UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark one)
[X] Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
1934. For the fiscal year ended December 31, 2013.
[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934. For the transition period from ______ to ______
Commission File Number 000-50045
EMPIRE GLOBAL CORP.
(Name of small business issuer in its charter)
Delaware 33-0823179
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
671 Westburne Dr., Concord, Ontario L4K 4Z1
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (647) 229-0136
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
(par value $0.0001)
Check whether the issuer is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act. Yes [ ] No [X]
Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. Yes [ ] No [X]
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 [ ]
Indicate by checkmark whether the registrant has submitted electronically and
posted on its corporate Website, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (s.s.
232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
Yes [ ] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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-K or any
amendment to this form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of "large accelerated filer", "accelerated filer" and
"smaller reporting company" in Rule 12b-2 of the Exchange Act.
Larger accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the exchange Act). Yes [X] No [ ]
The issuer had $0 in revenues for its most recent fiscal year. The number of
shares outstanding of the issuer's single class of common stock, as of the close
on April 4, 2014 is 18,675,800 shares.
The aggregate market value of the Registrant's common stock, $0.0001 par value,
held by non-affiliates as of June 30, 2013, the last business day of the second
fiscal quarter, was $186,758 based on the average closing bid and asked prices
for the Common Stock of $0.01 per share.
TABLE OF CONTENTS
PAGE
PART I
ITEM 1. DESCRIPTION OF BUSINESS 3
ITEM 2. DESCRIPTION OF PROPERTY 5
ITEM 3. LEGAL PROCEEDINGS 6
ITEM 4. MINE SAFETY DISCLOSURES 6
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 6
ITEM 6. SELECTED FINANCIAL DATA 10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 10
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 15
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
(Financial Statements - pages numbered as F1 to F10) 16
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 27
ITEM 9A. CONTROLS AND PROCEDURES 27
ITEM 9B. OTHER INFORMATION 28
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 28
ITEM 11. EXECUTIVE COMPENSATION 30
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS 31
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 32
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 33
ITEM 15. EXHIBITS 34
SIGNATURES 35
2
PART I.
FORWARD-LOOKING STATEMENTS
The matters discussed in this Annual Report on form 10-K contain forward-looking
statements that involve risks and uncertainties, including primarily our ability
to fund future operations and investment opportunities until such time that our
cash flows from operations are sufficient for these purposes, changing market
conditions and the other risks and uncertainties described throughout this
Annual Report on form 10-K. Actual results may differ materially from those
projected. These forward-looking statements are not historical facts but rather
represent our judgment as of the date of the filing of this Annual Report on
form 10-K. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and other factors, some of which are
beyond our control, are difficult to predict and could cause actual results to
differ materially from those expressed or forecasted. We disclaim any intent or
obligation to update these forward-looking statements.
Item 1. Description of business
A. COMPANY OVERVIEW
The issuer, Empire Global Corp. ("the Company", "Empire") was organized as
Pender International, Inc. ("Pender") under the laws of the state of Delaware on
August 26, 1998.
We are authorized to issue an aggregate amount of eighty million (80,000,000)
shares of common stock with a $0.0001 par value, and twenty million (20,000,000)
shares of preferred stock with a $0.0001 par value. Each shareholder of the
common stock shall be entitled to one vote for each share of common stock held.
As of December 31, 2013 there were 18,675,800 shares of common stock outstanding
and no preferred shares of stock outstanding.
Since inception, the Company has explored a number of business ventures and in
conjunction with the various business opportunities has changed its name.
Contemporaneously with a plan of reorganization aimed at pursuing business
opportunities in Canada and China the Company changed its name to Empire Global
Corp. in September 2005. These business ventures proved to be difficult and
unsustainable, therefore where abandoned.
Since the ventures were abandoned, until the present, the Company has been
inactive and could be deemed to be a so-called "shell" company. Our sole purpose
as a "shell" company, at this time, except for filing required periodic reports
with the U.S. Securities and Exchange Commission (the "SEC") pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations promulgated thereunder and making other related corporate filings,
is to locate and consummate a merger or acquisition with a private entity. As of
the date hereof, the Company can be defined as a "shell" company, an entity
which is generally described as having no or nominal operations and with no or
nominal assets or assets consisting solely of cash and cash equivalents.
Management does not intend to undertake any efforts to cause a market to develop
in our securities, either debt or equity, until we have successfully concluded a
business combination. We intend to comply with the periodic reporting
requirements of the Exchange Act for so long as we are subject to those
requirements.
3
On December 9, 2011, the Company entered into a Stock Purchase and Share
Exchange Agreement (the "Agreement") with Avontrust Global Pte. Ltd. a Singapore
company ("AVT") with its head office and operations in Singapore. On July 2,
2012, prior to the closing of the Agreement, the Company and AVT mutually agreed
to terminate the Agreement.
B. BUSINESS DESCRIPTION
PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS
During the period covered by this report the Company together with its
subsidiaries was a diversified holding company seeking to acquire and operate
income producing businesses that have a good prospect for growth.
As of December 31, 2013, the Company did not have interests in any business.
DISTRIBUTION METHODS FOR PRODUCTS OR SERVICES
As of the fiscal year ended December 31, 2013 and 2012 the Company has no
products or services available.
STATUS OF PUBLICLY ANNOUNCED NEW PRODUCTS OR SERVICES
As of the fiscal year ended December 31, 2013 the Company has no current
business operations.
COMPETITIVE BUSINESS CONDITIONS, COMPETITIVE POSITION IN THE INDUSTRY AND
METHODS OF COMPETITION
As of the fiscal year ended December 31, 2013 the Company has no current
business operations and therefore does compete with any other business.
SOURCES AND AVAILABILITY OF SUPPLIES
For Empire to operate, our needs or inputs would simply be legal counsel,
accounting and auditor functions. Suppliers for these office and management
functions are deemed to be ubiquitous.
During the period covered by this report we did not retain legal counsel, and
our Independent Registered Public Accounting Firm is Paritz and Co., PA of
Hackensack, NJ.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
As of the end of the period covered by this report Empire does not have any
active business interests.
The Company will continue to seek a potential acquisition target to
develop an operating business.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR
LABOR CONTRACTS
Empire Global Corp. does not have any patents, trademarks, licenses, franchises,
concessions, royalty agreements or labor contracts.
NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCTS OR SERVICES
There is no current need for Government Approval for its products or service.
4
EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS
There is no current effect on us of existing or probable governmental
regulations on the business.
RESEARCH AND DEVELOPMENT COSTS
The Company had no research and development costs during the year ended December
31, 2013 and 2012.
COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS
Empire is not directly affected by any environmental laws, but may indirectly be
affected if a subsidiary company project or property falls under the scope of
any Federal, State and Local environmental laws.
NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL TIME EMPLOYEES
Empire currently has no employees, while our CEO, CFO and Secretary will provide
the day to day operations and management services. Management expects to use
consultants, attorneys and accountants as necessary, and does not anticipate a
need to engage any full-time employees so long as it is seeking and evaluating
business opportunities. The need for employees and their availability will be
addressed in connection with the decision whether or not to acquire or
participate in specific business opportunities.
Item 1A. Risk Factors
Empire is a smaller reporting company as defined by Rule 12b-2 of the Exchange
Act and is not required to provide the information required under this item.
Item 1B. Unresolved Staff Comments
None.
Item 2. Description of Property.
Empire currently does not maintain a principal executive office. Empire's
mailing address is 671 Westburne Dr., Concord, Ontario, L4K 4Z1, Canada. Other
than this mailing address, Empire does not currently maintain any other office
facilities, and does not anticipate the need for maintaining office facilities
at any time in the foreseeable future. Empire pays no rent or other fees for the
use of the mailing address.
It is likely that Empire will not establish an office until it has completed a
business acquisition transaction, but it is not possible to predict what
arrangements will actually be made with respect to future office facilities.
Item 3. Legal Proceedings
The Company may be subject to claims arising in the ordinary course of business.
