10-Q 1 gulfshores10q1q11.txt FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2010 g SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended September 30, 2010 -OR- [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities And Exchange Act of 1934 for the transaction period from _________ to________ Commission file number: 333-162177 Gulf Shores Investments, Inc. (Exact name of registrant as specified in its charter) Nevada 27-0155619 (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 7985 113th Street, Suite 220 Seminole, FL 33772 (Address of principal executive offices) (Zip Code) Registrant's Telephone number, including area code: (727) 393-7439 Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerate filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act): Large accelerated filer [ ] Non-accelerated filer [ ] Accelerated filer [ ] Smaller reporting company [x] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x] The number of outstanding shares of the registrant's common stock, November 15, 2010: Common Stock - 78,273,000 2 Gulf Shores Investments, Inc. Form 10-Q For the quarterly period ended September 30, 2010 INDEX Page ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3. Quantitative and Qualitative Disclosure About Market Risk 18 Item 4. Controls and Procedures 18 PART II - OTHER INFORMATION Item 1. Legal Proceedings 20 Item 1A. Risk Factors 20 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20 Item 3. Defaults upon Senior Securities 20 Item 4. (Removed and Reserve) 20 Item 5. Other Information 20 Item 6. Exhibits 20 SIGNATURES 3 PART I Item I - FINANCIAL STATEMENTS GULF SHORES INVESTMENTS, INC. (A Development Stage Company) Condensed Balance Sheets (Unaudited) ASSETS ------ September 30, June 30, 2010 2010 ------------ ------------ CURRENT ASSETS Cash $ 129 $ 1,449 ------------ ------------ Total Current Assets 129 1,449 ------------ ------------ TOTAL ASSETS $ 129 $ 1,449 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Accounts Payable and Accrued Expenses 35,319 31,750 Note Payable - Related Parties 6,500 7,500 ------------ ------------ Total Current Liabilities 41,819 39,250 ------------ ------------ STOCKHOLDERS' EQUITY (DEFICIT) Preferred stock, $0.00001 par value, 20,000,000 shares authorized, 0 shares issued and outstanding Common stock, $0.00001 par value, 250,000,000 shares authorized, 78,273,000 and 78,273,000 shares issued and outstanding at September 30, 2010 and June 30, 2010, respectively. 783 783 Additional paid-in capital 60,327 60,327 Deficit accumulated during the development stage (102,800) (98,911) ------------ ------------ Total Stockholder' Equity (Deficit) (41,690) (37,801) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 129 $ 1,449 ============ ============ The accompanying notes are an integral part of these financial statements. 4 GULF SHORES INVESTMENTS, INC. (A Development Stage Company) Condensed Statement of Operations (Unaudited) From Inception Three Months Three Months on May 8, Ended Ended 2009 Through September 30, September 30, September 30, 2010 2009 2010 ------------ ------------ ------------ REVENUES $ - $ - $ - OPERATING EXPENSES Consulting Fees - Related Party 42,900 Professional Fees 1,500 48,750 General and administrative 2,389 1,545 11,150 ------------ ------------ ------------ Total Operating Expenses 3,889 1,545 102,800 ------------ ------------ ------------ INCOME (LOSS) FROM OPERATIONS (3,889) (1,545) (102,800) ------------ ------------ ------------ INCOME (LOSS) BEFORE INCOME TAXES (3,889) (1,545) (102,800) Income tax expense - - - ------------ ------------ ------------ NET INCOME (LOSS) $ (3,889) $ (1,545) $ (102,800) ============ ============ ============ BASIC INCOME (LOSS) PER COMMON SHARE $ (0.000) $ (0.000) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 78,273,000 72,163,681 ============ ============ The accompanying notes are an integral part of these financial statements 5 GULF SHORES INVESTMENTS, INC. (A Development Stage Company) Condensed Statements of Cash Flows Unaudited From Inception Three Months Three Months on May 8, Ended Ended 2009 Through September 30, September 30, September 30, 2010 2009 2010 ------------ ------------ ------------ OPERATING ACTIVITIES Net loss $ (3,889) $ (1,545) $ (102,800) Adjustments to reconcile net loss to net cash used by operating activities: Common stock issued for legal services - 250 250 (Decrease) Increase in accounts payable accrued expenses 3,569 (2,841) 35,319 ------------ ------------ ------------ Net Cash Used in Operating Activities (320) (4,136) (67,231) ------------ ------------ ------------ INVESTING ACTIVITIES Net Cash Used in Investing Activities - - - ------------ ------------ ------------ FINANCING ACTIVITIES Proceeds from Notes Payable - Related Parties - - 7,500 Payments on Notes Payable - Related Parties (1,000) - (1,000) Common stock issued for cash - 200 60,860 ------------ ------------ ------------ Net Cash Provided by Financing Activities (1,000) 200 67,360 ------------ ------------ ------------ NET INCREASE (DECREASE) IN CASH (1,320) (3,936) 129 CASH AT BEGINNING OF PERIOD 1,449 4,729 - ------------ ------------ ------------ CASH AT END OF PERIOD $ 129 $ 793 $ 129 ============ ============ ============ 6 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION CASH PAID FOR: Interest $ - $ - Income Taxes $ - $ - The accompanying notes are an integral part of these financial statements. 