Miami, FL -- May 21,2015 -- InvestorsHub NewsWire
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METROSPACES, INC.
FORM 10-Q
(Quarterly Report)
Filed 05/20/15 for the Period Ending 03/31/15
Address 888 BRICKELL KEY DR.
UNIT 1102
MIAMI, FL 33131
Telephone 3056000407
CIK 0001488501
Symbol MSPC
SIC Code 6500 - Real estate
Industry Construction Services
Sector Capital Goods
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2015, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 10-Q
--------------------------------
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended March 31, 2015
[ ] 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: 333-186559
METROSPACES, INC.
(Exact name of registrant as specified in its charter)
(305) 600-0407
(Registrant’s telephone number, including area code)
(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 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 (§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 [ X ]
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.
Indicate by check mark whether the issuer is a shell company (as
defined in rule 12b-2 of the Exchange Act) Yes [ ] No [ X ]
Delaware 90-0817201
(State or other jurisdiction of incorporation or
organization) (IRS Employer Identification No.)
888 Brickell Key Dr., Unit 1102,
Miami, FL 33131
(Address of principal executive offices) (zip code)
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [ X ]
(Do not check if a smaller reporting company)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required by Section 12, 13, or 15(d) of the Exchange Act after the
distribution of
securities under a plan confirmed by a court Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer’s classes of common stock, as of the latest practicable
date.
As of May 15, 2015, there were 3,783,677,219 shares of the
Registrant’s Common Stock outstanding.
METROSPACES, INC.
For the Quarterly Period Ended March 31,
2015
TABLE OF CONTENTS
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. SUCH
STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ASSUMPTIONS,
ESTIMATES AND PROJECTIONS ABOUT THE
COMPANY AND ITS INDUSTRY. FORWARD-LOOKING STATEMENTS ARE SUBJECT
TO KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS,
LEVELS OF ACTIVITY, PERFORMANCE,
ACHIEVEMENTS AND PROSPECTS TO BE MATERIALLY DIFFERENT FROM THOSE
EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION
TO UPDATE PUBLICLY ANY
FORWARD-LOOKING STATEMENTS FOR ANY REASON EVEN IF NEW
INFORMATION BECOMES AVAILABLE OR OTHER
EVENTS OCCUR IN THE FUTURE.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 1
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures about Market
Risk 15
Item 4. Controls and Procedures 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 1A. Risk Factors 16
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds. 16
Item 4. (Removed and Reserved). 16
Item 5. Other Information 16
Item 6. Exhibits 16
SIGNATURES 17
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Metrospaces, Inc.
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
2015 2014
ASSETS
Current assets
Cash 8,426 -
Accounts receivable 268,632 -
Prepaid expenses 117,412 39,010
Total current assets 394,470 39,010
Advance payment for real property 369,991 369,991
Investment in non-consolidated subsidiary 150,000 150,000
Property and equipment 2,662,103 -
Goodwill 1,862,048 -
5,044,142 519,991
Total assets 5,438,612 559,001
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
Current liabilities
Bank overdraft payable - 166
Accounts payable 37,139 -
Accrued expenses 283,466 68,750
Accrued interest - related party 58,215 52,013
Sales deposit 34,046 34,046
Long term debt related party - 400,000
Notes payable -related parties 16,990 166,590
Convertible note payable related party, net of discount 36,288
39,472
Note payable 10,000 10,000
Convertible note payable, net of discount 32,088 25,056
Current portion of acquisition note, net of discount 833,962
-
Derivative liability 6,042,426 2,645,300
Total current liabilities 7,384,620 3,441,393
Acquisition note, net of discount 1,231,118 -
STOCKHOLDERS' DEFICIT
Preferred stock, $0.000001 par value,
8,000,000 shares authorized,
no shares issued and outstanding - -
Series B Preferred Stock, $0.000001 par value,
2,000,000 shares authorized, 600,000 shares issued
and outstanding at March 31, 2015 6 -
Common Stock, $0.000001 par value, 5,000,000,000 shares
authorized
1,947,663,945 and 846,555,925 shares issued and outstanding
at March 31, 2015 and December 31, 2014, respectively 1,948
847
Additional paid in capital 2,367,770 1,160,693
Accumulated deficit (5,464,108) (4,043,932)
Accumulated other comprehensive loss (82,742) -
TOTAL STOCKHOLDERS' DEFICIT (3,177,126) (2,882,392)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 5,438,612
559,001
The accompanying notes are an integral part of these financial
statements.
1
Metrospaces, Inc.
Consolidated Statement of Operations
(Unaudited)
The accompanying notes are an integral part of these financial
statements.
2
Three Months ended March 31,
2015 2014
Revenue 245,860 -
Cost of revenue 14,849 -
Gross profit 231,011 -
OPERATING EXPENSES:
General and administrative expenses 37,746 30,572
Total operating expenses 37,746 30,572
Operating income (Loss) 193,265 (30,572)
Other expense (income):
Interest expense 344,977 279,531
Loss on change in fair value of derivative 1,084,217 (9,043)
Loss on extinguishment of debt 184,247 117,509
1,613,441 387,997
NET LOSS (1,420,176) (418,569)
Net loss per common share - basic and diluted (0.00) (0.09)
Weighted average of common shares - basic and diluted
1,143,698,101 4,877,207
Metrospaces, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
The accompanying notes are an integral part of these financial
statements.
