Item 1.
Business
Company History
We were incorporated on May 27, 2003 under the laws of the State of Florida. On August 23, 2006 Amended and Restated Articles of Incorporation were filed with the Florida Department of State changing the par value of our stock from no par value to a par value of $.01 and the total authorized capital stock to 75,000,000 common shares. Since inception, we have engaged in commercial real estate development. We have office space at 200 Miramar Blvd., NE, Saint Petersburg, FL 33704. RJS currently only requires minimal office space. In light of present economic circumstances, we presently are operating the Company business from the personal residence of our president, Joseph Tyszko. We intend to locate and secure a separate office location for the Company as economic circumstances will allow in the future.
Competition
The real estate development industry is highly competitive and fragmented. Competitive overbuilding in local markets, among other competitive factors, could materially adversely affect commercial builders in those markets. Commercial developers compete for financing, raw materials and skilled labor, as well as for the leases for space in their finished projects. Additionally, competition for prime properties is intense and the acquisition of such properties may become more expensive in the future to the extent demand and competition increase. We compete with other local, regional and national real estate developers. Some of our competitors have greater financial, marketing, sales and other resources than we have, but we believe that we generally have an advantage in the Greater Tampa Bay market due to the experience of the Company.
We do not compete against all of the developers in our geographic market in all of our product types or submarkets; some developers focus on particular types of projects within those markets, such as large mall type buildings that are not in competition with our projects. We believe the factors that commercial businesses seeking space consider when deciding whether to lease long-term from us include the location, value and design of our products. We believe that we typically build attractive, innovative products in sought-after locations that are perceived as good value by our tenants. Accordingly, we believe that we compare favorably in these factors.
Employees
As of March 2012, there are 2 full-time employees at RJS Development. Our President, Joe Tyszko and Treasurer, Valerie Tyszko. The Company has previously utilized outside consultants and sales personnel that were are paid on a specific fee basis or a commission basis, though no consultants were utilized in 2011 or 2010. As market conditions improve, the Company may again utilize outside consultants.
Regulation
We are subject to a limited variety of local, state, and federal regulations. While we believe that our operations are in compliance with all applicable regulations, there can be no assurances that from time to time unintentional violations of such regulations will not occur. We are subject to federal, state and local laws and regulation applied to businesses, such as payroll taxes on the state and federal levels. Our current business requires that we comply with state corporate filings, city or county business license and the necessary business liability insurance. The requirements of these regulations are minimal and do not cause any undue burden.
Internet access and online services are not subject to direct regulation in the United States. Changes in the laws and regulations relating to the telecommunications and media industry, however, could impact our business. For example, the Federal Communications Commission could begin to regulate the Internet and online service industry, which could result in increased costs for us. The laws and regulations applicable to the Internet and to our services are evolving and unclear and could damage our business. There are currently few laws or regulations directly applicable to access to, or commerce on, the Internet. Due to the increasing popularity and use of the Internet, it is possible that laws and regulations may be adopted, covering issues such as user privacy, defamation, pricing, taxation, content regulation, quality of products and services, and intellectual property ownership and infringement. Such legislation could expose us to substantial liability as well as dampen the growth in use of the Internet, decrease the acceptance of the Internet as a communications and commercial medium, or require us to incur significant expenses in complying with any new regulations.
SEC Reports Available on Website
The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Item 1.A Risk Factors
An investment in our common stock involves major risks. Before you invest in our common stock, you should be aware that there are various risks, including those described below. You should carefully consider these risk factors together with all of the other information included in this Form 10-K before you decide to purchase shares of our common stock.
Purchase of our stock is a highly speculative and you could lose your entire investment. We had a small profit in 2010 and in 2011 nearly tripled our profit in 2011. However, you should not assume that our plans and business prospects described herein will either materialize or prove successful. Accordingly, you may lose all or a substantial part of your investment. The purchase of our stock must be considered a highly speculative investment.
We can provide no assurances we will be able to continue as a going concern or raise additional financing in the future.
Failure to achieve significant revenues and profitability in the future would cause the market price for our common stock to decline further. We currently have no market for our stock. We have generated net losses for several years and have only recently shown a profit over the past two fiscal years. If we don’t achieve, increase or maintain revenues and continued profitability in the near future, we may not be able to generate a market for our common stock.
