and raising capital.

 

(B) 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.

 

(C) Cash and Cash Equivalents

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.  At June 30, 2010, the Company had no cash equivalents.

 

(D) Loss Per Share

 

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, “Earnings Per Share.”  As of June 30, 2010 there were no common share equivalents outstanding.

 

(E) Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”).  Under ASC 740-10-25, 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 740-10-25, 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.

 

 

 

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REAL ESTATE RESTORATION AND RENTAL, INC.

 (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2010

 

 

As of June 30, 2010, the Company has a net operating loss carryforward of approximately $34,725 available to offset future taxable income through June 30, 2030.  The valuation allowance at June 30, 2010 was $13,388.  The net change in the valuation allowance for the year ended June 30, 2010 was an increase of $13,388.  The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company’s continued operating losses and the uncertainty of the Company’s ability to utilize all of the net operating loss carryforwards before they will expire through the year 2030.

 

The net deferred tax liability in the accompanying balance sheet includes the following amounts of deferred tax assets and liabilities:

 

		June 30, 2010
Deferred tax liability:		$	-
Deferred tax asset
Net Operating Loss Carryforward			13,388
Valuation allowance			(13,388)
Net deferred tax asset			-
Net deferred tax liability		$	-

 

The components of income tax expense related to continuing operations are as follows:

 

		2010
Federal
Current		$	-
Deferred			-
		$	-
State and Local
Current		$	-
Deferred			-
		$	-

 

 

 

F-7

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REAL ESTATE RESTORATION AND RENTAL, INC.

 (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2010

 

The Company's income tax expense differed from the statutory rates (federal 34% and state 4.55%) as follows:

 

		For the Period Ended June 30,
		2010
Statutory rate applied to earnings before income taxes:		$	(14,620)
Increase (decrease) in income taxes resulting from:
State income taxes			-
Change in deferred tax asset valuation allowance			13,388
Non-deductible expenses			1,232
Income Tax Expense		$	-

 

(F) Business Segments

 

The Company operates in one segment and therefore segment information is not presented.

 

(G) Revenue Recognition

 

The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.  The Company recognizes rental revenue in accordance with FASB ASC No. 840-25.  FASB ASC No. 840-25 requires that rental revenue be recognized on a straight-line basis over the term of the lease for operating leases.

 

NOTE 2

STOCKHOLDERS’ EQUITY

 

(A) Common Stock Issued for Cash

 

For the period ended June 30, 2010, the Company issued 1,782,500 shares of common stock for $178,250($0.10/share) less stock offering costs of $7,500.  The Company also issued 1,000,000 shares of common stock to its founder for $100 ($0.0001 per share) (See note 4).

 

 

F-8

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REAL ESTATE RESTORATION AND RENTAL, INC.

 (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2010

 

 

 

(B) In-Kind Contribution

 

For the period ended June 30, 2010, a shareholder of the Company contributed services having a fair value of $2,800 (See Note 4).

 

(C) Stock Issued for Services

 

On December 19, 2009, the Company issued 4,000,000 shares of common stock to its founder having a fair value of $400 ($0.0001/share) in exchange for services provided (See Note 4).

 

NOTE 3      COMMITMENTS

 

On February 16, 2010, the Company entered into a consulting agreement to receive administrative and other miscellaneous services.  The Company is required to pay $5,000 a month.  The agreement is to remain in effect unless either party desired to cancel the agreement.

 

NOTE 4      RELATED PARTY TRANSACTIONS

 

For the period ended June 30, 2010, a shareholder of the Company contributed services having a fair value of $2,800 (See Note 2(B)).

 

On December 19, 2009, the Company issued 5,000,000 shares of common stock to its founder having a fair value of $500 ($0.0001/share) in exchange for services and cash (See Note 2 (A) and 2 (C)).

 

NOTE 5      GOING CONCERN

 

As reflected in the accompanying financial statements, the Company is in the development stage with limited operations, used cash in operations of $29,725 from inception and has a net loss since inception of $37,925.    This raises substantial doubt about its ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

 

 

 

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REAL ESTATE RESTORATION AND RENTAL, INC.

 (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2010

 

 

NOTE 6      SUBSEQUENT EVENTS

 

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through September 24, 2010, the date the financial statements were issued.