We are not a party to, or the subject of, any pending legal proceeding. We are
not aware of any legal proceeding or any action being contemplated by a
governmental authority.
Item. 4. Mine Safety Disclosures
Not applicable.
5
PART II
Item 5. Market for common equity and related stockholder matters
MARKET INFORMATION
Our common stock is quoted on the Over the Counter Pink Sheet Quotation System
(OTC-PK), which is a network of security dealers who buy and sell stock.
The OTC-PK is an unorganized, inter-dealer, over-the-counter market that
provides significantly less liquidity than other markets. Purchasers of our
common stock may therefore have difficulty selling their shares should they wish
to do so.
The stock market in general and the stock prices of Empire's common stock in
particular, have experienced extreme volatility that often has been unrelated to
the operating performance of any specific public company. The market price of
Empire's common stock has fluctuated in the past and is likely to fluctuate in
the future as well, especially if Empire's common stock continues to be thinly
traded. Factors that may have a significant impact on the market price of
Empire's common stock include:
a. announcements concerning Empire or its competitors, including the
negotiation
b. for or acquisition of a target business;
c. announcements regarding financial developments;
d. government regulations, including stock option accounting and tax
regulations;
e. acts of terrorism and war; or
f. rumors or allegations regarding Empire's financial disclosures or
practices.
A small number of Empire's stockholders own a substantial amount of Empire's
common stock, and if such stockholders were to sell those shares in the public
market within a short period of time, the price of Empire's common stock could
drop significantly. A large number of shares of outstanding common stock are
restricted and are not freely-trading. An established public trading market for
our common stock may never develop or, and if developed, it may not be
sustained.
PENNY STOCK RULES
Our common stock may be deemed a "penny stock." Penny stocks generally are
equity securities with a price of less than $5.00 per share, other than
securities registered on certain national securities exchanges. Trading in
Empire's securities is subject to certain regulations adopted by the SEC
commonly known as the "penny stock" rules. These rules govern how
broker-dealers can deal with their clients and "penny stocks". The additional
burdens imposed upon broker-dealers by the "penny stock" rules may discourage
broker-dealers from effecting transactions in Empire's securities, which could
severely limit the market price and liquidity of our common stock.
We were listed and became eligible for trading on the OTCBB on March 4, 2004 and
the first electronic trade of our stock occurred on October 14, 2004. We now
trade on the OTCQB under the symbol EMGL.
Trading in our common stock in the over-the-counter market has been limited and
sporadic and the quotations set forth below are not necessarily indicative of
actual market conditions. Further, these quotations reflect inter-dealer prices
without retail mark-up, mark-down, or commission, and may not necessarily
6
reflect actual transactions. Such quotes are not necessarily representative of
actual transactions or of the value of our common stock, and are in all
likelihood not based upon any recognized criteria of securities valuation as
used in the investment banking community.
The following tables set forth the high and low sale prices for our common stock
as reported on the Pink Sheets LLC for the periods covered by this report as
indicated.
BID PRICES
HIGH LOW
2012 PERIOD
January 1 - March 31 $ 0.01 $ 0.01
April 1 - June 30 0.01 0.01
July 1 - September 30 0.01 0.01
October 1 - December 31 0.01 0.01
2013 PERIOD
January 1 - March 31 $ 0.005 $ 0.002
April 1 - June 30 0.005 0.01
July 1 - September 30 0.01 0.01
October 1 - December 31 0.035 0.01
SHAREHOLDERS
As of December 31, 2013, there were an estimated 400 holders of record of our
common stock. Certain of the shares of common stock are held in street name or
are listed as undisclosed and may, therefore, be held by several beneficial
owners.
DIVIDENDS
We have never paid a cash dividend on our common stock since inception. The
payment of dividends may be made at the discretion of our Board of Directors,
and will depend upon, among other things, our operations, capital requirements,
and overall financial condition.
DESCRIPTION OF SECURITIES
As of December 31, 2013, there were 18,675,800 shares of common stock, of 0.0001
par value, issued and outstanding of which 20 shares are restricted within the
meaning of Rule 144(a)(3) promulgated under the Securities Act of 1933, as
amended. The Company may issue restricted shares in private transactions not
involving a public offering or issued as consideration for payments of fees and
services provided to the Company.
Restricted securities may only be sold pursuant to an effective registration
statement or an exemption from registration, if available. The SEC has adopted
final rules amending Rule 144 which became effective on February 15, 2008.
Pursuant to Rule 144, one year must elapse from the time a "shell company", as
defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act,
ceases to be a "shell company" and files Form 10 information with the SEC,
during which time the issuer must remain current in its filing obligations,
before a restricted shareholder can resell their holdings in reliance on Rule
144. Form 10 information is equivalent to information that a company would be
required to file if it were registering a class of securities on Form 10 under
the Exchange Act. Under Rule 144, restricted or unrestricted securities, that
were initially issued by a reporting or non-reporting shell company or a company
7
that was at anytime previously a reporting or non-reporting shell company, can
only be resold in reliance on Rule 144 if the following conditions are met:
(1) the issuer of the securities that was formerly a reporting or non-reporting
shell company has ceased to be a shell company;
(2) the issuer of the securities is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act;
(3) the issuer of the securities has filed all reports and material required to
be filed under Section 13 or 15(d) of the Exchange Act, as applicable,
during the preceding twelve months (or shorter period that the Issuer was
required to file such reports and materials), other than Form 8-K reports;
and
(4) at least one year has elapsed from the time the issuer filed the current
Form 10 type information with the SEC reflecting its status as an entity
that is not a shell company.
At the present time, we are classified as a "shell company" under Rule 405 of
the Securities Act and Rule 12b-2 of the Exchange Act. As such, any restricted
securities of our company may not be resold in reliance on Rule 144 until:
(1) we file Form 10 information with the SEC when we cease to be a "shell
company";
(2) we have filed all reports as required by Section 13 and 15(d) of the
Securities Act for twelve consecutive months; and
(3) one year has elapsed from the time we file the current Form 10 type
information with the SEC reflecting our status as an entity that is not a
shell company.
No prediction can be made as to the effect, if any, that future sales of shares
of common stock or the availability of common stock for future sale will have on
the market price of the common stock prevailing from time-to-time. Sales of
substantial amounts of common stock on the public market could adversely affect
the prevailing market price of the common stock.
In each of the foregoing described stock splits we filed a notice under rule
10b-17 with NASD of our intention to effect the stock split and reflected the
approval of our Board of Directors and written consent of a majority
shareholders. All fractional shares are rounded up to the nearest whole shares.
1 for 10 Reverse Split
On September 30, 2005, we completed a 1 for 10 reverse split of our common
stock.
1 for 10 Reverse Split
Effective June 30, 2005, we completed a 1 for 10 reverse split of our common
stock.
7 for 1 Forward Split
On July 23, 2004, the Board of Directors approved a 7 for 1 forward split of our
common stock. The common stock dividend payment date was July 26, 2004 to
stockholders of record as at July 23, 2004.
Each of the foregoing change in authorized shares was approved by the Board of
Directors and the holders of a majority of the issued and outstanding shares of
common stock and a Certificate of Amendment filed with the State of Delaware.
On September 21, 2004, the Company amended its Certificate of Incorporation to
increase the number of authorized common shares from 80,000,000 to 400,000,000.
8
On December 28, 2006, the Company amended its Certificate of Incorporation to
decrease the number of authorized common shares from 400,000,000 to 80,000,000.
Preferred Stock
The Company has authorized 20,000,000 preferred shares of which none have been
issued.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The purpose of the 2005 Incentive Stock Option Plan (the "Stock Plan") is to
secure long-term relationships for the Company and its stockholders, from the
benefits arising from capital stock ownership by the Company's Officers,
Directors, Employees, Consultants and Advisors, who can help in the Company's
growth and success and to provide an effective means of compensation for such
persons and entities providing services to the Company in lieu of cash payments
therefore. The Stock Plan became effective as of the 1st day of July, 2005, and
shall expire on the 30th day of June, 2015, unless further extended by
appropriate action of the Board of Directors. The Board of Directors of the
Company may at any time, by appropriate action, suspend or terminate the Stock
Plan, or amend the terms and conditions of the Stock Plan.
