|
Location
|
|
Description
|
|
Acquisition
Cost
|
|
|
Reading,
PA
|
|
|
Mobile
home
|
|
$
|
1,058
|
|
|
Reading,
PA
|
|
|
Mobile
home
|
|
$
|
2,682
|
|
|
Sellersville,
PA
|
|
|
Vacant
land parcel
|
|
$
|
1,921
|
|
As
shown
on the Company’s consolidated balance sheet, as of September 30, 2007, the
Company had total assets of $6,285.
Total
revenue
.
We
had no
revenue for the nine month period ended September 30, 2007. Although the
Company currently owns three properties in Pennsylvania, no revenues have
been
generated from these properties and there will be no revenue from any of
the
properties until they are rented or sold.
Operating
Expenses.
Our
operating expenses are composed primarily of salaries, professional fees
and
administrative costs. For the nine month period ended September 30, 2007,
operating expenses were $89,553 as compared to $114,193 for the same period
in
2006. The decrease in operating expenses in 2007 was primarily attributable
to a
decrease in salaries and to the lesser extent professional fees during
such
period. For the three month period ended September 30, 2007, operating
expenses
were $12,000 as compared to $32,001 for the same period in 2006. The decrease
in
operating expenses in 2007 was primarily attributable to a decrease in
salaries
during such period
Liquidity
and Capital Resources
Our
capital requirements to date have depended on several factors, including
the
costs of tax lien certificates acquired, the timing of redemptions of tax
lien
certificates and the timing of the sale of properties acquired by the Company
through foreclosure. The Company intends to acquire assets which may require
financing which there is no assurance will be secured. We believe that
we will
not generate enough cash from operations to be sufficient to fund our ongoing
operations through the next twelve months. As of September 30, 2007, we
had $0
in cash and $625 in marketable securities on our balance sheet. We previously
had secured financing to enable us to meet our obligations in the form
of a
credit line agreement which provided up to $100,000 in debt financing from
Triple J Associates, a company owned by a former officer and director of
the
Company. However, the credit line agreement expired on December 31, 2006,
was
not extended and is no longer available to the Company.
There
can
be no assurance that we will be able to secure needed financing. Therefore,
there can be no assurance that we will have sufficient financing for the
Company’s operations, to enable us to acquire assets and to continue our
business. The Company will be required to seek alternative financing. There
can
be no assurance that we will be able to successfully raise such additional
funds, or that such funds will be available on acceptable terms. Funds
raised
through future equity financing will likely be dilutive to our current
stockholders. The incurrence of indebtedness would result in an increase
in our
fixed obligations and could result in borrowing covenants that would restrict
our operations. If financing is not available when required or is not available
on acceptable terms, we may be unable to develop or enhance our products
or
services. In addition, we may be unable to take advantage of business
opportunities or respond to competitive pressures. Any of these events
could
have a material and adverse effect on our business, results of operations
and
financial condition. Lack of additional funds will materially affect our
business and may cause us to cease operations. Consequently, stockholders
could
incur a loss of their entire investment in the Company.
Our
financial statements were prepared on the assumption that we will continue
as a
going concern. The report of our independent accountants for the year ended
December 31, 2006 acknowledges that we have incurred losses in each of
the last
fiscal years and that we will require additional funding to sustain our
operations. These conditions cause substantial doubt as to our ability
to
continue as a going concern. Our financial statements included herein do
not
include any adjustments that might result should we be unable to continue
as a
going concern.
Critical
Accounting Policies and Estimates
The
preparation of condensed financial statements in conformity with the accounting
principles generally accepted in the United States requires us to make
estimates
and assumptions that affect reported amounts of assets and liabilities
and the
disclosure of contingent assets and liabilities as the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. These estimates and assumptions are based on historical
experience and various other factors that are believed to be reasonable
under
the circumstances. Actual results could differ materially form those estimates
under different assumptions.
We
believe that the following accounting policies are the most critical to
our
condensed financial statements since these policies require significant
judgment
or involve complex estimates to the portrayal of our financial condition
and
operating results:
·
Revenue
recognition
·
Stock
based compensation
Our
audited financial statements as of December 31, 2006 filed as part of our
Form
10-KSB contain further discussions on our critical accounting policies
and
estimates.
We
have
no off-balance sheet arrangements.
The
preceding statements under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" which are not historical facts are
forward-looking statements. These forward-looking statements involve risks
and
uncertainties that could render them materially different, including, but
not
limited to, the risk that the Company will be unable to make acquisitions
and
secure the financing necessary to do so and to continue operations and
the risk
that we will not be able to fund our working capital needs from cash
flow.