7 GULF SHORES INVESTMENTS, INC. (A Development Stage Company) Notes to Unaudited Condensed Interim Financial Statements From Inception Through September 30, 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business The financial statements presented are those of Gulf Shores Investments, Inc. The Company was originally incorporated under the laws of the state of Nevada on May 8, 2009. The Company has not commenced significant operations and, in accordance with ASC Topic 915, is considered a development stage company. Gulf Shores Investments, Inc. seeks real estate management opportunities where it believes it can achieve higher cash flows as a result of its efforts. The Company's initial focus is on Florida and the southeastern region of the United States particularly where it perceives there to be the potential to manage undervalued and distressed properties. The Company believes it can enhance the value of these properties through the execution of its strategy. The Company expects to manage real estate properties in well-located, sometimes under-performing real estate markets. The Company attempts to identify those markets and submarkets with job growth opportunities and demand demographics that support potential long-term value appreciation for the properties it manages. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Dividends The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown. Revenue Recognition Revenues and related expenses from rendering property management services are recognized when services are completed and billed. In some situations, we may receive advance payments from our customers. The Company will defer revenue associated with these advance payments until it has completed the contracted services. Advertising Costs The Company's policy regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expense as of September 30, 2010. Cash and Cash Equivalents For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. As at September 30, 2010 the Company had no cash equivalents. 8 GULF SHORES INVESTMENTS, INC. (A Development Stage Company) Notes to Unaudited Condensed Interim Financial Statements From Inception Through September 30, 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basic (Loss) per Common Share Basic (loss) per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of September 30, 2010. For the Three Months For the Three Months Ended September 30, Ended September 30, 2010 2009 ---------------- ---------------- Net (Loss) Per Share - Basic Net (Loss) $ (3,889) $ (1,545) Weighted Average Shares - Basic 78,273,000 72,163,681 ---------------- ---------------- Net (Loss) Per Share - Basic $ (0.000) $ (0.000) ================ ================ Net (Loss) Per Share - Diluted Net (Loss) $ (3,889) $ (1,545) Weighted Average Shares - Diluted 78,273,000 72,163,681 ---------------- ---------------- Net (Loss) Per Share - Diluted $ (0.000) $ (0.000) ================ ================ Income Taxes The Company provides for income taxes under ASC 740 "Accounting for Income Taxes". ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. 9 GULF SHORES INVESTMENTS, INC. (A Development Stage Company) Notes to Unaudited Condensed Interim Financial Statements From Inception Through September 30, 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The provision for income taxes differs from the amounts which would be provided by applying the statutory federal and state income tax rate of 39% to net loss before provision for income taxes for the following reasons: From Inception For the Three On May 8, 2009 Months Ended Through September 30, September 30, 2010 2010 ------------ ------------ Income tax expense at statutory rate $ (1,517) $ (40,092) Net deferred tax asset 1,517 40,092 ------------ ------------ Income tax expense per books $ - $ - ============ ============ Net deferred tax assets consist of the following components as of: From Inception For the Three On May 8, 2009 Months Ended Through September 30, September 30, 2010 2010 ------------ ------------ NOL carryover $ 1,517 $ 40,092 Valuation allowance (1,517) (40,092) ------------ ------------ Net deferred tax asset $ - $ - ============ ============ Impairment of Long-Lived Assets The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. Property The Company does not own or rent any property. Office space is provided by the Company's president at no charge. 10 GULF SHORES INVESTMENTS, INC. (A Development Stage Company) Notes to Unaudited Condensed Interim Financial Statements From Inception Through September 30, 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Accounting Basis The basis is accounting principles generally accepted in the United States of America. The Company has adopted a June 30 fiscal year end. Stock-based compensation In July 2009, the Company issued 75,000 shares of stock as part of our fee agreement for legal services associated with the Company's S-1 filing. The shares were valued at $0.00333 per share. The above issuance of stock reflects the effect of the Company's 3 for 1 forward stock split effective on January 5, 2010 (see Note 6). The Company records stock-based compensation in accordance with ASC 718 (formerly SFAS No. 123R "Share Based Payments"), using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. Recent Accounting Pronouncements The Company has evaluated all the recent accounting pronouncements and believes that none of them will have a material effect on the company's financial statements. 