Pursuant to the stock plan, 1,000,000 shares of common stock, par value $0.0001
per share, of Empire Global Corp., may be issued upon the exercise of stock
options or stock grants. Consultants, Advisors, Employees and Directors, to the
Company, or any of its subsidiary corporations, shall be eligible for
participation in the Stock Plan. Each person or entity acquiring shares of
Common Stock pursuant to the Stock Plan shall be acquiring such shares for
investment purposes only, and in lieu of cash compensation for services rendered
to the Company. A Compensation Committee appointed by the Board of Directors
shall determine the manner in which each option or stock grant shall be
exercisable and the timing and form of the purchase price to be paid by a
grantee upon the exercise of an option or stock grant under the Stock Plan. To
the extent provided in the option agreement, payment of the purchase price may
be in cash, part in cash, part by personal promissory note or in lieu of payment
for services performed. There are no restrictions on the resale of securities
purchased under the Stock Plan. The Stock Plan is not qualified under Section
401(a) of the Internal Revenue Code.
On July 26, 2005, options to purchase up to a total of 1,000,000 shares of
common stock were granted at an exercise price of $0.50 per share to two
consultants pursuant to Consulting Services Agreements entered into with the
Company to perform research and analysis work with respect to business planning
in the potential acquisition of technology based companies. The shares were
issued in lieu of payment for services performed or to be performed. The Company
relied on the exemption from the registration requirements of the Securities Act
provided by Rule 701 under the Securities Act. More details of the Stock Plan
and the shares issued pursuant to these consultant agreements can be found on
form S-8 filed on July 27, 2005.
RECENT SALES OF UNREGISTERED SECURITIES
There are no recent sales of unregistered securities by the Company during the
period covered by this report, which have not been previously disclosed in form
10-Q filings or form 8-K filings.
PURCHASES OF EQUITY SECURITIES BY THE REGISTRANT
No stock repurchases were made by Empire or affiliated purchasers in a month
within the fourth quarter of the fiscal year covered by this report.
9
Item 6. Selected Financial Data
Not Applicable.
Item 7. Management's discussion and analysis of financial condition and results
of operations
ABILITY TO CONTINUE AS A GOING CONCERN
The Company's auditors have issued an opinion on our ability to continue as a
going concern. This means that its auditors believe there is doubt that the
Company can continue as an on-going business for the next twelve months unless
it obtains additional capital to pay its obligations. This is because the
Company has not generated any revenues and no revenues are anticipated until it
begins operations from a new business plan.
We have suffered recurring losses from operations and are in serious need of
additional financing. These factors among others indicate that we may be unable
to continue as a going concern, particularly in the event that we cannot obtain
additional financing or, in the alternative, complete a merger or acquisition.
Our continuation as a going concern depends upon our ability to generate
sufficient cash flow to conduct our operations and our ability to obtain
additional sources of capital and financing. There is no assurance that we will
be able to accomplish all or any of these items. In the event that these events
do not take place, we will in all probability not be able to continue as a going
concern.
The following discussion and analysis should be read in conjunction with the
financial statements of the Company and the accompanying notes appearing under
the caption "Financial Statements and Supplementary Data."
GENERAL
Empire was incorporated in the state of Delaware on August 26, 1998. Our
principal executive office is located in Toronto, Canada.
As of December 31, 2013, the Company has no business operations and has been
seeking new business opportunities during the period covered by this report. On
July 10, 2012 the Company reported that it terminated the Agreement to acquire
AVT which was first entered into on December 9, 2011.
PLAN OF OPERATION
At December 31, 2013 we had no cash and no assets and $174,236 in current
liabilities. Our cash flow requirement for the twelve-month period from January
2014 to December 2014 is estimated to be $150,000.
Empire Additional Working Capital:
Empire has a working capital deficit as of December 31, 2013 of $174,236.
Additional working capital is not currently assessable since the Company is
seeking business opportunities.
As of the date of this report, the Company has no business or operations,
therefore, the amount of working capital required cannot be determined, if any,
at this time.
10
The company plans to fund the above operations, with loans and advances from our
current management and stockholders and to execute private placements with
related and other parties over the next twelve months.
The Company's plan of operation is actively seeking an acquisition or new
business opportunity, finding a business partner, or locating a qualified
company as a candidate for a business combination. We are authorized to enter
into a definitive agreement with a wide variety of businesses without limitation
as to their industry or revenues. It is not possible at this time to predict
with which company, if any, we will enter into a definitive agreement or what
will be the industry, operating history, revenues, future prospects or other
characteristics of that company.
It is impossible at this time to determine the result of our business
development as a result of any proposed agreement. Therefore, the Company will
continue to seek additional opportunities and potential acquisition targets to
develop an operating business.
We may seek a business opportunity with entities which have recently commenced
operations, or that may wish to utilize the public marketplace in order to raise
additional capital to expand their business, to develop a new product or
service, or for other corporate purposes. We may acquire assets and establish
wholly-owned subsidiaries in various businesses or acquire existing businesses
as subsidiaries.
We are not limiting our search for business opportunities to any particular
industry; therefore, our management may not be experienced in matters relating
to the business of any such target and will rely upon its own reasonable efforts
in accomplishing our business purposes. The Company may employ outside
consultants or advisors to assist in the search for qualified target companies
in which case any outside consultants or advisors fees may need to be assumed
by the target business, as we have no cash assets with which to pay such
obligation.
In analyzing prospective business opportunities, management may consider factors
such as:
a. financial strength and quality of managerial resources;
b. history of operations, if any;
c. the available empirical and technical data;
d. the availability of audited financial statements;
e. the nature of its present business and future prospects;
f. specific risk factors associated with the proposed activities;
g. the potential for profit, growth or expansion;
h. the perceived public recognition or acceptance of products, services, or
trades;
i. public identity; and other relevant factors.
Our Management does not have the capacity to conduct exhaustive due diligence of
a target business as might be undertaken by a venture capital fund or similar
institution. As a result, management may elect to merge with a target business
which has one or more undiscovered shortcomings and may, if given the choice to
select among target businesses, fail to enter into an agreement with the most
investment-worthy target business.
Following a business combination we may benefit from the services of others in
regard to accounting, legal services, underwritings and corporate public
relations. If requested by a target business, management may recommend one or
more underwriters, financial advisors, accountants, public relations firms or
other consultants to provide such services.
11
A potential target business may have an agreement with a consultant or advisor,
providing that services of the consultant or advisor be continued after any
business combination. Additionally, a target business may be presented to us
only on the condition that the services of a consultant or advisor are continued
after a merger or acquisition. Such pre-existing agreements of target businesses
for the continuation of the services of attorneys, accountants, advisors or
consultants could be a factor in the selection of a target business.
In implementing a structure for a particular business acquisition, we may become
a party to a merger, consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. We may also acquire stock or
assets of an existing business. On the consummation of a transaction, our
present management and stockholders may no longer control the Company. In
addition, it is likely that our officers and directors will, as part of the
terms of the acquisition transaction, appoint one or more new officers and
directors.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon an exemption from registration under applicable federal
and state securities laws. In some circumstances however, as a negotiated
element of a transaction, we may agree to register all or a part of such
securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after we have entered
into an agreement for a business combination or have consummated a business
combination. Although there can be no assurance that a market for our common
stock will develop or be sustained, the issuance of additional securities and
their potential sale into any trading market may depress the market value of our
securities in the future.
While the terms of a business transaction to which we may be a party cannot be
predicted, it is expected that the parties to the business transaction will
desire to avoid the creation of a taxable event and thereby structure the
acquisition in a tax-free reorganization under Sections 351 or 368 of the
Internal Revenue Code of 1986, as amended.