3
Three months ended March 31,
2015 2014
Cash flows from operating activities
Net loss $ (1,420,176) $ (418,569)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization of imputed interest 7,148
Salary accrued to related party 3,750 3,750
Non-cash interest expense 344,977 272,383
(Gain) loss on change in fair value of derivative 1,084,217
(9,043)
Loss on extinguishment of debt 184,247 117,509
Changes in operating assets and liabilities:
Accounts receivable (226,379)
Prepaid expenses 2,146 (10,000)
Accounts payable (16,716) 4,995
Bank overdraft (166) -
Accrued expenses 392 2,000
Net cash used in operating activities (43,708) (29,827)
Cash flows from investing activities
Cash acquired from acquisition 29,415 -
Net cash provided by financing activities 29,415 -
Cash flows from financing activities
Proceeds from issuance of note payable 42,000 40,000
Repayment of acquisition loan (25,000)
Proceeds from stockholder loans 400 -
Net cash provided by financing activities 17,400 40,000
Effect of exchange rate on cash 5,319 -
Increase in cash 8,426 10,173
Cash, beginning of period - 3,179
Cash, end of period $ 8,426 $ 13,352
Supplemental disclosure of cash flow
information
Derivative liability recognized as debt discount $ 2,761,827 $
-
Conversion of convertible debt into common stock $ 30,605 $
-
Common Stock issued from conversion of convertible debt $
658,184 $ -
Preferred stock issued from conversion of debt $ 550,000 $ -
Metrospaces, Inc.
Notes to Consolidated Financial Statements
March 31, 2015
(Unaudited)
Note 1 –Basis of Presentation and Business
The accompanying unaudited consolidated financial statements
have been prepared in accordance with accounting principles
generally
accepted in the United States of America for interim financial
statements and with the instructions to Form 10-Q and Article 10 of
Regulation
S-X of the United States Securities and Exchange Commission
(“SEC”). Accordingly, they do not contain all information and
footnotes
required by accounting principles generally accepted in the
United States of America for annual financial statements. In the
opinion of the
Company’s management, the accompanying unaudited financial
statements contain all the adjustments necessary (consisting only
of normal
recurring accruals) to present the financial position of the
Company as of March 31, 2015, and the results of operations and
cash flows for the
periods presented. The results of operations for the three
months ended March 31, 2015, are not necessarily indicative of the
operating results
for the full fiscal year or any future period. These unaudited
financial statements should be read in conjunction with the
financial statements
and related notes thereto included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2014, filed
with the SEC
on April 15, 2015.
Metrospaces, Inc. (the "Company") was incorporated as “Strata
Capital Corporation” on December 10, 2007, under the laws of the
State of
Delaware. Urban Spaces, Inc. (“Urban Spaces”) was incorporated
on April 3, 2012, under the laws of the State of Nevada and
thereafter
formed Urban Properties LLC, a Delaware limited liability
company and its 99.9% owned subsidiary (“UPLLC”). Through Urban
Spaces and
its subsidiaries, the Company builds, sells and manages
condominium properties located in Argentina and Venezuela. On
January 13, 2015, the
Company acquired all of the outstanding shares of stock of
Bodega IKAL, S.A., an Argentine corporation, and Bodega Silva
Valent S.A., an
Argentine corporation, which collectively own 75 hectares of
vineyards, from which they currently sell grapes to local
wineries.
Note 2 – Significant accounting policies
Use of Estimates
The preparation of the financial statements in conformity with
Generally Accepted Accounting Principles ("GAAP") requires
management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the
dates of the financial statements and the reported amounts of
revenue and expenses during the reporting periods. Actual results
could differ
from those estimates.
Real Property
Real property is stated at cost less accumulated depreciation.
Depreciation is provided for on a straight-line basis over the
useful lives of the
assets. Expenditures for additions and improvements are
capitalized; repairs and maintenance are expensed as incurred.
Investments in non-consolidated subsidiaries
Investments in non-consolidated entities are accounted for using
the equity method or cost basis depending upon the level of
ownership and/or
the Company's ability to exercise significant influence over the
operating and financial policies of the investee. When the equity
method is
used, investments are recorded at original cost and adjusted
periodically to recognize the Company's proportionate share of the
investees' net
income or losses after the date of investment. When net losses
from an investment accounted for under the equity method exceed its
carrying
amount, the investment balance is reduced to zero and additional
losses are not provided for. The Company resumes accounting for
the
investment under the equity method if the entity subsequently
reports net income and the Company's share of that net income
exceeds the share
of net losses not recognized during the period the equity method
was suspended. Investments are written down only when there is
clear
evidence that a decline in value that is other than temporary
has occurred.
Business Combinations
The Company allocates the fair value of purchase consideration
to the tangible assets acquired, liabilities assumed and intangible
assets
acquired based on their estimated fair values. The excess of the
fair value of purchase consideration over the fair values of these
identifiable
assets and liabilities is recorded as goodwill. Such valuations
require management to make significant estimates and assumptions,
especially
with respect to intangible assets. Significant estimates in
valuing certain intangible assets include, but are not limited to,
future expected cash
flows from acquired users, acquired technology, and trade names
from a market participant perspective, useful lives and discount
rates.
Management’s estimates of fair value are based upon assumptions
believed to be reasonable, but which are inherently uncertain
and
unpredictable and, as a result, actual results may differ from
estimates. During the measurement period, which is one year from
the acquisition
date, the Company may record adjustments to the assets acquired
and liabilities assumed, with the corresponding offset to goodwill.
Upon the
conclusion of the measurement period, any subsequent adjustments
are recorded to earnings.
4
Long-Lived Assets, Including Goodwill and Other Acquired
Intangible Assets
The Company evaluates the recoverability of property and
equipment and finite-lived intangible assets for possible
impairment whenever
events or circumstances indicate that the carrying amount of
such assets may not be recoverable. Recoverability of these assets
is measured by
a comparison of the carrying amounts to the future undiscounted
cash flows the assets are expected to generate. If such review
indicates that the
carrying amount of property and equipment and intangible assets
is not recoverable, the carrying amount of such assets is reduced
to fair value.
We have not recorded any significant impairment charge during
the years presented.