If we are unable to compete effectively with our competitors, we will not be successful generating revenues or attaining profits. The real estate industry is highly competitive. Our ability to generate revenues and profitability is directly related to our ability to compete with our competitors. We face competition in our markets from competing technologies and direct competition from additional companies that may enter this market with greater financial resources than we have. If we are unable to compete effectively, we will not be successful in generating revenues or attaining profits.
Loss of key personnel could cause a major disruption in our day-to-day operations and we could lose our relationships with third-parties with whom we do business. Our future success depends in a significant part upon the continued service of our executive officer as key management personnel. The loss of key personnel or the inability to hire or retain qualified replacement personnel could have cause a major disruption in our day-to-day operations and we could lose our relationships with third-parties with whom we do business, which could adversely affect our financial condition and results of operations.
We do not expect to be able to pay cash dividends in the foreseeable future, so you should not make an investment in our stock if you require dividend income. The payment of cash dividends, if any, in the future rests within the discretion of its Board of Directors and will depend, among other things, upon our earnings, our capital requirements and our financial condition, as well as other relevant factors. We have not paid or declared any cash dividends upon our Common Stock since our inception and by reason of our present financial status and our contemplated future financial requirements does not contemplate or anticipate making any cash distributions upon our Common Stock in the foreseeable future.
We have a limited market for our common stock which causes the market price to be volatile and to usually decline when there is more selling than buying on any given day. Our common stock currently does not trade on any over the counter bulletin board. We currently have a trading symbol (RJSD), but it is not trading as we do not have a market maker as yet to take the stock to the market. However, if the stock was to trade it would be considered a “penny stock”.
Future sales of common stock into the public market place will increase the public float and may adversely affect the market price. As of December 31, 2011, we have outstanding 35,000,000 shares of common stock, including an estimated 14,700,000 outstanding shares held by non-affiliated persons. Holders of restrictive securities may also sell their restrictive shares pursuant to Rule 144. In general, under Rule 144 of the Securities Act of 1933, as amended, shares of our common stock beneficially owned by a person for at least six months (as defined in Rule 144) are eligible for resale under Rule 144, subject to the availability of current public information about us and, in the case of affiliated persons, subject to certain additional volume limitations, manner of sale provisions and notice provisions. Pursuant to Rule 144, non-affiliates may sell or otherwise transfer their restricted shares without compliance with current public information where the restricted securities have been held for at least one year pursuant to Rule 144(a). Future sales of common stock or the availability of common stock for sale may have an adverse effect on the market price of our thinly traded common stock, which in turn could adversely affect our ability to obtain future funding as well as create a potential market overhang.
“Penny Stock” regulations may adversely affect your ability to resell your stock in market transactions. The SEC has adopted penny stock regulations which apply to securities traded over-the-counter. These regulations generally define penny stock to be any equity security that has a market price of less than $5.00 per share or an equity security of an issuer with net tangible assets of less than $5,000,000 as indicated in audited financial statements, if the corporation has been in continuous operations for less than three years. Subject to certain limited exceptions, the rules for any transaction involving a penny stock require the delivery, prior to the transaction, of a risk disclosure document prepared by the SEC that contains certain information describing the nature and level of risk associated with investments in the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Monthly account statements must be sent by the broker-dealer disclosing the estimated market value of each penny stock held in the account or indicating that the estimated market value cannot be determined because of the unavailability of firm quotes. In addition, the rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and institutional accredited investors (generally institutions with assets in excess of $5,000,000). These practices require that, prior to the purchase, the broker-dealer determined that transactions in penny stocks were suitable for the purchaser and obtained the purchaser’s written consent to the transaction.
Our common stock will be subject to the penny stock regulations. Compliance with the penny stock regulations by broker-dealers will likely result in price fluctuations and the lack of a liquid market for the common stock, and may make it difficult for you to resell your stock in market transactions.
Item 1.B. Unresolved Staff Comments
We do not have any unresolved comments from the Commission staff.
Item 2.
Item 2.
Properties
We do not own any real property. Our business is presently operated from the residence of our President.
Our office is at the following address:
·
Address: 200 Miramar Blvd. NE, St. Petersburg, Florida 33704
·
Size: 400 square feet
·
Landlord: Joe Tyszko
·
Term: As long as needed.
