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  **UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
  **FORM
        10-KSB/A**
 **(Amendment
        No. 2)**
 (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, 2004**
 
  o
                  TRANSITION
                      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                      ACT
 For
                      the transition period from
                  
                  toCommission
                      file number
                  **000-49770**
 **SUPREME
          REALTY INVESTMENTS, INC.**
 (Exact
          name of small business issuer as specified in its charter)
  **Nevada**
                  **43-1954776**(State
                      or other jurisdiction of incorporation or organization)
                  (IRS
                      Employer Identification No.)
 
 **P.O.
          Box 690578, Orlando, FL 32869**
 (Address
          of principal executive offices)
  **(407)
          583-4603**
 (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:NoneTitle
                      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  x **** No 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
 
 Issuer’s
        revenues for the fiscal year ended December 31, 2004, were $63,405.
 
 The
        aggregate market value of the voting and non-voting common equity held by
        non-affiliates of the Issuer as of April 8, 2005, based upon the last reported
        sales price on the OTCBB was $412,433.
 
 **(APPLICABLE
        ONLY TO CORPORATE ISSUERS)**
 
 The
        Registrant’s common stock outstanding as of April 8, 2005, was 30,000,000
        shares.
 
 **DOCUMENTS
        INCORPORATED BY REFERENCE:**
 
 Form
        10-KSB, Filed April 15, 2005 and amended September 20, 2005
 
 Transitional
        Small Business Disclosure Format (Check One): Yes o No x
   **Explanatory
        Note**
  This
        Amendment No. 2 to the Annual Report on Form 10-KSB of Supreme Realty
        Investments, Inc. for the fiscal year ended December 31, 2004 is being filed
        solely for the purpose of revising and amending our audited financial statements
        and related notes to correct accounting errors.
  
 2
  SUPREME
        REALTYINVESTMENTS,
        INC.
  **10-KSB**
  **FOR
        THE YEAR ENDED DECEMBER 31, 2004**
  **INDEX**
  PagePart
                    I
                Item
                    1
                Description
                    of Business
                4Item
                    2
                Description
                    of Property
                5Item
                    3
                Legal
                    Proceedings
                7Item
                    4
                Submission
                    of Matter to a Vote of Security
                    Holders
                7Part
                    II
                Item
                    5
                Market
                    for Common Equity and Related Stockholder
                    Matters
                7Item
                    6
                Management’s
                    Discussion and Analysis or Plan of
                    Operation
                8Item
                    7
                Financial
                    Statements
                11Item
                    8
                Changes
                    in and Disagreements with Accountants on Accounting
                    and Financial Disclosure
                29Item
                    8A
                Controls
                    and Procedures
                29Item
                    8B
                Other
                    Information
                29Part
                    III
                Item
                    9
                Directors,
                    Executive Officers, Promoters and Control
                    Persons: Compliance with Section 16(a) of the Exchange
                    Act
                29Item10
                Executive
                    Compensation
                32Item
                    11
                Security
                    Ownership of Certain Beneficial Owners and
                    Management and Related Stockholder Matters
                32Item
                    12
                Certain
                    Relationships and Related
                    Transactions
                32Item
                    13
                Exhibits
                32Item
                    14
                Principal
                    Accountant Fees and Services
                32Signatures
                32
  3
 *Index*
 **PART
          I**
 **Item
          1. Description of Business**
 
 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. Through its and its wholly-owned subsidiary, Supreme
          Capital
          Funding, Inc., it also engages in mortgage banking activities such as loan
          origination, servicing, and brokering real estate loans to and from lending
          institutions and institutional investors.
 
 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.
 
 *Mortgage
          Banking Operations.* The
          Company, through its subsidiary Supreme Capital Funding, Inc., acquires
          1st or
          2nd mortgages, on single-family dwellings and apartment buildings. Not
          more than
          20% of our total assets may be invested in any type of mortgage and not
          more
          than 1% of our total assets may be invested in any one mortgage.
 
 The
          Company will acquire these mortgages and package them for resale. The Company
          applies the same rigorous underwriting analysis to the acquisition of these
          loans that it does to the direct acquisition of property. The Company looks
          to
          enhance its total returns through increased yields or, upon sale, the
          realization of some or the entire discount at which they were
          acquired.
 
 *Direct
          Lending and Joint Participation.* In
          some
          cases, particularly land development (or redevelopment), the Company's
          Acquisition Committee will apply the same underwriting criteria as applied
          in
          its direct investments to make direct loans to developers for the construction
          and sale of multi-family housing or commercial properties.
 
 *Loan
          Origination and Brokerage.* To
          generate fees associated with the origination of mortgage loans, the Company
          relies on the relationships of the senior management of Supreme Capital
          Funding,
          Inc. with lenders and institutional investors. They have extensive experience
          in
          the mortgage lending and real estate finance industries and have cultivated
          extensive contacts with banks, wholesale lenders, other mortgage brokers,
          and
          direct borrowers. The Company uses a variety of web-based lead generation
          tools
          along with direct marketing and solicitation of loan business from homebuyers
          and real estate brokers.
  4
 *Index*
  Since
          the
          Company's focus will be on residential borrowers with substandard credit,
          banks
          and other institutional lenders make referrals to the Company for loan
          opportunities that they do not wish to underwrite. The Company's management
          has
          formal brokerage agreements with several national mortgage lenders who
          underwrite the loan packages. Origination fees, administration fees, and
          document processing fees are paid to the Company at loan closing, by the
          lender,
          out of the loan proceeds.
 
 **Item
          2.Description of Property**
 
 ***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 t he
          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.
 
 ***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 t h at
          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 following different property types, in rapidly-growing
          suburban areas, near large population centers, in the following economic
          regions
          or "belts":
 
 Currently
          100% of portfolio is held in apartment buildings located in Chicago,
          Illinois.
 
 ·
                12-unit
                    apartment building in Chicago, Illinois, acquired by Installment
                    Agreement
                    for Warranty Deed at a cost of $600,000, which carries a non-recourse
                    mortgage note in the amount of $480,000, which bears interest
                    at a rate of
                    7%, and is due on December 15, 2005. Property is currently 92%
                    occupied
                    and stable. The company leases the residential apartments pursuant
                    to a
                    Section 8-Housing Assistance Payments contract with the U.S.
                    Dept. of
                    Housing and Urban Development(HUD).
  5
 *Index*
  ·
                4-unit
                    apartment building in Chicago, Illinois acquired by Installment
                    Agreement
                    for Warranty Deed at a cost of $280,000, which carries a non-recourse
                    mortgage note in the amount of $224,000, which bears interest
                    at a rate of
                    7% and is due on December 15, 2005. Property is currently 100%
                    occupied
                    and stable.
 