The Company reviews goodwill for impairment at least annually or
more frequently if events or changes in circumstances indicate that
the
carrying value of goodwill may not be recoverable. The Company
has elected to first assess the qualitative factors to determine
whether it is
more likely than not that the fair value of our single reporting
unit is less than its carrying amount as a basis for determining
whether it is
necessary to perform the two-step goodwill impairment under
Accounting Standards Update (ASU) No. 2011-08, Goodwill and
Other (Topic
350): Testing Goodwill for Impairment, issued by the
Financial Accounting Standards Board (FASB). If it is determined
that it is more likely
than not that its fair value is less than its carrying amount,
then the two-step goodwill impairment test is performed. The first
step, identifying a
potential impairment, compares the fair value of the reporting
unit with its carrying amount. If the carrying amount exceeds its
fair value, the
second step would need to be performed; otherwise, no further
step is required. The second step, measuring the impairment loss,
compares the
implied fair value of the goodwill with the carrying amount of
the goodwill. Any excess of the goodwill carrying amount over the
applied fair
value is recognized as an impairment loss, and the carrying
value of goodwill is written down to fair value. As of March 31,
2015 , no
impairment of goodwill has been identified.
In addition to the recoverability assessment, the Company
routinely reviews the remaining estimated useful lives of property
and equipment
and finite-lived intangible assets. If we reduce the estimated
useful life assumption for any asset, the remaining unamortized
balance would be
amortized or depreciated over the revised estimated useful
life.
Revenue Recognition
The Company generally recognizes revenue from grape sales upon
delivery to the customer. The Company does not have any allowance
for
returns because grapes are accepted upon delivery.
Income Taxes
The Company use s the asset and liability method of accounting
for income taxes in accordance with ASC Topic 740, "Income Taxes."
Under
this method, income tax expense is recognized for the amount of:
(i) taxes payable or refundable for the current year and (ii)
deferred tax
consequences of temporary differences resulting from matters
that have been recognized in an entity's financial statements or
tax returns.
Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which
those
temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in
tax rates is
recognized in the results of operations in the period that
includes the enactment date. A valuation allowance is provided to
reduce the deferred
tax assets reported if based on the weight of the available
positive and negative evidence, it is more likely than not some
portion or all of the
deferred tax assets will not be realized.
ASC Topic 740.10.30 clarifies the accounting for uncertainty in
income taxes recognized in an enterprise's financial statements and
prescribes a
recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax position
taken or expected to
be taken in a tax return. ASC Topic 740.10.40 provides guidance
on derecognition, classification, interest and penalties,
accounting in interim
periods, disclosure, and transition. We have no material
uncertain tax positions for any of the reporting periods
presented.
Fair Value Measurement
The Company adopted the provisions of ASC Topic 820, “Fair Value
Measurements and Disclosures”, which defines fair value as used
in
numerous accounting pronouncements, establishes a framework for
measuring fair value and expands disclosure of fair value
measurements.
5
The estimated fair value of certain financial instruments,
including cash and cash equivalents, accounts receivable, accounts
payable and
accrued expenses are carried at historical cost basis, which
approximates their fair values because of the short-term nature of
these instruments.
The carrying amounts of our short and long term credit
obligations approximate fair value because the effective yields on
these obligations,
which include contractual interest rates taken together with
other features such as concurrent issuances of warrants and/or
embedded
conversion options, are comparable to rates of returns for
instruments of similar credit risk.
ASC 820 defines fair value as the exchange price that would be
received for an asset or paid to transfer a liability (an exit
price) in the principal
or most advantageous market for the asset or liability in an
orderly transaction between market participants on the measurement
date. ASC 820
also establishes a fair value hierarchy, which requires an
entity to maximize the use of observable inputs and minimize the
use of unobservable
inputs when measuring fair value. ASC 820 describes three levels
of inputs that may be used to measure fair value:
Level 1 — quoted prices in active markets for identical assets
or liabilities
Level 2 — quoted prices for similar assets and liabilities in
active markets or inputs that are observable
Level 3 — inputs that are unobservable (for example cash flow
modeling inputs based on assumptions)
The derivative liability in connection with the conversion
feature of the convertible debt, classified as a level 3 liability,
is the only financial
liability measured at fair value on a recurring basis.
The change in the level 3 financial instrument is as
follows:
The estimated fair value of the derivative instruments were
valued using the Black-Scholes option pricing model, using the
following
assumptions at December 31, 2014:
Convertible Instruments
The Company evaluates and account for conversion options
embedded in convertible instruments in accordance with ASC 815
“Derivatives
and Hedging Activities.”
Applicable GAAP requires companies to bifurcate conversion
options from their host instruments and account for them as free
standing
derivative financial instruments according to certain criteria.
The criteria include circumstances in which (a) the economic
characteristics and
risks of the embedded derivative instrument are not clearly and
closely related to the economic characteristics and risks of the
host contract, (b)
the hybrid instrument that embodies both the embedded derivative
instrument and the host contract is not re-measured at fair value
under other
GAAP with changes in fair value reported in earnings as they
occur and (c) a separate instrument with the same terms as the
embedded
derivative instrument would be considered a derivative
instrument.
6
Balance January 1, 2014 $ 2,645,300
Issued during the year ended 2,761,827
Converted during the year (448,917)
Change in fair value recognized in operations 1,084,217
Balance December 31, 2014 $ 6,042,427
Estimated Dividends None
Expected Volatility 493%
Risk free interest rate .50%
Expected term
.10 to 1.54
years
The Company accounts for convertible instruments (when we have
determined that the embedded conversion options should not be
bifurcated
from their host instruments) as follows: We record when
necessary, discounts to convertible notes for the intrinsic value
of conversion options
embedded in debt instruments based upon the differences between
the fair value of the underlying common stock at the commitment
date of the
note transaction and the effective conversion price embedded in
the note. Debt discounts under these arrangements are amortized
over the term
of the related debt to their stated date of redemption.