·
Monthly Rent: $450 on a month to month basis. This property is adequate for our current needs.
Item 3.
Item 3.
Legal Proceedings
From time to time the Company may be a party to litigation matters involving claims against the Company. As of the date of these financial statements, management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.
Item 4.
Item 4.
Submission of Matters to a Vote of Security Holders
None
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
There is currently no market for our stock. If our stock goes to market, it is expected to trade as “penny stock”.
Penny Stock Considerations
Our shares are "penny stocks", as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price of less than $5.00. Thus, our shares will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.
Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser's written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with his or her spouse, is considered an accredited investor.
In addition, under the penny stock regulations, the broker-dealer is required to:
·
Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;
·
Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities;
·
Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer's account, the account's value, and information regarding the limited market in penny stocks; and
·
Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction, prior to conducting any penny stock transaction in the customer's account.
Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our Common Stock, which may affect the ability of selling shareholders or other holders to sell their shares in the secondary market, and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities. In addition, the liquidity for our securities may be decreased, with a corresponding decrease in the price of our securities. Our shares in all probability will be subject to such penny stock rules and our shareholders will, in all likelihood, find it difficult to sell their securities.
OTC Bulletin Board Qualification for Quotation
We intend to secure a qualification for our securities to be quoted on the OTC Bulletin Board. To have our shares of Common Stock qualified for quotation on the OTC Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock.
Sales of our Common Stock under Rule 144
There are 588,000 (14,700,000 pre-reverse split) shares of our common stock held by non-affiliates and 812,000 (20,300,000 pre-reverse split) shares held by affiliates that Rule 144 of the Securities Act of 1933 defines as restricted securities.
In general, persons holding restricted securities, including affiliates, must hold their shares for a period of at least six months, may not sell more than one percent of the total issued and outstanding shares in any 90-day period, and must resell the shares in an unsolicited brokerage transaction at the market price. These restrictions do not apply to non-affiliates after a holding period of one year but continue to apply for affiliates regardless of their holding period. The availability for sale of substantial amounts of common stock under Rule 144 could reduce prevailing market prices for our securities. All 14,700,000 shares held by non-affiliates have been held for at least 6 months.
Holders
As of the date of this registration statement, we had approximately 50 shareholders of record of our Common Stock.
Dividends and Distributions
We have not declared any cash dividends on our Common Stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant.
Reports to Shareholders
We are subject to the information and reporting requirements of the Securities Exchange Act of 1934 and file periodic reports, proxy statements, and other information with the Securities and Exchange Commission We will voluntarily send an annual report to shareholders containing audited financial statements.
Where You Can Find Additional Information
We have filed with the Securities and Exchange Commission a registration statement on S-1. The registration statement and exhibits may be inspected, without charge, and copies may be obtained at prescribed rates, at the SEC's Public Reference Room at 100 F St., N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The registration statement and other information filed with the SEC are also available at the web site maintained by the SEC at http://www.sec.gov.
Sales of Unregistered Securities
There have been no sales of securities during the year ended December 31, 2011.
Item 6.
Item 6. Selected Financial Data
Not applicable. We qualify as a smaller reporting company, as defined by Rule 229.10(f)(1), and are not required to provide the information required by this Item
Item 7.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operation
The following discussion of our results of operations, financial condition and capital resources and liquidity should be read in conjunction with our Financial Statements and the related notes, all included elsewhere in this Form 10-K.
Forward-Looking Statements
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this registration statement. This registration statement contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Certain statements contained in this discussion, including, without limitation, statements containing the words "believes", "anticipates," "expects" and the like, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, as we will issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act; we are ineligible to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained herein to reflect future events or developments.
Summary
RJS Development specializes in commercial real estate development and leasing. Our business, financial condition and results of operations have improved over the prior year due to new leasing assignment. The market still faces high unemployment, lower family income, lower consumer confidence, a large number of foreclosures and homes for sale, increased volatility in the availability and cost of credit, shrinking mortgage markets, unstable financial institutions, lower valuation of retirement savings accounts, lower corporate earnings, lower business investment and lower consumer spending which continue to be an “overhang” on the general marketplace. We have maintained low operational expenditures as a result of the market crash in 2008 and 2009.
