Form 10KSB/A Home System Group

[Amend] Annual report pursuant to section 13 and 15(d) for small business issuers

What is Form 10KSB/A?
  • Accession No.: 0001144204-07-000933 Act: 34 File No.: 000-49770 Film No.: 07518011
  • CIK: 0001172319
  • Submitted: 2007-01-08
  • Period of Report: 2005-12-31

10KSB/A HTML

v062119_10ksb-a.htm


 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-KSB/A
Amendment 4

(Mark One)

x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the annual period ended
December 31, 2005

o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT  
For the transition period from
 
to
 
Commission file number
000-49770

SUPREME REALTY INVESTMENTS, INC.
(Exact name of small business issuer as specified in its charter)

Nevada
(State or other jurisdiction of incorporation or organization)
43-1954776
(IRS Employer Identification No.)
 
Industrial Park Shagang Road.
Gang Kou Town, Zhongshan, China
(Address of principal executive offices)
 
86 755 83570142
(Issuer's telephone number)
 
Securities Issued under Section 12(b) of the Exchange Act:
 
Title of Each Class
 
Name of Exchange on which registered
$0.001 par value, common
 
Over-the-Counter Bulletin Board(OTCBB)
     
Securities Issued under Section 12(g) of the Exchange Act: None
 
Title of Class
 
 
 
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 xNo o

 
 

 

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. x

Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes x No o

Issuer’s revenues for the fiscal year ended December 31, 2005, were $1,273.

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Issuer as of April 1, 2006, based upon the last reported sales price on the OTCBB was $290,000.

(APPLICABLE ONLY TO CORPORATE ISSUERS)

The Registrant’s common stock outstanding as of May 19, 2006 was 12,500,000 shares.

DOCUMENTS INCORPORATED BY REFERENCE:

None

Transitional Small Business Disclosure Format (Check One): Yes o No x

 
2

 
 
SUPREME REALTY INVESTMENTS, INC.
 
10-KSB
 
FOR THE YEAR ENDED DECEMBER 31, 2005
 
INDEX
 
     
Page
Part I
Item 1
Description of Business
4
 
Item 2
Description of Property
5
 
Item 3
Legal Proceedings
7
 
Item 4
Submission of Matter to a Vote of Security Holders
7
Part II
Item 5
Market for Common Equity and Related Stockholder Matters
7
 
Item 6
Management’s Discussion and Analysis or Plan of Operation
8
 
Item 7
Financial Statements
11
 
Item 8
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
29
 
Item 8A
Controls and Procedures
29
 
Item 8B
Other Information
29
Part III
Item 9
Directors, Executive Officers, Promoters and Control Persons: Compliance with Section 16(a) of the Exchange Act
29
 
Item10
Executive Compensation
32
 
Item 11
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
32
 
Item 12
Certain Relationships and Related Transactions
32
 
Item 13
Exhibits
32
 
Item 14
Principal Accountant Fees and Services
32
   
Signatures
32

 
3

 
 
PART I
 
 
Supreme Realty Investments, Inc. is a real estate operating company primarily engaged in the acquisition, operation, and disposition of real properties and loans secured by real properties.

The Company acquires hotels and other real properties either directly in fee simple, or indirectly through ownership of beneficial interests in land trusts or partnerships that hold title to the real property. The Company believes that, in some cases acquiring indirect interests in real property is advantageous because it gives us flexibility in addressing the financial and risk management considerations presented by the particular property when debt financing may not be appropriate or when the Company is trying to avoid exposing its entire portfolio to litigation as the result of personal injuries resulting from environmental hazards or other unforeseen conditions on the property.

The Company's policy is to acquire properties primarily for current income. However, income from, and appreciation of its properties may be adversely affected by general and local economic conditions, neighborhood values, competitive overbuilding, weather, casualty losses, and other factors beyond its control. The value of real properties may also be affected by the cost of compliance with regulations and liability under applicable environmental laws, changes in interest rates, and the availability of financing. Income properties are also adversely affected if a significant number of tenants are unable to pay rent or if available space cannot be rented on favorable terms.

Investments in Real Estate Securities or other Passive Interests. From time to time, Supreme will also invest in the interests of others primarily engaged in real estate activities. The Company will invest in the common stock of other public and private real estate operating companies, real estate investment trusts, partnerships, or joint ventures. The primary opportunities the Company will consider are residential housing developments. The Company's acquisition committee will apply the same underwriting criteria as applied in its direct investments.

 
Investment Policies
 
Investment policies are established by the Board of Directors with respect to investing in real property interests and loans secured by real property. Such policies may be changed by the directors in response to economic and market conditions without vote of the stockholders; however the Board will promptly notify the shareholders in writing of any such change in policies. The percentage of assets invested in any one type of investment, property, loan, or security is set by the Board of Directors during its annual meeting. Under our current investment policy, not more than 20% of Supreme's total assets may be invested in any one property, loan, or security. Currently, we have exceeded this guideline with respect to one property which we hold as we have approximately 23% of our current total assets invested with that property. We expect this percentage will drop to below 20% as we develop our business model.
 
The number or amount of mortgages or other loans securing any one piece of real property may not exceed 90% of the property's appraised value.
 
Supreme's excess funds are generally held as cash or invested in short-term, highly liquid, interest-bearing securities, which may include short-term municipal bonds, time deposits, money market funds, commercial paper, and U.S. government securities.
 

 
4

 
 
Investments in Real Estate or other Property Interests.
 
Supreme acquires real property either directly in fee simple, or indirectly through ownership of beneficial interests land trusts or partnerships that hold title to the real property. Supreme believes that, in some cases acquiring indirect interests in real property is advantageous because it gives us flexibility in addressing the financial and risk management considerations presented by the particular property when debt financing may not be appropriate or when Supreme is trying to avoid exposing its entire portfolio to litigation as the result of personal injuries resulting from environmental hazards or other unforeseen conditions on the property.
 