 

On September 24, 2010, the Company entered into a 10 - year patent license agreement for a product that reduces energy consumption and carbon emissions of commercial coolers. The fee for the license is $30,000 and royalty payments of 14% of net sales.

 
 

 

F-10

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REAL ESTATE RESTORATION AND RENTAL, INC.

(A DEVELOPMENT STAGE COMPANY)

CONTENTS

PAGE	F-1	CONDENSED BALANCE SHEETS AS OF DECEMBER 31, 2010 (UNAUDITED) AND AS OF JUNE 30, 2010
PAGE	F-2	CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2010(UNAUDITED), FOR THE PERIOD FROM DECEMBER 15, 2009 TO DECEMBER 31, 2009 (UNAUDITED) AND FOR THE PERIOD DECEMBER 15, 2009 (INCEPTION) TO DECEMBER 31, 2010 (UNAUDITED)
PAGE	F-3	CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM DECEMBER 15, 2009 (INCEPTION) TO DECEMBER 31, 2010 (UNAUDITED)
PAGE	F-4	CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED DECEMBER 31, 2010, FOR THE PERIOD FROM DECEMBER 15, 2009 TO DECEMBER 31, 2009 AND FOR THE PERIOD DECEMBER 15, 2009 (INCEPTION) TO DECEMBER 31, 2010 (UNAUDITED)
PAGES	F-5 - F-8	NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

 

 

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Real Estate Restoration and Rental, Inc.
(A Development Stage Company)
Condensed Balance Sheets
ASSETS
		December 31, 2010				June 30, 2010
		(Unaudited)
Current Assets
Cash		$	62,507			$	141,125
Prepaid Expense			2,500				2,500
Total  Current Assets			65,007				143,625
Licensing Rights, net			29,203				-
Total Assets		$	94,210			$	143,625
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable		$	10,956			$	7,500
Total  Liabilities			10,956				7,500
Commitments and Contingencies
			-				-
Stockholders' Equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized,
none issued  and outstanding			-				-
Common stock, $0.0001 par value; 100,000,000 shares authorized, 6,802,500  and 6,782,500 shares
issued and outstanding, respectively			680				678
Additional paid-in capital			176,045				173,372
Deficit accumulated during the development stage			(93,471	)			(37,925	)
Total Stockholders' Equity			83,254				136,125
Total Liabilities and Stockholders' Equity		$	94,210			$	143,625

 

 

See accompanying notes to condensed unaudited financial statements

 

F-1

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Real Estate Restoration and Rental, Inc.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
		For the Three Months Ended				For the Six Months Ended				For the period from December 15, 2009(inception) to				For the period from December 15, 2009(inception) to
		December 31, 2010				December 31, 2010				December 31, 2009				December 31, 2010
Operating Expenses
Professional fees		$	25,593			$	49,425			$	-			$	74,150
General and administrative			4,233				6,121				200				19,321
Total Operating Expenses			29,826				55,546				200				93,471
LOSS FROM OPERATIONS BEFORE INCOME TAXES			(29,826	)			(55,546	)			(200	)			(93,471	)
Provision for Income Taxes			-				-				-				-
NET LOSS		$	(29,826	)		$	(55,546	)		$	(200	)		$	(93,471	)
Net Loss Per Share  - Basic and Diluted		$	(0.00	)		$	(0.01	)		$	(0.00	)
Weighted average number of shares outstanding
during the period - Basic and Diluted			6,370,000				6,370,000				4,000,000

 

 

See accompanying notes to condensed unaudited financial statements

 