Over the past four years we have not been involved in any new development activity. We have concentrated on renting and managing existing commercial locations on a contractual basis for the owners. Our contracts are centered in the Tampa Bay area and are generally on a month-to-month basis.
Our expenses consist of minimal rent for office space and professional fees to keep the company active. We do not own any property and have a minimal amount of equipment. RJS currently requires minimum office space. In light of past economic circumstances, during 2009, we moved the operations from rented space to the personal residence of our president, Joseph Tyszko, at 200 Miramar Blvd. NE, St Petersburg, FL 33704. We are reimbursing his expenses on a month-to-month basis. We intend to locate and secure a separate office location for the Company as economic circumstances will allow in the future.
We have no long-term commitments in the form of leases or loans. Additional working capital, when necessary, has been provided by our majority shareholder in the form of short-term revolving loans from shareholder.
RJS has been doing business under their current name since May 2003 when the corporation was formed. On August 23, 2006 Amended and Restated Articles of Incorporation were filed with the Florida Department of State changing the par value of our stock from no par value to a par value of $.01 and the total authorized capital stock to 75,000,000 common shares.
We do not have any off-balance-sheet arrangements.
Results of Operations
The year ended December 31, 2011and 2010
The following summary data is presented for the year ended December 31, 2011 and 2010:
Revenues
For the years ended December 31, 2011 and 2010, revenues were $104,047 and $42,713, respectively. The increase in revenue was due to the addition of leasing commissions in 2011. We continue to have one management contract in effect.
Operating Expenses
Operating expenses were incurred in the amount of $72,361 for the year ended December 31, 2011, compared to $30,210 for the comparative year ended December 31, 2010. The change was due to an increase in general and administrative expenses due to legal fees and transfer agent fees for the 211 process in obtaining our trading symbol and commission and consulting expenses.
Net Income
The Company recorded net income for the year ended December 31, 2011 in the amount of $31,686 compared to net income of $12,503 for the year ended December 31, 2010. The change in the year earnings is primarily related to the increase in revenues.
Liquidity and Capital Resources
At December 31, 2011, we had cash of $1,455, working capital of $12,600, an accumulated surplus of $12,433 and shareholder surplus of $12,783.
For the year ended December 31, 2011, net cash provided by operating activities was $8,967 primarily due to our increase in income of $31,686. During the year ended December 31, 2011we had no investing activities and used $7,724 in operating activities as funds were used to pay down previous advances from our majority shareholder.
We anticipate that our future liquidity requirements will arise from the need to fund our growth from operations, pay current debt obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability.
The commercial real estate development market trend has seen signs of stabilization but there still remains a lot of uncertainty as companies in general are still not hiring at a pace to sustain a healthy growth in GDP (Gross Domestic Product) and only select retailers are expanding which limits our ability to develop shopping centers and lease space in existing shopping centers.
Our internal liquidity is provided by our operations. The Company is dependent on additional funding to continue business. The Company will seek capital investment, through private placement of its common stock or through debt arrangement. The Company has historically received temporary debt arrangements from its majority shareholder to bridge temporary cash needs, however the majority shareholder has no obligation to continue this arrangement.
Although we are seeking to expand our services, the uncertain economy could have a material adverse effect on such plans. While we have seen improvement in the business economy, we cannot be assured that continued recovery will occur.
At December 31, 20101 the Company had minimal cash to meet current obligations. The Company may rely upon the issuance of common stock and additional capital contributions from shareholders to fund any operating shortfall.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements.
Significant Accounting Policies and Recent Accounting Developments
The Company follows SFAS No. 128, “Earnings Per Share.” Basic earnings per share calculations are determined by dividing net income by the weighted average number of shares outstanding during the year. Diluted earnings per share calculations are determined by dividing net income by the weighted average number of shares. There are no share equivalents and, thus, anti-dilution issues are not applicable.
Item 8.
Item 8.
Financial Statements and Supplementary Data
The information required by Item 8 and an index thereto commences on page
Item 9.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There were no changes in, or disagreements with accountants on accounting or financial disclosure as defined by Item 304 of Regulation S-K.
Item 9A.
Item 9A. Controls and Procedures
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.
Our principal executive officer and principal financial officer (one person) has assessed the effectiveness of our internal control over financial reporting as of December 31, 2011, following the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework. Based on our assessment under the framework in Internal Control - Integrated Framework, our management, including our Board of Directors and principal financial and executive officer has concluded that our internal control over financial reporting was not effective as of December 31, 2011.