With respect to any merger or acquisition negotiations with a target business,
management expects to give specific attention to the overall dilutive effect
such a transaction would have on existing shareholders in exchange for the
target business. Any merger or acquisition effected by us may have a dilutive
effect on the percentage of shares held by our stockholders at such time,
therefore, depending upon, among other things, the target business's assets and
liabilities, our stockholders will in all likelihood hold a lesser percentage
ownership interest in Empire.
No assurances can be given that we will be able to enter into or complete a
business combination, as to the terms of a business combination, or as to the
nature of the target business.
We anticipate that the selection of a business opportunity in which to
participate will be complex and without certainty of success. Management
believes (but has not conducted any research to confirm) as previously described
in this report that there are numerous firms in various industries seeking the
perceived benefits of a publicly registered corporation. Such perceived benefits
may include facilitating or improving the terms on which additional equity
financing may be sought, providing liquidity for incentive stock options or
similar benefits to key employees, increasing the opportunity to use securities
for acquisitions, and providing liquidity for our stockholders and other
factors. Business opportunities may be available in many different industries
12
and at various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities extremely
difficult and complex. We can provide no assurance that we will be able to
locate compatible business opportunities.
On December 12, 2011 the Company filed a form 8-K report with the Securities and
Exchange Commission containing material facts that management entered into an
agreement to acquire AVT as described elsewhere. On July 10, 2012 the Company
filed an 8-K announcing that agreement to acquire AVT was terminated.
RESULTS OF OPERATIONS
Overview
The historical financial information about the Company upon which to base an
evaluation of our performance has been interrupted by a number of failed
business ventures. Accordingly, comparisons with prior periods are generally
not meaningful.
The Company is subject to risks inherent in the establishment of a new business
enterprise, including limited capital resources, possible delays in the decision
and implementation of a new business plan.
Revenues
The Company has no revenues for the period covered by this report. We do not
expect to generate any revenue, unless we are able to merge with a revenue
producing business.
Expenses
Our general and administrative expenses decreased from $15,825 in 2012 to
$8,411 in 2013. The decrease was a result of our limited operations during the
year ended December 31, 2013.
In 2013 and 2012 we financed our capital needs with advances from a private
shareholder Gold Street Capital Corp. In the subsequent twelve month period our
operating costs are expected to decrease due to the limited scope of work and
expenses anticipated to be incurred for filing our regulatory requirements and
actively pursuing a new business venture.
Interest expense included imputed interest on advances from shareholders of
$8,244 and $7,598 for the years ended December 31, 2013 and 2012 respectively.
Net Income/Loss
For the year ended December 31, 2013, we had a net loss of $16,655 or $0.001 net
loss per share which was a decrease of $6,768 from our net loss of $23,423 or
$0.001 net loss per share for the year ended December 31, 2012.
Assets
At December 31, 2013 and December 31, 2012 we had no assets.
Liabilities
Our current liabilities at December 31, 2013 were $174,236 as compared to
$165,825 in 2012. The increase was a result of debts due to shareholders to fund
our operations during 2013.
13
RELATED PARTY TRANSACTIONS
The amount due to related parties at December 31, 2013 is $165,971 compared to
$159,575 for the year ended December 31, 2012. Advances are due to stockholders,
are non-interest bearing and are due on demand. Interest was imputed at 5% per
annum. The Company recorded an interest expense of $8,244 and $7,598 for the
years ended December 31, 2013 and 2012, respectively.
Liquidity and capital resources
The Company had no cash balance at December 31, 2013 or 2012. The notes to our
financial statements as of December 31, 2013 and 2012, contain footnote
disclosure regarding our uncertain ability to continue as a going concern. We
have no revenues to cover our expenses, and we have an accumulated deficit of
$5,100,948. As of December 31, 2013, we had $174,236 in current liabilities as
well as a working capital deficit of $174,236 and as such we cannot assure that
we will succeed in achieving a profitable level of operations sufficient to meet
our ongoing cash needs or in locating a viable business opportunity.
We have not generated revenues from operations, consequently, we have been
dependent upon cash advances from related or other parties and private investors
as well as the issuance of our common stock to fund our cash requirements.
No trends have been identified which would materially increase or decrease our
results of operations or liquidity. We will need to raise significant additional
operating capital to finance our operations and to acquire sources of operating
revenues. Due to our poor financial condition, raising capital will be very
difficult and expensive. The Company will seek funds from possible strategic and
joint venture partners and financing to cover any short term operating deficits
and provide for long term working capital. No assurances can be given that the
Company will successfully engage strategic or joint venture partners or
otherwise obtain sufficient financing through the sale of equity.
Below is a discussion of our sources and uses of funds for the year ended
December 31, 2013 and 2012.
CASH FLOWS
Net Cash Used In Operating Activities
Our net cash used in operating activities decreased to $6,396 during the year
ended December 31, 2013 versus $9,575 in 2012. The decrease was primarily due
to a decrease in our operating costs.
Net Cash Used In Investing Activities
There were no investing activities in 2013 or 2012.
Net Cash Provided By Financing Activities
Our cash from financing activities in 2013 decreased to $6,396 versus $9,575
for the period ended 2012 and were limited to advances from a shareholder
during the years ended December 31, 2013 and 2012.
OFF BALANCE-SHEET ARRANGEMENTS
We have no off-balance sheet arrangements and no non-consolidated,
special-purpose entities.
14
INCOME TAXES
Note 5 of the financial statements included in this report sets out our deferred
tax assets as of December 31, 2013 and 2012. We have established a 100%
valuation allowance, as we believe it is more likely than not that the deferred
tax assets will not be realized.
We based the establishment of a 100% valuation allowance against our deferred
tax assets on our current operating results. If our operating results improve
significantly, we may have to record our deferred taxes in our financial
statements, which could have a material impact on our financial results.
CONTINGENCIES AND COMMITMENTS
We had no long-term commitments at December 31, 2013.
CONTRACTUAL OBLIGATIONS
We had no contractual obligations at December 31, 2013.
INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY
We have funded our operations primarily through cash injections from related and
other parties.
IMPACT OF INFLATION
We do not believe that general price inflation will have a material effect on
the Company's business in the near future.
FOREIGN EXCHANGE
Transactions involving the Company are generally denominated in U.S. dollars.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
From time to time, new accounting pronouncements are issued by the Financial
Accounting Standards Board or other standard setting bodies that may have an
impact on the Company's accounting and reporting. The Company believes that such
recently issued accounting pronouncements and other authoritative guidance for
which the effective date is in the future either will not have an impact on its
accounting or reporting or that such impact will not be material to its
financial position, results of operations, and cash flows when implemented.
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
See Note 6 "Subsequent Events" of Notes to Financial Statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Empire is a smaller reporting company as defined by Rule 12b-2 of the Exchange
Act and is not required to provide the information required under this item.
15
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
EMPIRE GLOBAL CORP.
(A Development Stage Company)
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2013 and 2012
CONTENTS
Report of Independent Registered Public Accounting Firm F-1
Balance Sheets F-2
Statements of Comprehensive Loss F-3
Statements of Changes in Stockholders' Deficiency F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6 - F-10
16
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Empire Global Corp
Toronto, Ontario, Canada
We have audited the accompanying balance sheets of Empire Global Corp.,
("the Company") as of December 31, 2013 and 2012 and the related statements of
comprehensive loss, changes in stockholders' deficiency, and cash flows for the
years then ended and for the period from inception (January 5, 2010) to December
31, 2013. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
2013 and 2012 and the results of its operations and its cash flows for the years
then ended and for the period from inception (January 5, 2010) to December 31,
2013 in conformity with accounting principles generally accepted in the United
States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has no assets, incurred significant losses
from operations since its inception and has not yet established any source of
revenues. These conditions, among others, raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Paritz & Company, P.A.
