**SECURITIES
AND EXCHANGE COMMISSION**


WASHINGTON,
D.C. 20549





**FORM
10-QSB**





(Mark
One)





**QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE**


**ACT
OF 1934**





x For the quarterly period ended March 31, 2005 or





**TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE**


**ACT
OF 1934**





For the
transition period from _______________ to ____________________





*Commission
File Number: 000-21247*





**REII
INCORPORATED**


(Exact
Name of Registrant as Specified in Its Charter)




Delaware
    
    13-2622429(State
      or Other Jurisdiction
    
    (IRS
      Employerof
      Incorporation or Organization)
    
    Identification
      No.)


Rua
Cotoxo 611-cj63 Sao Paulo-SP- Brazil- 05021-000


(Address
of Principal Executive Offices)





972
544 816 339


(Registrant's
Telephone Number)





Former
Address: 1051 Fifth Avenue North, Naples, Florida 34102-5818


(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 as required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. YES x NO o





As of May
13, 2005, there were 4,655,312 shares of the registrant's common stock
outstanding.











**PART
I.**  **FINANCIAL
INFORMATION**





**ITEM
1.**  **FINANCIAL
STATEMENTS**




Consolidated
      Balance Sheets at March 31, 2005 (Unaudited) and December 31, 2004
    1Consolidated
      Statements of Operations for the Three Months
    2Ended
      March 31, 2005 and 2004 (Unaudited)Consolidated
      Statements of Cash Flows for the Three Months
    3Ended
      March 31, 2005 and 2004 (Unaudited)Notes
      to Consolidated Financial Statements
    4




**REII
      INCORPORATED AND SUBSIDIARY****(A
      DELAWARE CORPORATION)****Sao
      Paulo, Brazil****CONSOLIDATED
      BALANCE SHEETS********(U.S.
      Dollars)****(Unaudited)****March
      31,**
    
    December
      31,**2005**
    
    2004**ASSETS**Cash
      and Cash Equivalents
    
    **$**
    **332,315**
    
    $
    375,967Other
      Current Assets
    
    
    **11,012**
    
    
    10,362**Total
      Assets**
    
    **$**
    **343,327**
    
    $
    386,329**LIABILITIES
      AND STOCKHOLDERS' EQUITY****Liabilities**Accounts
      Payable and Accrued Expenses
    
    **$**
    **755**
    
    $
    11,814**Total
      Liabilities**
    
    
    **755**
    
    
    11,814**Stockholders'
      Equity**Common
      Stock: $.001 Par;
      20,000,000 Shares Authorized;4,655,310
      Shares Issued and Outstanding
    
    
    **4,655**
    
    
    4,655Additional
      Paid-In Capital
    
    
    **336,381**
    
    
    336,381Retained
      Earnings
    
    
    **1,536**
    
    
    33,479**Total
      Stockholders' Equity**
    
    
    **342,572**
    
    
    374,515**Total
      Liabilities and Stockholders' Equity**
    
    **$**
    **343,327**
    
    $
    386,329




The
accompanying notes are an integral part of these financial
statements.





1







**REII
      INCORPORATED AND SUBSIDIARY****(A
      DELAWARE CORPORATION)****Sao
      Paulo, Brazil****CONSOLIDATED
      STATEMENTS OF OPERATIONS (UNAUDITED)****(U.S.
      Dollars)**Three
      Months Ended March 31,
    
    **2005**
    
    2004**Revenues**Rental
      Income
    
    **$**
    **—**
    
    $
    20,750**Total
      Revenues**
    
    
    **—**
    
    
    20,750**Expenses****Direct
      Expenses**Depreciation
    
    
    **—**
    
    
    6,111Interest
    
    
    **—**
    
    
    3,088Real
      Estate Taxes and Insurance
    
    
    **—**
    
    
    9,113Repairs
      and Maintenance
    
    
    **—**
    
    
    8,989Other
      Direct Expenses
    
    
    **—**
    
    
    1,200**Total
      Direct Expenses**
    
    
    **—**
    
    
    28,501**General
      and Administrative Expenses**
    
    
    **25,943**
    
    
    11,179**Management
      Services Expenses**
    
    
    **6,000**
    
    
    —**Bad
      Debt Expense**
    
    
    **—**
    
    
    2,899**Total
      Expenses**
    
    
    **31,943**
    
    
    42,579**Loss
      Before Other Income**
    
    
    **(31,943**
    **)**
    
    (21,829
    )**Other
      Income**Interest
      and Other Income
    
    
    **—**
    
    
    18Gain
      on Sale of Revenue Producing Assets
    
    
    **—**
    
    
    43,138**Income
      (Loss) Before Provision for Taxes**
    
    
    **(31,943**
    **)**
    
    21,327Provision
      for Taxes
    
    
    **—**
    
    
    830**Net
      Income (Loss) for the Period**
    
    **$**
    **(31,943**
    **)**
    $
    20,497**Weighted
      Average Number of Common Shares****Outstanding
      - Basic and Diluted**
    
