EXP World Holdings, Inc. - Quarter Report: 2013 March (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________ to ______________________

Commission File Number: 333-168025

DESERT CANADIANS LTD.
(Exact name of registrant as specified in its charter)

(360) 389-2426
(Registrant’s telephone number, including area code)

15057 Stony Plain Road, Edmonton, AB, Canada
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has 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 require 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 (§232.405 of this chapter) during the preceding 12 months (of for such shorter period that the registrant was required to submit and post such files).
Yes [X]     No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]      Accelerated filer [   ]      Non-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]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court.
Yes [   ]     No [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of May 14, 2013 the registrant’s outstanding common stock consisted of 40,086,000 shares.

Table of Contents

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PART I - FINANCIAL INFORMATION

Item 1.                  Financial Statements

Desert Canadians Ltd.
(A Development Stage Company)
(unaudited)
March 31, 2013

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Desert Canadians Ltd.
Balance Sheets
(A Development Stage Company)
(Expressed in U.S. dollars)

The accompanying notes are an integral part of these financial statements

F–1

Desert Canadians Ltd.
Statements of Operations
(A Development Stage Company)
(Expressed in U.S. dollars)
(unaudited)

The accompanying notes are an integral part of these financial statements

F–2

Desert Canadians Ltd.
Statements of Cash Flows
(A Development Stage Company)
(Expressed in U.S. dollars)
(unaudited)

The accompanying notes are an integral part of these financial statements

F–3

Desert Canadians Ltd.
Notes to the Financial Statements
(A Development Stage Company)
March 31, 2013
(Expressed in U.S. dollars)
(unaudited)

F–4

Desert Canadians Ltd.
Notes to the Financial Statements
(A Development Stage Company)
March 31, 2013
(Expressed in U.S. dollars)
(unaudited)

F–5

Desert Canadians Ltd.
Notes to the Financial Statements
(A Development Stage Company)
March 31, 2013
(Expressed in U.S. dollars)
(unaudited)

F–6

Item 2.                   Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used in this quarterly report, the terms “we”, “us” and “our” mean Desert Canadians Ltd., unless otherwise indicated. All currency references in this report are to U.S. dollars unless otherwise noted.

Forward Looking Statements

This quarterly report includes forward-looking statements. To the extent that any statements made in this quarterly report contain information that is not historical, such as financial projections, information or expectations about our business plans, results of operations, products or markets, or future events, such statements are forward-looking. Forward-looking statements can be identified by the use of words such as “intends”, “anticipates”, “believes”, “estimates”, “projects”, “forecasts”, “expects”, “plans” and “proposes”. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. We do not undertake any obligation to publicly update any forward-looking statements.

Business Overview

We were incorporated as a Delaware company on July 30, 2008. We have no subsidiaries.

We are a development stage company engaged in the dissemination of online information about real estate in the Coachella Valley of California as well as issues related to property ownership in the area. We have developed a website that hosts a variety of practical, accurate and interesting information on local real estate, taxation, immigration and issues, as well as local recreational activities, and we planned to generate revenue from our website through a number of advertising mechanisms.

On March 12, 2013, our majority shareholder, Carol Callaghan, sold her controlling interest of 40,000,000 shares of our common stock to Glenn Sanford.

Following the purchase of shares by Glenn Sanford, Carol Callaghan resigned as President, CEO, CFO, Secretary and Treasurer and Mr. Sanford was appointed as President, CEO, CFO, Secretary and Treasurer and as a director on March 12, 2013. On March 13, 2013, Ms. Callaghan resigned as a director of the Company and Mr. Sanford remained as our sole director.

Our new director, Glenn Sanford, acquired control of our company in order to consider negotiating the purchase of eXp Realty Inc, a cloud-based national real estate brokerage company. Mr. Sanford believes that the purchase would be a natural fit for our company. Mr. Sanford owns a substantial interest in eXpRealty International Inc.

Our plan of operations for the next 12 months was to complete the development of our website, retain two business development consultants to assist us in marketing and promoting our website, enter into agreements with companies to advertise their goods and services on our website and complete private and/or public financing to help cover the cost of operating our business for the foreseeable future. However, with a change of management and directorship, this plan of operation could change substantially. With the planned acquisition of a cloud based real estate company, the company’s focus will change significantly.

If we were to continue in our current business, during the next 12 months we had planned to incur approximately $346,000 in expenses to carry out our business plan. Of this amount, we anticipated that we will spend $20,000 on completing the development of and maintaining our website, $80,000 on hiring two part-time business development consultants, $140,000 on marketing and advertising expenses and $126,000 on general working capital expenses.

These plans may not be relevant based on new management’s intent to acquire a cloud based real estate company.

We do not have any full-time or part-time employees. Our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and sole director, Glenn Sanford, works as a consultant in the areas of business development and management and contributes approximately 20% of his time to us. For the rest of the time, Mr. Sanford works as a real estate agent for a nationally-recognized cloud based real estate agency.

