SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
<P>
AMENDMENT NO. 1 TO
FORM 10-KSB
<P>
Annual Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
<P>
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
<P>
For Fiscal Year Ended
June 30, 2000
<P>
Commission File #0-26187
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
(Exact name of registrant as specified in its charter)
<P>
Florida
(State or other jurisdiction of incorporation or
organization)
<P>
65-0735872
(IRS Employer Identification Number)
<P>
701 Brickell Ave., Suite 3120, Miami, Florida 33131
(Address of principal executive offices ) (Zip Code)
<P>
(305)539-0900
(Registrant's telephone no., including area code)
<P>
(Former name, former address and former fiscal year, if
changed since last report)
<P>
Securities registered pursuant to Section 12(b) of the Act:
<P>
None
<P>
Securities registered pursuant to Section 12(g) of the Act:
<P>
Common Stock, $0.001 par value
<P>
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
<P>
Yes [X] No [ ]
<P>
Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B not contained in this
form, and no disclosure will be contained, to the best of
the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III
of this Form 10-KSB or any amendment to this Form 10-KSB.( )
<P>
Revenues for year ended June 30, 2000: $0
<P>
Aggregate market value of the voting common stock held by
non-affiliates of the registrant as of August 31, 2000, was:
$5,275,000
<P>
Number of shares of the registrant's common stock
outstanding as of August 31, 2000 was: 10,550,000
<P>
Transfer Agent as of August 31, 2000:
<P>
American Registrar & Transfer Co.
342 East 900 South
Salt Lake City, Utah 84111
<P>
<PAGE>
PART I
------
<P>
Item 1. Description of Business
--------------------------------
<P>
Business Development. We were incorporated under the name
Global Realty Management Group, Inc. in the State of Florida
on February 10, 1997.
<P>
We have not been involved in any bankruptcy, receivership or
similar proceeding. We have not been involved in any
material reclassification, merger, consolidation, or
purchase or sale of a significant amount of assets not in
the ordinary course of business.
<P>
Business of Issuer. We are a development stage company whose
business is property management, development, construction
and leasing. We will be responsible for not only collecting
rent from our clients, but also maintaining the property and
paying expenses relating to the property. In addition, the
Company intends to manage residential and office properties
owned by third parties and affiliated companies. There are
numerous residential and office properties that compete with
the Company in attracting tenants.
<P>
The Company's corporate offices are located at 701 Brickell
Avenue, Suite 3120, Miami, Florida 33131. The Company's
corporate staff consists of three persons, including two
professionals experienced in all aspects of residential and
commercial real estate. The Company's telephone number is
(305) 539-0900.
<P>
All of the management and leasing operations with respect to
the properties as well as leasing operations with respect to
a portion of the properties not owned by the Company will be
conducted through a management company organized as a
limited liability company ("Management LLC").
MANHATTAN OFFICE MARKET BACKGROUND
<P>
The term "Class B" is generally used in the Manhattan (New
York City) office market to describe office properties which
are more than 25 years old but which are in good physical
condition, enjoy widespread acceptance by high-quality
tenants and are situated in desirable locations in
Manhattan. Class B office properties can be distinguished
from Class A properties in that Class A properties are
generally newer properties with higher finishes and obtain
the highest rental rates within their markets.
<P>
A variety of tenants who do not require, desire or cannot
afford Class A space are attracted to Class B office
properties due to their prime locations, excellent
amenities, distinguished architecture and relatively less
expensive rental rates. Class B office space has
historically attracted many smaller growth oriented firms
and has played a critical role in satisfying the space
requirements of particular industry groups in Manhattan,
such as the advertising, apparel, business services,
engineering, not-for-profit, "new media" and publishing
industries. In addition, several areas of Manhattan,
including many in which particular trades or industries
traditionally congregate, are dominated by Class B office
space and contain no or very limited Class A office space.
Examples of such areas include the Garment District, the
Flatiron District, the areas immediately south and north of
Houston Street ("Soho" and "Noho", respectively), Chelsea,
and the area surrounding the United Nations. Businesses
significantly concentrated in certain of these areas include
those in the following industries: "new media", garment,
apparel, toy, jewelry, interior decoration, antiques, gift
ware, and UN-related businesses. The concentration of
businesses creates strong demand for the available Class B
office space in those locations.
<P>
The Company's management team intends to develop a
comprehensive knowledge of the Manhattan Class B office
market, an extensive network of tenant and other business
relationships and experience in acquiring management
contracts of underperforming office properties and
repositioning them into profitable Class B properties
through intensive full service management and leasing
efforts.
<P>
The Company believes that the recovery of the New York
commercial real estate market from the downturn of the late
1980's and early 1990's combined with the ongoing strength
of the New York City economy will create an attractive
environment for managing, operating and acquiring Class B
office properties in Manhattan.
<P>
GROWTH STRATEGIES
<P>
The Company will seek to capitalize on current opportunities
in the Class B Manhattan office market through (i) property
acquisitions- acquire Class B office properties at
significant discounts to replacement costs that provide
attractive initial yields and the potential for cash flow
growth, (ii) property repositioning - repositioning acquired
properties that are underperforming through renovations,
active management and pro-active leasing and (iii)
integrated leasing and property management.
<P>
LEASING AND PROPERTY MANAGEMENT. The Company will seek to
capitalize on management's extensive knowledge of the Class
B Manhattan marketplace and the needs of the tenants therein
by using a pro-active approach to leasing and management,
which will include (i) the use of in-depth market research,
(ii) the utilization of an extensive network of third-party
brokers, (iii) comprehensive building management analysis
and planning and (iv) a commitment to tenant satisfaction by
providing "Class A" tenant services. The Company believes
pro-active leasing efforts have contributed to average
occupancy rates at the Properties that are above the market
average.