    
    **4,655,310**
    
    
    4,655,310**Net
      Income (Loss) Per Common Share - Basic and
Diluted**
    
    **$**
    **(0.01**
    **)**
    $
    0.00





The
accompanying notes are an integral part of these financial
statements.




2




**REII
      INCORPORATED AND SUBSIDIARY****(A
      DELAWARE CORPORATION)****Sao
      Paulo, Brazil****CONSOLIDATED
      STATEMENTS OF CASH FLOWS (UNAUDITED)****(U.S.
      Dollars)**Three
      Months Ended March 31,
    
    **2005**
    
    2004**Cash
      Flows from Operating Activities****Net
      Income (Loss) for the Period**
    
    **$**
    **(31,943**
    **)**
    $
    20,497**Adjustments
      to Reconcile Net Income (Loss) for the Period****to
      Net Cash Flows from Operating Activities:**Bad
      Debt Expense
    
    
    **—**
    
    
    2,899Depreciation
    
    
    **—**
    
    
    6,318Gain
      on Sale of Revenue Producing Assets
    
    
    **—**
    
    
    (43,138
    )**Changes
      in Assets and Liabilities:**Other
      Current Assets
    
    
    **(650**
    **)**
    
    (2,859
    )Accounts
      Payable and Accrued Expenses
    
    
    **(11,059**
    **)**
    
    (3,787
    )**Net
      Cash Flows from Operating Activities**
    
    
    **(43,652**
    **)**
    
    (20,070
    )**Cash
      Flows from Investing Activities**Improvements
      to Revenue Producing Properties
    
    
    **—**
    
    
    (473
    )Proceeds
      from Sale of Revenue Producing Assets
    
    
    **—**
    
    
    59,065**Net
      Cash Flows from Investing Activities**
    
    
    **—**
    
    
    58,592**Cash
      Flows from Financing Activities**Repayment
      of Mortgages
    
    
    **—**
    
    
    (1,288
    )Repayment
      of Loan Due to Stockholder
    
    
    **—**
    
    
    (28,066
    )**Net
      Cash Flows from Financing Activities**
    
    
    **—**
    
    
    (29,354
    )**Net
      Change in Cash and Cash Equivalents**
    
    
    **(43,652**
    **)**
    
    9,168Cash
      and Cash Equivalents - Beginning of Period
    
    
    **375,967**
    
    
    81,718**Cash
      and Cash Equivalents - End of Period**
    
    **$**
    **332,315**
    
    $
    90,886**SUPPLEMENTARY
      DISCLOSURES**Interest
      Paid
    
    **$**
    **—**
    
    $
    3,090Income
      Taxes Paid
    
    **$**
    **10,631**
    
    $
    3,653**NON-CASH
      INVESTING AND FINANCING ACTIVITIES****Disposal
      of Revenue Producing Assets:**Net
      Book Value of Disposed Revenue Producing Assets
    
    **$**
    **—**
    
    $
    15,927





The
accompanying notes are an integral part of these financial
statements.






3


****


**REII
INCORPORATED AND SUBSIDIARY**


**(** **A
DELAWARE CORPORATION)**


**Sao
Paulo, Brazil**





**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**








**Note
A -**  **Basis
of Presentation**





The
consolidated financial statements of REII Incorporated and Subsidiary (the
“Company”) included herein have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission
(the “SEC”). Certain information and footnote disclosures normally included in
consolidated financial statements prepared in conjunction with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. These consolidated financial statements should be read
in conjunction with the annual audited financial statements and the notes
thereto included in the Company’s Form 10-KSB Annual Report, and other reports
filed with the SEC.





