0001080319-12-000012.txt : 20121011
0001080319-12-000012.hdr.sgml : 20121011
20121011101428
ACCESSION NUMBER: 0001080319-12-000012
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20111231
FILED AS OF DATE: 20121011
DATE AS OF CHANGE: 20121011
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: EMPIRE GLOBAL CORP.
CENTRAL INDEX KEY: 0001080319
STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500]
IRS NUMBER: 000000000
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-50045
FILM NUMBER: 121139229
BUSINESS ADDRESS:
STREET 1: 671 WESTBURNE DR.
CITY: CONCORD
STATE: A6
ZIP: L4K 4Z1
BUSINESS PHONE: 647-229-0136
MAIL ADDRESS:
STREET 1: 671 WESTBURNE DR.
CITY: CONCORD
STATE: A6
ZIP: L4K 4Z1
FORMER COMPANY:
FORMER CONFORMED NAME: TRADESTREAM GLOBAL CORP.
DATE OF NAME CHANGE: 20050727
FORMER COMPANY:
FORMER CONFORMED NAME: VIANET TECHNOLOGY GROUP LTD
DATE OF NAME CHANGE: 20050707
FORMER COMPANY:
FORMER CONFORMED NAME: PENDER INTERNATIONAL INC
DATE OF NAME CHANGE: 19990223
10-K
1
emgl10k-111231.txt
ANNUAL REPORT YEAR ENDED 2011
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, 2011.
[ ] 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 September 25, 2012 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, 2011, 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. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 6
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 6
ITEM 6. SELECTED FINANCIAL DATA 11
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS 11
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 17
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
(Financial Statements - pages numbered as F1 to F12) 17
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 30
ITEM 9A. CONTROLS AND PROCEDURES 30
ITEM 9B. OTHER INFORMATION 31
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 31
ITEM 11. EXECUTIVE COMPENSATION 33
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS 34
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 35
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 36
ITEM 15. EXHIBITS 36
SIGNATURES 38
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 no par value. Each shareholder of the common
stock shall be entitled to one vote for each share of common stock held. As of
September 25, 2012 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. As reported in
Subsequent Events, 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.
On July 9, 2004, the Company acquired 100% of the stock of IMM Investments Inc.,
an Ontario corporation ("IMM"), thus making IMM a wholly owned subsidiary of
Empire. IMM owns 5 million (20 million pre-reverse split) shares of Armistice
Resources Corp. a Canadian exploration company developing a gold mining interest
in Northern Ontario. On January 4, 2010, the Company disposed of IMM.
As of December 31, 2011, the Company did not have interests in any business,
however the Company had entered into an Agreement to purchase AVT on December 9,
2011, and subsequently terminated the Agreement to purchase AVT on July 2, 2012.
DISTRIBUTION METHODS FOR PRODUCTS OR SERVICES
As of the fiscal year ended December 31, 2011 the Company has no products or
services available.
STATUS OF PUBLICLY ANNOUNCED NEW PRODUCTS OR SERVICES
As of the fiscal year ended December 31, 2011 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, 2011 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 new potential acquisition targets to
develop an operating business.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR
LABOR CONTRACTS
4
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 services.
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, 2011.
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 and one active independent contractor.
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.
Note: Mining Operations
Although Empire does not engage in mining operations, our wholly owned
subsidiary IMM which we disposed of on January 4, 2010 had made an investment in
Armistice Resources Corp. which does. However, our investment in Armistice did
not deem us a controlling entity. Armistice Resources Corp. is a reporting
Canadian company and information about its business can be found on the System
5
for Electronic Document Analysis and Retrieval (SEDAR) developed in Canada for
the Canadian Securities Administrators (www.sedar.com). As a result of our
disposal of IMM, the Company no longer has an interest in Armistice.
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. Reserved
Not applicable.
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.
6
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 under the symbol, EMGL.PK.
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
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
2010 PERIOD HIGH LOW
January 1 - March 31 $ 0.015 $ 0.02
April 1 - June 30 0.015 0.015
July 1 - September 30 0.015 0.005
October 1 - December 31 0.01 0.001
2011 PERIOD
January 1 - March 31 $ 0.001 $ 0.001
April 1 - June 30 0.001 0.001
July 1 - September 30 0.001 0.001
October 1 - December 31 0.03 0.01
SHAREHOLDERS
As of December 31, 2011, 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
On July 26, 2004, shareholders of record on that date became entitled to receive
a stock dividend of six new shares of common stock of the Company for each one
share held pursuant to a forward split approved by the Board of Directors of the
Company on July 12, 2004.