F-2

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Real Estate Restoration and Rental, Inc.
(A Development Stage Company)
Condensed Statement of Changes in Stockholders' Equity
For the period from December 15, 2009 (Inception) to September 30, 2010
(Unaudited)
																						Deficit
		Preferred Stock								Common stock								Additional				accumulated during the				Total
																		paid-in				development				Stockholder's
		Shares				Amount				Shares				Amount				capital				stage				Equity
Balance December 15, 2009			-			$	-				-			$	-			$	-			$	-			$	-
Common stock issued for services to founder ($0.0001 per share)			-				-				4,000,000				400				-				-				400
Common stock issued for cash to founder ($0.0001 per share)											1,000,000				100				-				-				100
Common stock issued for cash ($0.10/ per share)			-				-				1,782,500				178				178,072				-				178,250
Stock Offering Costs			-				-				-				-				(7,500	)			-				(7,500	)
In kind contribution of services			-				-				-				-				2,800				-				2,800
Net loss for the period December 15, 2009 (inception) to June 30, 2010			-				-				-				-				-				(37,925	)			(37,925	)
Balance, June 30, 2010			-				-				6,782,500				678				173,372				(37,925	)			136,125
Common stock issued for cash ($0.10/ per share)			-				-				20,000				2				1,998				-				2,000
Stock Offering Costs			-				-				-				-				(1,925	)			-				(1,925	)
In kind contribution of services			-				-				-				-				2,600				-				2,600
Net loss for the  six months ended December 31, 2010			-				-				-				-				-				(55,546	)			(55,546	)
Balance, December 31, 2010			-			$	-				6,802,500			$	680			$	176,045			$	(93,471	)		$	83,254

 

 

See accompanying notes to condensed unaudited financial statements

 

F-3

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Real Estate Restoration and Rental, Inc.
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
		For the Six Months Ended				For the Period from December 15, 2009 to				For the period from December 15, 2009(inception) to
		December 31, 2010				December 31, 2009				December 31, 2010
Cash Flows Used in Operating Activities:
Net Loss		$	(55,546	)		$	(200	)		$	(93,471	)
Adjustments to reconcile net loss to net cash used in operations
In-kind contribution of services			2,600				200				5,400
Shares issued to founder for services			-				-				500
Amortization of licensing fee			797				-				797
Changes in operating assets and liabilities:
(Increase)/Decrease in prepaid expenses			-				-				(2,500	)
(Decrease) Increase in accounts payable and accrued expenses			3,456				-				10,956
Net Cash Used In Operating Activities			(48,693	)			-				(78,318	)
Cash Flows From Investing Activities:
Purchase of License			(30,000	)			-				(30,000	)
Net Cash Used In Investing Activities			(30,000	)			-				(30,000	)
Cash Flows From Financing Activities:
Proceeds from issuance of common stock, net of offering costs			75				-				170,825
Net Cash Provided by Financing Activities			75				-				170,825
Net Increase (Decrease) in Cash			(78,618	)			-				62,507
Cash at Beginning of Period			141,125				-				-
Cash at End of Period		$	62,507			$	-			$	62,507
Supplemental disclosure of cash flow information:
Cash paid for interest		$	-			$	-			$	-
Cash paid for taxes		$	-			$	-			$	-

See accompanying notes to condensed unaudited financial statements

 

F-4

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REAL ESTATE RESTORATION AND RENTAL, INC.

 (A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2010

(UNAUDITED)

 

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

(A)  Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information.  Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

It is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statements presentation.  The results for the interim period are not necessarily indicative of the results to be expected for the year.

 

(B) 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.

(C) Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.  At December 31, 2010 and June 30, 2010, the Company had no cash equivalents.

(D) Loss Per Share

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, “Earnings Per Share.”  As of December 31, 2010 there were no common share equivalents outstanding.

 

 

 

F-5

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REAL ESTATE RESTORATION AND RENTAL, INC.

 (A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2010

(UNAUDITED)

(E) Intangible Assets

In accordance with Statement FASB Accounting Standards Codification No. 350, Intangibles, Goodwill and Other, requires that intangible assets with a finite life are amortized over its life and requires that goodwill and intangible assets be reviewed for impairment annually or more frequently if impairment indicators arise.

 

(F) Income Taxes

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”).  Under ASC 740-10-25, 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 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enact ment date.

(G) Business Segments

The Company operates in one segment and therefore segment information is not presented.

(H) Revenue Recognition

The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.  The Company recognizes rental revenue in accordance with FASB ASC No. 840-25.  FASB ASC No. 840-25 requires that rental revenue be recognized on a straight line basis over the term of the lease for operating leases.

 

 

 

F-6

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REAL ESTATE RESTORATION AND RENTAL, INC.

 (A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2010

(UNAUDITED)

NOTE 2

INTANGIBLE ASSETS

At December 31, 2010 and June 30, 2010 intangible assets are as follows:

 

		As of December 31, 2010				As of June 30, 2010
License Agreement			30,000				-
Less Amortization			(797	)			(-	)
Total Property and Equipment		$	29,203			$	-

 

Amortization expense for the three and six months ended December 31, 2010 and the period from December 15, 2009 (Inception) to December 31, 2010 was $748, 797 and $797 respectively.