2. GOING CONCERN These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. During the 3 month period ending September 30, 2010, the Company recognized no sales revenue and incurred a net loss of $3,889, and had an accumulated deficit of $102,800 from inception on May 8, 2009 through September 30, 2010. The continuation of the Company as a going concern is dependent upon the continued financial support from its Shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 11 GULF SHORES INVESTMENTS, INC. (A Development Stage Company) Notes to Unaudited Condensed Interim Financial Statements From Inception Through September 30, 2010 3. STOCKHOLDERS' EQUITY COMMON STOCK On May 8, 2009, we entered into an agreement for the sale of 60,000,000 shares of common stock at a price of $0.00000333 per share. The Company realized $200 from this subscription. - On May 19, 2009, we entered into an agreement for the sale of 12,000,000 shares of common stock at a price of $0.00333 per share. The Company realized $40,000 from this subscription. - On July 1, 2009, the Company issued 75,000 shares of stock as part of our fee agreement for legal services associated with the Company's S-1 filing. The shares were valued at $0.00333 per share. - During the quarter ending September 2009, the Company entered into an agreement for the sale of 198,000 shares at a price of $0.00333 per share to 39 different investors. The Company realized $660 from these subscriptions. - On December 1, 2009, the Company entered into an agreement for the sale of 6,000,000 at a price of $0.00333 per share. The Company realized $20,000 from this subscription. The above issuance of stock reflects the effect of the Company's 3 for 1 forward stock split effective on January 5, 2010 (see Note 6). The stockholders' equity section of the Company contains the following classes of Capital stock as of September 30 2010, respectively: - Preferred stock, $0.00001 par value, 20,000,000 shares authorized 0 shares issued and outstanding. - Common Stock, $0.00001 par value, 250,000,000 shares authorized 78,273,000 shares issued and outstanding. 4. STOCK SUBSCRIPTION RECEIVABLE In May 2009, the Company issued to its founder 60,000,000 million shares of its common stock for a price of $.0000033. Payment for the stock was received on September 23, 2009. The above issuance of stock reflects the effect of the Company's 3 for 1 forward stock split effective on January 5, 2010 (see Note 5). 12 GULF SHORES INVESTMENTS, INC. (A Development Stage Company) Notes to Unaudited Condensed Interim Financial Statements From Inception Through September 30, 2010 5. RELATED PARTY TRANSACTIONS The Company's founder and majority shareholder and other related parties provide various consulting services to the Company for which they are compensated. For the quarter ending September 30, 2010 consultant fees paid were $-0-. 6. STOCK SPLIT The company's board of directors authorized a three-for-one stock split effective on January 5, 2010. Each shareholder of record on January 5, 2010 received two additional shares of common stock for each share held on that date. All share and related information presented in these financial statements and accompanying footnotes have been adjusted to retroactively reflect the increased number of shares resulting from this action. 7. SUBSEQUENT EVENTS Management has evaluated all activity since September 30, 2010 through the date the financial statements are issued, and has concluded that no subsequent events have occurred that would require recognition in the Financial Statements or disclosure in the Notes to the Financial Statements. 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section 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. Liquidity and Capital Resources ------------------------------- As of September 30, 2010, we had $129 cash on hand. Based upon the above, we do not believe we have enough cash to support our daily operations while we are attempting to commence operations and produce revenues. We estimate the Company needs an additional $49,000 to implement its business plans over the next twelve months. We anticipate we will need a minimum of $39,000 to cover marketing and operational 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 real estate management 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 intuitional 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, our auditors have raised substantial doubt about our ability to continue as a going concern. 14 Investing Activities -------------------- For the three months ended September 30, 2010 and 2009, we did not pursue any investing activities. Financing Activities -------------------- For the three months ended September 30, 2010, we made payments on notes payable - related parties of $1,000. As a result, we had net cash used by financing activities of $1,000. For the three months ended September 30, 2009, we received proceeds from the sale of common stock of $200. As a result, we had net cash provided by financing activities of $200. Limited Operating History ------------------------- We have generated no independent 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. In January 2010, the board of directors approved a three for one forward split. The board of directors hopes the decision to restructure the Company's capital structure will potentially lead to greater liquidity of the Company's common stock in the future. In addition, the Board of Directors hopes the forward split will attract potential investors. Results of Operations --------------------- For the three months ended September 30, 2010, we had no revenue. Expenses for the three months ended September 30, 2010 totaled $3,889 resulting in a net loss of $3,889. Operating expenses consisted of general and administrative expenses of $2,389 and professional fees were $1,500. 15 For the three months ended September 30, 2009, we had no revenue. Expenses for the three months ended September 30, 2009 totaled $1,545 resulting in a net loss of $1,545. Operating expenses consisted of general and administrative expenses of $1,545. Plan of Operation ----------------- We have commenced limited operations and we will require outside capital to implement our business model. 