Cautionary Notice Regarding Forward Looking Statements
This section of this Form 10-K includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like
believe, expect, estimate, anticipate, intend, project and similar expressions,
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from our predictions.
Readers should not place undue reliance on these forward-looking statements,
which are based on management's current expectations and projections about
future events, are not guarantees of future performance, are subject to risks,
uncertainties and assumptions (including those described below), and apply only
as of the date of this filing. Our actual results, performance or achievements
could differ materially from the results expressed in, or implied by, these
forward-looking statements. Factors which could cause or contribute to such
differences include, but are not limited to, the risks to be discussed in our
Annual Report on form 10-K and in the press releases and other communications to
shareholders issued by us from time to time which attempt to advise interested
parties of the risks and factors which may affect our business. We undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
Our Operating Strategy
Our website allows real estate professionals and consumers to interact through
the Internet as a business medium. Our operating strategy is to feature real
estate agents' websites on the www.realestatecontacts.com portal website in the
areas that they service and work enabling potential home buyers to view real
estate listings and homes that are for sale. This format would be called a lead
generation program for real estate professionals that are on the
RealEstateContacts.com portal website.
Our business strategy is an ease of use approach which allows the consumer to
view listings of homes from our website and also of their local real estate
office or agent.
Our focus is driving high volumes of traffic to our website and our advertisers
profile pages putting the consumer with the most relevant and desired
professional. Many unique visitors visit our website to view real estate
listings and homes for sale. We accomplish this through highly focused and
well-designed SEO strategies that allow our advertisers to receive greater
amount of exposure without spending huge resources. Our methodology and resource
expenditures are invaluable tools to our advertisers. We do the marketing and
our advertisers get the leads.
Our real estate search portal website will also include local real estate
service providers that want more traffic and exposure to their business website
for potential new clients.
We believe the driving of internet traffic is the key to any online marketing
company. We intend to build our advertising campaign around all internet related
marketing concepts, such as search engine optimization, pay per clicks
advertising, banner advertising, email marketing, and linking up to other real
estate portals and directories.
Our goal is to connect real estate professionals with consumers who are
interested in buying or selling a home. We believe that when a customer does
research and knows which house he or she is interested in, the result is a more
effective and time-efficient transaction for both buyer and seller.
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Plan of Operations
Our plan of operation is to operate a search engine portal website for real
estate.
Our real estate search website allows real estate professionals and consumers to
interact through the internet as a business medium. The Company's operating
strategy is to feature real estate professional's websites and profiles on the
RealEstateContacts.com portal website in the areas that they service and work
enabling potential home buyers to view real estate listings and homes that are
for sale and featured on the real estate professionals' website. This format is
called a lead generation program for real estate professionals that are on the
RealEstateContacts.com portal website.
Our business strategy is an ease of use approach which allows the consumer to
view listings of homes from of their local real estate office, broker or agent.
This service is provided from our real estate search website:
www.realestatecontacts.com. In addition, our real estate search website will
feature a select few per city. For this reason, we believe our concept will have
a high level of interest from any real estate professional. We believe this
approach will be attractive to real estate professionals in each locale.
The RealEstateContacts.com portal website will also feature local real estate
service providers such as local or national mortgage lenders and mortgage
brokers. By featuring local mortgage brokers our website allows the consumer to
have access to any financial questions and can receive all the information they
need quickly in their geographical area.
Our goal is to connect real estate professionals with consumers who are
interested in buying or selling a home.
We anticipate generating revenues from advertising sales from real estate
professionals on our current website.
We plan to grow revenues in the next 12 months by undertaking the following
steps:
· Devote greater resources to marketing and selling our services such as
developing and creating a more productive advertising sales division
within our company by the hiring of advertising sales account executives.
· Focus to expand our network of advertisers and real estate professionals
by increasing our online presence to include various marketing channels
such as the major search engines, Google, Yahoo and Bing.
· Expand our company's public relations by creating more brand awareness on
the internet. An example would be to focus on other social media websites
such as Facebook, Twitter, and LinkedIn.
· Develop other marketing programs to efficiently increase our brand
awareness such as email campaigns, newsletters, linking our website to
other real estate business websites, real estate portals and directories.
· We intend to continue, maintain and aggressively pursue to build our
advertising campaign around all internet related marketing concepts, such
as search engine optimization, pay per click advertising, banner
advertising and social media networks to help manage and geographically
target consumer traffic and lead volume.
· Focus on driving more internet traffic and unique visitors to our websites
by using these search engine marketing techniques.