<P>
PROPERTY REPOSITIONING. The Company believes that there are
a significant number of potential acquisitions that could
greatly benefit from management's experience in enhancing
property cash flow and value by renovating and repositioning
properties to be among the best in their sub-markets. Many
Class B buildings are located in or near sub-markets which
are undergoing major reinvestment and where the properties
in these markets have low vacancy rates. Featuring unique
architectural design, large floor plates or other amenities
and functionally appealing characteristics, reinvestment in
these properties poses an opportunity to the Company to meet
market needs.
<P>
PROPERTY ACQUISITIONS. In acquiring properties, the Company
believes that it will have the following advantages over its
competitors: (i) enhanced access to capital as a public
company, (as compared to the generally fragmented
institutional or venture oriented sources of capital
available to private companies) and (ii) the ability to
offer tax-advantaged structures to sellers through the
exchange of ownership interests as opposed to solely cash
transactions.
<P>
COMPETITION IN ITS MARKETPLACE
<P>
All of the properties initially will be located in highly
developed areas of Manhattan and its suburbs that include a
large number of other office properties. Manhattan is by far
the largest office market in the United States and contains
more rentable square feet than the next six largest central
business district office markets in the United States
combined. Of the total inventory of 379 million rentable
square feet in Manhattan, approximately 172 million rentable
square feet is comprised of Class B office space and 207
million rentable square feet is comprised of Cass A office
space. Many tenants have been attracted to Class B
properties in part because of their relatively less
expensive rental rates (as compared to Class A properties)
and the tightening of the Class A office market in midtown
Manhattan. Consequently, an increase in vacancy rates and/or
a decrease in rental rates for Class A office space would
likely have an adverse effect on rental rates for Class B
office space. Also, the number of competitive Class B office
properties in Manhattan (some of which are newer and better
located) could have a material adverse effect on the
Company's ability to lease office space at its properties,
and on the effective rents the Company is able to charge.
<P>
In addition, the Company will compete with other property
owners that have greater resources than the Company. In
particular, the Company may in the future compete with REITs
which have been formed solely to own, operate and acquire
Manhattan Class B office properties. In addition, the
Company may face competition from other real estate
companies (including REITs that currently invest in markets
other than Manhattan) that have greater financial resources
than the Company or that are willing to acquire properties
in transactions which are more highly leveraged than the
Company is willing to undertake. The Company also will face
competition from other real estate companies that provide
management, leasing and construction similar to those to be
provided by the Company.
<P>
EMPLOYEES
<P>
At March 31, 2000, the Company employed a total of 2 persons
on a full-time basis. In addition, depending on client
demand, the Company will utilize manpower agencies to
contract between additional persons on a temporary, part-
time basis. None of the Company's employees are represented
by a labor union. The Company believes that its relations
with its employees are good.
<P>
Item 2. Description of Property
-------------------------------
<P>
We currently sublease office space in a building located at
701 Brickell Avenue, Suite 3120, Miami, Florida. The
facility is leased pursuant to a month to month lease. The
primary tenant is The Farkas Group, Inc. The Farkas Group,
Inc. subleases the facility to Atlas Equity Group, Inc.
which is wholly owned by Michael Farkas an affiliated
individual. Atlas Equity Group, Inc. subleases the facility
to us. The landlord is not affiliated with us. The present
monthly rent is $1,000 which includes utilities and common
charges. We believe that this space is sufficient for us at
this time.
<P>
In addition, the Company subleases office space at 5420 13th
Avenue, Brooklyn, NY 11219 from Allstate Realty Associates
for $500 per month. Joseph Spitzer, our President, Chairman,
Chief Executive Officer and Director is currently the
President, Owner and founder of Allstate Realty Associates.
<P>
Item 3. Legal Proceedings
--------------------------
<P>
The Company and its subsidiaries are not presently parties
to any litigation, nor to the Company's knowledge and belief
is any litigation threatened or contemplated.
<P>
Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------
<P>
None.
<P>
PART II
<P>
Item 5. Market for Common Equity and Related Stockholder
Matters
---------------------------------------------------------
<P>
On August 31, 2000, there were 22 shareholders of record of
the Company's common stock. Based on information received
from brokers and others in fiduciary capacities, the Company
estimates that the total number of shareholders of the
Company's common stock does not exceeds 500. The Company's
common stock is available for trading through electronic
trading services via the OTC Bulletin Board.
<P>
The following table sets forth, for the periods indicated,
the range of high and low closing bid prices for the
Company's common stock through August 31, 2000 and as
available through electronic trading services subsequent to
such date.
<TABLE>
<S> <C> <C> <C>
Common Stock Bid
High Low
---- ---
Fiscal Quarter High Low
---- ---
August 31, 2000 0.5000 0.3700
<P>
Dividends
---------
<P>
The Company does not intends to retain future earnings to
support the Company's growth. Any payment of cash dividends
in the future will be dependent upon: the amount of funds
legally available therefore; the Company's earnings;
financial condition; capital requirements; and other factors
which the Board of Directors deems relevant.
<P>
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations
----------------------------------------------------------
<P>
The following discussion and analysis should be read in
conjunction with the financial statements of the Company and
the accompanying notes appearing subsequently under the
caption "Financial Statements."
<P>
The following discussion and analysis contains forward-
looking statements, which involve risks and uncertainties.
The Company's actual results may differ significantly from
the results, expectations and plans discussed in these
forward-looking statements.
<P>
During the past years the Company has spent considerable
time and capital resources defining and developing its
strategic plan operating in the property management,
development, construction, and leasing industries.
<P>
The Company's operations have been devoted primarily to
developing a business plan and raising capital for future
operations and administrative functions. The Company
intends to grow through internal development, strategic
alliances, and acquisitions of existing businesses. Because
of uncertainties surrounding its development, the Company
anticipates incurring development stage losses in the
foreseeable future. The ability of the Company to achieve
its business objectives is contingent upon its success in
raising additional capital until adequate revenues are
realized from operations.