The Company accounts for the conversion of convertible debt when
a conversion option has been bifurcated using the general
extinguishment
standards. The debt and equity linked derivatives are removed at
their carrying amounts and the shares issued are measured at their
then-current
fair value, with any difference recorded as a gain or loss on
extinguishment of the two separate accounting liabilities.
Note 3 – Going Concern
The accompanying consolidated financial statements have been
prepared on a going concern basis, which contemplates the Company
will
continue to realize its assets and discharge its liabilities in
the normal cours e of business. The Company has t generated minimal
revenues , has
a stockholders' deficit of $ 3,177,126, and a working capital
deficit of $6,990,150 as of March 31, 201 5 . The continuation of
the Company as
a going concern is dependent upon, among other things, the
continued financial support from its shareholders and the
attainment of profitable
operations. These factors, among others, raise substantial doubt
regarding the Company's ability to continue as a going concern.
There is no
assurance that the Company will be able to generate revenues in
the future. These financial statements do not give any effect to
any adjustments
that would be necessary should the Company be unable to continue
as a going concern.
Note 4 – Acquisition
On January 13, 2015, the Company acquired all of the outstanding
shares of common stock of Bodega IKAL, S.A. and all of the
outstanding
shares of common stock of Bodega Silva Valent S.A., both of
which are Argentine corporations which collectively own 75 hectares
of
vineyards that produce grapes that they sell to local wineries.
The consideration for these shares was a convertible promissory
note in the
principal amount of $4,500,000. The acquisitions have been
recorded in accordance with the acquisition method of accounting
and have
included the financial results of the acquired companies from
the date of acquisition. Pro forma historical results of operations
have not been
presented because they are not material to the consolidated
statement of operations.
The Company has estimated the fair value assets acquired and
liabilities assumed as part of the acquisition and is currently
undergoing a formal
valuation and will adjust these estimates accordingly within the
one year measurement period.
The following table summarizes the estimated fair values
assigned to the assets acquired and liabilities assumed:
Note 5 – Advance payment for Real Property
The Company purchased from GBS Capital Partners, Inc. ("GBS"), a
related party, the right to receive 9 loft-type condominium units
from
their builder upon the completion of these units (see note 9).
As consideration for this purchase, the Company agreed to pay
$750,000 to GBS,
without interest (See note 6). The Company has imputed interest
on this obligation at the rate of 8% per annum and has recorded the
advance
payment net of such imputed interest at a cost of $665,984.
On December 5, 2014, the Company entered into an agreement with
GBS to return 4 of the 9 loft-type condominium units in exchange
for
$350,000 of the debt. The Value assigned to the units returned
was $295,993, which after the exchange of the debt, resulted in a
gain of
$54,007, which has been recorded as an equity transaction with
related parties. The remaining 5 units will be offered for sale
upon their
acquisition.
7
Current assets $ 152,215
Current liabilities (264,264)
Land 2,250,000
Equipment 500,000
Net Assets Acquired 2,637,951
Goodwill 1,862,049
Consideration 4,500,000
Note 6 – Investment in non-consolidated
subsidiary
On December 3, 2012, UPLLC assigned to GBS Fund I, LLC, a
Florida limited liability company (the “Fund”), UPLLC’s rights to
acquire all
of the outstanding shares of Promotora Alon-Bell, C.A., a
Venezuelan corporation which owns vacant land located in Venezuela
upon which a
condominium project is to be constructed. UPLLC had acquired
such rights from a stockholder of the Company in exchange for a
promissory
note in the principal amount of $150,000. (See note 7.) This
stockholder had acquired his rights to acquire these shares under
an agreement
with their holders, pursuant to which he paid them $150,000 in
cash. This investment, which represents an interest of 26.32% in
the Fund, is
being accounted for under the equity method of accounting. The
Fund acquired the shares in Promotora Alon-Bell, C.A. on December
16,
2012. The Company has not recognized any gain or loss from its
investment since the subsidiary has not yet commenced any
operations.
Note 7 – Long Term Debt – Related Party
On April 13, 2012, the Company entered into an agreement to
purchase nine condominium units from GBS Capital Partners (GBS), a
related
party of the Company, in exchange for a two year non-interest
bearing note payable. Interest has been imputed at a rate of 8% per
annum.
The Company has recorded an initial debt discount of $84,016
related to the imputed interest which is being amortized on the
effective interest
rate method over the term of the note, which was fully amortized
as of December 31, 2014.
On December 5, 2014 the Company entered into an agreement with
GBS to return 4 of the 9 loft-type condominium units in exchange
for
$350,000 of the debt leaving a remaining balance of $400,000 on
December 31, 2014, which was past due.
On February 19, 2015 the Company exchanged the remaining
$400,000 of debt to GBS in exchange for 400,000 shares of newly
designated
shares of Series B Preferred Stock.
Note 8 – Notes Payable – Related Parties
Notes Payable – related party
On February 19, 2015 the company exchanged the $150,000 of debt
in exchange for 150,000 shares of newly designated shares of series
B
preferred stock.
Convertible Note Payable – related party
On February 19, 2014, the Company issued a convertible
promissory note in the amount of $260,000 in exchange for a
previously issued note
of $260,000 to the prior president and sole director of the
Company. The new note bears interest at a rat e of 0.30% per annum
and matured
February 19, 2015. The note was further amended on July 11, 2014
to change the conversion feature and is now convertible into shares
of the
Company’s common stock at a price per share of 2.5% of the
current market price of the Company’s common stock, as defined in
the
agreement. Since the issuance of the note, the holder has
converted $223,712 of principal into shares of common stock . The
remaining
principal balance of the note at March 31, 201 5, was $ 36,288.
The Company has determined that the conversion feature embedded in
the
notes constitutes a derivative and has been bifurcated from the
note and recorded as a derivative liability, with a corresponding
discount
recorded to the associated debt, on the accompanying balance
sheet, and revalued to fair market value at each reporting
period.