 ·
                6-unit
                    apartment building in Chicago, Illinois, acquired by Installment
                    Agreement
                    for Warranty Deed at a cost of $586,000, which carries a non-recourse
                    first mortgage note in the amount of $131,000, which bears interest
                    at a
                    rate of 7% and is due on February 1, 2031. The property is currently
                    unoccupied and scheduled for demolition. The company plans to
                    demolish the
                    building and build townhouses on the 18,750 SF site.
  Description
                
                Encumbrances
                
                Initial
                    Cost
                
                Cost
                    Capitalized
                
                Gross
                    amount
                  carried
                    at
                  close
                    of period
                
                Accumulated
                  Depreciation
                
                Date
                    of
                  Construction12-Unit
                    Apartment Bldg(1)
                
                $
                480,000
                
                $
                600,000
                
                
                -0-
                
                $
                600,000
                
                $
                67,272
                
                
                N/A6-Unit
                    Apartment Bldg(3)
                
                $
                131,000
                
                $
                586,000
                
                
                -0-
                
                $
                586,000
                
                $
                35,102
                
                
                N/A4-Unit
                    Apartment Bldg(4)
                
                $
                224,000
                
                $
                280,000
                
                
                -0-
                
                $
                280,000
                
                $
                31,394
                
                
                N/ATOTALS
                
                
                835,000
                
                
                1,466,000
                
                
                0
                
                
                1,466,000
                
                
                133,768
 
 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 has entered into a formal Letter of Intent to acquire the following
          portfolio of hotel properties from a Belgium-based company for a total
          acquisition cost of $34 million, plus transaction costs:
 
 ·
                263-room,
                    full service hotel in Detroit, Michigan (DoubleTree
                    Hotel)
 ·
                197-room,
                    full service hotel in St. Louis, Missouri (DoubleTree
                    Hotel)
 ·
                185-room,
                    full service hotel in Dayton, Ohio (DoubleTree Hotel); and
 ·
                283-room,
                    full service hotel in Tulsa, Oklahoma (Hilton
                    Hotel)
 
 The
          company plans to finance the transaction by issuing debentures and/or
          convertible securities trhough a private placement to institutional investors.
 The
          properties have a total of 938 rooms and 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 **Hilton
          Hotels,** and  **DoubleTree
          Inn.**
  6
 *Index*
  The
          properties currently have an average occupancy rate of 66%, an average
          daily
          rate (ADR) of $66. **23** ,
          and
          approximately $23.1 million in gross revenues.
  **Item
          3. Legal Proceedings**
 
 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.
  **Item
          4. Submission of Matter to a Vote of Security Holders**
  No
          matters were submitted during the fourth quarter of the period covered
          in this
          report to a vote of shareholders.
 
 **PART
          II**
  **Item
          5. Market for Common Equity and Related Stockholder
          Matters**
  **Market
          Information**
 
 The
          Company’s common stock trades on the Over-the-Counter Bulletin Board (OTCBB)
          under the symbol “SUPR”.
 
 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,
          2005, was $0.05.
 
 **Holders**
 
 As
          of
          December 31, 2004, 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").
  7
 *Index*
  **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
                
                
                34,000,000Equity
                    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**
 
 ***2004
          Developments***
 
 During
          the period the management continued to shift its focus away from residential
          multi-unit properties to hotel and other hospitality-related properties.
          We sold
          our interests in one of our properties and we continue to actively market
          our
          interests in our other residential properties. Management has determined
          that it
          is not economically feasible at this time to undergo the extensive renovations
          required to meet the standards required to qualify for the housing assistance
          payments that are necessary to operate affordable housing units
          profitably.
 
 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, in December,
          the Company entered into a formal Letter of Intent to acquire a portfolio
          of
          four (4) hotel properties from a Belgium-based company. The hotels fit
          our
          strategy of geographic diversification and are excellent candidates that
          can
          benefit from our property renovation and brand repositioning strategies.
          All
          four of the hotels meet our criteria for their ability to enhance the
          performance of our portfolio, 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 Sage Hospitalty,
          of Denver, Colorado to provide management and development services for
          the
          properties upon acquisition.
 
 The
          company has entered into a private placement agency agreeement with the
          investment banking firm of M.R. Beal & Co., New York, NY to place up to $40
          million of its debt and/or 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.
  8
 *Index*
  ***Results
          of Operations***
 
 *Revenues
          from Continuing Operations*
 
 Rental
          revenue decreased to $48,405 for the year ended December 31, 2004 compared
          to
          $191,758 for the year ended December 31, 2003. The decrease in rental revenue
          in
          2004 can be attributed to the fact that one six-unit property was sold
          during
          the period and rent payments for twelve units were suspended under the
          terms of
          the HUD Rental Assistance contract pending mandated repairs.
 
 Income
          from the Realty and Management segment increased from -0- to $15,000 during
          the
          year ending December 31, 2004, reflecting brokerage commissions earned
          on
          transactions closed during the period.
 
 *Expenses
          from Continuing Operations.*
 
 Total
          expenses from continuing operations increased from $266,046 for
          the year
          ended December 31, 2003 to $275,804 for the year ended December 31, 2004,
          a net
          increase of $9,758.
 
 1.
                Property
                    operating expensesincreased by $63,903 for the year ended December 31, 2004 compared
                    to the
                    year ended December 31, 2003. This expense increase is primarily
                    attributable to mortgage interest costs and property
                    repairs.
 2.
                Property
                    Depreciation and Amortizationdecreased by $7,030 for the year ending December 31, 2004 compared
                    to the
                    same period ending December 31, 2003. This reflects the fact
                    that we sold
                    our interest in one of our apartment buildings during the period
                    and we
                    have changed the estimated useful life of one of our properties
                    to -0-.
 3.
                Salaries,
                    commissions and employees benefitsdecreased by $15,658, reflecting lower labor costs after we moved
                    our
                    corporate headquarters to Orlando, FL.
 4.
                General
                    and administrative expensesdecreased by $38,487 for the year ending December 31, 2004 compared
                    to the
                    same period ending December 31, 2003. This reflects the fact
                    that fewer
                    expenses were paid to outside parties for legal, accounting,
                    consulting,
                    and other fees and expenses for services rendered in association
                    with, and
                    related to, the merger.
 5.
                Other
                    Depreciation and Amortizationreflects the depreciation on Office Furniture, Fixtures, and
                    Equipment.
 6.
                Gain(Loss)
                    on Sale of Assestreflects
                    the gain on the sale of our Illinois mortgage banking license
                    and other
                    intangible assets related to our mortgage banking
                    operation.
 7.
                Gain(Loss)
                    on Sale of Assetsreflects
                    the gain on the sale of our interest in one of our apartment
                    buildings.
 
 *Net
          Income/Loss from Operations.*
 
 Net
          loss
          from operations for the year ended December 31, 2004 was $ (212,399) versus
          net
          loss of $(74,288) for the year ended December 31, 2003. The net loss in
          2004 is
          attributed primarily to expenses associated with the merger, loss of rental
          revenues, and interest on mortgage indebtedness charges.
  ***Liquidity
          and Capital Resources***
 
 For
          the
          years ended December 31, 2004 and December 31, 2003, Supreme's net cash
          provided
          by operating activities totaled ($24,196)and $12,900, respectively. This
          change
          relates to an increase in accrued mortgage interest.
 
 As
          of the
          year ended December 31, 2004, Supreme's unrestricted cash resources were
          $4,126
          as compared to $3,266 as of the year ended December 31, 2003. 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.
  9
 *Index*
  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. Supreme intends to sell its remaing apartment buildings
          and
          use the proceeds to pay off the existing current liabilities, namely the
          balloon
          mortgage payments coming due in December, 2005. 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.
 