1. All business functions will be coordinated and managed by our founder, including marketing, finance and operations. We intend to contract with outside professionals to facilitate services for the on- site management of properties and real estate rehab and maintenance services that may be required. These services include total property management responsibilities for the care and upkeep of the property. We will use independent contractors as leasing agents, as well as for janitorial services, lawn services and general maintenance services as required on-site from time to time. The Company has no outside contracts, but we intend to contract with these professionals under normal industry terms, which may include lease fees in the 2% - 5% range depending on the nature of the services. 2. We will focus on evaluating our performance based on the following criteria during the next twelve months of operations as the Company emerges from the development stage: a. Number of new real estate projects i. The Company will initially look for distressed and under- managed projects in Southwest Florida. The Southwest Florida multi- family residential property market has been hard hit by the recent economic downturn. Properties in this marketplace are selling at an average of 33% below 2007 property values. Foreclosed and bank repossessed real estate owned properties are at an even greater discount to the previous market highs. We are currently in discussions with banks and developers of distressed condominium projects in this market proposing to manage the properties to improve their cash flow. These negotiations are on-going and subject to the Company securing management contracts under acceptable terms. ii. Over the next twelve months, the Company intends to identify at least ten suitable properties for management. iii. The Company incurs nominal travel expenses associated with the search for properties since the Southwest Florida region is nearby its home office. We have not entered into any contracts or agreements to manage any properties. There can be no assurance that we will be able to identify suitable properties for management or be able to negotiate property management contracts on favorable terms with the property owners. 16 b. Expense management i. The Company has a limited operating budget and has maintained tight expense controls. ii. Over the next twelve months, the Company anticipates its minimum need for additional funding is $49,000 to implement its business plans over the next twelve months. We anticipate operating expenses to be $24,000 prior to generating revenues. These expenses are estimated at $2,000 per month primarily travel related cost associated with the search for properties to manage in Southwest Florida. The Company has targeted to identify 10 suitable properties for management over the next twelve months. The Company will also incur $15,000 in marketing expenses associated with the development of promotional materials and attendance at trade shows. The Company will incur additional operating expenses once the Company generates revenues, which are tied to commissions paid to leasing agents and operating expenses associated with the upkeep of the properties. The Company plans to hire on a commission-only basis at such time as the Company has signed property management contracts, so no additional expenses are created until revenues are generated. There can be no assurance that we will be able to align ourselves with professionals for services on a commission-only basis c. Achieving positive cash flow i. After the Company's properties are under management, we will launch a marketing campaign to attempt generate revenues. There can be no assurance that we will be able to implement our business development plans and that we will be successful in negotiating new contracts to manage properties or attract tenants to utilize the properties. ii. Over the next twelve months the Company anticipates its minimum cash needs to be $49,000 prior to generating revenues. d. Creating strategic alliance relationships i. The Company intends to contract with outside professionals to facilitate services for the on-site management of properties and real estate rehab and maintenance services that may be required. These services include total property management responsibilities for the care and upkeep of the property. We will use independent contractors as leasing agents, as well as for janitorial services, lawn services and general maintenance services as required on-site from time to time. ii. Over the next twelve months, the Company intends to hire additional employees on a commission only basis at such time as the Company has signed property management contracts, so no additional expenses are created until revenues are generated. In January, the Company hired Sanjiv Matta, a Florida licensed real estate professional to assist the president in furthering the business plan by identifying new properties for management in Southwest Florida. Mr. Matta is a commission-only employee. 17 iii. The Company has no contracts with outside vendors, but we intend to contract with these professionals under normal industry terms, which may include leasing fees in the 2% - 5% range depending on the nature of the services. Our growth is driven by the number of new real estate projects that we evaluate and contract for management. There is no assurance we will be able to secure such management contracts for properties or be able to lease-out such properties on a profitable basis. Certain competitors may be willing to accept lower fees based on their overhead structure. As a result, we may have difficulty attracting new properties to manage and tenants to utilize the properties. There can also be no assurance that we will be able to align ourselves with professionals for services on a commission only basis. 