 

NOTE 3

STOCKHOLDERS’ EQUITY

(A) Common Stock Issued for Cash

For the period ended June 30, 2010, the Company issued 1,782,500 shares of common stock for $178,250($0.10/share) less stock offering costs of $7,500.  The Company also issued 1,000,000 shares of common stock to its founder for $100 ($0.0001 per share) (See note 5).

During the months of August and September 2010, the Company issued 20,000 shares of common stock for $2,000 less offering costs of $1,925 ($0.10/share).

(B) In-Kind Contribution

For the period ended June 30, 2010, a shareholder of the Company contributed services having a fair value of $2,800 (See Note 5).

For the six months ended December 31, 2010, a shareholder of the Company contributed services having a fair value of $2,600 (See Note 5).

(C) Stock Issued for Services

On December 19, 2009, the Company issued 4,000,000 shares of common stock to its founder having a fair value of $400 ($0.0001/share) in exchange for services provided (See Note 5).

 

 

 

F-7

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REAL ESTATE RESTORATION AND RENTAL, INC.

 (A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2010

(UNAUDITED)

 

NOTE 4             COMMITMENTS

On February 16, 2010, the Company entered into a consulting agreement to receive administrative and other miscellaneous services.  The Company is required to pay $5,000 a month.  The agreement is to remain in effect unless either party desired to cancel the agreement.

 

NOTE 5             RELATED PARTY TRANSACTIONS

For the period ended June 30, 2010, a shareholder of the Company contributed services having a fair value of $2,800 (See Note 3(B)).

For the six months ended December 31, 2010, a shareholder of the Company contributed services having a fair value of $2,600 (See Note 3(B)).

On December 19, 2009, the Company issued 5,000,000 shares of common stock to its founder having a fair value of $500 ($0.0001/share) in exchange for services and cash (See Note 3 (A) and 3 (C)).

NOTE 6             LICENSING RIGHTS

On September 24, 2010 the Company entered into an agreement with a third party to purchase the rights of a license. Under the terms of the agreements the Company will have the rights to manufacture and sell the “EnerG2” product. As of December 31, 2010 the company paid $30,000 for the acquisition of the patent. The amount as been classified as an asset and is being amortized over the life of the license.

 

NOTE 7             GOING CONCERN

As reflected in the accompanying financial statements, the Company is in the development stage with minimal operations, used cash in operations of $78,418 from inception and has a net loss since inception of $93,471.  This raises substantial doubt about its ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

NOTE 8             SUBSEQUENT EVENT

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through February 2, 2011, the date the financial statements were issued.

 

 

F-8

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

 

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section 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.< /font>

 

Plan of Operations

 

Our C ompany was established in December 2009 to provide renovation and management services to larger real estate developers and hedge funds that own and are acquiring additional vacation rental properties in North and South Carolina at below-market prices. We will provide property management services ranging from completing necessary renovation work to marketing and renting the properties on a seasonal basis at a profit.

 

We are continuing to approach prospective clients who have or are acquiring foreclosed or distressed vacation properties in North and South Carolina. We plan to sign contracts to provide renovation and management services with two real estate developers and one hedge fund during our first 12 months.

Our goal is to have three vacation homes under management and available for rent during the summer 2011 high season, May to August. Our estimate for costs associated with each home that comes under our management includes approximately $7,500-$12,000 in renovation fees and approximately $2,500 a month for marketing expenses. We plan to add another 10 to 12 homes under management for the summer 2012 high season.

Additionally, the Company will attempt to obtain green energy solutions for use in its managed properties. Solutions we are considering include LED lighting, solar power and solar heating. We may also look to resell these solutions to other property management firms or vacation home owners. Our plan is to sign at least one reseller agreement with a manufacturer of LED lighting systems for interior and exterior residential lighting applications in the first six months of operation. We plan to implement LED lighting in each home that comes under our management.

The Company will also seek to acquire access to commercial/industrial-level green solutions such as geothermal and Frigitek (fan speed controls for cooling condensers) that have the potential to be repositioned or re-engineered for residential applications. We currently have a licensing agreement with Madison Energy Group that allows us to sell Frigitek products.