<P>
Development stage expenses during the year ended June 30,
2000 were greater than the comparable period of February 10,
1997 (Inception) to June 30, 2000, increasing from $45,668
to $80,998 or a 56.38% increase. The expenses incurred were
primarily due to various consulting, managerial and
professional services in connection with its Form 10 filing
and in connection with its pursuit of the Company's
objectives. This was in part the result of consulting and
professional fees necessitated by operating in a public
environment and an agreement between the Company and Atlas
Equity Group, Inc. (Owned by Michael D. Farkas, a related
party) for shared office and rent expenses. On-going
increases to development stage expenses are anticipated.
<P>
Liquidity and Capital Resources
--------------------------------
<P>
Despite capital contributions and both related party and
third party loan commitments, the company from time to time
experienced, and continues to experience, cash flow
shortages that have slowed the Company's growth.
<P>
The Company has primarily financed its activities from sales
of capital stock of the Company and from loans from related
and third parties. A significant portion of the funds
raised from the sale of capital stock has been used to cover
working capital needs such as office expenses and various
consulting fees.
<P>
The Company continues to experience cash flow shortages, and
anticipates this continuing through the foreseeable future.
Management believes that additional funding will be
necessary in order for it to continue as a going concern.
The Company is investigating several forms of private debt
and/or equity financing, although there can be no assurances
that the Company will be successful in procuring such
financing or that it will be available on terms acceptable
to the Company.
<P>
Year 2000 Impact Statement
--------------------------
<P>
The Company has analyzed operations in the property
management, development, construction, and leasing
industries to determine the needs of the Company to manage
residential and office properties. The Company has
professionals experienced in all aspects of residential real
estate, commercial real estate, management and development
agreements in the normal course of its business and believes
those arrangements are sufficient to handle any minor issues
that may arise as a result of the Year 2000, if any. The
Company also intends to create hard copy of all year-end
accounting and management reports, in the ordinary course of
business, which will serve as a back up of such data if
needed.
<P>
Item 7. Financial Statements
----------------------------
<P>
The financial statements of the Company, together with the
report of auditors, are included in this report after the
signature pages.
<P>
Item 8. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure
-----------------------------------------------------------
<P>
The Company's accountant is Salibello & Broder, C.P.A. of
New York City, New York. The Company does not presently
intend to change accountants. At no time has there been any
disagreements with such accountants regarding any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure. The Company
initially engaged Salibello & Broder, C.P.A. to render
accounting services on , 1999.
<P>
PART III
<P>
Item 9. Directors, Executive Officers, Promoters and Control
Persons: Compliance With Section 16(a) of the
Exchange Act
-----------------------------------------------------------
<P>
The directors and officers of the Company and its
subsidiaries, as of August 31, 2000, are set forth below.
The directors hold office for their respective term and
until their successors are duly elected and qualified.
Vacancies in the existing Board are filled by a majority
vote of the remaining directors. The officers serve at the
will of the Board of Directors.
<P>
</TABLE>
<TABLE>
With Company
<S> <C> <C> <C>
Name Age Since Director/Position
---------------------------------------------------------------------
Joseph Spitzer 44 1997 President, Chief Executive Officer,
Chairman and Director
<P>
Michael D. Farkas 28 1997 Executive Vice President, Chief
Financial Officer, Treasurer,
Secretary and Director
</TABLE>
<P>
Joseph Spitzer, 44 years old, has served as our
President/Chairman/ Chief Executive Officer and Director
since inception in February, 1997. Mr. Spitzer is currently
the President and Founder of Allstate Realty Associates and
has been for the past 21 years. Allstate Realty Associates
currently owns and manages 23 buildings with a combination
of 2,100 rental and co-operative units and three commercial
office buildings totaling in excess of 430,000 square feet.
Mr. Spitzer specializes in stabilizing distressed properties
and tenant/landlord relationships.
<P>
Michael D. Farkas, 28 years old, has served as our Executive
Vice President, Chief Financial Officer, Treasurer,
Secretary and Director since inception in February, 1997.
Mr. Farkas is currently the Chairman and Chief Executive
Officer of Wealthhound.com, Inc., a financial services
portal, and President of Atlas Equity Group, Inc., a private
investment bank. For the past five years, he has been an
investment banker specializing in fund raising for
telecommunications, information technology and high tech
ventures. He has also specialized in mergers and
acquisitions for various entrepreneurial companies and prior
to that served as a financial consultant to several NYSE
member firms including Paine Webber and Prudential
Securities.
<P>
All officers and directors listed above will remain in
office until the next annual meeting of our stockholders,
and until their successors have been duly elected and
qualified. There are no agreements with respect to the
election of Directors. We have not compensated our
Directors for service on our Board of Directors, any
committee thereof, or reimbursed for expenses incurred for
attendance at meetings of our Board of Directors and/or any
committee of our Board of Directors. Officers are appointed
annually by our Board of Directors and each Executive
Officer serves at the discretion of our Board of Directors.
We do not have any standing committees. Our Board of
Directors may in the future determine to pay Directors' fees
and reimburse Directors for expenses related to their
activities.
<P>
None of our Officers and/or Directors have filed any
bankruptcy petition, been convicted of or been the subject
of any criminal proceedings or the subject of any order,
judgment or decree involving the violation of any state or
federal securities laws within the past five (5) years.
<P>
Certain Legal Proceedings
-------------------------
<P>
No director, nominee for director, or executive officer of
the Company has appeared as a party in any legal proceeding
material to an evaluation of his ability or integrity during
the past five years.
<P>
Item 10. Executive Compensation
--------------------------------
<P>
The following information relates to compensation received
by the Chief Executive Officer of the Company in fiscal year
ending June 30, 2000, to executive officers who were serving
as of fiscal year ending June 30, 2000, whose salary and
bonus during fiscal year ending June 30, 2000 exceeded
$100,000. In 1999, no officer received compensation in
excess of $100,000.