8
(a) A $150,000 promissory note payable to a shareholder of the
Company incurred for the transfer of an option to purchase the
outstanding shares of Promotora Alon-Bell, C.A. (see Note 4),
which was due April 20, 2014, and bears interest at the rate of
11%
per annum. Interest expense for the year ended December 31,
2014, charged to the statement of operations was $16,500.
Accrued
interest of $45,375 on this note is included in accrued interest
on the accompanying balance sheet. See Note 14.
(b) During the period from the inception of Urban Spaces (April
3, 2012) through December 31, 2014, a stockholder of the
Company
paid operating expenses of the Company in the amount of $16, 9
90. These amounts were recorded as a loan payable, bearing no
interest and due on demand.
Note 9 – Acquisition note payable
In connection with the acquisition referred to in note 3, the
Company issued a convertible promissory note in the principal
amount of
$4,500,000. The note is payable in 10 equal monthly installments
of $450,000 commencing February 13, 2016, and every month
thereafter
until the balance is paid in full on November 13, 2016. The note
bears interest at the rate of 0.41% per annum prior to default.
After an event of
default, as defined in the agreement, the note shall bear
interest at a floating rate of interest which shall be five (5)
percentage points over the
rate of interest announced from time to time by Citibank, N.A.
as the rate of interest that it charges to its most creditworthy
commercial
customers. The note is convertible at, at any time at the option
of the holder, into shares of the Company at a conversion rate
equal to the
average of the daily closing price of the Company’s common stock
for the five consecutive trading days immediately prior to
conversion. The
note is subject to customary anti-dilution protection in the
case of stock dividends, stock splits, reverse splits,
reorganizations and
recapitalizations and subject to full ratchet protection in the
case of any issuance of rights, warrants, or options at a price
less than the then
effective conversion price of the note. The Company has
determined that the conversion feature embedded in the note
constitute a derivative
and have been bifurcated from the note and recorded as a
derivative liability, with a corresponding discount recorded to the
associated debt or a
charge to interest expense where the derivative exceeds the
carrying value of the note, on the accompany balance sheet, and
revalued to fair
market value at each reporting period. The note is presented net
of a discount of $2,409,920 on the accompanying balance sheet.
During the
three months ended March 31, 2015, the Company made principal
payments aggregating $25,000.
Note 10 – Notes Payable
On August 28, 2013, the Company received a $10,000 bridge loan
from a non related party. The loan bears interest at 15% per annum
and
matured on February 14, 2014. The loan remains past due and the
Company has continued to accrue interest on the note until an
agreement
with the lender for repayment has been reached.
Note 11 – Convertible Note Payable
On February 25, 2014, the Company entered into a convertible
note agreement in the principal amount of $40,000 with an unrelated
third
party , and an additional $42,000 on February 10, 2015. The se
note s bear interest at 8% per annum and are convertible into
shares of the
Company’s common stock at the option of the holder at a purchase
price equal to 58% of the lowest closing bid price of the
Company’s
common stock for fifteen prior trading days upon which a notice
of conversion is received by the Company. The note matures on
February 10 ,
201 6 , but may be redeemed by the Company for a) an amount
equal to 125% of the unpaid principal if redeemed within the first
90 days of
the note, b) an amount equal to 140% of the unpaid principal if
redeemed after the 91 st day but before the 151 st day of the note,
or c) an
amount equal to 150% of the unpaid principal if redeemed after
the 151 st day but before the 180th day of the note. The note may
not be
redeemed by the Company after 180 days. Since the inception of
the note $ 30 , 0 00 of principal of the note was converted into
shares of
common stock according to the terms of the convertible
instrument. The remaining principal balance of the note at December
31, 2014, was $
52,000 . The Company has determined that the conversion feature
embedded in the notes constitutes a derivative and has been
bifurcated from
the note and recorded as a derivative liability, with a
corresponding discount recorded to the associated debt, on the
accompany balance sheet,
and revalued to fair market value at each reporting period. The
note is presented net of a discount of $ 19,912 on the accompanying
balance
sheet.
Note 1 2 – Related Party Transactions
A stockholder is a 33% partner in GBS Capital Partners (see Note
4), the entity from which the Company acquired the deposit of
nine
condominium units.
The stockholder referred to above is entitled to receive a
monthly salary of $1,250. The salary has not been paid and the
Company has accrued
an amount of $ 3,750 for the three months ended March 31, 2015
and 2014. The Company has accrued an aggregate amount of $45,000
since
inception which is reflected in accrued expenses in t he
accompanying balance sheet at March 31, 2015.
See notes 4 and 6 regarding the assignment of the right to
acquire 9 condominium units from an entity in which this
stockholder of the
Company has an interest.
Note 1 3 – Income Taxes
As of March 31, 2015, the Company had approximately $ 6 30,000
of federal and state net operating loss carryovers ("NOLs") which
begin to
expire in 2032. Utilization of the NOLs may be subject to
limitation under the Internal Revenue Code Section 382 should there
be a greater
than 50% ownership change as determined under regulations.
In assessing the realization of deferred tax assets, management
considers whether it is more likely than not that some portion or
all of the
deferred tax assets will be realized. The ultimate realization
of deferred tax assets is dependent upon the generation of future
taxable income
during the periods in which those temporary differences become
deductible. Management considers the scheduled reversal of deferred
tax
liabilities, projected future taxable income and tax planning
strategies in making this assessment. Based on the assessment,
management has
established a full valuation allowance against all of the
deferred tax asset relating to NOLs for every period because it is
more likely than not
that all of the deferred tax asset will not be realized.
9
Note 1 4 – Stockholders Equity
On October 31, 2014, the board of directors approved an
amendment to the Company’s Certificate of Incorporation, as
amended, to effect a 1-
for-500 reverse stock split of the issued and outstanding common
stock. All relevant information relating to numbers of shares and
per share
information have been retrospectively adjusted to reflect the
reverse stock split for all periods presented.