If it becomes necessary to raise additional capital, we may approach one or more of our property management services clients to establish strategic funding partnerships. At the same time, we will continue to pursue green energy solutions with Madison Energy Group with the expectation of realizing some returns from these solutions in the next 12 months.

 

Limited Operating History

 

As reflected in the accompanying financial statements, the Company is in the development stage with minimal operations, used cash in operations of $78,418 from inception and has a net loss since inception of $93,471.  This raises substantial doubt about its ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.

 

We have not previously demonstrated that we will be able to expand our business. We cannot guarantee that the expansion efforts described in this prospectus will be successful. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our renovation services offering.

 

If the proceeds of our private placement prove to be insufficient to generate additional profits, future financing may not be available to us on acceptable terms.  If financing is not available on satisfactory terms, we may be unable to continue expanding our operations. Equity financing will result in a dilution to existing shareholders.

 

For the Period Ended December 31 , 2010

 

For the period December 31 , 2010, we had $0 in revenue. Expenses for the six month  period totaled $ 55,546 resulting in a net loss of $ 55,546 .  Expenses for the period consisted of $ 49,425 in professional fees and $ 6,121 for general and administrative expenses.

 

Capital Resources and Liquidity

 

We raised cash to grow our business through a private placement that was completed on June 8, 2010. We have sufficient capital to continue operations into 2011. We anticipate receiving some revenue from the partnership with Madison Energy in 2011. We will seek to enter into agreements to provide our renovation and management service. We do not at this time anticipate seeking further equity investment. If we need additional cash and are unable to raise it, we will either have to suspend or cease our expansion plans entirely. Other than as described in this registration statement, we have no other financing plans.

 

We issued 5,000,000 Shares of common stock to Deborah Lovig pursuant to the exemption from registration set forth in section 4(2) of the Securities Act of 1933. Ms. Lovig, the founder of the Company, was issued 5,000,000 shares in exchange for $100 in cash and $400 worth of services , which she provided to the Company.

 

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.

 

 

 

 

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Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

For the Year Ended June 30, 2010

 

Results of Operations

 

For the period from December 15, 2009 (inception), to June 30, 2010, we had $0 in revenue. Expenses for the period totaled $37,925 resulting in a net loss of $37,925.  Expenses for the period consisted of $24,725 in professional fees and $13,200 for general and administrative expenses.

 

Capital Resources and Liquidity

 

We raised cash to grow our business through a private placement that was completed on June 8, 2010. We have sufficient capital to continue operations into 2011. We anticipate receiving some revenue from the partnership with Madison Energy in 2011. We will seek to enter into agreements to provide our renovation and management service. We do not at this time anticipate seeking further equity investment. If we need additional cash and are unable to raise it, we will either have to suspend or cease our expansion plans entirely. Other than as described in this registration statement, we have no other financing plans.

 

We issued 5,000,000 Shares of common stock to Deborah Lovig pursuant to the exemption from registration set forth in section 4(2) of the Securities Act of 1933. Ms. Lovig, the founder of the Company, was issued 5,000,000 shares in exchange for $100 in cash and $400 worth of services , which she provided to the Company.

 

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.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

There have been no changes in or disagreements with accountants on accounting or financial disclosure matters.

 

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

The following table sets forth the name and age of officers and director as of February 3, 2011 . Our executive officers are elected annually by our Board of Director. Our executive officers hold their offices until they resign, are removed by the Board, or his successor is elected and qualified.  

 

Name	Age	Position
Deborah Lovig	49	President, Chief Executive Officer, Chief Financial Officer, and Director
James Coker	31	Secretary and Director

 

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

 

Ms. Deborah Lovig, age 49, President, Chief Executive Officer, Chief Financial Officer, Director.

 

Deborah Lovig is our President, Chief Executive Officer, Chief Financial Officer and Director. Ms. Lovig is a successful marketing executive and entrepreneur who has worked with companies and corporations of all sizes and stages across a broad range of industries. During the past six years she has served as a marketing executive for Cree, a world-leading manufacturer of light-emitting diodes (LEDs). Throughout her 25-year career, she has specialized in developing business and marketing plans for start-up and early-stage companies seeking funding and rapid sales growth.  She has assisted with the for mation and business development of a number of businesses in the real estate markets on the East Coast, including North Carolina.