Supreme's policy is to acquire properties primarily for current income. However, income from, and appreciation of its properties may be adversely affected by general and local economic conditions, neighborhood values, competitive overbuilding, weather, casualty losses, and other factors beyond its control. The value of real properties may also be affected by the cost of compliance with regulations and liability under applicable environmental laws, changes in interest rates, and the availability of financing. Income properties are also adversely affected if a significant number of tenants are unable to pay rent or if available space cannot be rented on favorable terms.
 
To help to mitigate these risks, our present policy goal is to diversify Supreme's portfolio across the different property types, in rapidly-growing suburban areas, near large population centers, in different economic regions or "belts".

Real Estate Investments are recorded at cost, less accumulated depreciation. If there is an event or change of circumstances that indicates that the basis of a property may not be recoverable, then management will assess any impairment in value by making a comparison of (i) the current and projected operating cash flows (undiscounted and without interest charges) of the property over its remaining useful life and (ii) the net carrying amount of the property. If the current and projected operating cash flows are less than the carrying value of the property, the carrying value would be written down to an amount to reflect the fair value of the property.
 
Proposed Real Estate Acquisitions
 
The Company plans to acquire a portfolio of hotel properties for a total acquisition cost of $105 million, plus transaction costs. The company plans to finance the transaction by issuing debentures and/or convertible securities through a private placement to institutional investors.
 
The properties are located in close proximity to well-known tourist attractions, metropolitan airports, business centers, and convention facilities. They are affiliated with well-known brands, such as Holiday Inn, Marriott, and Hilton Hotels.
 
 
The Company is not aware of any current, pending, or threatened litigation or proceedings that could have a material adverse effect on its results of operations, cash flows or financial condition. 
 
 
No matters were submitted during the fourth quarter of the period covered in this report to a vote of shareholders.

 
5

 
 
PART II
 
 
Market Information

The Company’s common stock trades on the Over-the-Counter Bulletin Board (OTCBB) under the symbol “SRLT”.

The range for high and low bids since the stock began trading on March 3, 2005 is $0.025 - $0.40. The last reported price of the Company’s common stock, as of April 8, 2006, was $0.05.

Holders

As of December 31, 2005, there were approximately 58 holders of record of the Company’s common stock.

Dividends

The Company has not paid any cash dividends since its inception. Any future dividends will be subject to the discretion of the Company's Board of Directors and will depend upon, among other things, future earnings, the operating and financial condition of the Company, its capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on the common stock will be paid in the future.
 
Securities Authorized for Issuance under Equity Compensation Plan
 
On August 28, 2004, the Board of Directors adopted and the shareholders approved a Stock Option and Restricted Stock Plan. The purpose of the plan is to advance the interests of the Corporation by enhancing the ability of the Corporation and its subsidiaries to attract and retain officers, employees and non-employee directors to the Corporation, to reward such individuals for their contributions and to encourage them to take into account the long-term interests of the Corporation through interests in the Corporation's Common Stock. The Plan provides for the grant of options to acquire Stock ("Options"), which may be non-qualified stock options ("NQSOs") within the meaning of the Internal Revenue Code of 1986, as amended (the "Code"), and awards of Stock subject to certain restrictions ("Restricted Stock"). Under the Plan, Restricted Stock consists exclusively of (i) Stock subject to performance-based restrictions intended to comply with the provisions of Section 162(m) of the Code ("Performance-Based Restricted Stock) and (ii) Stock awarded to non-employee directors in lieu of some or all of the cash compensation such directors would otherwise receive for their service as directors ("Non-employee Director Restricted Stock").
 

 
6

 
 
EQUITY COMPENSATION PLAN INFORMATION
 
 
Plan Category
Number of securities to be issued upon exercise of outstanding options, warrants and rights
Weighted average exercise price of outstanding options, warrants and rights
 
 
Number of securities remaining available for future issuance
 
(a)
(b)
(c)
Equity compensation plans approved by security holders
16,000,000
$0.10
34,000,000
Equity compensation plans not approved by security holders
-0-
-0-
-0-
Total
16,000,000
$0.10
34,000,000
 
Item 6. Management’s Discussion And Analysis
 
2005 Developments
 
During the period management continued to shift its focus away from residential multi-unit properties to hotel and other hospitality-related properties. We sold our interests in all of our residential properties and we continue to actively pursue opportunities in hotel properties. To better pursue opportunities in the hospitality sector, the Company moved its corporate headquarters to Orlando, Florida in October, 2004.
 
In furtherance of our business strategy to acquire hotel properties, the Company seeks to identify excellent candidates that can benefit from our property renovation and brand repositioning strategies, creating added value for our shareholders.
 
The Company plans to implement an extensive renovation plan to upgrade the properties by repositioning them to upscale select service hotels with premium brands to generate increased room rates commensurate with the improved quality. We have entered into a master hotel management agreement with Expotel Hospitality, of New Orleans, LA to provide management and development services for the properties upon acquisition.
 
The company has entered into a private placement agency agreement with the investment banking firm of DT Securities, Inc., Los Angeles, CA to place up to $50 million of its convertible securities in a private placement to institutional investors. The funds will be used to acquire the hotels and the debt will be secured by first mortgages.

 
7

 
 
Results of Operations
 
Revenues from Continuing Operations
 
Rental revenue decreased to $48,405 for the year ended December 31, 2005 compared to $191,758 for the year ended December 31, 2004. The decrease in rental revenue in 2004 can be attributed to the fact that all of our residential property was sold during the period.
 
Expenses from Continuing Operations.
 
Total expenses from continuing operations decreased from $266,046 for the year ended December 31, 2004 to $204,664 for the year ended December 31, 2005, a net decrease of $61,382.
 
 
1.
Property operating expenses decreased by $73,100 for the year ended December 31, 2005 compared to the year ended December 31, 2004. This expense decrease is primarily attributable to lower operating costs due to the sale of our residential properties.
 