 Management
          of believes that it has identified a unique niche in its market by acquiring
          "distressed" properties and under-performing real estate loans from banks
          and
          other lending institutions. "Distressed" properties are properties that
          are not
          being operated at optimal efficiency and "under-performing" loans are loans
          that
          are currently past due or in default.
 
 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.
  10
 *Index*


**Item
      7. Financial Statements**





GEORGE
                STEWART, CPA
              2301
                SOUTH JACKSON STREET, SUITE 101-G
              SEATTLE,
                WASHINGTON 98144
              (206)
                328-8554 FAX(206) 328-0383
              
              **INDEPENDENT
                AUDITORS REPORT**
              
              
              To
                the Board of Directors
              Supreme
                Realty Investments, Inc., Inc.
              
              
              I
                have audited the accompanying balance sheets of Supreme Realty
                Investments, Inc., Inc. as of December 31, 2004 and 2003, and the
                related
                statements of operations and retained earnings, stockholders’ equity and
                cash flows for the years ended December 31, 2004 and 2003. These
                financial
                statements are the responsibility of the Company’s management. My
                responsibility is to express an opinion on these financial statements
                based on my audit.
              
              I
                conducted my audit in accordance with the standards in the Public
                Company
                Accounting Oversight Board (United States). Those standards require
                that I
                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. I believe that my audit provides a reasonable basis
                for my
                opinion.
              
              In
                my opinion, the financial statements referred to above present fairly,
                in
                all material respects, the financial position of Supreme Realty
                Investments, Inc., Inc., as of December 31, 2004 and 2003, and the
                results
                of its operations and cash flows for the years ended December 31,
                2004 and
                2003 in conformity with generally accepted accounting principles
                in the
                United States of America.
              
              The
                accompanying financial statements have been prepared assuming the
                Company
                will continue as a going concern. As discussed in the Note #14 to
                the
                financial statements, the Company has experienced losses for several
                years. This raises substantial doubt about its ability to continue
                as a
                going concern. Management’s plan in regard to these matters is also
                described in Note #14. The financial statements do not include any
                adjustments that might result from the outcome of this
                uncertainty.
              
              /s/
                George Stewart
              Seattle,
                Washington
              May
                14, 2005




11
 *Index*


**CONSOLIDATED
      STATEMENT OF FINANCIAL POSITION**


**As
      of**





***31-Dec***
              ***2004***
            
            *31-Dec*
              *2003***ASSETS:***Current
                Assets:*Cash
                or Cash Equivalents
            
            
            **4,126**
            
            
            3,266Accounts
                Receivable
            
            
            **7,379**
            
            
            9,600***Total
                Current Assets***
            
            
            **11,505**
            
            
            12,866*Real
                Estate Investments*Existing
                Properties
            
            
            **1,466,000**
            
            
            1,966,000New
                Acquisitions
            
            
            **-**
            
            
            -Gross
                Properties
            
            
            **1,466,000**
            
            
            1,966,000Less:
                Accumulated Depreciation
            
            
            **(133,768**
            **)**
            
            (122,091
            )***Total
                Real Estate Investments***
            
            
            **1,332,232**
            
            
            1,843,909*Other
                Assets:*Goodwill
                & Other Intangibles
            
            
            **-**
            
            
            **-**Less:
                Amortization
            
            
            **-**
            
            
            **-**Furniture,
                Fixtures, and Equipment
            
            
            **11,662**
            
            
            11,662Less:
                Accumulated Depreciation
            
            
            **(7,002**
            **)**
            
            (4,339
            )***Total
                Other Assets***
            
            
            **4,660**
            
            
            7,323**TOTAL
                ASSETS**
            
            
            **1,348,397**
            
            
            1,864,098**LIABILITIES:**Current
                Liabilities
            
            
            **143,453**
            
            
            28,160Notes
                Payable
            
            
            **-**
            
            
            12,000Mortgages
                Payable
            
            
            **835,000**
            
            
            1,235,000Total
                Liabilities
            
            
            **978,453**
            
            
            1,275,160**STOCKHOLDERS'
                EQUITY**Common
                Stock,*$.001
                par value, 200,000,000 *authorized,
                30,000,000 outstanding**
            
            
            **30,000**
            
            
            64,356Additional
                Paid-In Capital
            
            
            **623,146**
            
            
            623,146Retained
                Earnings(Deficit)
            
            
            **(283,202**
            **)**
            
            (81,064
            )Less:
                Treasury Stock
            
            
            **-**
            
            
            (17,500
            )Total
                Stockholders' Equity
            
            
            **369,944**
            
            
            588,938**TOTAL
                LIABILITIES & STOCKHOLDERS' EQUITY**
            
            
            **1,348,397**
            
            
            1,864,098




12
 *Index*


**CONSOLIDATE
      STATEMENTS OF OPERATIONS**


**For
      the Fiscal Year Ended**


**December
      31**





***2004***
            
            *2003***REVENUES:**Revenues
                from Rental Properties
            
            
            **48,405**
            
            
            191,758Revenues
                from Mortgage Banking
            
            
            **-**
            
            
            -Revenues
                from Realty & Management
            
            
            **15,000**
            
            
            -**TOTAL
                REVENUES:**
            
            
            **63,405**
            
            
            191,758**PROPERTY
                OPERATING EXPENSES:**Real
                Estate Taxes
            
            
            **5,739**
            
            
            12,000Mortgage
                Interest
            
            
            **77,322**
            
            
            17,036Operations
                and Maintenance
            
            
            **48,463**
            
            
            25,374Property
                Depreciation
            
            
            **58,279**
            
            
            71,491**Total
                Property Expenses**
            
            
            **189,803**
            
            
            125,900**GENERAL
                EXPENSES:**Salaries,
                Commissions, & Employee Benefits
            
            
            **33,418**
            
            
            49,076General
                & Administrative Expenses
            
            
            **50,394**
            
            
            88,881Depreciation
                & Amortization
            
            
            **2,189**
            
            
            2,189**Total
                General Expenses**
            
            
            **86,001**
            
            
            140,146**TOTAL
                EXPENSES**
            
            
            **275,804**
            
            
            266,046**INCOME
                BEFORE INVESTMENT ACTIVITIES**
            
            
            **(212,399**
            **)**
            
            (74,288
            )Gain(Loss)-on
                Sale of Assets
            
            
            **4,200**
            
            
            -Gain(Loss)-on
                Forgiveness of Debt
            
            
            **-**
            
            
            -Gain(Loss)-on
                Sale of Properties
            
            
            **6,061**
            
            
            -**NET
                INCOME (LOSS)***Before
                Taxes & Extraordinary Items*
            
            
            **(202,138**
            **)**
            
            (74,288
            )Provision
                for Income Taxes
            
            
            **-**
            
            
            -Extraordinary
                Gains(Losses)
            
            
            **-**
            
            
            -**NET
                INCOME(LOSS)**
            
            
            **(202,138**
            **)**
            
            (74,288
            )*Weighted
                Average Common Shares Outstanding*
            