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.
7
DESCRIPTION OF SECURITIES
As of December 31, 2011, 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
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.
8
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.
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
9
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.
Share exchange - IMM Investments Inc.
On July 9, 2004, the Company acquired 100% of IMM Investments Inc., thus making
IMM a wholly owned subsidiary of the Company. The Company acquired IMM from
KJ Holding Inc. an Ontario Corporation owned by Kalano Jang father of our former
Chairman Kalson Jang, by issuing KJ Holding Inc. 3,000,000 (21,000,000
post-forward split) restricted shares of the Company in exchange for 100% of the
issued and outstanding stock in IMM. Details of this transaction are available
on the form 8-K filed on July 14, 2004 to announce the acquisition of IMM
Investments Inc. and the form 8-K/A filed on December 3, 2004 to amend 8-K filed
on July 14, 2004. Items 2.01 and 9.01 were amended on this report.
Sale of Shares - Private Placements - Cancellation of Debt
On June 27, 2005 the Company completed a private placement by issuing a total of
2,088,720 pre-split (20,888 post-split) shares of its common stock with a total
value of $208,872 to an accredited investor in exchange for the cancellation of
debt owed by the Company respectively to the investor.
On July 27, 2005 the Company completed a private placement by issuing a total of
500,000 pre-split (50,000 post-split) shares of its common stock with a total
value of $150,000 to an accredited investor in exchange for the cancellation of
debt owed by the Company to the investor.
On October 12, 2005 the Company completed a private placement by issuing a total
of 814,100 shares of its common stock with a total value of $472,178 to a group
of accredited investors in exchange for the cancellation of debt owed by the
Company respectively to each investor.
On August 21, 2006, the Company completed a private placement by issuing a total
of 7,236,300 shares of its common stock with a total value of $922,595 to a
group of accredited investors in exchange for the cancellation of debt owed by
the Company respectively to each investor.
On November 26, 2006, the Company completed a private placement by issuing a
total of 1,000,000 shares of its common stock with a total value of $127,495 to
an accredited investor in exchange for the cancellation of debt and rent for
use of office space in New York.
On November 5, 2007, the Company completed a private placement by issuing a
total of 3,378,900 shares of its common stock with a total value of $405,468 to
a group of accredited investors in exchange for the cancellation of debt owed by
the Company respectively to each investor.
On May 5, 2008, Empire completed a private placement of 5,500,000 shares of its
common stock. The Company issued 3,000,000 shares of common stock with a total
value of $200,000, as well as 2,500,000 shares of common stock with a total
value of $175,000 to a group of accredited investors in exchange for the
cancellation of debt owed by the Company to each investor.
10
The shares issued in each private placement are exempt from the registration
requirements of the Securities Act of 1933 (the "Act") pursuant to Section 4(2)
of the Act and Rule 506 promulgated thereunder. Each investor is an "accredited
investor" under the Act, and no form of general solicitation or general
advertising was conducted in connection with the private placements.
Each of the certificates representing shares of the Company's common stock
issued in each private placement contain restrictive legends preventing the
sale, transfer or other disposition of such shares, unless registered under the
Securities Act.
REGISTRATION STATEMENTS
On July 27, 2005 Empire issued 500,000 shares each by way of S-8 registration to
two consulting firms for an aggregate total of 1,000,000 pre-split (100,000
post-split) shares of its common stock. The consulting firms were engaged to
assess and make recommendations with respect to the Company's plans to enter
into a merger and reorganization with Vianet Direct, Inc. and subsequently
Tradestream Global, AG.
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.
Item 6. Selected Financial Data
Not Applicable.