<P>
Summary Compensation Table
<P>
Annual Compensation
<P>
<TABLE>
<S> <C> <C> <C> <C>
Name and Principal Position Year Salary Bonus Restricted Stock Award
<P>
None
</TABLE>
<P>
Employment Agreements. No officer or director has been
granted an employment contract or been provided a future
benefit to be received upon separation from service with the
Company.
<P>
Item 11. Security Ownership of Certain Beneficial Owners and
Management
------------------------------------------------------------
<P>
The following table sets forth as of August 31, 2000,
information with respect to the beneficial ownership of the
Company's Common Stock by (i) each person known by the
Company to own beneficially 5% or more of such stock, (ii)
each Director of the Company who owns any Common Stock, and
(iii) all Directors and Officers as a group, together with
their percentage of beneficial holdings of the outstanding
shares.
<P>
<TABLE>
<S> <C> <C>
Number of Shares of
Name of Beneficial Owner/ Common Stock % of Beneficial
Identity of Group Beneficially Owned Ownership
------------------------------------------------------------------------------------------
Joseph Spitzer 4,750,000 Common Shares 45.02%
<P>
Michael D. Farkas 4,750,000 Common Shares 45.02%
<P>
All directors and executive
officers as a group (2 persons) 9,500,000 Common shares 90.05%
</TABLE>
<P>
(1) The address of each person listed in the above table is
c/o the Company, 701 Brickell Ave., Suite 3120, Miami,
Florida 33131.
<P>
(2) The persons named in this table have sole voting and
investment power with respect to all shares of common stock
reflected as beneficially owned by each.
<P>
Item 12. Certain Relationships and Related Transactions.
--------------------------------------------------------
<P>
We currently sublease office space in a building located at
701 Brickell Avenue, Suite 3120, Miami, Florida. The
facility is leased pursuant to a month to month lease. The
primary tenant is The Farkas Group, Inc. The Farkas Group,
Inc. subleases the facility to Atlas Equity Group, Inc., an
entity which is wholly owned by Michael Farkas an affiliated
individual. Atlas Equity Group, Inc. subleases the facility
to us. The landlord is not affiliated with us. The present
monthly rent is $1,000 which includes utilities and common
charges.
<P>
The Company also subleases office space at 5420 13th Avenue,
Brooklyn, NY 11219 from Allstate Realty Associates for $500
per month. Allstate is an entity which is wholly owned by
Joseph Spitzer, an affiliated individual.
<P>
We have not and do not intend to enter into any additional
transactions with our management or any nominees for such
positions. We have not and do not intend to enter into any
transactions with our beneficial owners. We are not a
subsidiary of any parent company. Since inception, we have
not entered into any transactions with promoters other than
our founders Michael Farkas and Joseph Spitzer, who each
received 4,750,000 of our shares of common stock.
<P>
Our management is involved in other business activities and
may, in the future become involved in other business
opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting
between our business and their other business interests. We
have not and do not intend in the future to formulate a
policy for the resolution of such conflicts.
<P>
PART IV
<P>
Item 13. Exhibits and Reports on Form 8-K
-------------------------------------------
<P>
(a) The following documents are filed as part of this
report:
<P>
1. Financial statements; see index to financial statement
and schedules immediately following the signature pages of
this report.
<P>
2. Financial statement schedules; see index to financial
statements and schedules immediately following the signature
pages of this report.
<P>
3. Exhibits:
<P>
The following exhibits are filed with this Form 10-KSB and
are identified by the numbers indicated: see index to
exhibits immediately following financial statements and
schedules of this report.
<P>
3(i) Certificate of Incorporation, as amended (1)
<P>
3.2 Bylaws, as amended (1)
<P>
27 Financial Data Schedule for fiscal year ended
June 30, 2000
<P>
(1) Incorporated by reference to the Registrant's
Form 10-SB, filed on May 25, 1999
(SEC File No. (000-26187).
<P>
(b) Reports on Form 8-K
We did not file any reports on Form 8-K for the
quarter ended June 30, 2000.
<P>
SIGNATURES
<P>
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, there unto duly authorized.
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
By:/s/ Michael D. Farkas
-----------------------------------
Michael D. Farkas
Executive Vice President, Chief
Financial Officer, Treasurer,
Secretary and Director
<P>
Dated: October 11, 2000
<P>
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities
and on the dates indicated.
<P>
<TABLE>
<S> <C> <C>
Name Title Date
/S/Joseph Spitzer President, Chief Executive Officer, October 11, 2000
---------------------------- Chairman and Director
<P>
/s/Michael Farkas Executive Vice President, Chief October 11, 2000
---------------------------- Financial Officer, Treasurer,
Secretary and Director
<P>
</TABLE>
</PAGE>
<PAGE>
<TABLE>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
FINANCIAL STATEMENTS
<P>
JUNE 30, 2000
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
TABLE OF CONTENTS
<S> <C> <C>
INDEPENDENT AUDITORS' REPORT 1
<P>
BALANCE SHEETS 2
<P>
STATEMENTS OF OPERATIONS 3
<P>
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY 4-6
<P>
STATEMENTS OF CASH FLOWS 7-8
<P>
NOTES TO FINANCIAL STATEMENTS 9-18
<P>
</TABLE>
</PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
<P>
To the Stockholders and
Board of Directors
Global Realty Management Group, Inc.
(A Development Stage Company)
Miami, Florida
<P>
We have audited the accompanying balance sheets of Global
Realty Management Group, Inc. (a development stage company)
as of June 30, 2000 and the related statements of
operations, changes in stockholders' equity and cash flows
for years ended June 30, 2000. 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. The consolidated Financial
Statements of Global Realty Management Group, Inc. as of
June 30, 1999 were audited by other auditors who report
dated February 29, 2000, expressed on unqualified opinion on
those statements.
<P>
We conducted our audit in accordance with generally accepted
auditing standards. 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 included 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 the audit provides a
reasonable basis for our opinion.
<P>
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Global Realty Management Group, Inc. as of June
30, 2000, and the results of its operations and its cash
flows for the years ended June 30, 2000 in conformity with
generally accepted accounting principles.