2.
Property Depreciation and Amortization decreased by $26,279 for the year ending December 31, 2005 compared to the same period ending December 31, 2004. This reflects the fact that we sold our interest in all of our apartment buildings during the period.
 
3.
Salaries, commissions and employees benefits remained relatively stable.
 
4.
General and administrative expenses decreased by $11,945 for the year ending December 31, 2005 compared to the same period ending December 31, 2004. This reflects the fact that fewer expenses were paid to outside parties for legal, accounting, consulting, and other fees and expenses for services rendered.
 
5.
Other Depreciation and Amortization reflects the depreciation on Office Furniture, Fixtures, and Equipment.
 
6.
Gain(Loss) on Sale of Assets reflects the loss on the sale of our office furniture and equipment.
 
7.
Gain(Loss) on Sale of Properties reflects the loss on the sale of our interests in our apartment buildings.
 
Net Income/Loss from Operations.
 
Net loss from operations for the year ended December 31, 2005 was ($399,875) versus net loss of ($202,138) for the year ended December 31, 2004. The net loss in 2005 is attributed primarily to losses on the sale of our residential properties.
 
Liquidity and Capital Resources
 
For the years ended December 31, 2005 and December 31, 2004, Supreme's net cash provided by operating activities totaled ($499,140)and ($24,156), respectively. This change relates directly to a decrease in Supreme's receivables and payment of mortgages obligations that become payable in 2004.
 
As of the year ended December 31, 2005, Supreme's unrestricted cash resources were $69 as compared to $4,126 as of the year ended December 31, 2004. The cash flow from our existing properties will not fund our future liquidity requirements. The principal source of Supreme's capital has been from funds received from operations, the issuance of common stock, and the use of non-recourse debt in association with the acquisition of its real properties.
 
Supreme intends to use its future capital to increase its liquidity by issuing different classes of convertible preferred stock or convertible debentures to institutional investors in future offerings and by using cash provided from operations of its mortgage banking subsidiary and rents from its properties. At present, Supreme has no plans to increase its borrowings or add any new bank debt liabilities. The Company plans to use the proceeds of any debt or equity offerings to acquire, renovate, and operate hotel properties. Further, from time to time the Board of Directors may elect to distribute some of its taxable income in the form of dividends to our stockholders. That could limit the amount of cash Supreme will have available for other business purposes or to grow through the use of retained earnings. Much of Supreme's ability to raise capital is dependent upon the relative attractiveness of its shares, and the supply of shares of competitive real estate entities currently trading in the marketplace.

 
8

 

Management of believes that it has identified a unique niche in its market by acquiring "distressed" properties from banks and other lending institutions. "Distressed" properties are properties that are not being operated at optimal efficiency.
 
Cash provided by operations, equity transactions, and borrowings from lending institutions have generally provided the primary sources of liquidity to Supreme. Historically, Supreme has used these sources to fund operating expenses and to satisfy its debt service obligations.
 
Management believes that there are material trends, events, or uncertainties that are reasonably likely to have a material impact on the company's short-term or long-term liquidity or significant items of income or loss arising from continued operations. The acquisitions of hotels are likely to produce material changes in line items on the company’s financial statements, financial condition, and its results of operations.
 
Off-balance sheet arrangements
 
Supreme does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to its stockholders.


 
9

 


The Company has made numerous attempts to contact its former auditor. To date these efforts have been unsuccessful. Including attempts at contact through their council. Because of this we have not been able to get consent for the use of their opinion in this filing. The December 31, 2004, financial statements were audited by George Stewart of Seattle, Washington. Their opinion dated May 14, 2005 indicated the Company's financial statements presented fairly, in all material respects, the financial position of the Company and the results of operations and cash flows for the year ended December 31, 2004. Their opinion also contained a qualifying paragraph concerning the Company's ability to continue as a going concern.

Pollard-Kelley Auditing Services, Inc.
 
Auditing Services
 
3250 West Market St, Suite 307, Fairlawn, OH 44333 330-864-2265
 
 
Report of Independent Registered Public Accounting Firm
 

Supreme Realty Investments, Inc.
Orlando, FL 32839

We have audited the accompanying balance sheets of Supreme Realty Investments, Inc., as of December 31, 2005, and the related statements of income, changes in stockholders’ equity, and cash flows for the one year in the period ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conduct our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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. We believe that our audits provide a reasonable basis for our opinion.

The Company has not generated significant revenues or profits and has no operations at year end. These factors among others raise considerable doubt the Company will be able to continue as a going concern. The Company’s continuation as a going concern depends upon its ability to generate sufficient cash flow to conduct its operations and its ability to obtain additional sources of capital and financing. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2005, and the results of its operations and it cash flows for the one year in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting standards.

Pollard-Kelley Auditing Services, Inc.

/S/ Pollard-Kelley Auditing Services, Inc.

Fairlawn, Ohio
May 19, 2006

 
10

 

BALANCE SHEET

   
31-Dec
 
31-Dec
 
   
2005
 
2004
 
ASSETS:
         
Current Assets:
         
Cash or Cash Equivalents
   
69
   
4,126
 
Accounts Receivable
   
-
   
7,379
 
Total Current Assets
   
69
   
11,504
 
Real Estate Investments
             
Existing Properties
   
-
   
1,466,000
 
New Acquisitions
   
-
   
-
 
Gross Properties
         
1,466,000
 
Less: Accumulated Depreciation
         
(133,768
)
Land and Other Non-Depreciable Property
         
-
 
Total Real Estate Investments
         
1,332,232
 
Other Assets:
             
Goodwill & Other Intangibles
         
-
 
Less: Amortization
         
-
 
Furniture, Fixtures, and Equipment
         
11,662
 
Less: Accumulated Depreciation
         
(7,002
)
Total Other Assets
         
4,660
 
                    
TOTAL ASSETS
   
69
   
1,348,397
 
LIABILITIES:
             