Item 7. Management's discussion and analysis
FORWARD-LOOKING STATEMENTS
This management discussion and analysis of financial condition and results of
operations ("MD&A") on form 10-K includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical fact, including statements regarding
guidance, industry prospects or future results of operations or financial
position, made in this MD&A on form 10-K are forward-looking. We use words such
as anticipate, believe, expect, future, intend, plan, aim, project, estimate,
will, should, could and similar expressions to identify forward-looking
statements. Forward-looking statements reflect management's current expectations
and are inherently uncertain. Factors that could cause our future results to
differ from these expectations include general economic conditions, particularly
as they affect our ability to acquire a target business and raise sufficient
working capital and the impact of foreign exchange fluctuations, changes in
global economic conditions and consumer spending. As a result, the
identification and interpretation of data and other information and their use in
developing and selecting assumptions from and among reasonable alternatives
requires the exercise of judgment. To the extent that the assumed events do not
occur, our outcome may vary substantially from our anticipated or projected
results, and accordingly, we express no opinion on the outcome of those
forward-looking statements and give no assurance that any of the assumptions
relating to the forward-looking statements are accurate. These risks and
uncertainties, as well as other risks and uncertainties that could cause our
actual results to differ significantly from management's expectations describes
some, but not all, of the possible risk factors whether known or unknown to
management on the date of this filing.
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
11
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.
On July 9, 2004 we acquired 100% of the shares of IMM Investments Inc. ("IMM"),
an Ontario Corporation. On January 4, 2010 the Company disposed of IMM.
As of December 31, 2011, the Company has no business operations and has been
seeking new business opportunities during the period covered by this report. As
reported in Subsequent Events, 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, 2011 we had no cash and no assets and 150,000 in current
liabilities. Our cash flow requirement for the twelve-month period from January
2012 to December 2012 is estimated to be $192,000.
Empire Additional Working Capital:
Empire has a working capital deficit as of December 31, 2011 of $150,000.
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.
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.
Subsequent to the period covered by this report, the Company terminated the
12
Agreement to acquire AVT. It is impossible at this time to determine the result
of our business development as a result of the Agreement. Therefore, the Company
will continue to seek additional opportunities and potential acquisition targets
to develop a 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 will 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.
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
13
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
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 has entered into
an agreement to acquire AVT as described elsewhere. On July 10, 2012 the Company
filed an 8-K announcing that the Company had terminated agreement to acquire
AVT.
14
COMPARISONS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
Overall Results of Operations
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
General and administrative expenses represent the bulk of our net operating
results. Our net loss from continuing operations decreased from $70,846 in 2010
to $31,744 in 2011. The amount of $31,744 recorded in 2011 includes an imputed
interest expense on advances from shareholders of $6,547. The decrease was a
result of our limited operations during the year ended December 31, 2011.
In 2011 we financed our capital needs with advances from two shareholders,
Braydon Capital Corp and 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.
Net Income/Loss
For the year ended December 31, 2011, we had a net loss from operations of
$31,744 or $0.002 net loss per share which was a decrease of $45,560 in net loss
from our net loss of $77,304 or $0.005 net loss per share for the year ended
December 31, 2010. During 2010 our losses included $6,458 associated with our
discontinued operations of IMM.
Assets and Liabilities
Assets
At December 31, 2011 we had no cash and no assets compared to no cash and total
assets of $2,932 at December 31, 2010.
Liabilities
Our current liabilities at December 31, 2011 were $150,000 versus $127,735 in
2010. The increase was a result of debts due to two shareholders to fund our
operations during 2011.
RELATED PARTY TRANSACTIONS
The amount due to related parties at December 31, 2011, is $150,000 compared to
$127,735 for the year ended December 31, 2010. 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 $6,547 for the year ended
December 31, 2012.
Liquidity and capital resources
The Company had no cash balance at December 31, 2011 or 2010. The notes to our
financial statements as of December 31, 2011 and 2010, contain footnote
disclosure regarding our uncertain ability to continue as a going concern. We
15
have no revenues to cover our expenses, and we have an accumulated deficit of
$5,060,870. As of December 31, 2011, we had $150,000 in current liabilities as
well as a working capital deficit of $150,000 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.
Specifically, we engage an independent contractor when required to provide
services for us. The contractor submits invoices for time and out of pocket
expenses.
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, 2011 and 2010.
CASH FLOWS
Net Cash Used In Operating Activities
Our net cash used in operating activities decreased to $22,265 during the year
ended December 31, 2011 versus $70,114 in 2010. The decrease was primarily due
to a decrease in our operating costs.
Net Cash Used In Investing Activities
There were no investing activities in 2011 or 2010.
Net Cash Provided By Financing Activities
Our cash from financing activities in 2011 decreased to $22,265 versus $70,114
for the period ended 2010 and were limited to advances from two shareholders
during the years ended December 31, 2011 and 2010.