· We plan to increase our online Search Engine Marketing to create more
unique users. Measuring unique users is important to us because our
advertising revenues depend in part on our ability to enable our consumers
to connect with real estate professionals. We define a unique user as a
user who visits our website at least once during a calendar month, as
measured by our analytical tools.
· The number of real estate professionals (advertisers) on our website is an
important driver of revenue growth.
Limited Operating History
We have generated a limited financial history and have not previously
demonstrated that we will be able to expand our business through increased
investment in marketing activities. We cannot guarantee that the expansion
efforts described in this Registration Statement will be successful. The
business is subject to risks inherent in growing an enterprise, including
limited capital resources and possible rejection of our business model and/or
sales methods.
Future financing may not be available to us on acceptable terms. If debt
financing is not available or not available on satisfactory terms, we may be
unable to continue expanding our operations. Equity financing will result in a
dilution to existing shareholders.
Results of Operations
For the years ended December 31, 2019 and 2018.
Revenues
For the years ended December 31, 2019 and 2018, we generated no revenues.
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Operating Expenses
Operating expenses in the amount of $4,109,730 and $509,358 were incurred for
the years ended December 31, 2019 and 2018, respectively. The increase was due
to increased stock-based compensation and general and administrative expenses.
We anticipate that our professional fees ($50,454 in 2019 vs $53,504 in 2018)
will remain significant as we maintain compliance with our public reporting
requirements.
Net Loss
The Company recognized net losses of $4,237,188 and $702,564 for the years ended
December 31, 2019 and 2018, respectively. The increased loss is largely due to
stock-based compensation issued to the Company's CEO. At this time, normal costs
of public filing will continue and it is not known when significant revenues
will occur to off-set these expenses.
Liquidity and Capital Resources
The Company is currently financing its operations primarily through loans,
equity sales and advances from shareholders. These advances are being made to
supplement any cash generated by the operating revenue. We believe we can
currently satisfy our cash requirements for the next twelve months with our
current expected increase in revenue, and the expected capital to be raised in
private placement and sales of our common stock. Additionally, we will begin to
use our common stock as payment for certain obligations and to secure work to be
performed. Management plans to continue to rely upon advances from shareholders
until it has generated revenue through yearly advertising subscriptions.
The Company has negative working capital, in the amount of $1,742,797 as of
December 31, 2019 and has net cash used by operations of $11,030. During the
year ended December 31, 2019, the Company received $10,000 in proceeds from the
issuance of common stock. During the year ended December 31, 2018, the Company
received $65,000 from the issuance of convertible debt.
At December 31, 2019 the Company's cash balance was $132. The Company
anticipates generating revenue, which will partially mitigate cash flow
deficiencies; however, without revenue at the present time, we are unable to
cover our cash requirements without relying upon loans and advances. In
consideration of the potential shortfall in adequate resources, management has
disclosed its substantial doubt about its ability to continue as a going concern
and our auditor has also expressed the same in their auditors' report.
We do believe that we will have enough cash to support our daily operations, at
reduced levels of development, beyond the next 12 months while we are attempting
to expand operations and produce revenues. Although we believe we have adequate
funds to maintain our current operations for the near term, we do not believe
that we have the required funding to expand our product offering (and other
possible alternative service offerings). We estimate the Company needs an
additional $200,000 to fully implement its business plans over the next twelve
months. In addition, we anticipate we will need an additional minimum of
$120,000 to cover operational and administrative expenses for the next twelve
months. The majority shareholder has committed to cover any cash shortfalls of
the Company, although there is no written agreement or guarantee. If we are
unable to satisfy our cash requirements, we may be unable to proceed with our
plan of operations.
Future financing for our operations may not be available to us on acceptable
terms. To raise equity will require the sale of stock and the debt financing
will require institutional or private lenders. We do not have any institutional
or private lending sources identified. If debt financing is not available or not
available on satisfactory terms, we may be unable to continue expanding our
operations. Equity financing will result in a dilution to existing shareholders.
The foregoing represents our best estimate of our cash needs based on current
planning and business conditions. In the event we are not successful in reaching
our initial revenue targets, additional funds may be required, and we may not be
able to proceed with our business plan for the development and marketing of our
core services. Should this occur, we will suspend or cease operations.
We anticipate that depending on market conditions and our plan of operations, we
may incur operating losses in the foreseeable future. Therefore, there is
substantial doubt about our ability to continue as a going concern.
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Management Consideration of Alternative Business Strategies
In order to continue to protect and increase shareholder value management
believes that it may, from time to time, consider alternative management
strategies to create value for the company or additional revenues. Strategies to
be reviewed may include acquisitions; roll-ups; strategic alliances; joint
ventures on large projects; issuing common stock as compensation in lieu of
cash; and/or mergers.