Hackensack, NJ
April 4, 2014
F-1
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Balance Sheets
December 31,
2013 2012
------------ ------------
ASSETS
Cash $ - $ -
------------ ------------
$ - $ -
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities
Accounts payable and accrued liabilities $ 8,265 $ 6,250
Advances from stockholders 165,971 159,575
------------ ------------
Total Current Liabilities 174,236 165,825
------------ ------------
Stockholders' Equity (Deficiency)
Preferred Stock, $0.0001 par value, 20,000,000
shares authorized, none issued and outstanding - -
Capital Stock, $0.0001 par value, 80,000,000
shares authorized, shares issued and outstanding
18,675,800 at December 31, 2013 and 2012 1,868 1,868
Additional - paid in capital 4,924,844 4,916,600
Deficit accumulated during the development stage (142,668) (126,013)
Accumulated deficit (4,958,280) (4,958,280)
------------ ------------
Total Stockholders' Equity (Deficiency) (174,236) (165,825)
------------ ------------
$ - $ -
============ ============
See notes to financial statements
F-2
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Statements of Comprehensive Loss
From re-entry into
development stage
(January 5, 2010)
Years ended December 31, to December 31,
2013 2012 2013
-------- -------- ------------
Revenue - - -
General and administrative expenses $ 8,411 $ 15,825 $ 120,279
Interest expense - stockholders 8,244 7,598 22,389
-------- -------- ------------
Loss from continuing operations (16,655) (23,423) (142,668)
-------- -------- ------------
Discontinued operations
Loss on disposal of discontinued operations - - (6,458)
-------- -------- ------------
Net Loss $(16,655) $ (23,423) $ (149,126)
======== ========= ============
Basic and fully diluted loss
per common share $ (0.001) $ (0.001)
======== ========
Basic and fully diluted weighted
average number of shares outstanding 18,675,800 18,675,800
=========== ===========
See notes to financial statements
F-3
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Statements of Changes in Stockholders' Deficiency
Accumulated
Common Additional Other Total
Stock Paid-In Comprehensive Accumulated Stockholders'
Shares Par Value Capital Income Deficit Equity
-------------------------------------------------------------------------------------
Balance at January 5, 2010 18,675,800 $ 1,868 $ 4,902,455 $ (7,832) $ (4,943,990) $ (47,499)
Foreign currency
translation adjustment - - 7,832 - 7,832
Net loss - - - (85,136) (85,136)
-------------------------------------------------------------------------------------
Balance at December 31, 2010 18,675,800 1,868 4,902,455 - (5,029,126) (124,803)
Imputed interest on shareholder advances - 6,547 - - 6,547
Net loss - - - (31,744) (31,744)
-------------------------------------------------------------------------------------
Balance at December 31, 2011 18,675,800 1,868 4,909,002 - (5,060,870) (150,000)
Imputed interest on
stockholder advances - - 7,598 - - 7,598
Net loss - - - - (23,423) (23,423)
-------------------------------------------------------------------------------------
Balance at December 31, 2012 18,675,800 1,868 4,916,600 - (5,084,293) (165,825)
Imputed interest on
stockholder advances - - 8,244 - - 8,244
Net loss - - - - (16,655) (16,655)
-------------------------------------------------------------------------------------
Balance at December 31, 2013 18,675,800 $ 1,868 $ 4,924,844 $ - $ (5,100,948) $ (174,236)
=====================================================================================
See notes to financial statements
F-4
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Statements of Cash Flows
From re-entry into
development stage
(January 5, 2010)
Years ended December 31, to December 31,
2013 2012 2013
-------- -------- ------------
Cash Flows from Operating Activities
Net loss from continuing operations $ (16,655) $ (23,423) $ (142,668)
Net loss from discontinued operations - - (6,458)
Net loss (16,655) (23,423) (149,126)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation - - 879
Imputed interest 8,244 7,598 22,389
Disposal of equipment - - 2,785
Loss on disposal of
discontinued operations - - 6,458
Change in operating assets and liabilities
Accounts payable and accrued liabilities 2,015 6,250 8,265
Net cash used in operating activities (6,396) (9,575) (108,350)
--------- --------- ----------
Cash Flows from Financing Activities
Advances from stockholders 6,396 9,575 108,350
Net cash provided by financing activities 6,396 9,575 108,350
--------- --------- ----------
Net change in cash - - -
Cash - beginning of year - - -
--------- --------- ----------
Cash - end of year $ - $ - $ -
========= ========= ==========
Supplemental disclosure of cash flow information:
Cash paid during the years for:
Interest $ - $ - $ -
========= ========= ==========
Income taxes $ - $ - $ -
========= ========= ==========
See notes to financial statements
F-5
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Notes to Financial Statements
1. Nature of Business and Operations
Empire Global Corp. ("Empire" or "the Company") was incorporated in the state of
Delaware on August 26, 1998 as Pender International Inc. On September 30, 2005
contemporaneously with a change in management and business plan changed its name
to Empire Global Corp. On January 5, 2010, the Company became a development
stage company, as defined by Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") 915, Development Stage Entities. The
Company's principal executive offices are headquartered in Toronto, Canada.
The Company has been looking for potential acquisitions. Accordingly, the
Company's activities have been accounted for as those of a Development Stage
Enterprise starting from January 5, 2010. The Company's financial statements are
identified as those of a development stage company, and the statements of
operations, stockholders' equity and cash flows disclose activity since the date
of the Company's inception.
2. Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.
As shown in the accompanying financial statements, the Company has no assets,
has incurred significant losses from operations since its inception and has not
yet established any source of revenues. These conditions, among others, raise
substantial doubt about the Company's ability to continue as a going concern.
Management plans to mitigate its losses in future years by significantly
reducing its operating expenses and seeking out new business opportunities.
However, there is no assurance that the Company will be able to obtain
additional financing, reduce its operating expenses or be successful in locating
or acquiring a viable business.
The accompanying financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the
possible inability of the Company to continue as a going concern.
3. Summary of Significant Accounting Policies
a) Basis of Presentation and Consolidation
The Company is considered to be in the development stage as defined by Financial
Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC")
915-10-05. This standard requires companies to report their operations,
shareholders equity and cash flows from inception through the reporting date.
The Company will continue to be reported as a development stage entity until,
among other factors, revenues are generated from management's intended
operations. Management has provided financial data since inception (January 5,
2010).
The accompanying financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States of
America and are expressed in US dollars.
F-6
b) Cash
Cash consists of cash on hand and cash deposited with financial institutions,
including money market accounts, and commercial paper purchased with an original
maturity of three months or less.
c) Use of Estimates
In preparing the Company's financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenue and expenses
during the reporting periods. Actual results could differ from those estimates.
Significant estimates made by management are, among others, realizability of
long-lived assets, and deferred taxes. Management reviews its estimates on a
quarterly basis and, where necessary, makes adjustments prospectively.
d) Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any impairment losses. Depreciation is computed using the straight-line
method over the useful lives of the assets. Major renewals and betterments are
capitalized and depreciated; maintenance and repairs that do not extend the life
of the respective assets are expensed as incurred. Upon disposal of assets, the
cost and related accumulated depreciation are removed from the accounts and any
gain or loss is included in the statements of income and
comprehensive income.
e) Impairment of Long Lived Assets
In accordance with the Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") 360-10, Accounting for the Impairment or Disposal
of Long-Lived Assets, long-lived assets, such as property, plant and equipment
and purchased intangibles subject to amortization are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying value of
an asset may not be recoverable, or it is reasonably possible that these assets
could become impaired as a result of technological or other industrial changes.
The determination of recoverability of assets to be held and used is made by
comparing the carrying amount of an asset to future undiscounted cash flows to
be generated by the assets.
If such assets are considered to be impaired, the impairment to be recognized is
measured as the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less cost to sell. During the reporting
periods there was no impairment loss of long-lived assets recognized.
f) Earnings Per Share
FASB ASC 260, "Earnings Per Share" provides for calculation of "basic" and
"diluted" earnings per share. Basic net earnings per common share are determined
by dividing net loss by the weighted average number of shares of common stock
outstanding during the period. Diluted net earnings per common share is computed
by dividing net loss by the weighted average number of shares of common stock
and potentially outstanding shares of common stock during each period.