<P>
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
is development stage company. The realization of a major
portion of its assets is dependent upon its ability to meet
its future financing requirements, and the success of future
operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The
financial statements do not include any adjustments that
might result from this uncertainty.
<P>
Salibello & Broder
New York, NY
September 18, 2000
<P>
-1-
</PAGE>
<PAGE>
<TABLE>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
BALANCE SHEETS
<P>
ASSETS
<S> <C> <C>
June 30, 2000 June 30, 1999
-------------------------------
CURRENT ASSETS:
<P>
Cash $ 2,733 $ 76,760
Prepaid expenses 1,500 1,000
--------------------------------
Total Current Assets 4,233 77,760
<P>
Organization costs, net 0 678
Investment in i-Realty Auction.Com, Inc. 30,500 0
--------------------------------
TOTAL ASSETS $ 34,733 $ 78,438
================================
<P>
LIABILITIES AND STOCKHOLDERS' EQUITY
<P>
CURRENT LIABILITIES:
<P>
Accounts payable and accrued expenses $ 14,587 $ 13,124
--------------------------------
Total Current Liabilities 14,587 13,124
<P>
STOCKHOLDERS' EQUITY:
<P>
Common Stock, par value $.001 per share;
50,000,000 shares authorized;10,550,000
and 10,050,000 shares issued and
outstanding, respectively 10,550 10,050
Additional paid-in capital 99,950 99,950
Deficit accumulated during the
development stage (90,354) (44,686)
--------------------------------
Total Stockholders' Equity 20,146 65,314
--------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 34,733 $ 78,438
================================
<P>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<P>
-2-
</PAGE>
<PAGE>
<TABLE>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENTS OF OPERATIONS
<P>
<S> <C> <C> <C>
FOR THE PERIOD
YEAR ENDED FEBRUARY 10, 1997
JUNE 30 (INCEPTION) TO
1999 2000 JUNE 30, 2000
-----------------------------------------------------
DEVELOPMENT STAGE REVENUES $ 0 $ 0 $ 0
<P>
DEVELOPMENT STAGE EXPENSES:
<P>
Organization Cost $ 0 $ 964 $ 964
Accounting 3,000 19,300 22,300
Advertising 848 0 848
Bank charges 130 0 130
Consulting fees 10,000 0 10,000
Courier 89 0 89
Licenses and taxes 370 1,037 1,407
Office expenses 4,598 19,065 23,663
Professional fees 16,295 5,302 21,597
------------------------------------------------------
TOTAL DEVELOPMENT STAGE EXPENSES (35,330) (45,668) (80,998)
------------------------------------------------------
LOSS FOR THE PERIOD $(35,330) $(45,668) $ (80,998)
======================================================
LOSS PER COMMON SHARE
<P>
Basic $(0.0037) $(0.0044) $ (0.0082)
======================================================
Weighted-average number of
common shares outstanding 9,500,000 10,332,787 9,787,905
=======================================================
<P>
The accompanying notes are an integral part of these financial statements.
</TABLE>
-3-
</PAGE>
<PAGE>
<TABLE>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<P>
FOR THE PERIOD FEBRUARY 10, 1997 (INCEPTION) THROUGH JUNE 30, 2000
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
-------------------------------------------------------------------
Balance,
February 10, 1997
(inception)
0 $ 0 $ 0 $ 0 $ 0
Restricted common stock
issued to related parties
for consulting fees 200 0 1,000 0 1,000
<P>
Loss during development
stage for the period
February 10, 1997
(inception) through
June 30, 1997 0 0 0 (856) (856)
--------------------------------------------------------------------
Balance, June 30, 1997
200 0 1,000 (856) 144
<P>
Loss during development
stage for the year ended
June 30, 1998 0 0 0 0 0
--------------------------------------------------------------------
<P>
Balance, June 30, 1998 200 $ 0 $ 1,000 $ (856) $ 144
====================================================================
<P>
The accompanying notes are an integral part of these financial statements.
<P>
-4-
</TABLE>
</PAGE>
<PAGE>
<P>
<TABLE>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<P>
FOR THE PERIOD FEBRUARY 10, 1997 (INCEPTION) THROUGH
JUNE 30, 2000 (CONT'D)
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
-------------------------------------------------------------------
Balance,
June 30, 1998 200 $ 0 $ 1,000 $ (856) $ 144
<P>
March 25, 1999.
Forward stock split
47,500 to 1 9,499,800 9,500 (1,000) (8,500) 0
<P>
Common stock issued
to third parties in
private offering 500,000 500 99,500 0 100,000
<P>
Common stock issued
for legal services 50,000 50 450 0 500
<P>
Deficit accumulated
during the development
stage for the year
ended June 30, 1999. 0 0 0 (35,330) (35,330)
-------------------------------------------------------------------
Balance,
June 30, 1999 10,050,000 $10,050 $ 99,950 $(44,686) $ 65,314
======================================================================
<P>
The accompanying notes are an integral part of these financial statements.
<P>
-5-
</TABLE>
</PAGE>
<PAGE>
<TABLE>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<P>
FOR THE PERIOD FEBRUARY 10, 1997 (INCEPTION) THROUGH JUNE 30, 2000 (CONT'D)
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
-------------------------------------------------------------------
Balance,
June 30, 1999 10,050,000 $ 10,050 $ 99,950 $ (44,686) $ 65,314
<P>
Restricted common stock
issued to acquire
I-RealtyAuction.Com,
Inc. 500,000 500 0 0 500
<P>
Deficit accumulated
during the development
stage for the year
ended June 30, 2000 0 0 0 (45,668) (45,668)
----------------------------------------------------------------------
Balance,
June 30, 2000 10,550,000 $ 10,550 $ 99,950 $ (90,354) $ 20,146
======================================================================
<P>
The accompanying notes are an integral part of these financial statements.