During the three months ended March 31, 201 5, $ 9,105 of
principal of the convertible note payable to a related party
referred to in note 7 was
converted into 1,076,300 ,000 shares of common stock according
to the terms of the convertible instrument.
During the three months ended March 31, 201 5, $ 21 ,500 of
principal of the convertible note payable referred to in note 9 was
converted into
24,808,020 shares of common stock according to the terms of the
convertible instrument .
On February 19, 2015, the Company exchanged the $400,000 of debt
to GBS referred to in note 9 for 400,000 shares of Series B
Preferred
Stock and the $150,000 of debt to the stockholder referred to in
note 7 for 150,000 shares of such Preferred Stock.
Note 1 5 – Stock-Based Compensation
On November 4, 2014, the Board of Directors adopted the
Metrospaces, Inc. Restricted Stock Plan. The plan is administered
by the board's
compensation committee. Also on November 4, 2014, the
compensation committee granted an award of 800,000,000 shares under
the plan to
Oscar Brito, who was then the Company’s principal executive
officer and a director. The shares awarded shall vest as
follows:
1. After the Corporation publishes its audited annual financial
statement for the year ended December 31, 2019, the Grantee
shall
receive a number of shares (subject to the Base Amount and
Additional Annual Amount), free of all restrictions, equal to the
market
value on the date of such publication, determined on the basis
of the Last Price, of twenty percent (20%) of the sum of the
amounts, if
any, shown as net income on the Corporation’s statement of
operations for the years ended December 31, 2019, 2018, 2017, 2016
and
2015.
2. For each of the years ended December 31, 2020, 2021, 2022,
2023 and 2024, when the Corporation publishes its audited
annual
financial statements with respect to such year, the Grantee
shall receive a number of shares (subject to the Base Amount
and
Additional Annual Amount), free of all restrictions, equal to
the market value on the date of such publication, determined on the
basis
of the Last Price, of twenty percent (20%) of the amount, if
any, shown as net income on the Corporation’s statement of
operations for
such year.
3. Shares of Restricted Stock that have not Vested on the date
of the publication of the Corporation’s audited annual
financial
statements for the year ended December 31, 2024, shall never
Vest and the Grantee shall have no further rights with respect to
them.
As of March 31, 2015, none of the award have vested and no
compensation cost has been recorded in the Company’s financial
statements.
Based on the $.0001 per share closing price of the Company’s
common stock on March 31, 2015, there was approximately $800,000
of
unrecognized compensation cost related to these non-vested
restricted shares outstanding.
Note 1 6 – Subsequent Events
Management has evaluated events occurring after the date of
these financial statements through the date that these financial
statements were
issued.
After March 31, 2015, the Company issued 1,746,013,274 shares of
common stock, of which 150,000,000 shares were issued as
consideration
under service contracts and 1,596,013,274 shares were issued
upon conversion of convertible notes.
10
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY’S FINANCIAL STATEMENTS
AND THE NOTES TO THOSE STATEMENTS AND OTHER FINANCIAL
INFORMATION APPEARING ELSEWHERE IN THIS
REPORT.
General
We acquire land and design, build, develop and resell
condominiums on it, principally in urban areas in Latin America,
alone or together with
investors; we are also acquiring condominiums that are under
construction for resale, but do not intend to conduct business in
this manner after
these condominiums have been sold. We sell condominiums at
different prices, depending principally on their location, size and
level of
options and amenities to customers who are able to make
substantial payments upon signing purchase agreements and at agreed
time as
construction progresses. Our current projects are located in
Buenos Aires, Argentina, and Caracas, Venezuela. One of these
projects is nearing
completion, one is in the construction stage, and one is in the
planning stage. We are considering projects in Peru and Colombia,
but have taken
no measures to implement them. We market directly with our own
sales force by personal contact, through real estate brokers and
agents and
internet websites. We will also manage these condominiums for
customers who wish to lease them on a long- or short-term basis.
The
Company’s operating subsidiary, Urban Spaces, Inc., a Nevada
corporation (“Urban Spaces”), which the Company acquired on August
13,
2012, commenced operations on April 3, 2012. Through two
Argentinian companies collectively called “IKAL,” which we acquired
on January
13, 2015, we operate vineyards and plan to develop a hotel and
time share villas.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2015
AS COMPARED WITH THE THREE MONTHS ENDED MARCH 31, 2014
Revenues
We had revenues of $245,860 for the three months ended March 31,
2015, as compared with no revenues for the three months ended March
31,
2014. Revenues increased in the later period from sales of
grapes from the annual IKAL grape harvest.
General and Administrative Expenses
General and administrative expenses for the three months ended
March 31, 2015, were $37,346, of which $3,750 was for salary and
most of the
remainder for administrative costs, transfer agent fees and
accounting fees. General and administrative expenses for the three
months ended
March 31, 2014, were $30,572, of which $3,750 was for salary and
most of the remainder for administrative costs, transfer agent fees
and
accounting fees. General and administrative expenses increased
for the three months ended March 31, 2015, principally due to
expenses in
connection with the 2015 Ikal grape harvest.
11
Gain/Loss from Operations
We had a gain from operations of $193,265 for the three month
period ended March 31, 2015, as compared with an operating loss of
$30,572
for the three month period ended March 31, 2014. The difference
between these periods was due to the increase in revenues described
above.
Other Expense
Interest
During the three month period ended March 31, 2015, we incurred
interest of $345,153.
Loss on change in fair value of derivative
During the three month period ended March 31, 2015, we incurred
a loss on change in fair value of derivative of $1,084,217,
compared to a gain of $9,043 for the three month period ended
March 31, 2014.
Gain on extinguishment of debt
During the three month period ended March 31, 2015, we incurred
a loss on extinguishment of debt of $184,217, compared to a
gain
of $117,509 for the three month period ended March 31, 2014.