OFF BALANCE-SHEET ARRANGEMENTS
We have no off-balance sheet arrangements and no non-consolidated,
special-purpose entities.
INCOME TAXES
Note 7 of the financial statements included in this report sets out our deferred
tax assets as of December 31, 2011 and 2010. 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.
16
CONTINGENCIES AND COMMITMENTS
See Note 8 of Notes to Financial Statements for a detailed explanation of our
contingencies. We had no long-term commitments at December 31, 2011.
CONTRACTUAL OBLIGATIONS
We had no contractual obligations at December 31, 2011.
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
See Note 3(k) "Recently Accounting Pronouncements" of Notes to Financial
Statements.
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
See Note 9 "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.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
EMPIRE GLOBAL CORP.
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2011 and 2010
CONTENTS
Report of Independent Registered Public Accounting Firm F-1 - F-2
Consolidated Balance Sheets F-3
Consolidated Statements of Operations and Comprehensive Loss F-4
Consolidated Statements of Changes in Stockholders' Deficiency F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7 - F-12
17
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 consolidated balance sheet of Empire Global
Corp., ("the Company") as of December 31, 2011 and the related consolidated
statements of operations and comprehensive loss, changes in stockholders'
deficiency, and cash flows for the year then ended and for the period from
inception (January 5, 2010) to December 31, 2011. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 2011 and the results of its operations and its cash flows for the
year then ended and for the period from inception (January 5, 2010) to December
31, 2011 in conformity with accounting principles generally accepted in the
United States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2, the
Company has no cash and other assets, incurred significant losses from
operations since its inception and has not yet established any source of
revenues. These conditions 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
September 18, 2012
F-1
To the Board of Directors and Stockholders of Empire Global Corp
Toronto, Ontario, Canada
We have audited the accompanying consolidated balance sheet of Empire Global
Corp., ("the Company"), and subsidiary as of December 31, 2010 and the related
statements of operations and comprehensive loss, changes in stockholders' equity
(deficiency), and cash flows for the year ended December 31, 2010. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 2010 and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2, the
Company has incurred significant losses from operations since its inception and
has incurred a net loss, which substantially exceeds its working capital and has
not yet established any source of revenues. These conditions 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/ Bernstein & Pinchuk LLP
New York, NY
February 21, 2012
F-2
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Consolidated Balance Sheets
December 31,
2011 2010
------------ ------------
US$ US$
ASSETS
Current Assets
Pre-paid and other assets - -
------------ ------------
Total Current Assets - -
Property and equipment, net - 2,932
------------ ------------
- 2,932
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities
Advances from stockholders 150,000 127,735
------------ ------------
Total Current Liabilities 150,000 127,735
Commitments and Contingencies - -
Stockholders' Equity (Deficiency)
Preferred Stock, $0.0001 par value, 20,000,000
shares authorized, none issued and outstanding - -
Capital Stock, $0.0001 par value, 80,000,000
shares authorized, shares issued and outstanding
18,675,800 for both years 1,868 1,868
Additional - paid in capital 4,909,002 4,902,455
Accumulated other comprehensive income - (7,832)
Deficit (5,060,870) (5,029,126)
------------ ------------
Total Stockholders' Equity (Deficiency) (150,000) (124,803)
------------ ------------
- 2,932
============ ============
See notes to financial statements
F-3
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Consolidated Statements of Operations and Comprehensive Loss
From inception
(January 5, 2010)
Years ended December 31, December 31,
2011 2010 2011
-------- -------- ------------
US$ US$ US$
Revenue - - -
General and administrative expenses 25,197 70,846 96,043
Interest expense - stockholders 6,547 - 6,547
Loss from continuing operations (31,744) (70,846) (102,590)
-------- -------- ------------
Discontinued operations
Loss on disposal of discontinued operations - (6,458) (6,458)
-------- -------- ------------
Net Loss (31,744) (77,304) (109,048)
Basic and fully diluted loss
per share - continuing operations (0.002) (0.004)
======== ========
Basic and fully diluted loss
per share - discontinued operations (0.000) (0.001)
======== ========
Basic and fully diluted loss
per common share (0.002) (0.005)
======== ========
Basic and fully diluted weighted
average number of shares outstanding 18,675,800 18,675,800
=========== ===========
See notes to financial statements
F-4
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Consolidated Statements of Changes in Stockholders' Deficiency
Accumulated
Common Additional Other Total
Stock Paid-In Comprehensive Accumulated Stockholders'
Shares Par Value Capital Income Deficit Equity
-------------------------------------------------------------------------------------
US$ US$ US$ US$ US$ US$
Balance at January 1, 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)
=====================================================================================
See notes to Consolidated Financial Statements
F-5
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Consolidated Statements of Cash Flows
From inception
(January 5, 2010)
Years ended December 31, December 31,
2011 2010 2011
-------- -------- ------------
US$ US$ US$
Cash Flows from Operating Activities
Net loss from continuing operations (31,744) (70,846) (102,590)
Net loss from discontinued operations - (6,458) (6,458)
Net loss (31,744) (77,304) (109,048)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation 147 732 879
Imputed interest 6,547 - 6,547
Disposal of equipment 2,785 - 2,785
Loss on disposal of
discontinued operations - 6,458 6,458
Net cash used in operating activities (22,265) (70,114) (92,379)
Cash Flows from Financing Activities
Advances from stockholders 22,265 70,114 92,379
Net cash provided by financing activities 22,265 70,114 92,379
Net increase (decrease) 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-6
EMPIRE GLOBAL CORP.