            
            **3,800,000**
            
            
            3,800,000**NET
                INCOME (LOSS) per Common Share-Basic**
            
            
            ($0.05
            )
            
            ($0.02
            )**NET
                INCOME (LOSS) per Common Share-Diluted**
            
            
            ($0.05
            )
            
            ($0.02
            )




13
 *Index*




CONSOLIDATED
      STATEMENT OF CASH FLOWS


**For
      the Fiscal Year Ended**


**December
      31**





***2004***
            
            *2003***CASH
                FLOW FROM OPERATING ACTIVITIES:**Net
                Income
            
            
            **(202,138**
            **)**
            
            (74,288
            )*Adjustments
                to reconcile net income to cash providedby Operating
                Activities*Depreciation
                and Amortization
            
            
            **60,468**
            
            
            73,680Provision
                for Income Taxes(Increase)
                Decrease in Receivables
            
            
            **2,221**
            
            
            9,600(Increase)
                Decrease in Prepaid ExpensesIncrease
                (Decrease) in Current Liabilities
            
            
            **115,293**
            
            
            23,109**Net
                Cash from Operating Activities**
            
            
            **(24,196**
            **)**
            
            12,900**CASH
                FLOW FROM INVESTING ACTIVITIES:***Purchases
                of Furniture, Fixtures, & Equipment*
            
            
            
            
            
            (522
            )*Proceeds
                from the Sale of:**Furniture,
                Fixtures, & Equipment*
            
            
            **6,061***Real
                Estate Improvements*
            
            
            **450,000****Net
                Cash from Investing Activities**
            
            
            **456,061**
            
            
            (522
            )**CASH
                FLOW FROM FINANCING ACTIVITIES:*****Proceeds
                from:****Borrowings-Mortgages**Issuance
                of Common Stock*
            
            
            
            
            
            17,500***Payments
                for:****Debt
                Repayment*
            
            
            **(412,000**
            **)**
            
            28,600*Repurchase
                of Treasury Stock*
            
            
            **(19,045**
            **)****Net
                Cash from Financing Activities**
            
            
            **(431,045**
            **)**
            
            (11,100
            )Net
                Change In Cash
            
            
            **860**
            
            
            1,278Cash
                Balance, January 1
            
            
            **3,266**
            
            
            1.987**Cash
                Balance, December 31**
            
            
            **4,126**
            
            
            3,266


14
 *Index*




**STATEMENT
      OF CHANGES IN STOCKHOLDERS’ EQUITY**





*Common
                Stock*
            
            *Additional
                paid in*
            
            
            
            *Treasury
                Stock*
            
            *Total
                Stockholders’**Shares*
            
            *Amount*
            
            *Capital*
            
            *Retained**Earnings*
            
            *(common)*
            
            *Equity***Beginning
                Balance, January 1, 2001**
            
            
            1,000,000
            
            
            10,000
            
            
            15,000
            
            
            -
            
            
            -
            
            
            25,000Common
                Stock Issued
            
            
            4,000,000
            
            
            40,000
            
            
            127,769
            
            
            -
            
            
            -
            
            
            167,769Net
                Income
            
            
            -
            
            
            -
            
            
            -
            
            
            8,915
            
            
            -
            
            
            8,915**Balance,
                December 31, 2001**
            
            
            **5,000,000**
            
            
            **50,000**
            
            
            **142,769**
            
            
            **8,915**
            
            
            **-**
            
            
            **201,684**Common
                Stock Issued
            
            
            14,356,327
            
            
            14,356
            
            
            445,377
            
            
            -
            
            
            -
            
            
            439,733Net
                Income
            
            
            -
            
            
            -
            
            
            -
            
            
            (15,691
            )
            
            -
            
            
            (15,691
            )**Balance,
                December 31, 2002**
            
            
            **19,356,327**
            
            
            **64,356**
            
            
            **588,146**
            
            
            **(6,776**
            **)**
            
            **-**
            
            
            **625,726**Common
                Stock Issued
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            -Net
                Income
            
            
            -
            
            
            -
            
            
            -
            
            
            (74,288
            )
            
            -
            
            
            (74,288
            )Treasury
                Stock Acquired from Subsidiary
            
            
            (100,000
            )
            
            
            
            
            35,000
            
            
            
            
            
            
            
            
            35,000Treasury
                Stock Reissued
            
            
            82,500
            
            
            
            
            
            
            
            
            
            
            
            (17,500
            )
            
            (17,500
            )**Balance,
                December 31, 2003**
            
            
            **19,338,827**
            
            
            **64,356**
            
            
            **623,146**
            
            
            **(81,064**
            **)**
            
            **(17,500**
            **)**
            
            **568,938**Common
                Stock Issued In Merger
            
            
            10,661,173
            
            
            (16,856
            )
            
            
            
            
            
            
            
            
            
            
            (16,856
            )Treasury
                Stock Reissued
            
            
            
            
            
            (17,500
            )
            
            
            
            
            
            
            
            17,500Net
                Income
            
            
            
            
            
            
            
            
            
            
            
            (202,138
            )
            
            
            
            
            (202,138
            )**Balance,
                December 31, 2004**
            
            
            **30,000,000**
            
            
            **30,000**
            
            
            **623,146**
            
            
            **(283,202**
            **)**
            
            **-0-**
            
            
            **369,944**


15
 *Index*


**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. Through its and its wholly-owned subsidiary, Supreme Capital
      Funding, Inc., it also engages in mortgage banking activities such as loan
      origination, servicing, and brokering real estate loans to and from lending
      institutions and institutional investors.





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.





*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.





*Mortgage
      Banking Operations*





The
      Company, through its subsidiary Supreme Capital Funding, Inc., acquires 1st
      or
      2nd mortgages, on single-family dwellings and apartment buildings. Not more
      than
      20% of our total assets may be invested in any type of mortgage and not more
      than 1% of our total assets may be invested in any one
      mortgage.


16
 *Index*


The
      Company will acquire these mortgages and package them for resale. The Company
      applies the same rigorous underwriting analysis to the acquisition of these
      loans that it does to the direct acquisition of property. The Company looks
      to
      enhance its total returns through increased yields or, upon sale, the
      realization of some or the entire discount at which they were
      acquired.





*Direct
      Lending and Joint Participation*





In
      some
      cases, particularly land development (or redevelopment), the Company's
      Acquisition Committee will apply the same underwriting criteria as applied
      in
      its direct investments to make direct loans to developers for the construction
      and sale of multi-family housing or commercial properties.





*Loan
      Origination and Brokerage*





To
      generate fees associated with the origination of mortgage loans, the Company
      relies on the relationships of the senior management of Supreme Capital Funding,
      Inc. with lenders and institutional investors. They have extensive experience
      in
      the mortgage lending and real estate finance industries and have cultivated
      extensive contacts with banks, wholesale lenders, other mortgage brokers, and
      direct borrowers.





The
      Company uses a variety of web-based lead generation tools along with direct
      marketing and solicitation of loan business from homebuyers and real estate
      brokers.





Since
      the
      Company's focus will be on residential borrowers with substandard credit, banks
      and other institutional lenders make referrals to the Company for loan
      opportunities that they do not wish to underwrite.