Current Liabilities
   
10,000
   
143,453
 
Notes Payable
   
-
   
-
 
Mortgages Payable
   
-
   
835,000
 
Total Liabilities
   
10,000
   
978,453
 
STOCKHOLDERS' EQUITY
             
Common Stock, $.001 par value, 200,000,000 authorized, 5,000,000 outstanding
   
5,000
   
30,000
 
Additional Paid-In Capital
   
668,146
   
623,146
 
Retained Earnings (Deficit)
   
(683,078
)
 
(283,202
)
Less: Treasury Stock
   
-
   
-
 
Total Stockholders' Equity
   
(9,931
)
 
369,944
 
                    
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
   
69
   
1,348,397
 


See accompanying notes to the financial statements 

 
11

 

CONSOLIDATED STATEMENT OF EARNINGS
For the Fiscal Year Ended
December 31

   
2005
 
2004
 
REVENUES:
         
Revenues from Rental Properties
   
1,273
   
48,405
 
Revenues from Mortgage Banking
   
-
   
-
 
Revenues from Realty & Management
   
-
   
15,000
 
TOTAL REVENUES:
   
1,273
   
63,405
 
PROPERTY OPERATING EXPENSES:
             
Real Estate Taxes
   
-
   
5,739
 
Mortgage Interest
   
77,324
   
77,322
 
Operations and Maintenance
   
7,379
   
48,463
 
Property Depreciation
   
32,000
   
58,279
 
Total Property Expenses
   
116,703
   
189,803
 
GENERAL EXPENSES:
             
Salaries, Commissions, & Employee Benefits
   
32,395
   
33,418
 
General & Administrative Expenses
   
38,449
   
50,394
 
Depreciation & Amortization
   
2,189
   
2,189
 
Total General Expenses
   
73,033
   
86,001
 
TOTAL EXPENSES
   
189,736
   
275,804
 
               
INCOME BEFORE INVESTMENT ACTIVITIES
   
(188,463
)
 
(212,399
)
Gain(Loss)-on Sale of Assets
   
(2,472
)
 
4,200
 
Gain(Loss)-on Forgiveness of Debt
   
-
   
-
 
Gain(Loss)-on Sale of Properties
   
(208,940
)
 
6,061
 
NET INCOME(LOSS) Before Taxes & Extraordinary Items
   
(399,875
)
 
(202,138
)
Provision for Income Taxes
   
-
   
-
 
Extraordinary Gains(Losses)
   
-
   
-
 
NET INCOME(LOSS)
   
(399,875
)
 
(202,138
)
               
Weighted Average Common Shares Outstanding
   
4,184,000
   
2,288,120
 
               
NET INCOME per Common Share
   
($0.10
)
 
($0.09
)
NET INCOME per Common Share-Fully Diluted
   
($0.10
)
 
($0.09
)
 

See accompanying notes to the financial statements 

 
12

 

CONSOLIDATED STATEMENT OF CASH FLOWS
For the Fiscal Year Ended
December 31

   
2005
 
2004
 
CASH FLOW FROM OPERATING ACTIVITIES:
         
           
Net Income
   
(399,875
)
 
(202,138
)
Adjustments to reconcile net income to cash provided by operating activities
             
Depreciation and Amortization
   
34,189
   
60,468
 
Provision for Income Taxes
   
-
   
-
 
(Increase) Decrease in Receivables
   
-
   
2,221
 
(Increase) Decrease in Prepaid Expenses
   
-
   
-
 
Increase (Decrease) in Current Liabilities
   
(133,453
)
 
115,293
 
Net Cash from Operating Activities
   
(499,140
)
 
(24,156
)
               
CASH FLOW FROM INVESTING ACTIVITIES:
             
Purchases of Furniture, Fixtures, & Equipment
   
-
   
-
 
Purchases of Real Estate Improvements
   
-
   
-
 
Proceeds from the Sale of:
             
Gain on Sale of Property
   
-
   
6,061
 
Real Estate Improvements
   
779,184
   
450,000
 
Land
   
550,899
       
Net Cash from Investing Activities
   
1,330,083
   
456,061
 
               
CASH FLOW FROM FINANCING ACTIVITIES:
             
Proceeds from the Issuance of:
             
Mortgages
             
Common Stock
             
Payments for:
             
Debt Repayment
   
(835,000
)
 
(412,000
)
Net Cash from Financing Activities
   
(835,000
)
 
(431,045
)
               
Net Change In Cash
   
(4,057
)
 
860
 
Cash Balance, January 1
   
4,126
   
3,266
 
                    
Cash Balance, December 31
   
69
   
4,126
 


See accompanying notes to the financial statements 

 
13

 

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

   
Common Stock
                     
   
Shares
 
Amount
 
Additional paid in Capital
 
Retained Earnings
 
Treasury Stock
(common)
 
Stock Subscriptions
Receivable
 
Total Stockholders’ Equity
 
                                             
Balance, December 31, 2004
   
30,000,000
   
30,000
   
623,146
   
(283,202
)
 
-0-
         
369,944
 
                                             
Common Stock Subscribed
   
16,000,000
   
16,000
   
1,584,000
               
(1,600,000
)
 
-
 
                                             
Net Income
                     
(399,875
)
             
(399,875
)
                                             
1-10 Reverse Stock Split
   
(41,400,000
)
 
(41,400
)
 
41,400
                     
-
 
                                             
Common Stock Subscribed
   
400,000
   
400
   
39,600
               
(40,000
)
     
                                             
Stock Subscriptions Paid
                                 
20,000
   
20,000
 
                                             
Stock Subscriptions Cancelled
               
(1,620,000
)
             
1,620,000
   
-
 
                                             
Balance, December 31, 2005
   
5,000,000
   
5,000
   
668,146
   
(683,078
)
 
-0-
   
-0-
   
(9,931
)
 

See accompanying notes to the financial statements 

 
14

 

NOTES TO FINANCIAL STATEMENTS
 
1.
Summary of Significant Accounting Policies
 
Basis of Presentation
 
A summary of the significant accounting policies of Supreme Realty Investments, Inc. ("the Company") is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management which is responsible for their integrity and objectivity. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. The financial statements herein are presented using the accrual basis of accounting.
 