Evaluation of Disclosure Controls and Procedures
Our principal executive officer and principal financial officer (one person) has reviewed the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as of the end of the period covered by this report and has concluded that the disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the last day they were evaluated by our principal executive officer and principal financial officer.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9B.
Item 9B. Other Information
None
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance.
The board of directors elects our executive officers annually. A majority vote of the directors who are in office is required to fill vacancies. Each director shall be elected for the term of one year, and until his successor is elected and qualified, or until his earlier resignation or removal. Our directors and executive officer is as follows:
(1)
This is the first Directorship of a reporting company held by Mr. Tyszko.
(2)
This is the first Directorship of a reporting company held by Mrs. Tyszko.
Background of Executive Officers and Director
Originally from Dunkirk, New York, Joe Tyszko attended college at Clarion University in Pennsylvania. Graduating Magna Cum Laude, he went to work for Ernst & Young, a “Big 6” public accounting firm (at the time) in Pittsburgh, PA from 1991 until 1993. He moved to Saint Petersburg, Florida in 1993 and started his real estate career with a full service development company named Paragon Group. Mr. Tyszko did management, accounting and retail leasing for Paragon during his first year earning “Employee of the Year”. After two years at Paragon, he moved to a smaller firm, Merin Summa Codmin, which focused on leasing a variety of shopping centers throughout west central Florida. During the next two years, Mr. Tyszko became experienced in the retail leasing business through a variety of projects in different markets throughout West Central Florida.
Mr. Tyszko was then recruited by Trammel Crow, a major development and leasing company. Mr. Tyszko was responsible for leasing over one million square feet of retail properties owned and managed by Trammel Crow. Mr. Tyszko gained extensive experience in this endeavor by reporting to major clients like GE Capital, Aetna Insurance Company, GE Investments and other public and private equity firms.
Mr. Tyszko then became self-employed with the incorporation of RJS Development, Inc. after compiling excellent experience while working for these three commercial real estate companies. From that point on, he was involved in over two dozen developments ranging from acquisition and dispositions of tracts of land and to national, regional and local tenants, to building or selling over twenty (20) retail and office developments. Since 2001, Mr. Tyszko’s primary core business has been retail developments which are his primary expertise but he has also developed or sold office and industrial facilities.
Valerie Tyszko has served as our Treasurer and as a Director since 2006. Originally from Montreal, Canada, Mrs. Tyszko relocated to Florida in August 1992. She began her career in real estate while working for Archstone Communities from 1994 to 2000. Archstone Communities is an apartment company that both owns and manages upscale luxury apartment communities across the United States and Europe. Mrs. Tyszko held two positions while with Archstone Communities in both the corporate office as well as a property manager affording her both the experience and knowledge regarding the day-to-day operations of residential commercial real estate.
She then joined AG Armstrong Development, LLC in 2000 until 2003 as a commercial leasing agent after spearheading the design and development of its first apartment community, Tall Timbers. As a leasing agent, she was directly responsible for the lease up of newly constructed Publix supermarket anchored shopping centers.
Mrs. Tyszko joined RJ King & Associates Commercial Real Estate Company, a full service brokerage firm, from 2003 to 2006, where she represented developers and owners in transactions such as leasing, sales and property management.
Upon joining RJS Development, Inc. she resigned her position at RJ King & Associates in order to assist her husband Joe Tyszko and their company with the marketing and development of numerous shopping centers. As Vice President, she is responsible for not only site acquisitions, marketing and leasing of RJS Development projects, but also for the corporate administration.
Family Relationships
The officers are husband and wife.
Legal Proceedings
No officer, director, promoter or significant employee has been involved in the last ten years in any of the following:
·
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
·
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and
·
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Director Compensation
The Company has not:
·
established its own definition for determining whether its directors and nominees for directors are “independent” nor has it adopted any other standard of independence employed by any national securities exchange or inter-dealer quotation system, though our current director would not be deemed to be “independent” under any applicable definition given that he is an officer of the Company; nor
·
established any committees of the board of directors.
Given the nature of the Company’s business, its limited stockholder base and the current composition of management, the board of directors does not believe that the Company requires any corporate governance committees at this time.