<P>
-6-
</TABLE>
</PAGE>
<PAGE>
<TABLE>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENTS OF CASH FLOWS
<P>
INCREASE (DECREASE IN CASH)
<S> <C> <C> <C>
FOR THE PERIOD
YEAR ENDED FEBRUARY 10, 1997
JUNE 30 (INCEPTION) TO
2000 1999 JUNE 30, 2000
-----------------------------------------------------
OPERATING ACTIVITIES
Deficit accumulated during
the development stage $ (45,668) $ (43,830) $ (90,354)
<P>
Adjustments to reconcile net
loss to net cash used by operations
<P>
(Increase) Decrease in
Organization cost 678 (678) 0
(Increase) Decrease in
prepaid expenses (500) (1,000) (1,500)
Increase (Decrease) in
accounts payable and
accrued expenses 1,463 12,268 14,587
Accrued expenses - - -
------------------------------------------------------
Net Cash Used by
Operating Activities (44,027) (33,240) (77,267)
------------------------------------------------------
INVESTING ACTIVITIES:
<P>
Investment in
I-RealtyAuction.Com, Inc. (30,500) 0 (30,500)
------------------------------------------------------
Net Cash Used for
Investing Activities (30,500) 0 (30,500)
------------------------------------------------------
FINANCING ACTIVITIES
<P>
Proceeds from the issuance
of common stock 500 10,050 10,550
Proceeds from Additional
Paid in Capital 0 99,950 99,950
------------------------------------------------------
Net Cash Used for
Financing Activities 500 110,000 110,500
------------------------------------------------------
<P>
Increase (decrease) in cash (74,027) 76,760 2,733
Cash, Beginning of year 76,760 0 0
Cash, End of year $ 2,733 $ 76,760 $ 2,733
======================================================
<P>
The accompanying notes are an integral part of these financial statements.
<P>
-7-
<P>
</TABLE>
</PAGE>
<PAGE>
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENT OF CASH FLOWS
<P>
INCREASE (DECREASE IN CASH)
<P>
FOR THE PERIOD FROM FEBRUARY 10, 1997 (INCEPTION)
TO JUNE 30, 2000
<P>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
<P>
During the year ended June 30, 2000 and for the cumulative
period February 10, 1997 (inception) to June 30, 2000, the
Company did not pay or accrue any interest.
<P>
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
<P>
The Company entered into the following non-cash
transactions:
<P>
During the year ended June 30, 2000, the Company issued
500,000 shares of common stock in connection with the
formation and acquisition of its interest in the shares of
I-RealtyAuction.Com, Inc. The transaction was valued at
$500.
<P>
During the period February 10, 1997 (inception) through June
30, 1999, the Company issued 9,550,000 post split shares to
its founders and legal counsel for consulting and legal
services valued at $1,500.
<P>
The accompanying notes are an integral part of these
financial statements.
<P>
-8-
<P>
</PAGE>
<PAGE>
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO FINANCIAL STATEMENTS
<P>
JUNE 30, 2000
<P>
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
<P>
ORGANIZATION
------------
<P>
Global Realty Management Group, Inc. ("the Company") was
incorporated on February 10, 1997 under the laws of the
State of Florida. The Company's primary objective is to
position itself to take advantage of real estate management
opportunities. The Company intends to grow through internal
development, strategic alliances and acquisitions of
existing business. The Company commenced its development
stage operations during the fiscal year ended June 30, 1999.
<P>
USE OF ESTIMATES
----------------
<P>
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of
contingent assets and liabilities as of the date of the
financial statements and reporting period. Accordingly,
actual results could differ from those estimates.
<P>
CASH AND CASH EQUIVALENTS
-------------------------
<P>
For purposes of reporting cash flows, the company considers
all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
<P>
CARRYING VALUES
---------------
<P>
The Company reviews the carrying values of its long-lived
and identifiable intangible assets for possible impairment.
Whenever events or changes in circumstances indicate that
the carrying amount of assets may not be recoverable, the
Company will reduce the carrying value of the assets and
charge operations in the period the impairment occurs.
<P>
-9-
<P>
</PAGE>
<PAGE>
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO FINANCIAL STATEMENTS
<P>
JUNE 30, 2000
<P>
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
-------------------------------------------------------
<P>
INCOME TAXES
------------
<P>
The Company utilizes Statement of Financial Standards
("SFAS") No. 109, "Accounting for Income Taxes", which
requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of
events that have been included in financial statements or
tax returns. Under this method, deferred income taxes are
recognized for the tax consequences in future years of
differences between the tax basis of assets and liabilities
and their financial reporting amounts at each period end
based on enacted tax laws and statutory tax rates applicable
to the periods in which the differences are expected to
affect taxable income. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount
expected to be realized. The accompanying financial
statements have no provisions for deferred tax assets or
liabilities.
<P>
INVESTMENT
----------
<P>
The Company acquired a 30% interest in I-RealtyAuction.Com,
Inc. and accounts for the investment under the equity method
(Notes 4 and 8). I-Realty-Auction.com was inactive during
the year ended June 30, 2000.
<P>
NET LOSS PER SHARE
------------------
<P>
The Company has adopted SFAS No. 128 "Earnings Per Share".
Basic loss per share is computed by dividing the loss
available to common shareholders by the weighted-average
number of common shares outstanding. Diluted loss per share
is computed in a manner similar to the basic loss per share,
except that the weighted-average number of shares
outstanding is increased to include all common shares,
including those with the potential to be issued by virtue of
warrants, options, convertible debt and other such
convertible instruments. Diluted earnings per share
contemplates a complete conversion to common shares of all
<P>
-10-
<P>
</PAGE>
<PAGE>
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO FINANCIAL STATEMENTS
<P>
JUNE 30, 2000
<P>
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
------------------------------------------------------
<P>
NET LOSS PER SHARE (CONT'D)
---------------------------
<P>
convertible instruments only if they are dilutive in nature
with regards to earnings per share. Since the Company has
incurred net losses for all periods, and since there are no
convertible instruments, basic loss per share and diluted
loss per share are the same.