Basic and diluted loss per share was the same, at December 31, 2013 and 2012, as
there were no common stock equivalents outstanding.
F-7
g) Income Taxes
We use the asset and liability method of accounting for income taxes in
accordance with ASC Topic 740, "Income Taxes." Under this method, income tax
expense is recognized for the amount of: (i) taxes payable or refundable for the
current year and (ii) deferred tax consequences of temporary differences
resulting from matters that have been recognized in an entity's financial
statements or tax returns. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in the results of operations in the period that includes the
enactment date. A valuation allowance is provided to reduce the deferred tax
assets reported if based on the weight of the available positive and negative
evidence, it is more likely than not some portion or all of the deferred tax
assets will not be realized.
ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes
recognized in an enterprise's financial statements and prescribes a recognition
threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. ASC
Topic 740.10.40 provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. We have no
material uncertain tax positions for any of the reporting periods presented.
h) Fair Value of Financial Instruments
We measure our financial assets and liabilities in accordance with accounting
principles generally accepted in the United States of America. The carrying
value of the Company's short term investments, prepaid and sundry assets,
accounts payable and accrued charges, and advances from shareholder approximate
fair value because of the short term maturity of these financial instruments.
The Company adopted accounting guidance for financial assets and liabilities
(ASC 820). The adoption did not have a material impact on our results of
operations, financial position or liquidity. This standard defines fair value,
provides guidance for measuring fair value and requires certain disclosures.
This standard does not require any new fair value measurements, but rather
applies to all other accounting pronouncements that require or permit fair
value measurements. This guidance does not apply to measurements related to
share-based payments. This guidance discusses valuation techniques, such as the
market approach (comparable market prices), the income approach (present value
of future income or cash flow), and the cost approach (cost to replace the
service capacity of an asset or replacement cost). The guidance utilizes a fair
value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value into three broad levels. The following is a brief description
of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active market
for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly
or indirectly. These include quoted prices for similar assets or
liabilities in active markets and quoted prices for identical or
similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists,
therefore developed using estimates and assumptions developed by us,
which reflect those that a market participant would use.
The Company has no assets or liabilities measured at fair value or at recurring
basis.
F-8
i) Comprehensive Income
The Company adopted FASB ASC 220-10-45, "Reporting Comprehensive Income", ASC
220-10-45 establishes standards for reporting and presentation of comprehensive
income and its components in a full set of financial statements. Comprehensive
income is presented in the statements of operations, and consists of net income
and unrealized gains (losses) on available for sale marketable securities;
foreign currency translation adjustments and changes in market value of future
contracts that qualify as a hedge; and negative equity adjustments.
4. Advances from stockholders
Advances from stockholders are non-interest bearing and are due on demand.
Interest was imputed at 5% per annum. The Company recorded an interest expense
of $8,244 and $7,598 for the years ended December 31, 2013 and December 31, 2012
respectively. Advances from stockholders as of December 31, 2013 and 2012 are as
follows:
December 31, December 31,
2013 2012
---------- ----------
Braydon Capital Corp. $ 31,314 $ 31,314
Gold Street Capital Corp. $ 134,657 $ 128,261
---------- ----------
Total advances from stockholders: $ 165,971 $ 159,575
========== ==========
5. Income Taxes
The Company is incorporated in the United States of America and is subject to
United States federal taxation. No provisions for income taxes have been made,
as the Company had no U.S. taxable income for the year ended December 31, 2013
and 2012.
The Company's deferred tax assets as of December 31, 2013 and 2012 are as
follows:
December 31, December 31,
2013 2012
---------- ----------
Net loss carryforward $ 1,785,000 $ 1,779,000
Valuation allowance ( 1,785,000) ( 1,779,000)
---------- ----------
Deferred tax assets $ - $ -
========== ==========
The Company has accumulated a net operating loss carryforward ("NOL") of
approximately $5 million as of December 31, 2013. This NOL may be offset against
future taxable income through the year 2033. The use of these losses to reduce
future income taxes will depend on the generation of sufficient taxable income
prior to the expiration of the NOL. No tax benefit has been reported in the
financial statements for the year ended December 31, 2013 and 2012 because it
has been fully offset by a valuation reserve. The use of future tax benefit is
undeterminable because we presently have no operations.
F-9
NOL incurred are subject to limitation due to any ownership change (as defined
under Section 382 of the Internal Revenue Code of 1986) which resulted in a
change in business direction. Unused limitations may be carried over to future
years until the NOLs expire. Utilization of NOLs may also be limited in any one
year by alternative minimum tax rules.
6. Subsequent Events
The Company has evaluated all events or transactions that occurred subsequent to
December 31, 2013 through the date these financial statements were issued, and
has disclosed as follows:
On January 1, 2014 Empire Global Corp. entered into a Lease Assignment Agreement
(the "Agreement") with Finca Zephir Veintitre S.A. ("Finca") to Lease with
Option to Buy the El Sabanero Beach Hotel and Casino (the "property") situated
on Flamingo Beach, in Santa Cruz, Guanacaste, Costa Rica. The Company and the
property owners were unable to reach an agreement on purchase option terms,
therefore the Agreement was rescinded on March 31, 2014 retroactive to the
effective date of the Agreement on January 1, 2014.
On January 31, 2014, Empire Global Corp. signed a letter of intent to acquire
Multigioco Srl a licenced gaming operator organized in 2011 based in Rome,
Italy.
On the closing date the company will acquire 70% of the issued and outstanding
shares of the yet to be named Maltese company and an additional 15% at the end
of year 2 plus the remaining 15% at the end of year 3 which acquisition includes
all of the assets, intellectual property, operations and licences governed under
the Amministrazione Autonoma Monopoli di Stato (AAMS) in Italy.
Multigioco has over 750 venues under its licence mainly situated throughout
Central and South Italy, with an extensive current on-line platform and
certified for PosteItalia, MasterCard, Visa and Skrill Gaming Card use and with
mobile applications on the horizon.
F-10
Item 9. Changes in and disagreements with accountants on accounting and
financial disclosure
None.
Item 9a. Controls and procedures
Annual Evaluation of Disclosure Controls
We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer),
who are the same person, to allow for timely decisions regarding required
disclosure.
As required by SEC Rule 15d-15(b), our Chief Executive Officer and Chief
Financial Officer carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures pursuant to Exchange Act
Rule 15d-14 as of the end of the period covered by this report. Based on the
foregoing evaluation, our CEO and CFO concluded that our disclosure controls and
procedures are effective in providing material information required to be
included in our periodic SEC filings on a timely basis and to ensure that
information required to be disclosed in our periodic SEC filings is accumulated
and communicated to our management, including our CEO and CFO, to allow timely
decisions regarding required disclosure about our internal control over
financial reporting discussed below.
Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting for our company. Our internal control system
was designed to, in general, provide reasonable assurance to our management and
board regarding the preparation and fair presentation of published financial
statements, but because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2013. The framework used by management in making
that assessment was the criteria set forth in the document entitled "Internal
Control - Integrated Framework" issued by the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission. Based on that assessment, our
management has determined that as of December 31, 2013, our internal control
over financial reporting was not effective due to material weaknesses resulting
from our limited resources.
This annual report does not include an attestation report of the Company's
registered accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission.
27
Changes in Internal Control, Over Financial Reporting
There were no changes to our internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred
during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
Item 9b. Other information
None.
PART III
Item 10. Directors and executive officers, promoters and control persons
All directors of our company hold office until the next annual meeting of the
stockholders or until their successors have been elected and qualified or have
resigned. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office.
Our current directors, executive officers and significant employees, their ages,
positions held, and duration as such, as of the date of this report is as
follows:
Date
Name Age Position First Elected Term Expiry
Michael Ciavarella 51 Chairman, Director June 6, 2011 None
Chief Executive Officer
Chief Operating Officer
Sharad Mistry 45 Director March 4, 2014 None
Chief Financial Officer
Julian L. Doyle 45 Director March 4, 2014 None
Secretary
Vic Dominelli 50 Director January 6, 2005 None
Secretary
Identity of Significant Employees
There are no employees or personnel that are expected to make a significant
contribution to the business.