Management will only consider these options where it believes the result would
be to increase shareholder value while continuing the viability of the company.
At the current time, there have been no planned commitments to any independent
considerations mentioned above.
Subsequent Events
On January 7, 2020, 100,000 shares of the Company's common stock were issued to
its President and Chief Executive Officer pursuant to the Plan of Share Exchange
Agreement originally entered into on December 27, 2019 with Florida Beauty
Express, Inc., Florida Beauty Flora, Inc., Floral Logistics of Miami, Inc.,
Floral Logistics of California, Inc., and Tempest Transportation Inc.
On January 13, 2020, we entered into an Amended Agreement and Plan of Share
Exchange Agreement by and Amongst, REAC Group, Inc. and Florida Beauty Express,
Inc., Florida Beauty Flora, Inc., Floral Logistics of Miami, Inc., Floral
Logistics of California, Inc., Tempest Transportation Inc. (the "Companies").
The Agreement is for the exchange of 100% of the outstanding shares of the
Companies in exchange for 15,015,002 shares of REAC Common Stock and 500,000
shares of REAC Series A Preferred Stock. The Agreement also states that the Mr.
Robert DeAngelis will return to the REAC Treasury all of the shares that he
currently controls, in return for $350,000, to be paid as follows: $100,000
shall be paid in cash within three (3) days of closing by wired funds to Robert
DeAngelis. The remaining $150,000 will be payable in $75,000 installments for
the first two quarters after closing (March 31, 2020 and June 30, 2020
respectively) and Mr. DeAngelis will also receive 100,000 shares of common
stock, that will be valued at $1.00 per share, respectively. As part of the
Agreement, Mr. Robert DeAngelis will also resign and appoint new officers and
directors as to be chosen by the Companies.
On February 3, 2020, the Company entered into a Senior Convertible Promissory
Note in the amount of $277,750 and the Company authorized the disbursement of
the proceeds to Florida Beauty Flora, Inc. The Note bears interest at a rate of
12% and matures one year from the purchase date. The Note is convertible into
shares of the Company's common stock at a conversion price equal to 50%
multiplied by the lowest trading price during the previous twenty-five (25)
days. At any time during the period beginning on the Issue Date and ending on
the last Trading Day immediately preceding the Maturity Date, the Borrower shall
have the right, exercisable on not less than three (3) Trading Days prior
written notice to the Holder of the Note and subject to the Holder's written
consent at the time of such prepayment, to prepay the outstanding Note
(principal and accrued interest), in full by making a payment to the Holder of
an amount in cash equal to 150%, multiplied by the sum of the then outstanding
principal amount of this Note, plus accrued and unpaid interest on the unpaid
principal amount of the Note, plus Default Interest, if any.
On February 25, 2020, the Company issued 1,000,000 shares of common stock to its
President and Chief Executive Officer as a performance bonus for 2020. The
shares were valued at the quoted market price on the date of issuance.
On April 13, 2020, we entered into a second Amended Agreement and Plan of Share
Exchange Agreement that was originally entered into on December 26, 2019 by and
Amongst, REAC Group, Inc. and Florida Beauty Express, Inc., Florida Beauty
Flora, Inc., Floral Logistics of Miami, Inc., Floral Logistics of California,
Inc., Tempest Transportation Inc. (the "Companies") and Companies shareholders.
The Agreement is for the exchange of 100% of the outstanding shares of the
Companies in exchange for 15,015,002 shares of REAC Common Stock and 500,000
shares of REAC Series A Preferred Stock. The Conditions to the Agreement have
been satisfied and fully closed, and the Companies are now wholly-owned
subsidiaries of REAC. The Agreement also states that Mr. Robert DeAngelis will
return to the REAC Treasury all of the shares that he currently controls, in
return for $350,000, to be paid as follows: $100,000 shall be paid in cash
within three (3) days of closing by wired funds to Robert DeAngelis. The
remaining $150,000 will be payable in $75,000 installments for the first two
quarters after closing (April 30, 2020 (of which $12,000 has been paid) and June
30, 2020 respectively) and Mr. DeAngelis will also receive 100,000 shares of
common stock, that will be valued at $1.00 per share, respectively. As part of
the Agreement, Mr. Robert DeAngelis will also resign and appoint new officers
and directors as to be chosen by the Companies. The Company plans to bring Mr.
DeAngelis back as a consultant and / or an advisor, but no agreements have been
made to do so, at this time.