The
      Company's management has formal brokerage agreements with several national
      mortgage lenders who underwrite the loan packages. Origination fees,
      administration fees, and document processing fees are paid to the Company at
      loan closing, by the lender, out of the loan proceeds.




**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.


17
 *Index*




**3.**
            **Real
                Estate Investments**





Supreme
      currently holds interests in the following properties:





·
            12-unit
                apartment building in Chicago, Illinois, acquired by Installment
                Agreement
                for Warranty Deed at a cost of $600,000, which carries a non-recourse
                mortgage note in the amount of $480,000, which bears interest at
                a rate of
                7%, and is due on December 15, 2005. Property is currently 92% occupied
                and stable. The company leases the residential apartments pursuant
                to a
                Section 8-Housing Assistance Payments contract with the U.S. Dept.
                of
                Housing and Urban Development(HUD).





·
            4-unit
                apartment building in Chicago, Illinois acquired by Installment Agreement
                for Warranty Deed at a cost of $280,000, which carries a non-recourse
                mortgage note in the amount of $224,000, which bears interest at
                a rate of
                7% and is due on December 15, 2005. Property is currently 100% occupied
                and stable, but each of the tenants receives rental assistance from
                HUD in
                the form of a Section 8 Housing
                Voucher.





·
            6-unit
                apartment building in Chicago, Illinois, acquired by Installment
                Agreement
                for Warranty Deed at a cost of $586,000, which carries a non-recourse
                first mortgage note in the amount of $131,000, which bears interest
                at a
                rate of 7% and is due on February 1, 2031. The property is currently
                unoccupied and scheduled for demolition. The company plans to erect
                (6)
                new townhouses on the 18,750 sf lot where the property now sits.





Description
            
            Encumbrances
            
            Initial
                Cost
            
            Cost
                Capitalized
            
            Gross
                amount
              carried
                at
              close
                of period
            
            AccumulatedDepreciation
            
            Date
                of
              Construction12-Unit
                Apartment Bldg (1)
            
            $
            480,000
            
            $
            600,000
            
            
            -0-
            
            $
            600,000
            
            $
            67,272
            
            
            N/A6-Unit
                Apartment Bldg  (3)
            
            $
            131,000
            
            $
            586,000
            
            
            -0-
            
            $
            586,000
            
            $
            35,102
            
            
            N/A4-Unit
                Apartment Bldg  (4)
            
            $
            224,000
            
            $
            280,000
            
            
            -0-
            
            $
            280,000
            
            $
            31,394
            
            
            N/ATOTALS
            
            
            835,000
            
            
            1,466,000
            
            
            0
            
            
            1,466,000
            
            
            133,768





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. At the time of the preparation of these
      financial statements, we have tested each of our real estate assets for
      impairment. The following table describes our net carrying costs and projected
      cash flows associated with each property:


18
 *Index*




Estimated
                  Fair Value (1)Description
              
              Gross
                  amount
                carried
                  at
                close
                  of period
              
              AccumulatedDepreciation
              
              Net
                  Carrying Cost
              
              Land
                  (2)
              
              Building
              
              Cost
                  to Sell (3)
              
              Estimated
                  Fair Value12-Unit
                  Apartment Bldg
              
              $
              600,000
              
              
              (67,272
              )
              
              532,728
              
              
              250,000
              
              
              400,000
              
              
              ($19,500
              )
              $
              624,0006-Unit
                  Apartment Bldg
              
              $
              586,000
              
              
              (35,102
              )
              
              550,898
              
              
              468,750
              
              
              100,000
              
              
              ($11,375
              )
              $
              557,3754-Unit
                  Apartment Bldg
              
              $
              280,000
              
              
              (31,394
              )
              
              248,606
              
              
              93,750
              
              
              256,250
              
              
              ($10,500
              )
              $
              336,000TOTALS
              
              
              1,466,000
              
              
              ($133,768
              )
              
              1,083,626
              
              
              812,500
              
              
              756,250
              
              
              ($41,375
              )
              $
              1,517,375





(1)
            SFAS
                144 defines “fair value” as the amount at which an asset could be sold in
                a current transaction between willing parties, other than in a forced
                or
                liquidation sale. When auoted market prices in active markets are
                not
                available, the estimate of fair value shall be the based on the best
                information available, including recent sales of similar assets.
                Our
                estimates are based on recent sales of comparable properties quoted
                by the
                Chicago Association of Realtors, Multiple Listing
                Service(MLS).


(2)
            Local
                vacant land values range from
                $15-$25/sf.


(3)
            Includes
                legal fees, broker’s commissions,
                etc.




Depreciation
      has been computed using the straight-line method over the estimated useful
      lives
      of 27.5 years. SFAS 144 states that a long-lived asset is considered abandoned
      when it ceases to be used. SFAS 144 further requires that when a company commits
      to a plan to abandon an asset before the end of its previously estimated useful
      life, depreciation estimates must be revised in accordance with SFAS 154 to
      reflect the use of the asset over its shortened useful life. Therefore, we
      have
      revised our revised our estimated useful life of the the six-unit apartment
      building listed above to -0-, and revised our depreciation estimates for this
      period and future periods.





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
      one of its residential properties. A tabular summary of that transaction
      follows.





Description
            
            Gross
                amount
              carried
                at
              time
                of sale
            
            Encumbrances
            
            AccumulatedDepreciation
            
            Sale
                Price
            
            Gain(Loss)
                on Sale6-Unit
                Apartment Bldg (2)
            
            
            500,000
            
            
            400,000
            
            
            43,939
            
            
            450,000
            
            
            6,061




**4.**
            **Proposed
                Real Estate Acquisitions**





The
      Company has entered into a formal Letter of Intent to acquire the following
      portfolio of hotel properties from CITY HOTELS, NV, of Brussels, Belgium:





·
            263-room,
                full service hotel in Detroit, Michigan (DoubleTree
                Hotel)


·
            197-room,
                full service hotel in St. Louis, Missouri (DoubleTree
                Hotel)


·
            185-room,
                full service hotel in Dayton, Ohio (DoubleTree Hotel); and


·
            283-room,
                full service hotel in Tulsa, Oklahoma (Hilton
                Hotel)


SFAS
      5
      requires the disclosure of contingencies involving uncertainty that may result
      in a gain or loss to the Company that will ultimately be resolved when one
      or
      more future events occur or fail to occur. For purposes of this statement,
      the
      likelihood that a future event will occur can range from *remote,* to *reasonably possible,* to *probable.* SFAS
      5
      further states that, in the event of a gain contingency, care must be exercised
      to avoid misleading implications as to the likelihood of realization. At this
      time, management considers it reasonably probable that these proposed
      acquisitions are likely to occur.


19
 *Index*




**5.**
            **Revenue
                Recognition**





Rental
      revenues are recognized in the month they are earned. Revenues from fees include
      brokerage commissions, management fees, development fees, origination fees,
      administration fees, and document processing fees and referral fees. All
      fee-base revenues are recognized when the service has been performed and the
      fee
      is due and payable. In cases where there is a significant degree of uncertainty
      surrounding collection of the fee, revenue is not recognized until the cash
      is
      collected.