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Results of Operations

Revenues

We have limited operational history. From our inception on July 30, 2008 to March 31, 2013 we did not generate any revenues. We anticipate that we will incur substantial losses for the foreseeable future and our ability to generate any revenues in the next 12 months continues to be uncertain.

Expenses

During the three months ended March 31, 2013 we incurred total operating expenses of $14,100, which consisted of $13,310 in professional fees and $790 in general and administrative expenses. During the same period in the previous fiscal year we incurred total operating expenses of $4,235 including ($1,331) in professional fees and $5,564 in general and administrative expenses.

During the nine months ended March 31, 2013 we incurred total operating expenses of $37,645, including $30,315 in professional fees and $7,330 in general and administrative expenses. During the same period in the previous fiscal year we incurred total operating expenses of $26,789, including $18,316 in professional fees and $8,473 in general and administrative expenses.

Overall, our operating expenses during the three and nine months ended March 31, 2013 are consistent with the same periods in the previous fiscal year and the variances are within norms.

From our inception on July 30, 2008 to March 31, 2013 we incurred total operating expenses of $191,019, including $12,604 in website development costs, $143,361 in professional fees and $35,054 in general and administrative expenses.

Our general and administrative expenses consist of transfer agent fees, filing fees, bank charges, office expenses, communication expenses (cellular, internet, fax and telephone) and courier and postage costs. Our professional fees include legal, accounting and auditing costs.

Net Loss

During the three months ended March 31, 2013 we incurred a net loss of $14,100, compared to a net loss of $4,235 during the same period in the previous fiscal year. During the nine months ended March 31, 2013 we incurred a net loss of $37,645, compared to a net loss of $26,789 during the same period in the previous fiscal year. We did not experience any net loss per share during these periods. From our inception on July 30, 2008 to March 31, 2013 we incurred a net loss of $191,019.

Liquidity and Capital Resources

As of March 31, 2013 we had $49 in cash, $49 in total assets, $10,750 in total liabilities, a working capital deficit of $10,701 and an accumulated deficit of $191,019.

We are solely dependent on funds raised through equity financing. Our net loss of $191,019 from our inception on July 30, 2008 to March 31, 2013 was funded by equity financing and advances from related parties. Since our inception on July 30, 2008 we have raised gross proceeds of $171,000 in cash from the sale of our common stock.

During the nine months ended March 31, 2013 we spent net cash of $39,095 on operating activities, compared to net cash spending of $18,627 on operating activities during the same period in the previous fiscal year. From our inception on July 30, 2008 to March 31, 2013 we spent net cash of $164,857 on operating activities, all of which was attributable to our net loss as described above, as offset by certain changes to our operating assets and liabilities.

During the nine months ended March 31, 2013 we received $38,406 in net cash from financing activities, including proceeds of $109,500 from stock subscriptions, whereas we received net cash of $22,255 from financing activities during the same period in the previous fiscal year, including $23,000 in advances from related parties. From our inception on July 30, 2008 to March 31, 2013 we received net cash of $164,906 from financing activities, including $171,000 from the issuance of our common stock.

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We had expected to require approximately $346,000 to continue our planned operations over the 12 months. Our proposed expenditures for that time period are summarized as follows:

These plans may not be relevant based on new management’s intent to acquire a cloud based real estate company. In such case, we may need considerably more than the above to carry out our revised business plans.

Our general and administrative expenses for the year will consist primarily of filing fees, bank charges, office expenses, communication expenses (cellular, internet, fax and telephone) and courier and postage costs. Our professional fees are related to our regulatory filings throughout the year.

Our near term activities will be directed by Glenn Sanford, our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and sole director, who will also manage our operations.

Due to our limited financial resources, there is no guarantee that we will be able to enter into any agreements with advertising partners or create sufficient interest in our website to make it a profitable venture. In any event, we anticipate that any marketing and advertising activities that we undertake will require us to obtain additional financing.

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Even though we plan to raise capital through equity or debt financing, we believe that the latter may not be a viable alternative for funding our operations as we do not have sufficient assets to secure any such financing. We anticipate that any additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide any assurance that we will be able to raise sufficient funds from the sale of our common stock to fund our operations or planned activities. In the absence of such financing, we will not be able to proceed with our plan of operations. If we do not continue to obtain additional financing, we may be forced to abandon our business plan or significantly curtail our operations.

Going Concern

Our financial statements for the three and nine months ended March 31, 2013 have been prepared on a going concern basis and contain an additional explanatory paragraph in Note 1 which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Item 3.                   Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4.                   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), 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 rules and forms of the SEC , and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report we carried out an evaluation of the effectiveness of our disclosure controls and procedures with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, we concluded that our disclosure controls and procedures were not effective to ensure that information we are required to disclose in the reports 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, and that such information was not accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control

During the three months ended March 31, 2013 there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1.                   Legal Proceedings

We are not aware of any legal proceedings to which we are a party. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.

Item 2.                   Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.                   Defaults Upon Senior Securities

None.

Item 4.                   Mine Safety Disclosures

Not applicable.

Item 5.                   Other Information

None.

Item 6.                   Exhibits

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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