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The 15,015,002 shares of Common Stock and 500,000 shares of Preferred Stock will
be distributed as described below:
Common Stock
Shares to Issue Shareholder
1,876,875 Efrat Afek
1,876,875 Ralph Milman
3,753,751 Ronan Koubi
3,003,000 The Q Trust
2,552,551 Ronald Minsky
1,951,950 The Apollo Family Trust
Series A Preferred Stock
Shares to Issue Shareholder
62,500 Ralph Milman
62,500 Efrat Afek
125,000 Ronan Koubi
105,000 The Q Trust
80,000 Ronald Minsky
65,000 The Apollo Family Trust
The Agreement may be terminated, and the Acquisition contemplated herein may be
abandoned at any time prior to the Effective Time, whether before or after
stockholder approval thereof by either Acquiror or the Companies. The
consummation of the transactions contemplated by this Agreement (the "Closing")
shall take place on such date as may be reasonably required to accommodate a
satisfaction of the conditions precedent to Closing, but in no event later than
April 13, 2020 without consent of the parties.
On April 16, 2020, the Company issued 400,000 shares of common stock to its
President and Chief Executive Officer pursuant to the terms of his employment
agreement. The shares were issued as a performance bonus for 2020 and were
valued at the quoted market price on the date of issuance.
On April 23, 2020, the Company issued 2,000,000 shares of common stock to its
President and Chief Executive Officer pursuant to the terms of his employment
agreement. The shares were issued as a performance bonus for 2020 and were
valued at the quoted market price on the date of issuance.
Effective June 22, 2020, Robert DeAngelis resigned from his position as
President and Chief Executive Officer and as a member of the board of directors
of REAC Group, Inc. Ronen Koubi will be appointed the new CEO. Ronen Koubi is
the President and Director of Florida Beauty Flora, Inc.
Effective July 29, 2020, the Company entered into a securities purchase
agreement with Auctus Fund, LLC, a Delaware limited liability company. The SPA
provides for the purchase by Auctus of a convertible promissory note in the
principal amount of $575,000; including 100% warrant coverage with full
anti-dilution rights and buyback option. The Company authorized the disbursement
of the proceeds of this Note to Florida Beauty Flora, Inc.. The Promissory Note
matures on July 29, 2021 and bears interest at a rate of 12% per annum.
Effective October 12, 2020, one of the Company's convertible promissory notes
dated March 13, 2017, with the original principal amount of $230,000, was
assigned to a new third party. All rights, title, and interest of the Note were
assigned without recourse and without representations or warranties of any kind.
Common Shares issued for Cash
In May 2019, the Company issued 20,000 common shares to a private investor in
exchange for $10,000, or $0.50 per share.
Common Shares issued as Compensation
On February 14, 2020, the Company issued 500,000 shares of common stock to its
President and Chief Executive Officer as a performance bonus for the year ending
December 31, 2019. The shares were valued at $1.65, the quoted market price on
the date of issuance and the Company has recorded common stock payable as of
December 31, 2019 for a value of $825,000.
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In March 2019, the Company issued 15,000,000 shares of common stock to its
President and Chief Executive Officer pursuant to the terms of his employment
agreement. The shares were issued for purposes of maintaining voting control of
the Company and were valued at $0.50, the quoted market price on the date of
issuance, or $3,000,000.
Common Shares issued for Repayment of Notes
In December 2019, the Company approved the issuance of 726,100 shares of common
stock in satisfaction of $4,608 in accrued interest and $500 in conversion fees
on a convertible note payable. As of December 31, 2019, the shares were not yet
issued by the Company's transfer agent; therefore the Company has recorded
common stock payable in the amount of $5,108. The Company will record the
issuances at the contract value, at the date of exchange, off-setting accrued
interest.
In August 2019, the Company issued 30,000 shares of common stock, for a value of
$1,050 in satisfaction of $550 in principal and $500 in conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable.
In January 2019, the Company issued 2,500 shares of common stock, for a value of
$2,000 in satisfaction of $1,500 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting accrued interest.
In January 2019, the Company issued 2,400 shares of common stock, for a value of
$1,920 in satisfaction of $1,420 in principal and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting accrued interest.
In August 2018, the Company issued 2,393 shares of common stock in connection
with a Securities Purchase Agreement and a Secured Convertible Promissory Note
that granted the investor a Warrant to purchase shares of the Company's common
stock. The shares were valued at $3,350, or $1.40 per share.
In June 2018, the Company issued 1,800 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In June 2018, the Company issued 2,195 shares of common stock in connection with
a Securities Purchase Agreement and a Secured Convertible Promissory Note that
granted the investor a Warrant to purchase shares of the Company's common stock.
The shares were valued at $3,073, or $1.40 per share.
During the year ended December 31, 2018, the Company issued 6,032 shares of
common stock, in a cashless exercise, for an aggregate value of $9,456 pursuant
to a Warrant Agreement associated with a convertible note payable.