The
accompanying unaudited interim consolidated financial statements reflect all
adjustments of a normal and recurring nature which are, in the opinion of
management, necessary to present fairly the financial position, results of
operations and cash flows of the Company for the interim periods presented. The
results of operations for these periods are not necessarily comparable to, or
indicative of, results of any other interim period or for the fiscal year as a
whole. Factors that affect the comparability of financial data from year to year
and for comparable interim periods include the acquisition or disposition of
income producing properties and general and administrative costs required to
meet SEC reporting obligations. Certain financial information that is not
required for interim financial reporting purposes has been omitted.





**Reclassifications**


Certain
amounts in the prior year consolidated financial statements have been
reclassified to conform with the current year presentation. The
reclassifications made to the prior year have no impact on the net income
(loss), or overall presentation of the consolidated financial
statements.





**Note
B -**  **Principles
of Consolidation**





The
      consolidated financial statements include the accounts of the Company and
      its wholly owned subsidiary, Ricketts Enterprises International, Inc. All
      significant intercompany balances and transactions have been eliminated in
      consolidation.





**Note
C -**  **Related
Party Transactions**





In
      January 2005, the Board of Directors approved the payment of a monthly
      Management Fee of $2,000 to Una M. Ricketts, President, for services
      rendered.





**Note
D -**  **Subsequent
Events**




**Dividend
Payment**


In April
2005, the Company declared and paid a cash dividend of $0.07 per share of the
issued and outstanding common stock, totaling $325,872.




**Change
in Control**


On April
29, 2005, Una M. Ricketts, President and Director, and Karen Ricketts,
Vice-President and Director, sold all of the respective shares owned and/or
under their control, representing approximately 78% of the issued and
outstanding common stock, to an unrelated third party. Concurrently with the
sale of their shares, both Una M. and Karen Ricketts resigned from their
respective offices of the Company, with Daniel Ollech being appointed President
and Director to replace Una M. Ricketts. This sale of shares resulted in a
change of control of the Company.




4





**ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS**





**OVERVIEW**





REII
Incorporated and Subsidiary ("REII") was in the business of residential rental
real estate in the state of Florida. REII sold its remaining revenue producing
assets in October 2004.





**FINANCIAL
CONDITION AND LIQUIDITY**





REII's
source of working capital was from rental operating activities. REII has not
borrowed any moneys from financial institutions for working capital needs.





Net cash
flows used in operating activities for the three month periods ended March 31,
2005 and 2004 was $43,652 and $20,070, respectively. The difference is primarily
due to the decrease in rental income due to the sale of the remaining revenue
producing assets in October 2004 and continuing obligations for general and
administrative expenses.





**MARKET
RISK AND CONTINGENT LIABILITIES**





The
nature and amount of REII's debt may vary as a result of future business
requirements, market conditions and other factors. At March 31, 2005, REII had
no outstanding long-term debt.





Management
of REII believes that there are no commitments, uncertainties, or contingent
liabilities that will have a materially adverse effect on the consolidated
financial position or operations of REII and is of the opinion that inflation
has not and will not have a material effect on operations.





**CAPITAL
EXPENDITURES, DISPOSITIONS AND FINANCING REQUIREMENTS**





During
the three months ended March 31, 2005, REII owned no revenue producing
properties and had no expenditures for office equipment.





Net cash
used in financing activities for the three month period ended March 31, 2005 was
$0, since REII had no outstanding financing obligations, and for the three month
period ended March 31, 2004 was $29,354, due to the repayment of mortgages on
revenue producing properties and for payment of the loan due to stockholder. The
cash used to pay the debt was obtained from the proceeds of the sale of revenue
producing assets.





**THREE
MONTHS ENDED MARCH 31, 2005 COMPARED WITH THREE MONTHS ENDED MARCH 31,
2004**





**NET
INCOME (LOSS)**





REII
reported a net loss of $31,943 for the three months ended March 31, 2005,
compared to net income of $20,497 for the three months ended March 31, 2004. The
net income in 2004 is primarily due to the gain on sale of revenue producing
assets.





**REVENUES**





Total
revenues for the three months ended March 31, 2005 decreased to $0 from $20,750
for the three months ended March 31, 2004. The decrease was due primarily to the
disposal of the remaining revenue producing assets in October 2004.





**DIRECT
EXPENSES**





Direct
expenses for the three months ended March 31, 2005 decreased to $0 from $28,501
for the three months ended March 31, 2004. The decrease was due primarily to the
disposal of the remaining revenue producing assets in October 2004.





