SEC Filing Summary: Real Estate Restoration and Rental, Inc.
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2011, for Real Estate Restoration and Rental, Inc. (Note: The input metadata listed "Vivosim Labs, INC." but the filing text explicitly identifies the registrant as Real Estate Restoration and Rental, Inc.). The company is classified as a Development Stage Company and a Shell Company. Its business plan involves providing renovation and management services for vacation rental properties in North and South Carolina and reselling green energy solutions (specifically "EnerG2" and Frigitek products) under a licensing agreement with Madison Energy Group.
Key Financial Metrics
| Metric | Three Months Ended Mar 31, 2011 | Nine Months Ended Mar 31, 2011 | Period from Inception (Dec 2009) to Mar 31, 2011 |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Net Loss | $(22,836) | $(78,382) | $(116,307) |
| Cash and Cash Equivalents | $31,705 (as of Mar 31, 2011) | N/A | |
| Total Assets | $62,668 | N/A | |
| Total Liabilities | $950 | N/A | |
| Stockholders' Equity | $61,718 | N/A | |
| Net Cash Used in Operating Activities | $(79,495) | N/A | |
| Net Cash Used in Investing Activities | $(30,000) | N/A | |
| Net Cash Provided by Financing Activities | $75 | N/A |
Note: The company has no debt other than accounts payable of $950. Margins are not applicable due to zero revenue.
Material Changes vs. Prior Period
- Revenue: Remained at $0 for the quarter, consistent with the prior year period and the company's development stage status.
- Expenses: Total operating expenses for the three months ended March 31, 2011, were $22,836, an increase from $17,625 in the same period in 2010. This increase was driven primarily by higher professional fees ($18,130 vs. $11,325).
- Assets: The company acquired "Licensing Rights" valued at $30,000 (net book value $28,463) during the nine-month period, representing a new asset class not present in the prior year.
- Cash Position: Cash decreased significantly from $141,125 as of June 30, 2010, to $31,705 as of March 31, 2011, due to operating losses and the $30,000 cash outflow for the license purchase.
Guidance, Outlook, and Risks
- Going Concern: The filing explicitly states that the company's limited operating history, accumulated deficit of $116,307, and cash burn raise substantial doubt about its ability to continue as a going concern. Continuation depends on raising additional capital.
- Liquidity: Management estimates current capital is sufficient for approximately five months of operations.
- Operational Outlook: The company aims to have three vacation homes under management by August 2011 (delayed from an initial summer 2011 target). It plans to take delivery of the first Frigitek units in July 2011 but has not yet generated sales from this product line.
- Financing: The company does not currently have definitive plans for a new private placement but may conduct one if necessary. Future equity financing would result in shareholder dilution.
- Commitments: The company has a consulting agreement requiring monthly payments of $5,000, which can be cancelled by either party.
Investor Verification Checklist
- Capital Runway: Verify if the company has secured the additional funding required to survive beyond the estimated five-month runway.
- Revenue Generation: Confirm if the company has signed the anticipated contracts with real estate developers or hedge funds to begin renovation and management services.
- Product Sales: Check for any sales activity regarding the "EnerG2" or Frigitek products following the July 2011 delivery target.
- Related Party Transactions: Review the valuation of in-kind services contributed by shareholders ($3,900 in the nine-month period) and stock issued to the founder.
- License Viability: Assess the commercial potential of the $30,000 licensing agreement with Madison Energy Group given the lack of sales to date.