(A Development Stage Company)
Notes to Consolidated 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.
On July 9, 2004, the Company acquired IMM Investments Inc. ("IMM") an Ontario
Corporation in exchange for 210,000 (21 million pre-reverse stock splits) shares
of the Company's common stock paid to the former shareholder of IMM thereby
making IMM a wholly owned subsidiary. On January 4, 2010 the Company disposed of
IMM (see note 4).
On December 9, 2011, the Company entered into a Stock Purchase and Share
Exchange Agreement (the "Agreement") to acquire Avontrust Global Pte. Ltd.
("AVT"), a Singapore company with its head office and operations in Singapore.
As disclosed in note 9, on July 2, 2012, prior to the closing of the Agreement,
the Company and AVT mutually agreed to terminate the Agreement as a result the
Company no longer has any business operations and is actively seeking new
business opportunities.
The Company did not have any business after disposal of IMM and has been looking
for potential acquisitions since then. 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 in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern.
As of December 31, 2011, the Company has no cash or other 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.
F-7
3. Summary of Significant Accounting Policies
a) Basis of Presentation and Consolidation
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. The consolidated financial statements
include the accounts of the Company and its subsidiary. All material
intercompany accounts and transactions have been eliminated in consolidation.
The Company's fiscal year end is December 31.
Certain amounts included in the 2010 financial statements have been reclassified
to conform to the 2011 financial statement presentation.
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 consolidated 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-8
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, 2011 and 2010, as
there were no common stock equivalents outstanding.
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:
F-9
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 adopted a newly issued accounting standard for fair value
measurements of all non-financial assets and liabilities not recognized or
disclosed at fair value in the financial statements on a recurring basis.
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.
j) Foreign Currency Translation
The Company accounts for foreign currency translation pursuant to
FASB ASC 830-20 "Foreign Currency Translation". The functional and reporting
currency of the Company is the U.S. dollar ("US$"), while the functional and
reporting currency for IMM Investments Inc., a wholly-owned Canadian subsidiary,
which was disposed of on January 4, 2010, is the Canadian dollar. Assets and
liabilities are translated into US$ using the exchange rate at the balance sheet
date, while equity accounts are translated using the historical exchange rate.
Revenues and expenses are translated using the average exchange rates prevailing
throughout the year. Translation adjustments are included in other comprehensive
income for the year.
k) Recent Accounting Pronouncements
During the year ending December 31, 2011, the Financial Accounting Standards
Board ("FASB") has issued ASU No. 2011-01 through ASU 2011-12, none of which are
expected to have a material impact on the financial statements upon adoption.
4. Discontinued Operations
On January 4, 2010 we disposed of our wholly owned subsidiary IMM which owned
5,000,000 shares of Armistice in exchange for the elimination of $200,000 of
debt. The Company recorded loss on disposal of subsidiary of $6,458 during the
year ended December 31, 2010.