Family Relationships
There are no family relationships among the current directors, executive
officers, or persons nominated or chosen by the Company to become directors or
executive officers.
Executive Resumes
Michael Ciavarella, B.Sc. - Chairman of the Board, CEO, COO, CFO
2011 - Present Chairman of the Board, CEO, COO, CFO
2005 - 2011 Director of Operations, Empire Global Corp.
2004 President and CEO, Empire Global Corp (formerly Pender)
1990 - 2007 Independent Investment Advisor, Limited Market Dealer
1986 - 1990 Teacher - Cree School Board
28
Mr. Ciavarella is 51 years old and is our former president, and chief executive
officer. Mr. Ciavarella graduated from Laurentian University with a Bachelor of
Science degree in science with studies in mining engineering. From 2002 to 2004
Mr. Ciavarella has served as a senior executive, financial planner and life
insurance underwriter with Dagmar Insurance Services and financial advisor with
Manulife Financial.
In 2004, Mr. Ciavarella was instrumental in financing Armistice Resources Corp.
a distressed gold mining venture situated in Northern Ontario, Canada. As a
result of Mr. Ciavarella's investment and the efforts invested by Armistice's
current management and staff, Armistice has completed its initial exploration
and development and is planning to commence mining operations and gold
production.
Since 2005, Mr. Ciavarella has been engaged as our Director of Operations and
assisted in a number of acquisition endevours explored by the Company during the
period. In 2011, Mr. Ciavarella was appointed as chairman and executive officer.
Sharad Mistry
Mr. Mistry is our chief financial officer and has over 30 years of experience in
the areas of corporate finance, business, and risk management. He is a Chartered
Professional Accountant and was previously Vice President of Financial Services
for one of Canada's leading retail chains. Since 1996, he has provided services
as Chief Financial Officer, and/or Chief Executive Officer to corporations,
including publicly listed companies in Canada (Toronto Stock Exchange) and the
U.S (NASDAQ), and financial, project management, mergers and acquisition and
consultancy services. Sharad's industry experience includes work with oil and
gas, battery manufacturing, investment management firms, automotive accessories
design and manufacturing, apparel manufacturing, retail, biotechnology research
and development, franchise operations, information technology, mining and
services businesses. He is currently Director, and member of Audit Committee of
a publically listed high tech company Wi2Wi Corporation operating out of San
Jose, CA.
Julian L. Doyle
Mr. Doyle is our Secretary and has a broad based corporate/commercial practice
in which he acts for a wide variety of businesses, advising them on matters of
mergers and acquisitions, debt and equity financing, corporate governance, risk
management, commercial contracts, financial and regulatory matters. He is a
member of the Canadian Bar Association and a significant part of Julian's
practice involves advising Canadian and non-Canadian clients on international
trade and international financing matters and he is active in assisting clients
to achieve their objectives in multiple jurisdictions. Julian is also very
active in the rapidly growing technology area and he provides advice on a wide
range of intellectual property, information technology and e-commerce issues.
Julian is a director of a number of private and public companies. Julian has
been a lecturer in business law at the Bar Admissions Course. He has been
practising law since 1985.
29
Involvement in Certain Legal Proceedings
1. No bankruptcy petition has been filed by or against any business of which
any director was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time.
2. No current director has been convicted in a criminal proceeding and is not
subject to a pending criminal proceeding (excluding traffic violations and
other minor offences).
3. No current director has been subject to any order, judgment, or decree,
not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities with the exception of the specific temporary
restrictions limited to Canada mutually agreed to between Mr. Michael
Ciavarella and the Ontario Securities Commission.
4. No director has been found by a court of competent jurisdiction (in a
civil action), the Securities Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, that has not been reversed, suspended, or vacated.
Compliance with Section 16(a) of the Exchange Act
Based solely on a review of forms 4 and 5 furnished to the Company and filed
with the Securities and Exchange Commission under Rule 16a-3(e) promulgated
under the Securities Exchange Act of 1934, which the exception of Braydon
Capital Corp., and Gold Street Capital Corp. the Company believes that all
directors, officers and beneficial owners of more than 10% of any class of
equity securities filed on a timely basis the reports required by Section 16(a)
of the Exchange Act during the most recent fiscal year.
Nomination Procedure for Directors
Empire has adopted a nominee committee charter however, due to our limited
operations does not have a standing nominating committee; recommendations for
candidates to stand for election as directors are made by the board of
directors.
Identification of Audit Committee
The Company does not have an audit committee or an audit committee financial
expert (as defined in Item 407 of Regulation S-K) serving on its Board of
Directors. All current members of the Board of Directors lack sufficient
financial expertise for overseeing financial reporting responsibilities. The
Company has not yet employed an audit committee financial expert on its Board
due to the inability to attract such a person.
Although we are not legally required to have an audit committee, the Company
intends to establish an audit committee of the board of directors, which will
consist of independent directors. The audit committee's duties will be to
recommend to the Company's board of directors the engagement of an independent
registered public accounting firm to audit the Company's financial statements
and to review the Company's accounting and auditing principles. The audit
committee will review the scope, timing and fees for the annual audit and the
results of audit examinations performed by the internal auditors and independent
registered public accounting firm, including their recommendations to improve
the system of accounting and internal controls. The audit committee will at all
times be composed exclusively of directors who are, in the opinion of the
Company's board of directors, free from any relationship which would interfere
with the exercise of independent judgment as a committee member and who possess
an understanding of financial statements and generally accepted accounting
principles.
30
Code of Ethics
On February 21, 2006, the Company's board of directors formally adopted a Code
of Business Conduct and Ethics effective December 31, 2005.
The Company filed the Code of Business Conduct and Ethics on April 17, 2006 with
the Securities and Exchange Commission as an Exhibit to the annual report on
form 10-KSB for the year ended December 31, 2005 and a copy is attached by
reference herein as an Exhibit to this annual report. The Company will provide
a copy of the Code of Business Conduct and Ethics to any person without charge,
upon request. Requests can be sent to: Empire Global Corp., 671 Westburne Dr.,
Concord, Ontario, L4K 4Z1 Attention: President and CEO.
Item 11. Executive compensation
The following table sets out compensation and awards paid to our officers and
directors during the period covered by this report.
SUMMARY COMPENSATION TABLE
-
Non-equity Nonqualified
Name and Stock Option Incentive Plan Deferred All Other Total
principal Salary Bonus Award(s) Award(s) Compensation Compensation Compensation Compensation
position Year ($) ($) ($) ($) ($) ($) ($) ($)
------------------- ---- ------ ------ ------- -------- -------------- ------------ ------------ ------------
Michael Ciavarella
CEO, CFO, Chairman 2013 0 0 0 0 0 0 0 0
2012 0 0 0 0 0 0 0 0
2011 0 0 0 0 0 0 0 0
Vic Dominelli,
Secretary, Director 2013 0 0 0 0 0 0 0 0
2012 0 0 0 0 0 0 0 0
2011 0 0 0 0 0 0 0 0
2010 0 0 0 0 0 0 0 0
2009 0 0 0 0 0 0 0 0
2008 0 0 0 0 0 0 0 0
2007 0 0 0 0 0 0 0 0
2006 0 0 0 0 0 0 0 0
2005 0 0 0 0 0 0 0 0
There are no current employment agreements between the Company and its executive
officers and directors. Our directors and officers submit invoices for services
provided to the Company for business development. The directors and officers
have agreed to receive shares of common stock in lieu of cash until such time as
the Company receives sufficient revenues necessary to provide proper salaries to
all officers and compensation for directors' participation. At this time,
management cannot accurately estimate when sufficient revenues will occur to
implement this compensation, or the exact amount of compensation.
There are no annuities, pensions or retirement benefits proposed to be paid to
officers, directors or employees of the corporation in the event of retirement
at a normal retirement date pursuant to any presently existing plan provided or
contributed to by the corporation.