<P>
FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
<P>
SFAS No. 107 "Disclosures about Fair Value of Financial
Instruments" requires the disclosure of the fair value of
financial instruments. The Company's management, using
available market information and other valuation methods,
has determined the estimated fair value amounts. However,
considerable judgment is required to interpret market data
in developing estimates of fair value. Accordingly, the
estimates presented herein are not necessarily indicative of
the amounts the Company could realize in a current market
exchange.
<P>
NOTE 2 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
--------------------------------------------------------
<P>
In June 1997, the Financial Accounting Standards Board
('FASB") issued SFAS No. 130, "Reporting Comprehensive
Income". This statement requires companies to classify
items of other comprehensive income by their nature in a
financial statement and display the accumulated balance of
other comprehensive income separately from retained earnings
and additional paid-in capital in the equity section of a
statement of financial position. SFAS No. 130 is effective
for financial statements issued for fiscal years beginning
after December 15, 1997. Management believes that SFAS No.
130 will not have a material effect on the Company's
financial statements.
<P>
In June 1997, FASB issued SFAS No. 131, "Disclosure About
Segments of an Enterprise and Related Information". This
statement establishes additional standards for segment
<P>
-11-
<P>
</PAGE>
<PAGE>
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO FINANCIAL STATEMENTS
<P>
JUNE 30, 2000
<P>
NOTE 2 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
(CONT'D)
--------------------------------------------------------
<P>
reporting in financial statements and is effective for
financial statements for fiscal years beginning after
December 15, 1997. Management believes that SFAS No. 131
will not have a material effect on the Company's financial
statements.
<P>
In April, 1998, the American Institute of Certified Public
Accountants issued Statement of Position No. 98-5,
"Reporting for Costs of Start-Up Activities", ("SOP 98-5").
The Company is required to expense all start-up costs
related to new operations as incurred. In addition, all
start-up costs that were capitalized in the past must be
written off when SOP 98-5 is adopted. The Company's
adoption did not have a material impact on the Company's
financial position or results of operations.
<P>
SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities", is effective for financial statements
issued for fiscal years beginning after June 15, 1999. SFAS
No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging
activities. Management does not believe that SFAS No. 133
will have a material effect on its financial position or
results of operations.
<P>
SFAS No. 134, "Accounting for Mortgage-Backed Securities
Retained after The Securitization of Mortgage Loans Held for
Sale by Mortgage Banking Enterprises", is effective for
financial statements issued in the first fiscal quarter
beginning after December 15, 1998. This statement is not
applicable to the Company.
<P>
SFAS No. 135, "Rescission of FASB Statement No. 75 and
Technical Corrections", is effective for financial
statements issued for fiscal years beginning February, 1999.
This statement is not applicable to the Company.
<P>
-12-
<P>
</PAGE>
<PAGE>
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO FINANCIAL STATEMENTS
<P>
JUNE 30, 2000
<P>
NOTE 3 - DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN
MATTERS
------------------------------------------------------------
<P>
The Company's initial activities have been devoted to
developing a business plan, negotiating real estate
management contracts and raising capital for future
operations and administrative functions.
<P>
The ability of the Company to achieve its business
objectives is contingent upon its success in raising
additional capital until adequate revenues are realized from
operations.
<P>
NOTE 4 - OTHER ASSETS
-------------------------
<P>
During the year ended June 30, 2000, the Company formed I-
RealtyAuction.Com, Inc. along with another investor I-
Incubator.Com, Inc., a related party. The Company issued
500,000 shares of its common stock to
<P>
I-RealtyAuction.Com, Inc., valued at $500, and paid $30,000
for a 30% interest in I-RealtyAuction.Com, Inc. I-
Incubator.Com, Inc. received a 70% interest in I-
RealtyAuction.Com, Inc. in exchange for services valued at
$700. I-RealtyAuction.Com, Inc. is a development stage
company and has not commenced operations. I-
RealtyAuction.Com, Inc. intends to market, auction and
provide other related real estate transactions through an
internet website.
<P>
NOTE 5 - INCOME TAXES
-------------------------
<P>
No provisions for income taxes have been made because the
Company has sustained cumulative losses since the
commencement of operations. At June 30, 2000 and June 30,
1999, the Company had net operating loss carryforwards
("NOL's") of $45,668 and $35,330, respectively, which will
be available to reduce future taxable income and expense in
the year ending June 30, 2015 and 2014, respectively.
<P>
In accordance with SFAS No. 109 the Company has computed the
components or deferred income taxes as follows.
<TABLE>
<S> <C> <C>
June 30, June 30,
2000 1999
---------------------------
Deferred tax assets $ 18,039 $ 13,955
Valuation allowance (18,039) (13,955)
------------------------------
<P>
Deferred tax asset, net $ - $ -
==============================
</TABLE>
<P>
-13-
</PAGE>
<PAGE>
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO FINANCIAL STATEMENTS
<P>
JUNE 30, 2000
<P>
At June 30, 2000 and June 30, 1999, a valuation allowance
has provided and realization of the deferred tax benefit is
not likely.
<P>
The effective tax rate varies from the U.S. Federal
statutory tax rate for both the periods ended June 30, 2000
and June 30, 1999, principally due to the following
<P>
U.S. statutory tax rate 34%
State and local taxes 5.5
Valuation allowance (39.5)
------
Effective rate - %
======
<P>
NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES
---------------------------------------------------
<P>
Accounts Payable and accrued expenses at June 30, 2000 and
June 30, 1999 consisted of the following:
<TABLE>
<S> <C> <C>
June 30, June 30,
2000 1999
---------------------------
Accounting fees $ 7,000 $ 3,000
Legal fees 7,487 10,024
Due to shareholder 100 100
---------------------------
<P>
Total accounts payable
accrued expenses$ 14,587 $ 13,124
===========================
</TABLE>
<P>
-14-
</PAGE>
<PAGE>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO FINANCIAL STATEMENTS
<P>
JUNE 30, 2000
<P>
NOTE 7 - STOCKHOLDERS' EQUITY
---------------------------------
<P>
The Company issued 100,000 restricted common shares each to
Joseph Spitzer (President) and Michael D. Farkas (Vice
President, Treasurer, Secretary), the Company's sole
officers and directors, in consideration for management
services valued at $1,000. These individuals are deemed to
be founders and affiliates of the Company.