5. Property and Equipment
Property and equipment consists of the following:
2011 2010
---------- ----------
Telephone system $ - $ 11,192
Less accumulated depreciation - 8,260
---------- ----------
$ - 2,932
========== ==========
F-10
During the second quarter of 2011, we determined that our telephone equipment no
longer functioned properly. The Company disposed the equipment and recorded loss
on disposal of equipment of $2,785 for the year ended December 31, 2011.
6. 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 $6,547 for the year ended December 31, 2011. Advances from stockholders as of
December 31, 2011 and 2010 are as follows:
2011 2010
---------- ----------
Braydon Capital Corp. $ 31,314 $ 112,621
Gold Street Capital Corp. $ 118,686 $ 15,114
---------- ----------
Total advances from stockholders: $ 150,000 $ 127,735
========== ==========
7. 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, 2011
and 2010.
The Company's deferred tax assets as of December 31, 2011 and 2010 are as
follows:
2011 2010
---------- ----------
Net loss carryforward $ 1,771,000 $ 1,760,000
Valuation allowance ( 1,771,000) ( 1,760,000)
---------- ----------
Deferred tax assets $ - $ -
========== ==========
The Company has accumulated a net operating loss carryforward ("NOL") of
approximately $5 million as of December 31, 2011. This NOL may be offset against
future taxable income through the year 2031. 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, 2011 and 2010 because it
has been fully offset by a valuation reserve. The use of future tax benefit is
undeterminable because we presently have no operations.
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.
8. Commitments and Contingencies
The Company may be subject to claims arising in the ordinary course of business.
The Company was subject to direct legal proceedings which were concluded in June
2010 and in indirect proceedings involving our current Chairman and Principal
Executive Officer which were concluded in May 2011. As a result of the
conclusion of these matters, the Company and our Chairman and Executive Officer
are no longer subject to ongoing legal proceedings.
F-11
On November 1, 2005, the Company was served with a Statement of Claim filed in
the Ontario Superior Court of Justice by Advanced Refractive Technologies Inc.
("Advanced"). In June 2010, the matter was mutually settled between the parties.
As a result of the mutual settlement the claim against the Company was
discontinued with no loss to the Company.
On December 10, 2004, the Ontario Securities Commission ("OSC") served upon the
former President and C.E.O. of the Company ("executive officer"), and companies
controlled by our executive officer, as well as a shareholder of the Company
related to the father of our former Chairman Kalson Jang and an unrelated party
hired by Kalson Jang's father, collectively the "respondents" an order to cease
trading in shares of Pender International Inc. ("Pender") an Ontario corporation
owned by our former Chairman Kalson Jang and his father Kalano Jang a former
shareholder of the Company. The allegations stated among other things that
Armistice was a worthless, flooded mine and that there was no basis for the
increase in the share price of the Company. On September 26, 2006 the Royal
Canadian Mounted Police ("RCMP") charged our executive officer.
As a result of the court proceedings, it was learned that the individual
co-accused with our executive officer, while employed by a company associated
with Kalano Jang, was a rogue RCMP agent and acted to defraud our executive
officer, it was also discovered that senior RCMP officers had tampered with
evidence allegedly to cover-up certain improper RCMP procedures and actions
leading to the fraud perpetrated against our executive officer and admitted to
a violation of his Canadian Charter Rights. On May 17, 2011 our executive
officer entered into a settlement agreement offered by the OSC whereby the OSC
agreed that our executive officer had no involvement in the fraud perpetrated
against him by the co-accused RCMP agent and our executive officer agreed that
he failed to properly monitor his trading accounts leading to the fraud
committed against him by the former RCMP agent. Our executive officer agreed not
to act in the capacity of an officer or director of any Canadian issuer for a
period of five years.
Criminal charges and proceedings against our executive Officer were subsequently
stayed on May 18, 2011.
9. Subsequent Events
The Company has evaluated all events or transactions that occurred subsequent to
December 31, 2011 through the date these financial statements were issued, and
has disclosed as follows:
On December 9, 2011, Empire Global Corp. (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. The Share Exchange Agreement was subject to, among other things,
(i) completion of due diligence by the parties to the Agreement; (ii) approval
of the respective board of directors of each party and (iii) there being no
material adverse change in the financial condition, business or prospects of the
Company or AVT prior to closing.
On July 2, 2012, prior to the closing of the agreement, the Company and AVT
determined that the Agreement was no longer in the best interests of their
respective shareholders and therefore entered into a Mutual Termination
Agreement as report on Form 8-K filed July 10, 2012.