30
Compensation of Directors
Currently, there are no arrangements between Empire and any of its directors or
between any of the subsidiaries and any of its directors whereby such directors
are compensated for any services provided as directors. No payments have been
made to our directors for their services as directors that have not been
previously reported by the Company.
Item 12. Security ownership of certain beneficial owners and management
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The tables below set forth, as of December 31, 2013 the beneficial ownership of
the Company's Common Stock (i) by any person or group known by the Company to
beneficially own more than 5% of the outstanding Common Stock, (ii) by each
Director and executive officer and (iii) by all Directors and executive officers
as a group. Unless otherwise indicated, the Company believes that the beneficial
owners of the shares have sole voting and investment power over such shares. The
address of all individuals for whom an address is not otherwise indicated is 671
Westburne Dr., Concord, Ontario L4K 4Z1.
Name and Address Percent
Title of Class of Beneficial Owner Amount of Class
-------------- ----------------------------- ----------- --------
Common Braydon Capital Corp. 5,568,700 29.8%
42 Wishing Well Crt.
Kleinburg, Ontario
Common Gold Street Capital Corp. 12,360,660 66.1%
155 Mary Street, Zephyr House
Georgetown, Grand Cayman
SECURITY OWNERSHIP OF MANAGEMENT
Name and Address Percent
Title of Class of Beneficial Owner Amount of Class
-------------- ----------------------------- ----------- --------
Common Michael Ciavarella 0 0%
Chairman, CEO, COO, CFO
671 Westburne Dr.
Concord, Ontario, L4K 4Z1
Common Vic Dominelli, 0 0%
Director and Secretary
671 Westburne Dr.
Concord, Ontario, L4K 4Z1
Common Total shares owned by officers 0 0%
and directors of the Company
as a group. All directors and
executive officers (2 persons)
The above tables are based upon information derived from our stock records.
Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, it believes that each of the
shareholders named in this table has sole or shared voting and investment power
with respect to the shares indicated as beneficially owned. Applicable
percentages are based upon 18,675,800 shares of common stock outstanding as of
December 31, 2013.
31
CHANGES IN CONTROL
None
Item 13. Certain relationships and related party transactions
In the last 2 years, there have been no transactions or proposed transactions in
which Empire was or was to be a party where directors or executive officers,
nominees for election as a director and members of the immediate family of such
persons were involved.
Empire Global Corp. has no parent company and was not involved in any
transactions or agreements with any promoters in the last five years.
Transactions with Related Persons
No director, executive officer, security holder, or any immediate family of such
director, executive officer, or security holder has had any direct or indirect
material interest in any transaction or currently proposed transaction, which
the Company was or is to be a participant that exceeded the lesser of
(1) $120,000 or (2) one percent of the average of our total assets at year-end
for the last three completed fiscal years, except for the following:
Promoters and control persons
During the past nine fiscal years, Vic Dominelli has been a promoter of Empire's
business, however Mr. Dominelli has not received anything of value from Empire
or its subsidiaries nor is any person entitled to receive anything of value from
Empire or its subsidiaries for services provided as a promoter of the business
of Empire and its subsidiaries.
Director independence
Pursuant to Item 407(a)(1)(ii) of Regulation S-B of the Securities Act, the
Company has adopted the definition of "independent director" as set forth in
Rule 4200(a)(15) of the NASDAQ Manual. In summary, an "independent director"
means a person other than an executive officer or employee of the Company or its
subsidiaries or any other individual having a relationship which, in the opinion
of our board of directors, would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director, and includes any
director who accepted any compensation from the Company in excess of $200,000
during any period of 12 consecutive months within the three past fiscal years.
Also, ownership of Empire's stock will not preclude a director from being
independent.
In applying this definition, our board of directors has determined that Vic
Dominelli qualifies as an "independent director" pursuant to Rule 4200(a)(15) of
the NASDAQ Manual.
As of the date of the report, Empire did not maintain a separately designated
compensation or nominating committee, however, the company has also adopted this
definition for the independence of the members of its audit committee.
Mr. Dominelli does not serve on any committees of the board.
32
Item 14. Principal accountant fees and services
AUDIT FEES
Audit fees are for professional services for the audit of our annual financial
statements, and for the review of the financial statements included in our
filing on form 10-K and for services that are normally provided in connection
with statutory and regulatory filings or engagements. The Company paid audit
fees of approximately $2,500 to Paritz and Co., PA in connection to audits for
both the periods ended December 31, 2012 and 2013 respectively.
AUDIT RELATED FEES
Audit related fees are funds paid for the assurance and related services
reasonably related to the performance of the audit or the review of our
financial statements. We paid no audit related fees during 2013 and 2012.
TAX FEES
Tax fees are those funds paid for professional services with respect to tax
compliance, tax advice, and tax planning. We paid no professional tax fees
during 2013 and 2012 other than those previously disclosed.
ALL OTHER FEES
All other fees are those fees paid for permissible work that does not fall
within any of the three other fees categories set forth above. No other fees
were paid during 2013 and 2012.
PRE-APPROVED POLICY FOR AUDIT AND NON-AUDIT SERVICES
Our policy is to pre-approve all audit and permissible non-audit services
performed by the independent accountants. These services may include audit
services, audit-related services, tax services and other services. Under our
audit committee policy, pre-approval is generally provided for particular
services or categories of services, including planned services, project based
services and routine consultations. In addition, the audit committee may also
pre-approve particular services on a case-by-case basis. All of the services
rendered to us in the past two fiscal years by Paritz and Co. PA, were
pre-approved by our Board of Directors.
33
Item 15. Exhibits
EXHIBITS
The exhibits required by Item 601 of Regulation S-B listed on the Exhibit Index
are included herein.
All Exhibits required to be filed with the form 10-K are included in this annual
report or incorporated by reference to our previous filings with the SEC, which
can be found in their entirety at the SEC website at www.sec.gov under SEC File
Number 000-50045.
Exhibit Description Status
------- ----------- -------
14.1 Code of Ethics filed as an exhibit to Empire's form 10-KSB Filed
filed on April 17, 2006, and incorporated herein by reference.
31 Certification of Principal Executive Officer and Included
Principal Financial Officer required under Rule 13a-14(a)
or Rule 15d-14(a) of the Securities and Exchange Act of 1934,
as amended.
32 Certification of Principal Executive Officer and Included
Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
REPORTS ON FORM 8-K (SUBSEQUENT TO THE DATE OF THIS ANNUAL REPORT)
On January 2, 2014, the Company filed an 8-K to report the following:
That the Company entered into an agreement to assume a Lease with Option To
Purchase the El Sabanero Beach Hotel in Guanacaste, Costa Rica. The agreement,
effective January 1, 2014 requires the Company to assume the Lease obligations
and terminates on April 30, 2015.
On January 31, 2014, the Company filed an 8-K to report the following:
That the Company signed a Letter of Intent to acquire Multigioco Srl, a
AAMS licenced gaming company based in Rome, Italy. The transaction is
subject to the completion of a Material Definitive Agreement and filing
of Audited Financial Statements with the Securities and Exchange Commission.
34
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EMPIRE GLOBAL CORP.
By: /s/ Michael Ciavarella Date: April 4, 2014.
---------------------------
Michael Ciavarella
Chairman of the Board
Chief Executive Officer
By: /s/ Sharad Mistry Date: April 4, 2014.
---------------------------
Sharad Mistry
Chief Financial Officer
(Principal Financial Officer)
By: /s/ Julian L. Doyle Date: April 4, 2014.
---------------------------
Julian L. Doyle
Secretary
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Name Title Date
By: /s/ Michael Ciavarella Chief Executive Officer April 4, 2014
---------------------------
Michael Ciavarella
By: /s/ Sharad Mistry Chief Financial Officer April 4, 2014
---------------------------
Sharad Mistry
By: /s/ Julian L. Doyle Secretary April 4, 2014
---------------------------
Julian L. Doyle