**6.**
            **Income
                Taxes**





The
      Company and its subsidiary file a consolidated federal income tax
      return.




**7.**
            **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, and $202,138 for 2004. The tax loss carry-forwards expire in 2022, 2023,
      and 2024 respectively.





**8.**
            **Investment
                in Affiliates**





The
      Company has one wholly-owned subsidiary, Supreme Capital Funding, 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.





In
      2002,
      the Company issued 100,000 shares of its common stock to the subsidiary, in
      exchange for 100% (1,000,000 shares) of the subsidiary's stock. The Company's
      shares had a stated value of 1.00.





The
      subsidiary then filed an application for a mortgage banking license in the
      state
      of Illinois. Since it had not been granted the license, the subsidiary had
      not
      commenced operations, and there were no earnings or losses during the period
      to
      adjust to reflect the Company's share of such earnings or losses.





On
      December 5, 2003, the subsidiary was granted a mortgage banking license by
      the
      State of Illinois Office of Banks and Real Estate and commenced operations
      in
      Illinois. The company subsequently sold its assets in its Illinois operation
      and
      has applied for licensing in the states of Nevada and Florida. To date, neither
      state has granted a mortgage banking license.





The
      consolidation method was used to account for the parent's investment from its
      inception through the 2003 fiscal year. As a result of applying the
      consolidation method, all significant intercompany balances and transactions
      have been eliminated in consolidation. The Company's stock issued to its
      subsidiary was reacquired and recorded as Treasury Stock.


20
 *Index*





**9.**
            **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.





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,
      2004
      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.





**10.**
            **Current
                Liabilities and Notes
                Payable**





Current
      Liabilities include trade payables and $77,322 in accrued mortgage interest.
      The
      $12,000 balance due to John Davis on Supreme Property, Inc.'s note for the
      purchase of substantially all of the assets from its predecessor company,
      Supreme Property Management & Sales, Inc., was paid on August 28,
      2004.


21
 *Index*


**11.**
            **Mortgages
                Payable**





Three(3)
      parcels of property are being purchased by Installment Agreement for Warranty
      Deed, over a term of thirty(30) years. The notes bear interest at the rate
      of 7%
      per annum. Interest only payments are payable in quarterly installments, with
      balloon payments of the outstanding principal on maturity dates in December
      of
      2005.




Principal
                  Payments Each Year2005
              
              2006
              
              2007
              
              200812-Unit
                  Apartment Bldg (1)
              
              
              480,000
              
              
              -0-
              
              
              -0-
              
              
              -0-6-Unit
                  Apartment Bldg (3)
              
              
              131,000
              
              
              -0-
              
              
              -0-
              
              
              -0-4-Unit
                  Apartment Bldg (4)
              
              
              224,000
              
              
              -0-
              
              
              -0-
              
              
              -0-TOTALS
              
              
              835,000
              
              
              -0-
              
              
              -0-
              
              
              -0-





**12.**
            **Common
                Stock Transactions**





In
      December, 2003, as a result of changing to the consolidation method of
      accounting for an investment in its subsidiary, the Company reacquired 100,000
      shares of its own stock from its subsidiary and recorded them as Treasury Stock.
      82,500 of those Treasury shares were reissued to non-related parties at an
      average price of 0.21 per share. The proceeds from this sale, $17,500 were
      used
      for operating capital.





During
      the 2004 fiscal year the remaining 17,500 Treasury shares were reissued to
      non-related parties at an average price of $1.20 per share. The proceeds from
      this sale were used for operating capital and the payment of the $12,000 balance
      due to John Davis on Supreme Property, Inc.'s note for the purchase of
      substantially all of the assets from its predecessor company, Supreme Property
      Management & Sales, Inc.





On
      March
      31, 2003, the Company entered into an Agreement and Plan of Exchange and
      Reorganization ("the Merger") with Coronation Acquisition Corp. ("Coronation").
      Coronation is a reporting "blank check" company formed in 2000, in the state
      of
      Nevada, solely for the purposes of effecting a merger or acquisition of an
      operating company.





The
      respective boards of directors and majority stockholders of each company spent
      considerable time reviewing the terms of the merger, the background of their
      respective business operations, management, and the future business potential
      and plans of the combined entities.





Based
      on
      these and other considerations, the Board of Directors of each company, together
      with their respective majority stockholders, believes that the transactions
      contemplated by the merger agreement, are fair and in the best interest of
      each
      company.





On
      August
      27, 2004, Coronation and Supreme completed the merger when the following
      specific conditions were satisfied: (a) receipt of all stockholder approvals;
      (b) Form S-4 Registration Statement having become effective under the *Securities
      Act of 1933* and all
      state securities permits or authorizations necessary to issue the shares of
      Coronation have been obtained; (c) no legal restraints or prohibitions which
      would prevent the consummation of the merger; (d) the representations and
      warranties of Coronation and Supreme under the merger agreement must be
      materially true and correct; (e) that there have been no material adverse change
      to the parties since signing the agreement; and (f) the parties have performed
      all material obligations required to be performed by them under the merger
      agreement.


22
 *Index*


The
      merger became effective on August 27, 2004 when the certificate of merger was
      filed with the Secretary of State of the States of Nevada and Illinois.





No
      regulatory approval is required in order to consummate the merger other than
      the
      successful registration of the shares to be issued in connection with the merger
      by the Securities and Exchange Commission and all applicable State securities
      regulators.





As
      a
      result of the merger, Supreme's stockholders received 1.3953 shares
      of
      common stock of Coronation for each share of Supreme that they previously owned.
      Coronation will issue approximately 27,000,000 shares of common stock
      to
      Supreme stockholders in connection with the merger. Supreme's stockholders
      will
      own approximately 89.98% of the outstanding common stock of Coronation after
      the
      merger. As of December 31, 2003, there were 19,338,327 shares of Supreme common
      stock outstanding, 17,500 shares of Treasury Stock outstanding, and no warrants
      or options. The Board of Directors of Supreme and Coronation have agreed to
      issue 1,650,000 or approximately 5.52% of the outstanding common stock to Nick
      Segounis and John Coleridge, who provided services in connection with the merger
      agreement. These shares will be registered under a separate registration
      statement. These parties were integral in introducing Supreme and Coronation
      to
      one another. The remaining 1,350,000 shares, which will represent 4.5% of the
      issued and outstanding share capital of Coronation on closing of the merger,
      will be retained by Mr. Harry Miller, President of Coronation.





Supreme’s
      transfer agent has placed appropriate legends on the certificates of any common
      stock of the Company to be received by affiliates of Supreme which are subject
      to the resale rules of Rule 144. In addition, affiliates of Supreme have also
      acknowledged the resale restrictions imposed by Rule 145 under the *Securities
      Act of 1933* on
      shares of common stock of Coronation to be received by them in the
      merger.





All
      shares of common stock of Coronation received by the stockholders of Supreme
      in
      connection with the merger are freely transferable unless the shareholder is
      considered an affiliate of either Coronation or Supreme under the federal
      securities laws.