 

 

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Mr. James Coker, age 31, Secretary, Director

 

Mr. James Coker was appointed as our Secretary and Director on April 27, 2010. Mr. Coker brings expertise in evaluating business opportunities and closing business deals that result in profits for the companies for which he has worked. He has recently been involved in real estate development in the Philadelphia area. His efforts in this market have focused on creating new rental properties for which he also provides property management services . He has also served as a Regional Sales Manager for Siemens Corporation for the past five years. He is in charge of selling diagnostic imaging equipment to hospitals and imaging centers in Ohio. His responsibilities include selling capital equipment (greater than $1,000,000) and service contracts, developing exten sive product knowledge, consulting on future trends in healthcare and the reimbursement landscape, as well as managing customer relationships. During his tenure in Ohio, Siemens has doubled its market share in the territory and managed to expand its presence despite a sluggish economy. Mr. Coker graduated from Boston College in 2001 with a B.A. in Marketing.

 

Our directors are not considered independent under the listing standards of any national securities exchange.

 

Board Committee

 

The Company does not currently have a designated audit, nominating or compensation committee.  The Company currently has no plans to form these separately designated Board committees. 

 

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.

 

EXECUTIVE COMPENSATION

 

Other than the 4,000,000 shares of common stock issued to Deborah Lovig for services , which she provided to the Company, we have not paid any form of compensation to our executives. The compensation discussed herein addresses all compensation awarded to, earned by, or paid to the named officer, including base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.

 

The Company has no employment agreement with Ms. Lovig. Ms. Lovig received compensation of 4,000,000 shares of common stock in exchange for $400 worth of services she provided to the Company during the period ended June 30, 2010. The Company has no employment agreement with Mr. Coker. Mr. Coker received no compensation during the period ended June 30, 2010.

 

There are no other stock option plans, retirement, pension or profit sharing plans for the benefits of our officers and directors other than as described herein.

 

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 period ended June 30, 2010.

 

Summary Compensation Table

 

Name and Principal Position		Year		Salary ($)			Bonus ($)		Stock Awards ($)			Option Awards ($)		Non-Equity Incentive Plan Compensation ($)			Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Totals ($)
Deborah Lovig, President, Chief Executive Officer, Chief Financial Officer, Director		2010		$	0		0			400		0			0		0		$0		$	400
James Coker, Secretary, Director		2010		$	0		0			0		0			0		0		$0		$	0

 

 

 

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Option Grants Table. There were no individual grants of stock options to purchase our common stock made to the executive officers named in the above Summary Compensation Table for the period from December 15, 2009 (inception) through June 30, 2010.

 

Aggregated Option Exercises and Fiscal Year-End Option Value. There were no stock options exercised during period from inception through June 30, 2010 by the executive officers named in the Summary Compensation Table.

 

Long-Term Incentive Plan (“LTIP”) Awards. There were no awards made to named executive officers in the last completed fiscal year under any LTIP.

 

 Compensation of Directors

 

Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.

 

Employment Agreements

 

Currently, we do not have any employment agreements in place.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding shares of common stock as of February 3, 2011 and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly and the shareholders listed possess sole voting and investment power with respect to the shares shown.

 

Name		Number of Shares Beneficially Owned				Percent of Class (1)
Deborah Lovig, President, CEO, CFO, Director 710 Wellingham Drive Durham, NC 27713			5,000,000				73.5	%
James Coker, 258 Frankfort Square Columbus, OH 43206			95,000				1.4	%
All Executive Officers and Directors as a group (1 person)			5,095,000				74.9	%

 

    (1) Based on 6,802,500 shares of common stock outstanding as of February 3, 2011.

 

TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

 

Deborah Lovig, our President, Chief Executive Officer, Chief Financial Officer and Director, purchased 5,000,000 shares of our Common Stock on February 2, 2010 for $100 in cash and $400 worth of services which she provided to the Company.

 

James Coker, our Secretary and Director, purchased 80,000 share of our Common Stock on March 17, 2010 and an additional 15,000 shares of our Common Stock on April 2, 2010, for a total of 95,000 shares, for $9,500.