3. Our plan of operation includes launching a targeted marketing campaign focusing on property management trade show participation, media promotions and public relations during the third quarter of 2010. The marketing is estimated to cost $15,000, in addition to our estimated minimum travel and operating expenses of $2,000 per month. The majority shareholder has committed to cover any cash shortfalls of the Company, although there is no written agreement or guarantee. The majority shareholder, David Dreslin, owns 77% of the Company and is the Company's president and primary employee. If we are unable to satisfy our cash requirements we may be unable to proceed with our plan of operations. We intend to support our marketing efforts through the development of high-quality marketing materials and an attractive and informative website, www.GulfShoresInvestments.com. There can be no assurance we will be successful in implementing our marketing campaign or that we will be able to provide our services at lower costs than other property managers. There can also be no assurance that we will be able to align ourselves with professionals for services on a commission-only basis. The development of an on-going marketing campaign will require the commitment of substantial resources. If additional capital is not available on acceptable terms, we may not be able to implement our business development plans or continue our business operations. 4. Over the next 12 month after the initiation of our marketing campaign, we believe that we will have identified suitable properties to manage and lease-out to begin to generate revenues from our targeted marketing approach. This refers to the minimum amount of time that we estimate will be required to generate revenues based on meetings with banks and developers in the Southwest Florida property market. Once a property is identified we will need to negotiate a management contract with the property owner. Only after a property is identified and contracted can we begin managing the property for a fee from the property owners to generate revenues, typically between 5% - 10% of gross monthly rents. We have not entered into any contracts or agreements to manage any properties. There can be no assurance that we will be able to identify suitable properties for management or be able to negotiate property management contracts on favorable terms with the property owners. 18 Our future will depend on our ability to identify suitable properties to manage and our ability to bring our services to the market place, which requires careful planning of providing a service that meets our customer's standards without incurring unnecessary cost and expense. Our operational results can be affected by our ability to introduce our services or to adjust pricing to try to gain a competitive advantage. There can be no assurance we will be able to implement our property management services. We are still pursuing this plan but to date we have not been able to raise additional funds through either debt or equity offerings. Without this additional cash, we have been unable to pursue our plan of operations and commence generating revenue. We believe that we may not e able to raise the necessary funds to continue to pursue our business operations. As a result of the foregoing, we have recently begun to explore our options regarding the development of a new business plan and direction. We are currently engaged in the discussions with a company regarding the possibility of a reverse triangular merger involving our company. At this stage, no definitive terms have been agreed to, and neither party is currently bound to proceed with the merger. Off-Balance Sheet Arrangements ------------------------------ We have no off-balance sheet arrangements ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS The registrant is subject to certain market risks, including changes in interest rates and currency exchange rates. The registrant does not undertake any specific actions to limit those exposures. ITEM 4. CONTROLS AND PROCEDURES This quarterly report does not include an attestation report of the registrant's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the registrant's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the registrant to provide only management's report in this quarterly report. a) Evaluation of Disclosure Controls. David Dreslin, our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of our quarter ended September 30, 2010 pursuant to Rule 13a-15(b) of the Securities and Exchange Act. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act 19 is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure. The registrant does not have an audit committee. Our management team consists of only two individuals who lack public company experience. Our senior management has never had responsibility for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including the establishing and maintaining internal controls over financial reporting. Based on his evaluation, Mr. Dreslin concluded that our disclosure controls and procedures were not effective as of September 30, 2010. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions b) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our management team will continue to evaluate our internal control over financial reporting in 2010 as we implement our Sarbanes Oxley Act testing. 20 PART II - OTHER INFORMATION Item 1. Legal Proceedings. not applicable. Item 1A. Risk Factors. not applicable Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. not applicable. Item 3. Defaults Upon Senior Securities. not applicable. Item 4. (Removed and Reserved) Item 5. Other Information. not applicable. Item 6. Exhibits Exhibit 31 - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Exhibit 32 - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: November 15, 2010 GULF SHORES INVESTMENTS, INC. By: /s/David Dreslin --------------------------- David Dreslin, Principal Executive Officer Principal Financial Officer