LIQUIDITY AND CAPITAL RESOURCES
Our net loss for the three months ended at March 31, 2015, was
$1,420,176 and our accumulated deficit at that date was $5,464,108.
We had
cash at that date of $8,246 and accounts receivable of $268,632.
We financed our operations during this period through a loan of
$40,000 from
a third party and a shareholder loan of $500. During the
three-month period then ended, Mr. Oscar Brito, our president,
earned $3,750 in salary
from Urban Spaces. We were unable to pay this obligation and it
has been accrued in our financial statements. We will be able to
pay this
obligation only from revenues from our operations and/or
financing. Given our current financial condition and prospects, we
can give no
assurance as to whether or when we will be able to do so.
Net cash used in operating activities for the three months ended
March 31, 2015, was $43,708, resulting principally from a net loss
of
$1,420,176, offset by a $1,084,217 gain on fair value of
derivative, as compared with net cash used in operating activities
$29,827 for the three
months ended March 31, 2014.
Net cash provided by financing activities for the three months
ended March 31, 2015, was $17,400, as compared with $40,000 for the
three
months ended March 31, 2014.
12
Cash Requirements
At March 31, 2015 , we had a stockholders’ deficit of $
3,177,126 . The report of our independent registered public
accounting firm on our
audited financial statements at December 31, 2014 , contains a
paragraph regarding doubt as to our ability to continue as a going
concern. We
do not have sufficient working capital to pay our operating
costs for the next 12 months and we will require additional funds
to pay our legal,
accounting and other fees associated with our company and its
filing obligations under federal securities laws, as well as to pay
our other
accounts payable generated in the ordinary course of our
business.
The Company believes that it will require approximately
$2,000,000 million to fund its operations for the next 12 months.
The Company plans
to fund its activities, including those of Urban Spaces, during
the balance of 2015 and beyond through the sale of debt or equity
securities,
preconstruction sales of condominiums and/or deposits on
condominium units sold after construction of a project commences
but before these
units are delivered. The ability of the Company to obtain
funding from pension funds in Argentina has been restricted by the
recent
nationalization of the largest Argentine pension funds. The
Company believes that it will be able to obtain funding for its
projects from other
private lenders, but can give no assurance that it will be
successful in so doing or that such financing, if available, will
be on acceptable terms.
In Latin American countries, the proceeds of these
preconstruction sales and deposits are not held in escrow pending
closing, but may be used
freely. Most commonly, the Company will make a preconstruction
sale of one or a few penthouse or luxury condominiums in a project
at a
discount of 15%-25% from their list price. This discount
approximates the rate of interest that the Company would pay for
borrowed money in
these countries. Such preconstruction sales and deposits are
respectively expected to provide approximately 10% to 25% of a
project’s costs.
We believe that we will receive approximately $650,000 from
preconstruction sales and deposits from the Las Naranjas 320
Project and the Las
Naranjas 450 Project over the next 12 months. We expect the
balance of this project to be financed through a bank loan.
We believe that we will receive approximately $455,000 from the
sale of the 5 condominium units which we are acquiring in the
Chacabuco
Project, which is $50,000 more than the $415,000 that we have
invested. However, until these units are sold, no assurance can be
given as to
what amount we will receive from such sale and accordingly, the
profit or loss that will result from such sale.
On August 13, 2012, the Company issued a promissory note payable
to Richard S. Astrom in the principal amount of $260,000. This
promissory note was due on August 13, 2013, bore interest at the
rate of 0.24% per annum and was secured by a Pledge Agreement,
dated as of
August 13, 2012, between the Company and Mr. Astrom, under which
the Company pledged the shares of Urban Spaces to Mr. Astrom.
The
maturity of the promissory note was extended to April 14, 2014.
Through a series of exchanges and after several conversions, that
note was
replaced by a convertible promissory note dated May 1, 2014, and
amended on July 11, 2014 in the original principal amount of
$66,944.04.
The principal and interest of this note are convertible at 2.5%
of Current Market Value, as that term is defined therein. Because
of conversions,
the principal amount is now $28,273. The Pledge Agreement has
been terminated.
13
While the Company is not in default under the above mentioned
convertible promissory note, it does not presently have funds
available to pay
it. The amount of the funds required for the Company to pay the
promissory note to Mr. Astrom is included in the $2,000,000 that
the
Company will require to fund its operations for the next 12
months. The Company plans to obtain such funds through the sale of
debt or equity
securities and from any profits that it receives from the
Chacabuco project, rather than from preconstruction sales of
condominiums and/or
deposits on condominium units sold after construction of its
other projects commence but before these units are delivered. In
the event that we
are unable to pay Mr. Astrom when required to do so, we intend
to ask for further extensions of the due date, but Mr. Astrom is
not obligated to
do so. Further, the Company has no information as to whether or
on what terms any such extension would be granted.
On April 13, 2012, UPLLC entered into an agreement with GBS
under which GBS assigned to UPLLC the right to receive 9
condominium
units being constructed in Buenos Aires and UPLLC agreed to pay
$750,000 to GBS for these units. The obligation of UPLLC to pay GBS
was
secured by a Pledge Agreement, dated April 13, 2012, between
Urban Spaces and GBS, under which Urban Spaces pledged its
membership
interests in UPLLC to GBS. Installments of $350,000 and $400,000
were due under this agreement on April 15, 2013, and April 15,
2014,
respectively. Because the units were not timely delivered, the
parties agreed that these dates would be extended to October 15,
2013, and 2014,
respectively and that the new dates would be further extended by
the number of days after May 30, 2013, that elapse until delivery.