Item
3: Controls and Procedures
Under
the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted
an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-14(c) promulgated under the Securities Exchange Act of 1934,
as
amended (the “Exchange Act”), within 90 days of the filing date of this report.
In designing and evaluating the Company’s disclosure controls and procedures,
management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving
their
objectives and management necessarily applied its judgment in evaluating
the
cost-benefit relationship of possible controls and procedures. Based on
this
evaluation, the Company’s chief executive officer and chief financial officer
concluded that as of September 30, 2007, the Company’s disclosure controls and
procedures were (1) designed to ensure that material information relating
to the
Company, including its consolidated subsidiaries, is made known to the
Company’s
chief executive officer and chief financial officer by others within those
entities, particularly during the period in which this report was being
prepared
and (2) effective, in that they provide reasonable assurance that information
required to be disclosed by the Company in the reports that it files or
submits
under the Exchange Act is recorded, processed, summarized and reported
within
the time periods specified in the SEC’s rules and forms.
Limitations
on the Effectiveness of Internal Controls
Management does not expect that our disclosure controls and procedures
or our
internal control over financial reporting will necessarily prevent all
fraud and
material errors. An internal control system, no matter how well conceived
and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and
the
benefits of controls must be considered relative to their costs. Because
of the
inherent limitations on all internal control systems, no evaluation of
controls
can provide absolute assurance that all control issues and instances
of fraud,
if any, within the Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty,
and that
breakdowns can occur because of simple error or mistake. The design of
any
system of internal control is also based in part upon certain assumptions
about
the likelihood of future events, and there can be no assurance that any
design
will succeed in achieving its stated goals under all potential future
conditions.
Over
time, controls may become inadequate because of changes in circumstances,
and/or
the degree of compliance with the policies and procedures may deteriorate.
Because of the inherent limitations in a cost effective internal control
system,
financial reporting misstatements due to error or fraud may occur and not
be
detected on a timely basis.
There
have been no significant changes (including corrective actions with regard
to
significant deficiencies or material weaknesses) in our internal controls
or in
other factors that could significantly affect these controls subsequent
to the
date of the evaluation referenced in the above paragraph.
Item
5: Other Information
On
November 14, 2007, the Board of Directors appointed Fredrick Schulman to
replace
Eric Sheppard as the Company’s President, Mr. Sheppard having resigned from the
position on that date. Mr. Schulman’s resume is presented below:
Fredrick
Schulman served as the Chairman and President of Gourmet Group, Inc. (“Gourmet”)
from September 2000 until March of 2005 and he has been a member of its
Board of
Directors since March, 2005. Gourmet, a publically traded company, is now
known
as Drinks Americas Holdings, Ltd. He has 25 years of experience in corporate
and
commercial finance, venture capital, leveraged buy outs, investment banking
and
corporate and commercial law. Mr. Schulman's career includes key positions
with
RAS Securities in New York from 1994 to 1998 as General Counsel and Investment
Banker, eventually becoming Executive Vice President and Director of Investment
Banking. From 1999 to September, 2001, he was President of Morgan Kent
Group,
Inc., a venture capital firm based in New York and Austin, Texas. Since
September, 2003, Mr. Schulman has served as Chairman of Skyline Multimedia
Entertainment, Inc., and, since September, 2002, he has served as President
and
Director of East Coast Venture Capital, Inc., a specialized small business
investment company and community development entity based in New York.
Since
September, 2006, Mr. Schulman also has served as chairman of the board
of
directors of NewBank, a New York chartered commercial bank.
PART
II
Item
1. Legal Proceedings
None
Item
6. Exhibits and Reports on Form 8-K
|
(a)
|
Exhibits.
|
|
|
|
|
|
|
|
31
|
Certification
of Chief Executive Officer and Chief Financial Officer as required
by Rule
13a-14(a) of the Securities Exchange Act of
1934
|
|
|
32
|
Certification
of Chief Executive Officer and Chief Financial Officer, as required
by
Rule 13a-14(b) of the Securities Exchange Act of 1934
|
|
|
|
|
|
(b)
Reports
on Form
8-K
|
|
Form
8-K
dated July 27, 2007 reporting a change in control of the Company, the
resignation of the Company’s Board of Directors and Executive Officers, and the
appointment of Executive Officers and Members of the Company’s Board of
Directors.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
SK
REALTY
VENTURES, INC.
(Registrant)
|
Signature
|
|
Title
|
|
Date
|
|
/s/
Fredrick Schulman
|
|
President
and Acting Principal Accounting Officer
|
|
November
21, 2007
|