Nature of Operations
 
Supreme Realty Investments, Inc. is a real estate operating company primarily engaged in the acquisition, operation, and disposition of real properties and loans secured by real properties.
 
The Company acquires hotel properties either directly in fee simple, or indirectly through ownership of beneficial interests in land trusts or partnerships that hold title to the real property. The Company believes that, in some cases acquiring indirect interests in real property is advantageous because it gives us flexibility in addressing the financial and risk management considerations presented by the particular property when debt financing may not be appropriate or when the Company is trying to avoid exposing its entire portfolio to litigation as the result of personal injuries resulting from environmental hazards or other unforeseen conditions on the property.
 
The Company's policy is to acquire properties primarily for current income. However, income from, and appreciation of its properties may be adversely affected by general and local economic conditions, neighborhood values, competitive overbuilding, weather, casualty losses, and other factors beyond its control. The value of real properties may also be affected by the cost of compliance with regulations and liability under applicable environmental laws, changes in interest rates, and the availability of financing. Income properties are also adversely affected if a significant number of tenants are unable to pay rent or if available space cannot be rented on favorable terms.
 
2.
Principles of Consolidation and Estimates
 
The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
 
Generally accepted accounting principles ("GAAP") requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition, and the recoverability of trade accounts receivable. The application of these estimates requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.
 

 
15

 
 
 
3.
Real Estate Investments
 
Real Estate Investments are recorded at cost, less accumulated depreciation. If there is an event or change of circumstances that indicates that the basis of a property may not be recoverable, then management will assess any impairment in value by making a comparison of (i) the current and projected operating cash flows (undiscounted and without interest charges) of the property over its remaining useful life and (ii) the net carrying amount of the property. If the current and projected operating cash flows are less than the carrying value of the property, the carrying value would be written down to an amount to reflect the fair value of the property.
 
Depreciation has been computed using the straight-line method over the estimated useful lives of 27.5 years.
 
Expenses for maintenance and repairs are charged to operations as incurred. Significant renovations are capitalized.
 
During the fourth quarter of the fiscal year, the company sold all of its interests in its residential properties. A tabular summary of that transaction follows.
 
 
 
Description
 
Gross amount
carried at
time of sale
 
 
 
Encumbrances
 
 
Accumulated Depreciation
 
 
Sale Price
 
 
Gain(Loss) on Sale
 
 
 
 
 
 
             
12-Unit Apartment Bldg
   
600,000
   
480,000
   
89,091
   
480,000
   
($30,909
)
4-Unit Apartment Bldg
   
280,000
   
224,000
   
41,576
   
244,000
 
$
5,576
 
6-Unit Bldg/ Vacant Lots
   
550,899
   
131,000
   
35,515
   
331,777
   
($183,607
)
                                 
TOTALS
 
$
1,430,899
 
$
835,000
 
$
166,182
 
$
1,055,777
   
($208,940
)
 
 
4.
Revenue Recognition
 
Rental revenues are recognized in the month they are earned. 
 
 
5.
Income Taxes
 
The Company and its subsidiary file a consolidated federal income tax return.
 
 
6.
Deferred Tax Assets, Liabilities, and Valuation Allowances
 
Management has provided for tax loss carry-forwards of $15,691 for 2002, and $74,299 for 2003, $202,138 for 2004, and 399,875 for 2005. The tax loss carry-forwards expire in 2022, 2023, 2024, and 2025 respectively.
 
 
7.
Investment in Affiliates
 
The Company has one wholly-owned subsidiary, Supreme Hotel Properties, Inc., of which it owns 100% of the outstanding common stock. SFAS 94 requires investments in companies in which the parent company has the ability to influence operations and finances to be accounted for by the consolidation method.
 
 
8.
Recent Accounting Pronouncements
 
In August 2001, the FASB issued Financial Accounting Standard No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 establishes a model for measurement and reporting the impairment of assets to be disposed of by sale and addresses accounting for a segment of a business accounted for as a discontinued operation. SFAS 144 is effective for fiscal years beginning after December 15, 2001. SFAS 144 supersedes SFAS 121 and thereby removes Goodwill from its scope and eliminates the requirement to allocate Goodwill to long-lived assets to be tested for impairment in business segments that are discontinued. Supreme has accounted for the write down of the Goodwill associated with its discontinued property management segment in accordance with SFAS 144.
 

 
16

 
 
In December 2002, the FASB issued Financial Accounting Standard No. 148, "Accounting for Stock-Based Compensation -Transition and Disclosure" ("FAS 148"), an Amendment of Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation" ("FAS 123"). FAS 148 amends FAS 123 to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation. It also amends the disclosure provisions of that Statement to require prominent disclosure about the effects on reported net income of an entity's accounting policy decisions with respect to stock-based employee compensation.
 
In December 1999, the SEC issued SAB 101, "Revenue Recognition in Financial Statements." SAB 101 summarizes certain aspects of the staff's views in applying generally accepted accounting principles to revenue recognition in financial statements. On March 24, 2000 and September 26, 2000, the SEC issued Staff Accounting Bulletin No. 101A and No. 101B, respectively, which extend the transition provisions of SAB 101 until no later than the fourth quarter of fiscal years beginning after December 15, 1999, which would be December 31, 2005 for us.
 
In March 2000, the FASB issued FIN 44, Accounting for Certain Transactions Involving Stock Compensation - an Interpretation of APB No. 25, Accounting for Stock Issued to Employees". This Interpretation clarifies (a) the definition of employee for purposes of applying Opinion 25, (b) the criteria for determining whether a plan qualifies as a non-compensatory plan, (c) the accounting consequences of various modifications to the terms of a previously fixed stock option or award, and (d) the accounting for an exchange of stock compensation awards in a business combination. This Interpretation is effective July 1, 2000, but certain conclusions in this Interpretation cover specific events that occur after either December 15, 1998, or January 12, 2000. To the extent that this Interpretation covers events occurring during the period after December 15, 1998, or January 12, 2000, but before the effective date of July 1, 2000, the effects of applying this Interpretation are recognized on a prospective basis from July 1, 2000.
 