As of the
date of this report, the units have not been delivered and the
date on which these payments will be due is not ascertainable; if
the units were
delivered on May 30, 2014, for example, these payments would be
due on October 15, 2014, and 2015, respectively. As indicated
above,
during 2014, the amount of this obligation was reduced to
$400,000 and on February 19, 2015, this indebtedness was exchanged
for 400,000
shares of our Series B Convertible PIK Preferred Stock. As a
result, of the exchange, we no longer are indebted to GBS and the
pledge of units
in UPLLC is no longer effective.
We can give no assurance that any of the funding described above
will be available on acceptable terms, or available at all. If we
are unable to
raise funds in sufficient amount, when required or on acceptable
terms, we may have to significantly reduce, or discontinue, our
operations. To
the extent that we raise additional funds by issuing equity
securities or securities that are convertible into the Company’s
equity securities, its
stockholders may experience significant dilution.
Off-Balance Sheet Arrangements
None.
Risks and Uncertainties
We operate in an industry that is subject to rapid and sometimes
unpredictable change. Our operations will be subject to significant
risk and
uncertainties, including financial, operational and other risks,
including the risk of business failure. Further, as noted in this
report, in order to
develop its business, the Company will require substantial
capital resources.
We currently do not have any off-balance sheet arrangements.
14
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
We are a smaller reporting company as defined by Rule 12b-2 of
the Securities Exchange Act of 1934 and are not required to
provide
information under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and
Procedures
Our management, with the participation of our Chief Executive
Officer and Chief Financial Officer, has evaluated the
effectiveness of the
design and operation of our disclosure controls and procedures
(as defined in Rule 13a-15(e) under the Exchange Act as of March
31, 2015.
Based on this evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that these disclosure controls and
procedures were
not effective as of such date, at a reasonable level of
assurance, in ensuring that the information required to be
disclosed by our company in the
reports we file or submit under the Exchange Act is: (i)
accumulated and communicated to our management (including the Chief
Executive
Officer and Chief Financial Officer) in a timely manner, and
(ii) recorded, processed, summarized and reported within the time
periods
specified in the SEC’s rules and forms.
Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is
defined in
Exchange Act Rules 13a-15(f) and 15d-15(f) of the Exchange Act.
Internal control over financial reporting is a process designed to
provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance
with U.S.
Generally Accepted Accounting Principles (“GAAP”).
Under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief
Financial Officer, we
conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the criteria in Internal
Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission. Based on our evaluation, management
has
concluded that our internal control over financial reporting was
not effective as of March 31, 2015. Because of its inherent
limitations, internal
control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness
to future periods
are subject to the risks that controls may become inadequate
because of changes in conditions, or that the degree of compliance
with the
policies or procedures may deteriorate. This report does not
include an attestation report of our registered public accounting
firm regarding
internal control over financial reporting pursuant to temporary
rules of the Commission.
A material weakness is a deficiency, or a combination of
deficiencies, in internal control over financial reporting, such
that there is a reasonable
possibility that a material misstatement of our annual or
interim financial statements will not be prevented or detected on a
timely basis. In
connection with our assessment of our internal control over
financial reporting as required under Section 404 of the
Sarbanes-Oxley Act of
2002, we identified the following material weaknesses in our
internal control over financial reporting as of March 31, 2015:
We have difficulty in accounting for complex accounting
transactions particularly in relation to complex equity
transactions.
Documented processes do not exist for several key processes.
Because of the material weaknesses noted above, we have
concluded that we did not maintain effective internal control over
financial reporting
as of March 31, 2015, based on Internal Control over
Financial Reporting – Guidance for Smaller Public Companies issued
by COSO .
15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any pending legal proceedings nor is any
of our property the subject of any pending legal proceedings.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of
the Securities Exchange Act of 1934 and are not required to
provide
information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. (REMOVED AND RESERVED).
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
16
EXHIBIT
NUMBER DESCRIPTION
31.1 Certification of Principal Executive Officer pursuant to
Sarbanes-Oxley Section 302
32.1 Certification of Chief Executive Officer pursuant to
Sarbanes-Oxley Section 906
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.
By: /s/ Carlos Daniel Silva
Carlos Daniel Silva
Principal executive officer; Director;
Acting principal accounting officer;
Acting principal financial officer
17
METROSPACES, INC. May 20, 2015
Exhibit 31.1 Certification of the Chief Executive
Officer of Metrospaces, Inc. pursuant to Section 302 of the
Sarbanes-Oxley Act of
2002
I, Carlos Daniel Silva, certify that:
1. I have reviewed this Form 10-Q of Metrospaces, Inc. for the
quarter ended March 31, 2015;
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 small business issuer as of, and for, the periods
presented in this
report;
4. The Registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-
15(f) and 15d-15(f)) 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 report is being prepared;
(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed
under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial
statements for external purposes in accordance with generally
accepted accounting principles;
(c) 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
(d) 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; and
5. The small business issuer's other certifying officer(s) and I
have disclosed, based on our most recent evaluation of internal
control over
financial reporting, to the small business issuer's auditors and
the audit committee of the small business issuer'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 small business
issuer'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 small
business issuer's internal control over financial reporting.
Date: May 20, 2015
/s/ Carlos Daniel Silva
Carlos Daniel Silva
Principal executive officer; Director;
Acting principal accounting officer;
Acting principal financial officer
Exhibit 32.1 Certification of the Principal Executive
Officer of Metrospaces, Inc. pursuant to Section 906 of the
Sarbanes Oxley Act
of 2002
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 Quarterly Report on Form 10-Q of
Metrospaces, Inc. (the "Company") for the fiscal quarter ended
March 31, 2015, as
filed with the Securities and Exchange Commission on the date
hereof (the "Report"), the undersigned Carlos Daniel Silva,
Principal Executive
Officer of Metrospaces, Inc., 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.
Date: May 20, 2015
/s/ Carlos Daniel Silva
Carlos Daniel Silva
Principal executive officer; Director;
Acting principal accounting officer;
Acting principal financial officer