The
      majority stockholders of Supreme and others have agreed to enter into a
      voluntary escrow agreement regarding the resale of their shares. Under the
      escrow agreement the stockholders have agreed to not resell 75% the shares
      of
      Coronation they will receive under the merger until Coronation has obtained
      a
      minimum of 3,000,000 in new debt or equity financing to advance its business.
      At
      that time an additional 25% of the shares will be released for resale with
      an
      additional 25% being released every three months until 100% of the shares
      escrowed have been released.





To
      date,
      no dividends have been declared or paid.





**13.**
            **Market
                for Common Equity and Related Stockholder
                Matters**





Management,
      through its market maker Penna Luna, & Co., has filed an application
      (15c-211) with the National Association of Securities Dealers (NASD) requesting
      a trading symbol and listing on the Over-the-Counter Bulletin Board (OTC BB).
      To
      date no symbol has been assigned and the shares of Supreme are not quoted for
      trading on any national market or quotation system. There can be no certainty
      that the shares of Supreme will ever trade in a public market.





**14.**
            **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").


23
 *Index*


**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
              34,000,000Equity
                  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.





**15.**
            **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 7380 Sand Lake Road - Suite 500, Orlando, Florida
      on a month-to-month basis.





**16.**
            **Contingencies**





The
      company leases 16 of its residential apartments pursuant to a Section 8-Housing
      Assistance Payments contract with the U.S. Dept. of Housing and Urban
      Development(HUD). Payments have been suspended under the terms of that contract
      pending the completion of mandated repairs. There is no assurance that the
      contract will be renewed or past due payments will ever be recovered.


24
 *Index*


**17.**
            **Material
                Subsequent Events**





The
      Company has entered into a formal *Letter
      of Intent* to
      acquire a portfolio of hotel properties. (See *Proposed
      Acquisitions* ).
      The *Letter
      of Intent* calls
      for the execution of a formal *Real
      Estate Purchase Agreement* for
      each
      property subsequent to the date of these financial statements. The proposed
      acquisition of the properties will necessitate the issuance of new equity and
      debt securities and cause the Company to enter into hotel management and
      franchise agreements with third parties that will have a material impact on
      the
      financial condition of the Company.





Pursuant
      to Rule 11-02 of Regulation S-X, the Company has included the following Pro
      Forma Financial Statements to disclose the estimated financial impacts of the
      proposed hotel acquisitions. Adjustments to reflect the acquisition of these
      properties for the pro forma income statements include depreciation charges
      based on the new accounting basis for the assets, interest financing on
      additional or refinanced debt, and other appropriate adjustments that can be
      factually supported.


25
 *Index*


**PRO
      FORMA CONDENSED FINANCIAL STATEMENTS**








**OVERVIEW**





**SUPREME
      REALTY INVESTMENTS, INC.,** has
      entered into a Letter of Intent to acquire four (4) hotel properties in major
      metropolitan areas throughout the United States for a total acquisition cost
      of
      $34 million, plus transaction costs. The company plans to finance the
      transaction by issuing debentures and/or additional shares of its common stock
      to institutional investors.





The
      properties have a total of 938 rooms and are located in prime locations in
      close
      proximity to well-known tourist attractions, metropolitan airports, business
      centers, and convention facilities. They are affiliated with well-known brands,
      such as **Hilton
      Hotels,** and  **DoubleTree
      Inn.**





The
      properties currently have an average occupancy rate of 66%, an average daily
      rate (ADR) of $66. **23** ,
      and
      approximately $23.1 million in gross revenues.





At
      current discount rates and capitalization rates, we have estimated the
      portfolio’s current total value at $52 million and we expect that with improved
      management and overall economic conditions we can increase that value by 10%-30%
      over the next 5 years.





These
      pro
      forma statements illustrate the possible future prospects of the Company because
      they set forth the scope of the change in the company's historical financial
      position and results of operations that may be caused by the transaction. The
      statements are presented as if the transaction was consummated at the beginning
      of the fiscal year presented.


26
 *Index*


**UNAUDITED
      PRO FORMA CONDENSED**


**STATEMENT
      OF INCOME**


**For
      the year ending**


**12/31**




**REVENUES:**
            
            ***2005***
            
            *2004*Revenues
                from Hotel Properties
            
            **$**
            **35,392,400**
            
            
            -Revenues
                from Apartment Properties
            
            
            **-**
            
            
            48,405Revenues
                from Realty & Management
            
            
            
            
            
            15,000**TOTAL
                REVENUES:**
            
            
            **35,392,400**
            
            
            63,405**PROPERTY
                OPERATING EXPENSES:**Interest
                on Long-Term Debt
            
            
            **2,443,750**
            
            
            -Operations
                and Maintenance
            
            
            **19,387,957**
            
            
            54,202Depreciation
                and Amortization-Property
            
            
            **871,795**
            
            
            64,461**Total
                Property Expenses**
            
            
            **21,481,627**
            
            
            118,663**GENERAL
                EXPENSES:**Salaries,
                Commissions, & Employee Benefits
            
            
            **2,376,306**
            
            
            33,418General
                & Administrative Expenses
            
            
            **596,800**
            
            
            50,394Depreciation
                & Amortization-Office
            
            
            **40,000**
            
            
            2,189**Total
                General Expenses**
            
            
            **3,013,106**
            
            
            86,001**TOTAL
                EXPENSES**
            
            
            **24,494,733**
            
            
            204,664**INCOME
                BEFORE INVESTMENT ACTIVITIES**
            
            
            **9,721,212**
            
            
            (141,259
            )Interest
                Income-Exempt
            
            
            **45,500**
            
            
            -Gains(Loss)
                on Sale of Assets
            
            
            **-**
            
            
            4,200Gains(Loss)
                on Forgiveness of Debt
            
            
            **-**
            
            
            -Gains(Loss)
                on Sale of Properties
            
            
            **-**
            
            
            6,061**NET
                EARNINGS (LOSS)***Before
                Taxes & Extraordinary Items*
            
            
            **10,943,167**
            
            
            (130,998
            )Provision
                for Income Taxes
            
            
            **(3,361,370**
            **)**
            
            -Extraordinary
                Gains(Losses)
            
            
            **-**
            
            
            -**NET
                EARNINGS(LOSS)**
            
            
            **6,359,922**
            
            
            (130,998
            )*Weighted
                Average Common Shares Outstanding*
            
            
            **62,594,000**
            
            
            30,000,000**NET
                EARNINGS per Common Share**
            
            **$**
            **0.10**
            
            **$**
            (
                0.00
            )




27
 *Index*


**UNAUDITED
      PRO FORMA CONDENSED**


**BALANCE
      SHEET**


**As
      of**


**12/31**





**ASSETS:**
            
            ***2005***
            
            *2004**Current
                Assets:*Cash
                or Cash Equivalents
            
            
            **9,935,481**
            
            
            4,125Capital
                Reserves
            
            
            **1,000,000**
            
            
            -Accounts/Notes
                Receivable
            
            
            **-**
            
            
            7,379**Total
                Current Assets**
            
            
            **10,935,481**
            
            
            11,504*Real
                Estate Investments*Existing
                Properties
            