Management believes that any other newly required pronouncements are not applicable.
 
 
9.
Current Liabilities and Notes Payable
 
Current Liabilities include $10,000 in trade payables.
 

 
17

 
 
 
10.
Mortgages Payable
 
N/A
 
 
11.
Common Stock Transactions
 
During the fiscal year, the Board of Directors reduced the number of shares outstanding by effecting 1-10 reverse stock split.
 
To date, no dividends have been declared or paid.
 
 
12.
Market for Common Equity and Related Stockholder Matters
 
The Company’s common stock trades on the Over-the-Counter Bulletin Board (OTCBB) under the symbol “SRLT”.

The range for high and low bids since the stock began trading on March 3, 2005 is $0.025 - $0.40. The last reported price of the Company’s common stock, as of April 8, 2006, was $0.05.
 
 
13.
Equity Compensation Plan
 
On August 28, 2004, the Board of Directors adopted and the shareholders approved a Stock Option and Restricted Stock Plan. The purpose of the plan is to advance the interests of the Corporation by enhancing the ability of the Corporation and its subsidiaries to attract and retain officers, employees and non-employee directors to the Corporation, to reward such individuals for their contributions and to encourage them to take into account the long-term interests of the Corporation through interests in the Corporation's Common Stock. The Plan provides for the grant of options to acquire Stock ("Options"), which may be non-qualified stock options ("NQSOs") within the meaning of the Internal Revenue Code of 1986, as amended (the "Code"), and awards of Stock subject to certain restrictions ("Restricted Stock"). Under the Plan, Restricted Stock consists exclusively of (i) Stock subject to performance-based restrictions intended to comply with the provisions of Section 162(m) of the Code ("Performance-Based Restricted Stock) and (ii) Stock awarded to non-employee directors in lieu of some or all of the cash compensation such directors would otherwise receive for their service as directors ("Non-employee Director Restricted Stock").
 
EQUITY COMPENSATION PLAN INFORMATION
 
Plan Category
Number of securities to be issued upon exercise of outstanding options, warrants and rights
Weighted average exercise price of outstanding options, warrants and rights
Number of securities remaining available for future issuance
 
(a)
(b)
(c)
Equity compensation plans approved by security holders
16,000,000
0.10
34,000,000
Equity compensation plans not approved by security holders
-0-
-0-
-0-
Total
16,000,000
0.10
34,000,000
 
On August 28, 2004, (“Grant Date” and “Measurement Date”) the Company granted options to purchase 16,000,000 shares of common stock to officers and non-employee consultants in recognition of past services rendered, at an exercise price of $0.10 per share. Under the provisions of APB 25, the Company estimated the “fair market value” of the shares to be equal to the book value of $0.02 per share. Since the exercise price was greater than the fair market value as of the measurement date, no compensation cost was incurred by the Company.
 

 
18

 
 
 
14.
Commitments
 
Employment Obligations
 
The Company has entered into automatically renewing, one-year employment agreements with its President and Chief Financial Officer. In the event of termination other than for cause, the contracted employee will receive a lump sum benefit.
 
Lease Obligations
 
The company leases office space at 4700 Millennia Blvd- Suite 175, Orlando, Florida on a month-to-month basis.
 
 
15.
Contingencies
 
None


 
19

 
 
 
16.
Material Subsequent Events
 
On February 15, 2006 the Board of Directors authorized the increase its outstanding common shares to approximately 12,500,000; and that the Company’s major shareholders will then sell 9,222,135 shares of common stock to for cash consideration, to be transferred to Supreme Hotel Properties, Inc. to continue its business purposes; the shares purchased will represent approximately 74% of the outstanding common stock; and that company’s current Board of Directors will then resign their duties to become the Board of Directors of Supreme Hotel Properties Inc.
 
On April 11, 2006, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Thomas Elliot, Jean LeRoy, Jimmy Harvey and Zujun Xu. There were no material relationships between the Registrant or its affiliates and any of the parties to the Stock Purchase Agreement, other than in respect of the Stock Purchase Agreement. Pursuant to the terms and conditions of the Stock Purchase Agreement, Zujun Xu acquired from Thomas Elliot, Jean LeRoy, and Jimmy Harvey an aggregate of 8,821,000 shares of common stock of the Registrant.

On April 12, 2006, Thomas Elliot resigned as the President of the Company.

On April 12, 2006, Zujun Xu was appointed President, Chief Executive Officer and Chief Financial Officer as well as a member of the Board of Directors of the Company.

On May 4, 2006, the Registrant issued and sold 55,000,000 shares of its common stock in a private placement exempt from the registration requirements of Section 5 of the Securities Act of 1933. The Registrant sold the shares at a price of $0.0182 per share, for aggregate offering consideration of $1,000,000.

 
20

 


The current Board of Directors believes that the Company’s Annual Report on Form 10-KSB, and amended Annual Report on Form 10-KSB/A for the year ended December 31, 2005 have been filed in error by the prior Board of Directors in that it prematurely included an audit report of Mr. George Stewart.

On March 27, 2006, George Stewart (“Stewart”) resigned as the Company’s principal independent accountant. Stewart’s report on the Company’s financial statements for the year ended December 31, 2004 did not contain an adverse opinion or disclaimer of opinion. During the Company’s recent fiscal year and through the date of Stewart’s resignation. The Company has requested from Mr. Stewart confirmation as to whether or not a disagreement or other disclosable event existed between the Company and Mr. Stewart, but has not received such confirmation from Mr. Stewart.

On May 10, 2006 the Company retained Pollard-Kelley Auditing Services, Inc. to serve as the Company’s principal independent accountant.