Committees
We have no standing or nominating committees of the Board of Directors or committees performing similar functions. Except that as of the date hereof, the entire board serves as the Company’s audit committee.
Item 11.
Item 11.
Executive Compensation.
Currently, we have no employment agreements with any of our Directors or Officers. All of our officers are unpaid. Compensation for the future will be determined when and if additional funding is obtained.
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to our Principal Executive Officer.
Summary Equity Awards Table
The following table sets forth certain information for our executive officers concerning unexercised options, stock that has not vested, and equity incentive plan awards as of December 31, 2011.
Narrative disclosure to summary compensation and option tables
At no time during the last fiscal year with respect to any person listed in the Table above was there:
·
an outstanding option or other equity-based award re-priced or otherwise materially modified (such as by extension of exercise periods, the change of vesting or forfeiture conditions, the change or elimination of applicable performance criteria, or the change of the bases upon which returns are determined;
·
any waiver or modification of any specified performance target, goal or condition to payout with respect to any amount included in non-stock incentive plan compensation or payouts;
·
any option or equity grant;
·
any non-equity incentive plan award made to a named executive officer; or
·
any nonqualified deferred compensation plans including nonqualified defined contribution plans.
Item 13.
Item 13.
Certain Relationships, Related Transactions and Director Independence
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers and directors, and persons who own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the “Commission”). Officers, directors and greater than ten percent stockholders are required by the Commission's regulations to furnish us with copies of all Section 16(a) forms they file. None of our officers, directors or 10% or greater stockholders filed any forms to the best of our knowledge.
Board Members Who Are Deemed Independent
None
Item 14.
Item 14.
Principal Accountant Fees and Services
The financial statements of RJS Development, Inc. as of, and for the years ended, December 31, 2011 and 2010, appearing in this Form 10-K, were audited by Peter Messineo, CPA. an independent registered public accounting firm, as stated in their report thereon, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
Audit Fees
The aggregate fees billed for professional services rendered by Peter Messineo, CPA. for the 2011 and 2010 audit of our annual financial statements and the reviews of the financial statements included in our quarterly reports on Form 10-Q for fiscal years 2011 and 2010 were $3,550 and $3,800, respectively.
Audit-Related Fees
There were no other fees billed by Peter Messineo, CPA during the last two fiscal years for assurance and related services that were reasonably related to the performance of the audit or review of the Company’s financial statements and not reported under “Audit Fees” above.
Tax Fees
There were no tax related fees billed by Peter Messineo, CPA during 2011 or 2010.
All Other Fees
There were no other fees billed by Peter Messineo, CPA during the last two fiscal years for products and services provided by Peter Messineo, CPA.
Item 15.
Item 15.
Exhibits
Exhibit No.
Description
15.01
Financial statements for the years ended December 31, 2011 and 2010
31(a)
Rule 13a-14(a) Certification - Chief Executive and Chief Financial Officer *
32(a)
Section 1350 Certification - Chief Executive and Chief Financial Officer *
______________
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
RJS Development, Inc.
Dated:
March 12, 2012
By:
/s/ Joe Tyszko
Joe Tyszko,
President and Chairman of the Board
15.01 Financial statements for the years ended December 31, 2011 and 2010
Financial Statements
RJS Development, Inc.
As of December 31, 2011 and 2010
And for the Years Ended December 31, 2011 and 2010
Peter Messineo
Certified Public Accountant
1982 Otter Way Palm Harbor FL 34685
peter@pm-cpa.com
T 727.421.6268 F 727.674.0511
Report of Independent Registered Public Accounting Firm
Board of Directors
RJS Development, Inc.
St. Petersburg, Florida
I have audited the accompanying balance sheets of RJS Development, Inc. as of December 31, 2011 and 2010 and the related statements of income, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required at this time, to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controls over financial reporting. Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, based on my audits, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and 2010 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Peter Messineo
Peter Messineo, CPA
Palm Harbor, Florida
March 5, 2012
RJS Development, Inc.
Balance Sheets
* Common shares outstanding have been retroactively restated for 25:1 reverse split, effective March 2012.
The accompanying notes are an integral part of these financial statements.
RJS Development, Inc.