            
            **-**
            
            
            1,466,000New
                Acquisitions
            
            
            **34,000,000**
            
            
            -Gross
                Properties
            
            
            **34,000,000**
            
            
            1,466,000Less:
                Accumulated Depreciation
            
            
            **(871,795**
            **)**
            
            (190,551
            )Land
                and Other Non-Depreciable Property
            
            
            **12,000,000**
            
            
            -**Total
                Real Estate Investments**
            
            
            **45,128,205**
            
            
            1,275,449*Other
                Assets:*Office
                Furniture, Fixtures, and Equipment
            
            
            **211,662**
            
            
            11,662Less:
                Accumulated Depreciation
            
            
            **(46,541**
            **)**
            
            (6,515
            )**Total
                Other Assets**
            
            
            **165,121**
            
            
            5,148**TOTAL
                ASSETS**
            
            
            **56,228,807**
            
            
            1,292,101**LIABILITIES:**Current
                Liabilities
            
            
            **2,067,068**
            
            
            851,017Income
                Taxes Payable
            
            
            **3,361,370**Notes
                Payable
            
            
            **-**
            
            
            -Long-Term
                Debt Payable,*6%*1stMtg Debentures
            
            
            **39,100,000**
            
            
            -**Total
                Liabilities**
            
            
            **44,528,438**
            
            
            851,017**STOCKHOLDERS'
                EQUITY****Common
                Stock**,$.001
                par value, 200,000,000 authorized, 62,594,000 outstanding
            
            
            **62,594**
            
            
            30,000**Partnership
                Units**
            
            
            **1,000,000**
            
            
            -Additional
                Paid-In Capital-Common
            
            
            **9,350,495**
            
            
            623,146Retained
                Earnings(Deficit)
            
            
            **1,287,280**
            
            
            (212,062
            )**Total
                Stockholders' Equity**
            
            
            **11,700,369**
            
            
            441,084**TOTAL
                LIABILITIES & STOCKHOLDERS' EQUITY**
            
            
            **56,228,807**
            
            
            1,292,101


28
 *Index*


**EXPLANATORY
      NOTES TO UNAUDITED PRO FORMA**


**CONDENSED
      FINANCIAL STATEMENTS**




**1.**
            **Financial
                Structure**





The
      company proposes to finance the acquisition of the hotels by issuing up to
      $40
      million of 1 st mortgage
      debentures and up to $12 million of common stock to institutional investors
      through a combination private placement and secondary public offering.
      Partnership units will be issued to the company’s hotel management
      agent.





The
      statements assume an interest rate of 6% on the debentures, payable
      semiannually. The cost of issuing the securities is estimated at
      8%-10%.





**2.**
            **Revenues**





Revenue
      projections are based on 938 hotel rooms with an average daily room rate of
      $128
      and an average occupancy rate of 65%.





**3.**
            **Depreciation**





Depreciation
      is computed on the new asset cost basis using the straight-line method with
      a 39
      year useful life. Acquisition costs and all substantial renovation and other
      capital improvements have been capitalized.





**4.**
            **Earnings
                per Share**





Earnings
      per share are reported on a fully diluted basis with 62,594,000 weighted average
      shares outstanding.





29
 *Index*


**Item
      8. Changes in and Disagreements with Accountants on
      Accounting and Financial Disclosure**





None.




**Item
      8A. Controls And Procedures**




**Evaluation
      of Disclosure Controls and Procedures** .





Our
      Chief
      Executive Officer and Chief Financial Officer have evaluated the effectiveness
      of our disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14
      of the Securities Exchange Act of 1934, as amended) as of the fiscal year ended
      December 31, 2004. Based upon their evaluation, the Chief Executive Officer
      and
      Chief Financial Officer have concluded that our disclosure controls and
      procedures are effective.





**Changes
      in internal controls** .





There
      were no significant changes in Supreme's internal controls or in any factors
      that could significantly affect internal controls subsequent to the date of
      the
      Chief Executive Officer and the Chief Financial Officer's
      evaluation.




**Item
      8B. Other Information**





**Completion
      of Dispostion 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.





**PART
      III**




**Item
      9. Directors, Executive Officers, Promoters, and Control
      Persons Compliance with Section 16(a) of the Act**





The
      Company’s Directors and Executive Officers, their ages and positions are as
      follows:




Name
              Age
              PositionThomas
                  Elliott
              50
              Chairman
                  & Chief Executive OfficerJean
                  LeRoy
              37
              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:


30
 *Index*





·
            *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.


*Committees
      of the Board*





The
      Company presently does not retain independent directors who chair the audit
      and
      compensation committees. The Company does not have 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.




31
 *Index*




**Item
      10. Executive Compensation**




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***
                  
                  ***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
                  
                  
                  2004
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  10,000,000
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  $
                  28,7582003
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  6,979,635(1)
                  
                  
                  Nil
                  
                  
                  13,7652002
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  6,979,635(1)
                  
                  
                  Nil
                  
                  
                  Nil2001
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil2000
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  NilJean
                      LeRoy, CFO
                  
                  
                  2004
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  4,000,000
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil2003
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  6,142,078(2)
                  
                  
                  Nil
                  
                  
                  Nil2002
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  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.




32
 *Index*




**Item
      11. Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters**





As
      of
      December 31, 2004, 30,000,000 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 7380 Sand Lake Road - Suite 500, Orlando, FL
      32819.





Name&
                Address of Beneficial Owner
            No.
                of Shares Beneficially Owned
            %
                of Outstanding Shares**Thomas
                Elliott**
            **13,959,270**
            **47%****Jean
                LeRoy**
            **6,142,078**
            **20%****TOTAL**
            **20,101,348**
            **67%**





**Item
      12. Certain Relationships and Related Party
      Transactions**





None.




**Item
      13. Exhibits**





**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
              Certificate
                  of CEO/CFO as Required by Rule
                  13a-14(a)/15d-14
 31.2
              Certificate
                  of CEO/CFO as Required by Rule Rule
                  13a-14(b) and Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section
                  1350 of
                  Chapter 63 of Title 18 of the United States
                  Code
 32.1
              Certificate
                  of CEO as Required by Rule Rule 13a-14(b)
                  and Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter
                  63
                  of Title 18 of the United States
                  Code




33
 *Index*


**b.
      Reports of Form 8-K** .





None.


**Item
      14. Principal Accountant Fees and
      Services**





*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, 2004 and December 31, 2003 and
      fees
      billed for other services rendered by George Stewart & Co., CPA’s. during
      those periods.





Fiscal
                2004
            
            Fiscal
                2003Audit
                fees (1)
            
            
            12,000
            
            
            2,000Audit
                Related Fees
            
            
            -0-
            
            
            -0-Tax
                Fees
            
            
            -0-
            
            
            -0-All
                Other Fees
            
            
            -0-
            
            
            -0-**TOTAL**
            
            
            **12,000**
            
            
            **2,000**





(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 audit committee has adopted a specific policy relating to pre-approval
      of all audit and non-audit services provided by the Company’s independent
      auditors.








**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.




**SUPREME
                REALTY INVESTMENTS, INC.**Date:
                October 5, 2005
              
              By:
            /s/
                Thomas ElliottThomas
                Elliott, Chief Executive Officer/s/
                Jean LeRoyJean
                LeRoy, President, Chief Financial
                Officer




34