Evaluation of Disclosure Controls and Procedures
 
As of December 31, 2005, the end of the period covered by this report, our Chief Executive Officer and our Chief Financial Officer reviewed and evaluated the effectiveness of the our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)), which are designed to ensure that material information we must disclose in our report filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported on a timely basis, and have concluded, based on that evaluation, that as of such date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.
 
Changes in Internal Control over Financial Reporting
 
There was no change in our internal control over financial reporting that occurred during the fourth fiscal quarter of the fiscal year covered by this Annual Report on Form 10-KSB that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
 
Completion of Disposition of Assets
 
On November 23, 2004, the Company sold its interest in a six (6) unit apartment building in Chicago, Illinois. The property was sold for $450,000 to a non-related party. The proceeds were used to retire existing debt related to the property.
 

 
21

 
 
PART III
 
 
The Company’s Directors and Executive Officers, their ages and positions are as follows (Both Mr. Elliot and Mr. LeRoy resigned their respective positions in April 2006):
 
Name
Age
Position
Thomas Elliott
51
Chairman & Chief Executive Officer
Jean LeRoy
38
President & Chief Financial Officer
 
There are no family relationships among the directors or officers of the Company.
 
Mr. Elliott's background covers a broad spectrum of real estate and development activities including master planning, financing, site acquisition, zoning, development, management, and sales of several major residential and commercial properties throughout the United States. More specifically, over the past 25 years, his duties have included performing feasibility studies and market analysis, arranging mortgage financing, providing contract administration, coordinating construction, and property management activities for single- and multi-family residential developments, elderly hi-rises, regional shopping malls, urban strip centers, and low-rise office complexes.
 
Prior to acquiring Supreme in April, 2000, Mr. Elliott was employed as:
 
 
·
Real Estate Attorney (1993-2001); advising clients on the planning, negotiation, and financing of real estate transactions.  
 
·
Sr. Project Manager, Mesirow/Stein Real Estate Services, Inc. (1991-1993); Large real estate development firm. Duties included supervision of master planning, financing, site acquisition, zoning, and development of several major residential and commercial properties in Chicago, Washington, DC, and St. Louis, MO.  
 
·
Assistant Commissioner, City of Chicago, - Dept. of Housing (1989-1991). Local government housing agency. Duties included planning and oversight of all major multi-family housing rehab projects throughout Chicago.
 
Mr. Elliott is a licensed real estate broker who also holds: Doctor of Jurisprudence (JD, Real Estate Law) Illinois Institute of Technology Chicago Kent College of Law; Master of Business Administration (MBA, Finance) Devry University Keller Graduate School of Management, Chicago, IL; and Bachelor of Science (BS, Bus. Admin/Econ.) Culver-Stockton College, Canton, MO.
 
Mr. Leroy's background includes extensive experience in the design, development, implementation, integration, and customization of information technology and accounting systems for the financial services, computing, and communication industries. Over the past 14 years he has performed these services for several Fortune 500 companies and leaders in their respective industries.
 
Prior to coming to Supreme in January, 2002 Mr. LeRoy was employed as:
 
 
·
Systems Engineer, EMC Corp (2001-2002).; Major information technology firm. Duties included design, development, implementation, integration, and customization of information technology and accounting systems.  
 
·
Management Consultant, Adventis Corp (1997-2001); Major management consulting firm. Duties included consulting for the design and integration of information technology systems for 3M Corp (manufacturing), BellSouth Wireless (telecommunications), and Reuters, Inc (news and information services).
 
Mr. LeRoy holds a Bachelor of Science (BS, Electronic Engineering) from Devry University and a Master of Business Administration (MBA, Finance) from DePaul University.

 
22

 
 
Committees of the Board

The Company does not have independent directors who chair the audit and compensation committees or an "audit committee financial expert" or a nominating committee.

Code of Ethics

The Board of Directors has adopted a Code of Business Ethics covering all of its officers, directors and employees. The Company requires all employees to adhere to the Code of Business Ethics in addressing legal and ethical issues encountered in conducting their work. The Code of Business Ethics requires that the Company’s employees avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner and otherwise act with integrity and in the Company's best interest.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors, executive officers and persons who own beneficially more than ten percent of the Company’s common stock, to file reports of ownership and changes of ownership with the SEC. Based solely on the reports received by the company and on written representations from certain reporting persons, the Company believes that the directors, executive officers and greater than ten percent beneficial owners have complied with all applicable filing requirements.

 
 
The following table provides information about the compensation received during the last five fiscal years by the Company’s executive officers.
 
SUMMARY COMPENSATION TABLE
Name & Position(3)
 
Year
 
Annual Compensation
 
Long-Term Compensation
   
           
Awards
 
Payouts
   
       
Salary
Bonus
Other
 
Securities Granted Under Options/SARS
Restricted Shares or Units
 
LTIP Payouts
 
All Other Compensation
                           
Thomas Elliott, CEO
 
2005
 
Nil
Nil
Nil
 
Nil
Nil
 
Nil
 
$ 32,395
   
2004
 
Nil
Nil
Nil
 
10,000,000
Nil
 
Nil
 
28,758
   
2003
 
Nil
Nil
Nil
 
Nil
6,979,635(1)
 
Nil
 
13,765
   
2002
 
Nil
Nil
Nil
 
Nil
6,979,635(1)
 
Nil
 
Nil
   
2001
 
Nil
Nil
Nil
 
Nil
Nil
 
Nil
 
Nil
                           
                           
Jean LeRoy, CFO
 
2005
 
Nil
Nil
Nil
       
Nil
 
Nil
   
2004
 
Nil
Nil
Nil
 
4,000,000
Nil
 
Nil
 
Nil
   
2003
 
Nil
Nil
Nil
 
Nil
6,142,078(2)
 
Nil
 
Nil
 
 
(1)
5,000,000 shares of Supreme Property, Inc. exchanged for 6,979,635 shares of Supreme Realty Investments, Inc. in the merger.
 