Statement of Operations
* Common shares outstanding have been retroactively restated for 25:1 reverse split, effective March 2012
The accompanying notes are an integral part of these financial statements.
RJS Development, Inc.
Statement of Stockholders' Equity (Deficit)
* Common shares outstanding have been retroactively restated for 25:1 reverse split, effective March 2012.
The accompanying notes are an integral part of these financial statements.
RJS Development, Inc.
Statements of Cash Flows
The accompanying notes are an integral part of these financial statements.
RJS Development, Inc.
Notes to the Financial Statements
December 31, 2011 and 2010
Note 1
Organization, Business Operations and Summary of Significant Accounting Policies
Summary
RJS Development specializes in commercial real estate development. RJS has been doing business under their current name since May 27, 2003. Originally formed to do any and all legal business, the intent of the corporation was to specialize in commercial real estate development, primarily retail shopping centers. The President has been involved in commercial real estate projects ranging from strip center development, to acquiring vacant land, going through the rezoning process, obtaining all civil permits and approvals and then selling platted lots to retailers. We build projects with the intent that they be sold either as fee-simple properties, be held in a limited liability corporation for which the President is a principal or have permanent debt placed on the assets and held as stabilized investment properties. We focus on geographic areas, products and price points where we believe there is significant demand for new commercial space and the potential for attractive returns to our company and investors. We currently develop and build in the Greater Tampa Bay market where we target a diverse range of companies that need to lease commercial space. The Greater Tampa Bay Area is generally considered to include Hillsborough, Pinellas, Pasco and Sarasota, Florida counties. Principal cities in these counties include Clearwater, Tampa, St. Petersburg and Sarasota, Florida. These counties also include several smaller municipalities that surround the city limits of the aforementioned cities.
Business and Operations
The Company was incorporated May 27, 2003 in the State of Florida. The Company is in the business of providing development services in the real estate industry. The Company operated in the Tampa Bay area on the West Coast of Florida.
Basis for Presentation
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.
Fair Value Instruments
FASB ASC 820, “Fair Value Measurements and Disclosures establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1:
Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2:
Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3:
Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
Financial Instruments
The Company’s balance sheets include the following financial instruments: cash, accounts receivable, and accounts payable. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying value of the loan from stockholder approximates fair value due an expected short time frame and revolving nature of the loan.
Cash and Cash Equivalents
The majority of cash is maintained with a major financial institution in the United States. At times during the year deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of six months or less to be cash equivalents. At December 31, 2011, there were no cash equivalents.
Fixed Assets
Furniture and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful live of the asset, which is 5-7 years. Major expenditures that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of equipment existed at December 31, 2011.
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. The Company did not recognize any impairment losses for any periods presented.
Revenue Recognition
The Company generates revenue through a variety of development services. The Company recognizes its revenue on the accrual basis which considers revenue to be earned when the services have been performed. Management fee revenue is recorded monthly over the term of the contract. Leasing revenues are recorded on a straight-line basis over the length of the initial leasing term. Leasing commission income is recorded when the lease is signed and the amount of commission can be determined.
Concentration of Credit Risk
All revenue recognized in 2011 and 2010 was generated from services performed for a minimal number of clients.
Advertising
The costs of advertising are expensed as incurred. Advertising expense was $0, and $0 for the years ended December 31, 2011 and 2010, respectively. Advertising expenses, when incurred, are included in the Company’s selling expenses.
Income Taxes
Prior to April 30, 2007, the Company reported its earnings under the S-Corporation election and thereby all taxable income was passed-thru to the sole shareholder and is taxed at the shareholder’s ordinary tax rate.
On April 30, 2007 the Company issued stock to a corporation thereby automatically terminating the S-Corporation election. As a result, earnings are taxed to the corporation when earned and are no longer passed through directly to the shareholders. In addition, earnings will be taxed at the corporate tax rate which varies on a graduated basis between 15% and 35%.
The Company accounts for income taxes under FASB Codification Topic 740 which requires use of the liability method. Topic 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. A valuation allowance may be applied against the net deferred tax when and if there is an uncertainty of its ultimate realization.
Earnings Per Share
Basic earnings per share calculations are determined by dividing net income by the weighted average number of shares outstanding during the year. Diluted earnings per share calculations are determined by dividing net income by the weighted average number of shares and share equivalents at the end of each period. There were no share equivalents at either December 31, 2011 or 2010 and, therefore, anti-dilution issues are not applicable.