F-12
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, 2011. 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, 2011, 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.
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
30
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
On December 31, 2011, Empire had two directors and two executive officers,
neither of which have any other directorships with any other reporting company.
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.
On June 6, 2011, Mr. Dominelli resigned as Chairman of the Board and as Interim
Chief Executive Officer and Chief Financial Officer but remained as a director.
On the same day Mr. Michael Ciavarella was appointed as Chairman of the Board
and as President, Chief Operating Officer and Chief Financial Officer. On
October 27, 2011, Mr. Merchant resigned as Chief Executive Officer and director
of the Company and on the same day Mr. Ciavarella resigned as president and was
appointed Chief Executive Officer.
Our 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 50 Chairman, Director June 6, 2011 None
Chief Executive Officer,
Chief Financial Officer,
Chief Operating Officer
Vic Dominelli 48 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.
Resumes
Michael Ciavarella, B.Sc. - 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
31
Mr. Ciavarella is 49 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.
Vic Dominelli - Director, Secretary
2002 - Current Construction Supervisor
1985 - 2002 Senior Human Resources Manager Bombardier Aircraft Canada Inc.
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
32
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.
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 2011 0 0 0 0 0 0 0 0
Vic Dominelli,
Secretary, Director 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
33
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.
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, 2011 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
The above table is 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, 2011.
34
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)
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 six 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.
35
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.
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 $10,000 to Bernstein and Pinchuk, LLP and $2,500 to Paritz
and Co., PA in connection to audits for the periods ended December 31, 2010 and
2011 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 2011 and 2010.
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 2011 and 2010 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 2011 and 2010.
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 Bernstein and Pinchuk, LLP and
Paritz and Co. PA, were pre-approved by our Board of Directors.
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.
36
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 February 1, 2012, the Company filed an amendment to the form 8-K to report
the following:
The Company and Avontrust Global Pte. Ltd. mutually agreed to extend the
closing date of the Agreement to March 6, 2012 to provide additional time to
file required financial statements.
On March 6, 2012, the Company filed an amendment to the form 8-K to report
the following:
The Company and Avontrust Global Pte. Ltd. mutually agreed to extend the
closing date of the Agreement to May 8, 2012 to provide additional time to
file required financial statements.
On July 10, 2012, the Company filed a form 8-K to report the following:
The Company and Avontrust Global Pte. Ltd. mutually agreed to terminate the
Agreement to acquire AVT on July 2, 2012.
On July 27, 2012, the Company filed an amendment to the form 8-K filed on
July 23, 2012 to report the following:
That the Company engaged Paritz and Co., PA of Hackensack, NJ as the new
independent certified public accountants.
37
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: October 10, 2012.
---------------------------
Michael Ciavarella
Chairman of the Board
Chief Executive Officer
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer)
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.
By: /s/ Michael Ciavarella Date: October 10, 2012.
---------------------------
Michael Ciavarella
Chairman of the Board
Chief Executive Officer
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer)
EX-31
2
section302-certification.txt
CERTIFICATION OF CEO AND CFO - SECTION 302
EXHIBIT 31
CERTIFICATION
Pursuant to 18 U.S.C. 1350
(Section 302 of the Sarbanes-Oxley Act of 2002)
I, Michael Ciavarella, certify that:
1. I have reviewed this annual report on form 10-K of Empire Global Corp. for
the fiscal year ending December 31, 2011;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: October 10, 2012
/s/ Michael Ciavarella
-----------------------
Michael Ciavarella
Chief Executive Officer and Chief Financial Officer
EX-32
3
section906-certification.txt
CERTIFICATION OF CEO AND CFO - SECTION 906
EXHIBIT 32
CERTIFICATION
Pursuant to 18 U.S.C. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)
In connection with the annual report on form 10-K of Empire Global Corp.
(the "Company") for the year ended December 31, 2011, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), Michael
Ciavarella, as Chief Executive Officer and Chief Financial Officer of the
Company, hereby certifies, pursuant to 18 U.S.C. ss.1350, as adopted pursuant
to ss.906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
Date: October 10, 2012 By: /s/ Michael Ciavarella
---------------------------------------
Michael Ciavarella
Chief Executive Officer, and
Chief Financial Officer
This certification accompanies each Report pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of ss.18
of the Securities Exchange Act of 1934, as amended.
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.