5


****


**GENERAL
AND ADMINISTRATIVE EXPENSES**





General
and administrative expenses for the three months ended March 31, 2005 increased
to $25,943 from $11,179 for the three months ended March 31, 2004. The increase
was due primarily to the increase in professional fees to meet SEC reporting
requirements.





**OTHER
INCOME**





Other
income for the three months ended March 31, 2005 decreased to $0 from $43,156
for the three months ended March 31, 2004. Other income in 2004 consisted of
interest income of $18 and gain on sale of revenue producing assets of $43,138.





**INCOME
TAXES**





REII did
not record a provision for income taxes during the three months ended March 31,
2005 since it had $0 revenues.





**SUBSEQUENT
EVENTS**





In April
2005, the Company declared and paid a cash dividend of $0.07 per share to
holders of the issued and outstanding common stock of the Company. The total
dividends paid by the Company equaled $325,872.





On April
29, 2005, Una M. Ricketts, President, Chief Executive Officer and Treasurer of
the Company and Karen Ricketts, Vice-President and Secretary of the Company and
the Company entered into a Stock Purchase Agreement with Livorno Investments
Ltd. , pursuant to which Una M. Ricketts and Karen Ricketts sold an aggregate of
3,609,850 shares of the Company’s common stock to Livorno Investments Ltd.,
representing approximately 77.5% of the total outstanding number of shares of
common stock of the Company.





In
connection with the sale of the Company’s common stock to Livorno Investments
Ltd., both Karen Ricketts and Garfield H. Ricketts, Jr. resigned as members of
the board of directors of the Company and Una M. Ricketts intends on resigning
as a member of the board of directors in the future. In addition, both Una M.
Ricketts and Karen Ricketts resigned as officers of the Company. Subsequent to
the foregoing resignations, Daniel Ollech was appointed as a member of the board
of directors and as the President, Chief Executive Officer, Treasurer and
Secretary of the Company.





**ITEM
3. CONTROLS AND PROCEDURES**





a)  Evaluation
of Disclosure Controls and Procedures. As of March 31, 2005, the Company’s
management carried out an evaluation, under the supervision of the Company’s
Chief Executive Officer and the Chief Financial Officer, of the effectiveness of
the design and operation of the Company’s system of disclosure controls and
procedures pursuant to the Securities and Exchange Act , Rule 13a-15(d) and
15d-15(d) under the Exchange Act.  Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Company’s
disclosure controls and procedures were effective, as of the date of their
evaluation, for the purposes of recording, processing, summarizing and timely
reporting material information required to be disclosed in reports filed by the
Company under the Securities Exchange Act of 1934.





b)  Changes
in internal controls. There were no changes in the Company’s internal controls
over financial reporting, that occurred during the period covered by this report
that have materially affected, or are reasonably likely to materially effect,
the Company’s internal control over financial reporting.





6


****


**PART
11. OTHER INFORMATION**





**ITEM
1 LEGAL PROCEEDINGS** ****





The
Company is not presently a party to any litigation of any kind or nature
whatsoever, nor to the company's best knowledge and belief is any litigation
threatened or contemplated.





**ITEM
2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS** **.**





There has
not been any recent unregistered sale of equity securities by the Company, nor
has there been any material changes of the rights of holders of registered
securities, and working capital restrictions and other limitations on the
payment of dividends.





**ITEM
3** **DEFAULTS
UPON SENIOR SECURITIES** **.**





There
have not been any defaults on any senior Securities.





**ITEM
4** **SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS**





No
matters were submitted to the Security Holders of the Company for a vote during
the three months ended March 31, 2005.





**ITEM
5** **OTHER
INFORMATION**





The
Company has no other information to report.





**ITEM
6** **EXHIBITS
AND REPORTS ON FORM 8-K** ****


Number
    Title31.1
    Certification
      by Daniel Ollech, President, Chief Executive Officer, Chief Financial
      Officer, Treasurer and Secretary, Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
    Certification
      by Daniel Ollech, President, Chief Executive Officer, Chief Financial
      Officer, Treasurer and Secretary, Pursuant to 18 U.S.C. Section 1350, as
      Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002
  7
  SIGNATURES










Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on the 16 th day of
May 2005.




**REII
      INCORPORATED**By:
    /s/Daniel OllechDaniel
      Ollech
      President,
      Chief Executive Officer, Chief
      Financial
      Officer, Treasurer and Secretary




8