(2)
4,000,000 shares of Supreme Property, Inc. exchanged for 6,142,078 shares of Supreme Realty Investments, Inc. in the merger.
 
(3)
Both Mr. Elliot and Mr. LeRoy resigned their respective positions in April 2006.

 
23

 
 

As of December 31, 2005, 5,000,000 shares of common stock were outstanding. The following table sets forth, as of such date, information with respect to shares beneficially owned by:

 
§
each person who is known by the Company to be the beneficial owner of more than 5% of its outstanding shares of common stock;
 
§
each of the Company’s directors;
 
§
each of the Company’s named executive officers; and
 
§
all of the Company’s directors and executive officers as a group.
 
Beneficial ownership has been determined in accordance with Rule 13d-3 of the Exchange Act. Under this rule, shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option) within 60 days of the date of this table. In computing the percentage ownership of any person, the amount of shares includes the amount of shares beneficially owned by the person by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person does not necessarily reflect the person’s actual voting power.

To the Company’s knowledge, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. Unless otherwise indicated, the business address of the individuals listed is 4700 Millennia Blvd - Suite 175, Orlando, FL 32839.
     
Name & Address of Beneficial Owner
No. of Shares Beneficially Owned
% of Outstanding Shares
Thomas Elliott
2,390,927
48%
Jean LeRoy
1,014,208
20%
          
TOTAL
20,101,348
68%

 
None.
 
 
 
a. Exhibits
 
 
Exhibit
Number
 
Exhibit Title
 
3.1
Articles of Incorporation, (incorporated by reference from our Form S-4 A/12, filed August 18, 2004)
 
3.2
Articles of Amendment (incorporated by reference from our Form S-4 A/12, filed August 18, 2004)
 
3.2
Bylaws (incorporated by reference from our Form S-4 A/12 Registration Statement, filed August 18, 2004)
 
31.1
Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
31.2
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
32.1
Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
32.2
Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
24

 
 
b. Reports of Form 8-K.
 
None.
 

Fees Paid to Independent Public Accountants

The following table presents fees for professional audit services rendered by George Stewart & Co., CPA’s. for the audit of the Company's annual financial statements for the years ended December 31, 2005 and December 31, 2004 and fees billed for other services rendered by George Stewart & Co., CPA’s. during those periods.
     
 
Fiscal 2005
Fiscal 2004
Audit fees (1)
20,000
12,000
Audit Related Fees
-0-
-0-
Tax Fees
-0-
-0-
All Other Fees
-0-
-0-
     
TOTAL
20,000
12,000

(1) Audit Fees consist of fees billed for professional services rendered for the audit of the Company's consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by George Stewart & Co., CPA’s in connection with statutory and regulatory filings or engagements.

Policy on Pre-Approval of Audit and Non-Audit Services of Independent Auditor

The Company’s Board of Directors has adopted a specific policy relating to pre-approval of all audit and non-audit services provided by the Company’s independent auditors.
 
 
 
In accordance with Section 13 or Section 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
SUPREME REALTY INVESTMENTS, INC.
Date: January 8, 2007
 
 
By
 
 
 
/s/ Li Wei Qiu
 
Li Wei Qiu
 
Chief Executive Officer, Director
   
Date: January 8, 2007
 
 
By
 
 
 
/s/ Kin Wai Cheung
 
Kin Wai Cheung
 
Chief Financial Officer, Director


 
25

 


EX-31.1 HTML

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CERTIFICATION PURSUANT TO
RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Li Wei Qiu, certify that:
 
 
1.
I have reviewed this annual report on Form 10-KSB/A of Supreme Realty Investments, Inc. (now known as Home System Group);
 
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.
The Registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the registrant and have:
 
a) Designed such disclosure controls and procedures, or caused such disclosure controls  and procedures to be designed under our supervision, to ensure that material information relating to  the registrant, including its consolidated subsidiaries, is made known to us by others within those  entities, particularly during the period in which this annual report is being prepared;
 
b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and  presented in this report our conclusions about the effectiveness of the disclosure controls and  procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial  reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth  fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to  materially affect, the registrant’s internal control over financial reporting;
 
 
5.
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):  
 
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.  
 

Date: January 8, 2007
/s/ Li Wei Qiu
 
Li Wei Qiu
Chief Executive Officer



 

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CERTIFICATION PURSUANT TO
RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kin Wai Cheung, certify that:

1.
I have reviewed this annual report on Form 10-KSB/A of Supreme Realty Investments, Inc. (now  known as Home System Group;
 
 
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
 
4.
The Registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the registrant and have:
 
a) Designed such disclosure controls and procedures, or caused such disclosure controls  and procedures to be designed under our supervision, to ensure that material information relating to  the registrant, including its consolidated subsidiaries, is made known to us by others within those  entities, particularly during the period in which this annual report is being prepared;
 
b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and  presented in this report our conclusions about the effectiveness of the disclosure controls and  procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial  reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth  fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to  materially affect, the registrant’s internal control over financial reporting;
 
 
5.
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):  
 
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.  
 

Date: January 8, 2007
/s/ Kin Wai Cheung
 
Kin Wai Cheung
Chief Financial Officer



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Exhibit 32.1
 
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Annual Report of Supreme Realty Investments, Inc. (now known as Home System Group, the “Company”) on Form 10-KSB/A for the year ending December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Li Wei Qiu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
 
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
 
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
   
   
/s/ Li Wei Qiu
 
Li Wei Qiu
 
Chief Executive Officer
 
 
__________________
 
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


 
 

 

EX-32.2 HTML

v062119_ex32-2.htm


Exhibit 32.2
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Annual Report of Supreme Realty Investments, Inc. (now known as Home System Group, the “Company”) on Form 10-K/A for the year ending December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kin Wai Cheung, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
 
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
 
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
   
   
/s/ Kin Wai Cheung
 
Kin Wai Cheung
 
Chief Financial Officer
 
 
__________________
 
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.