In May 2018, the Company issued 1,522 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In May 2018, the Company issued 1,523 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In May 2018, the Company issued 1,749 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In May 2018, the Company issued 1,908 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In May 2018, the Company issued 2,003 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
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In May 2018, the Company issued 1,329 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In May 2018, the Company issued 550 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In May 2018, the Company issued 1,444 shares of common stock in connection with
a Securities Purchase Agreement and a Secured Convertible Promissory Note that
granted the investor a Warrant to purchase shares of the Company's common stock.
The shares were valued at $3,033, or $2.10 per share.
In May 2018, the Company issued 1,500 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In April 2018, the Company issued 1,261 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In April 2018, the Company issued 1,259 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In April 2018, the Company issued 1,261 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In April 2018, the Company issued 1,449 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In March 2018, the Company issued 1,100 shares of common stock, for a value of
$2,640 in satisfaction of $2,140 in interest and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In February 2018, the Company issued 1,989 shares of common stock, for a value
of $17,500 in satisfaction of $14,507 in principal and $2,993 in interest on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In February 2018, the Company issued 1,125 shares of common stock, for a value
of $11,250 in satisfaction of $10,696 in principal and $554 in interest on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In February 2018, the Company issued 1,000 shares of common stock, for a value
of $4,000 in satisfaction of $1,826 in principal, $1,674 in interest, and $500
of conversion fees on a convertible note payable. The Company recorded the
issuances at the contract value, at the date of exchange, off-setting the notes
payable and accrued interest.
In January 2018, the Company issued 467 shares of common stock, for a value of
$6,541 in satisfaction of $6,041 in principal and $500 of conversion fees on a
convertible note payable. The Company recorded the issuances at the contract
value, at the date of exchange, off-setting the notes payable and accrued
interest.
In January 2018, the Company issued 250 shares of common stock, for a value of
$4,000 in satisfaction of $471 in principal, $3,029 in interest, and $500 of
conversion fees on a convertible note payable. The Company recorded the
issuances at the contract value, at the date of exchange, off-setting the notes
payable and accrued interest.
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Off-Balance Sheet Arrangements
Under the definition contained in Item 303(a)(4)(ii) of Regulation S-K, we do
not have any off-balance sheet arrangements, financings, or other relationships
with unconsolidated entities or other persons, also known as "special purpose
entities" (SPEs).
Critical Accounting Policies
The Company's significant accounting policies are presented in the Company's
notes to financial statements for the period ended December 31, 2019 and 2018,
which are contained in this filing and the Company's 2018 Annual Report on Form
10-K. The significant accounting policies that are most critical and aid in
fully understanding and evaluating the reported financial results include the
following:
· The Company prepares its financial statements in conformity with generally
accepted accounting principles in the United States of America. These
principals require management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Management believes that these estimates are reasonable and have
been discussed with the Board of Directors; however, actual results could
differ from those estimates.
· The Company currently does not issue credit on services provided,
therefore there are no accounts receivable. No allowance for doubtful
accounts is considered necessary to be established for amounts that may
not be recoverable, since there has been no credit issued.
· Long-lived assets such as property, equipment and identifiable intangibles
are reviewed for impairment whenever facts and circumstances indicate that
the carrying value may not be recoverable. When required impairment losses
on assets to be held and used are recognized based on the fair value of
the asset. The fair value is determined based on estimates of future cash
flows, market value of similar assets, if available, or independent
appraisals, if required. If the carrying amount of the long-lived asset is
not recoverable from its undiscounted cash flows, an impairment loss is
recognized for the difference between the carrying amount and fair value
of the asset. When fair values are not available, the Company estimates
fair value using the expected future cash flows discounted at a rate
commensurate with the risk associated with the recovery of the assets. We
did not recognize any impairment losses for any periods presented.
· The Company issues restricted stock to consultants for various services.
Cost for these transactions are measured at the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is measurable more reliably measurable. The value of the common
stock is measured at the earlier of (i) the date at which a firm
commitment for performance by the counterparty to earn the equity
instruments is reached or (ii) the date at which the counterparty's
performance is complete.
Recent Accounting Pronouncements
The Financial Accounting Standards Board and other standard-setting bodies
issued new or modifications to, or interpretations of, existing accounting
standards during the year. The Company has carefully considered the new
pronouncements that alter previous generally accepted accounting principles and
does not believe that any new or modified principles will have a material impact
on the corporation's reported financial position or operations in the near term.
These recently issued pronouncements have been addressed in the footnotes to the
financial statements included in this filing.
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REAC GROUP, INC. 