Subsequent Events
Management of the Company has reviewed subsequent events through the date of filing. Subsequent events have been evaluated for disclosure through that date.
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.
In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). This newly issued accounting standard requires an entity to disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions executed under a master netting or similar arrangement and was issued to enable users of financial statements to understand the effects or potential effects of those arrangements on its financial position. This ASU is required to be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. As this accounting standard only requires enhanced disclosure, the adoption of this standard is not expected to have an impact our financial position or results of operations.
In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (ASU 2011-05). This newly issued accounting standard (1) eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity; (2) requires the consecutive presentation of the statement of net income and other comprehensive income; and (3) requires an entity to present reclassification adjustments on the face of the financial statements from other comprehensive income to net income. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income nor do the amendments affect how earnings per share is calculated or presented. In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, which defers the requirement within ASU 2011-05 to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. During the deferral, entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect prior to the issuance of ASU 2011-05. These ASUs are required to be applied retrospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. As these accounting standards do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income, the adoption of these standards is not expected to have an impact on our financial position or results of operations.
In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04). This newly issued accounting standard clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (level 3) inputs. This ASU is effective on a prospective basis for annual and interim reporting periods beginning on or after December 15, 2011. The adoption of this standard is not expected to have a material impact on our financial position or results of operations.
Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future financial statements.
Note 2
Property and Equipment
Property and equipment, as of December 31, consist of:
Depreciation of property and equipment was $735 and $1,225 for the years ended December 31, 2011and 2010, respectively.
Note 3
Income Taxes
The provision for federal and state income taxes for the years ended December 31 is as follows:
The Company had previously recorded a 100% valuation allowance against the net deferred tax asset, resulting from net operating losses generated, through December 31, 2010, due to the uncertainty of its ultimate realization. For the year ended December 31, 2011 the Company earned profits in excess of the prior net operating loss and has applied the benefit, thereby recognizing the deferred asset, previously off-set by the valuation allowance. The Company has effectively recognized the benefit in the current year as an off-set to the current income tax provision. The Company does not have any carryforward temporary differences which would result in a deferred tax asset or liability.
Note 4
Equity
Common Stock includes 75,000,000 shares authorized at a par value of $0.01. The holders of Common Stock, voting together, shall appoint the members of the Board of the Directors. Each share of Common Stock is entitled to one vote. At December 31, 2011, there were 1,400,000 (35,000,000 pre-reverse split) shares of common stock outstanding.
Note 5
Related Party Transactions
Loans from Shareholder
The majority owner has and anticipates it to be necessary to advance cash to the Company, based on cash requirements. The amounts due to the majority shareholder were $0 and $7,724 as of December 31, 2011 and 2010, respectively. These cash advances are considered temporary in nature. There are no repayment terms and currently are not interest bearing. At December 31, 2011 all advances have been repaid.
Rent Expense
The Company has limited needs for office space. During 2011 and 2010, the Company used facilities provided by an officer. The use of the facility is expected to be temporary in nature and lease terms are month to month. The Company recognized rent expense of $5,400 and $5,400, paid to this officer, for the years ended December 31, 2011and 2010, respectively.
The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.
Note 6
Commitments and Contingencies
From time to time the Company may be a party to litigation matters involving claims against the Company. The Company does not believe any un-asserted claims that may exist would have a materially adverse effect on the Company’s financial position or results of operations.
Note 7
Subsequent Events
On or about January 31, 2012, the Company received written consents in lieu of a meeting of Stockholders from holders of 20,300,000 shares representing approximately 58% of the 35,000,000 shares of the total issued and outstanding shares of voting stock of the Company (the “Majority Stockholders”) authorizing the Company’s Board of Directors, to effect a reverse split of the Company’s common stock, par value $.01 per share, twenty five for one share outstanding (25:1) (pursuant to which the number of authorized shares of common stock will remain 75,000,000 following such reverse stock split) (the “Reverse Stock Split”); any fractional shares post-split will be rounded up to the next whole share. The effective date of the Reverse Stock Split is estimated to be effective and approved by FINRA in March or early April 2012.
The financial statements have been retroactively adjusted for the reverse-split. All shares and per share information reflect the reverse split.