<P>
On March 25, 1999, the Directors authorized a forward split
of 47,500 to 1 on its common stock. Immediately following
the split the founders owned 9,500,000 restricted common
shares.
<P>
On March 26, 1999, the Company entered into a private
offering of securities pursuant to Regulation D, Rule 504,
promulgated by the Securities Act of 1933. Common stock was
offered to non-accredited investors for cash consideration
of $.20 per share. 500,000 shares were issued to 25
unaffiliated investors. That offering is now closed.
<P>
In June 1999, the Company engaged legal counsel for services
relating to SEC filings and related documentation. The fees
to be paid for these services are estimated to be $15,500.
In addition, the Company issued 50,000 shares of common
stock (valued at $500) as additional payment for the
services performed.
<P>
On December 6, 1999 the Company issued 500,000 restricted
common shares in connection with the formation of I-
RealtyAuction.Com, Inc. valued at par $500 (see Note 4).
<P>
NOTE 8 - RELATED PARTY TRANSACTIONS
---------------------------------------
<P>
In April 1999, the Company agreed to reimburse Atlas Equity
Group, Inc., a related party, $1,000 per month (on a month-
to-month basis) for operating and administrative expenses.
Atlas Equity Group, Inc. is owned by Michael D. Farkas. For
the year ended June 30, 2000 and 1999, $12,000 and $3,000
respectively, are included as expense in the accompanying
financial statements.
<P>
-15-
</PAGE>
<PAGE>
<P>
GLOBAL REALTY MANAGEMENT GROUP, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO FINANCIAL STATEMENTS
<P>
JUNE 30, 2000
<P>
NOTE 8 - RELATED PARTY TRANSACTIONS (CONT'D)
-----------------------------------------------
<P>
In April, 1999 the Company agreed to reimburse Allstate
Realty Associates, a related party, $500 per month (on a
month-to-month basis) for operating and administrative
expenses. Allstate Realty Associates is owned by Joseph
Spitzer. For the year ended June 30, 2000 and 1999, $6,000
and $1,500 respectively, are included as expense in the
accompanying financial statement.
<P>
In December, 1999 the Company issued 500,000 shares of
common stock and paid $30,000 in connection with the
formation and acquisition of a 30% interest in I-RealtyAuction.com,
Inc. 70% of I-RealtyAuction.Com, Inc., is
owned by I-Incubator.Com, Inc. a related party. I-
Incubator.Com, Inc. exchanged consulting services valued at
$700 for its 70% interest in I-RealtyAuction.Com, Inc.
<P>
</PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis
---------------------------------------------
<P>
The following discussion and analysis should be read in
conjunction with the financial statements of the Company and
the accompanying notes appearing subsequently under the
caption "Financial Statements."
<P>
The following discussion and analysis contains forward-
looking statements, which involve risks and uncertainties.
The Company's actual results may differ significantly from
the results, expectations and plans discussed in these
forward-looking statements.
<P>
During the past years the Company has spent considerable
time and capital resources defining and developing its
strategic plan operating in the property management,
development, construction, and leasing industries.
<P>
The Company's operations have been devoted primarily to
developing a business plan and raising capital for future
operations and administrative functions. The Company
intends to grow through internal development, strategic
alliances, and acquisitions of existing businesses. Because
of uncertainties surrounding its development, the Company
anticipates incurring development stage losses in the
foreseeable future. The ability of the Company to achieve
its business objectives is contingent upon its success in
raising additional capital until adequate revenues are
realized from operations.
<P>
Development stage expenses during the year ended June 30,
2000 were greater than the comparable period of February 10,
1997 (Inception) to June 30, 2000, increasing from $45,668
to $80,998 or a 56.38% increase. The expenses incurred were
primarily due to various consulting, managerial and
professional services in connection with its Form 10 filing
and in connection with its pursuit of the Company's
objectives. This was in part the result of consulting and
professional fees necessitated by operating in a public
environment and an agreement between the Company and Atlas
Equity Group, Inc. (Owned by Michael D. Farkas, a related
party) for shared office and rent expenses. On-going
increases to development stage expenses are anticipated.
<P>
Liquidity and Capital Resources
--------------------------------
<P>
Despite capital contributions and both related party and
third party loan commitments, the company from time to time
experienced, and continues to experience, cash flow
shortages that have slowed the Company's growth.
<P>
The Company has primarily financed its activities from sales
of capital stock of the Company and from loans from related
and third parties. A significant portion of the funds
raised from the sale of capital stock has been used to cover
working capital needs such as office expenses and various
consulting fees.
<P>
The Company continues to experience cash flow shortages, and
anticipates this continuing through the foreseeable future.
Management believes that additional funding will be
necessary in order for it to continue as a going concern.
The Company is investigating several forms of private debt
and/or equity financing, although there can be no assurances
that the Company will be successful in procuring such
financing or that it will be available on terms acceptable
to the Company.
<P>
Year 2000 Impact Statement
--------------------------
<P>
The Company has analyzed operations in the property
management, development, construction, and leasing
industries to determine the needs of the Company to manage
residential and office properties. The Company has
professionals experienced in all aspects of residential real
estate, commercial real estate, management and development
agreements in the normal course of its business and believes
those arrangements are sufficient to handle any minor issues
that may arise as a result of the Year 2000, if any. The
Company also intends to create hard copy of all year-end
accounting and management reports, in the ordinary course of
business, which will serve as a back up of such data if
needed.
<P>
</PAGE>
