Item 1. Description of business
The issuer, Empire Global Corp. ("the Company", "Empire") formerly named Tradestream Global Corp ("Tradestream") and Vianet Technology Group, Ltd ("Vianet") was organized as Pender International, Inc. ("Pender") under the laws of the state of Delaware on August 26, 1998.
A. BUSINESS DEVELOPMENT
In 2002, the Company established a business plan to import high-end furniture from Mexico for sale in the United States and Canada. This business was unsuccessful and abandoned. In July 2004 the Company formed a business plan to acquire undervalued small-to-medium size development stage companies.
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 February 16, 2005, the Company acquired 100% of the stock of Montebello Developments Corp., an Ontario corporation ("Montebello"), thus making Montebello a wholly owned subsidiary of Empire. Through Montebello, the Company entered into an agreement to jointly develop Pueblomex a new villa resort near Huatulco, Mexico. This opportunity was abandoned.
Between February 2005 and December 31, 2006 the Company explored a number of business opportunities, none of which developed into a viable business.
B. BUSINESS DESCRIPTION
PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS
Empire Global Corp. (together with its subsidiaries, the "Company") is a diversified holding company seeking to acquire and operate income producing businesses that have a good prospect for growth. The Company's goal is to create, through acquisition, disposition and operation an ownership position in income producing properties servicing commercial business tenants as well as Hotel, Tourism and Leisure Travel business operators internationally.
As of December 31, 2008, the Company did not have interests in any properties. The Company intends to prudently develop on a speculative basis as opportunities warrant and will seek to expand its operations into new markets in addition to its primary target markets. When considering entry into a new market the Company will consider, among other factors, demographics, job growth, employment, real estate fundamentals, competition and other related matters.
We have not been satisfied with our business plan or original plan of operation. Our objectives are to identify and negotiate with an established business entity with a view to merge target businesses or alternatively acquire properties either compatible with our initial business plan or a business related to the resources industry in line with assets held by our subsidiary IMM Investments Inc. In certain instances, a target business may wish to become a subsidiary or may wish to contribute assets rather than merge. No assurances can be given that we will be successful in locating or negotiating with any target business.
TARGET SELECTION
Any acquisitions that we undertake could be difficult to integrate, disrupt our business, dilute shareholder value and significantly harm our operating results.
We expect to explore opportunities to buy other businesses or technologies that would complement our current business, expand the breadth of our markets, or that may otherwise offer growth opportunities. If we make any future acquisitions, we could issue stock that would dilute existing shareholders' percentage ownership, incur substantial debt or assume contingent liabilities. Potential acquisitions also involve numerous risks, including:
a. problems assimilating the purchased operations, technologies or products; b. unanticipated costs associated with the acquisition; c. adverse effects on existing business relationships with suppliers and customers; d. risks associated with entering markets in which we have no or limited prior experience; and e. potential loss of the purchased organization's or our own key employees.
We cannot provide any assurance that we would be successful in overcoming problems encountered in connection with such acquisitions and our inability to do so could significantly harm our business
Our Management believes that being a reporting company with a class of publicly-traded securities has certain apparent benefits. These apparent benefits may include: exposure to capital markets; the ability to use its registered securities to acquire assets or businesses; greater ease in subsequently raising capital or borrowing from financial institutions; stockholder liquidity; enhanced corporate image in the financial community and compensation of key employees through stock options.
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 if we will enter into a definitive agreement with any specific company or what will be the industry, operating history, revenues, future prospects or other characteristics of that company.
Empire is required to provide certain information about significant acquisitions including audited financial statements of the target business. Reporting requirements may delay or preclude any merger or acquisition, which may adversely affect Empire's business. Obtaining audited financial statements are the economic responsibility of the target business. The additional time and costs that may be incurred by some potential target businesses to prepare such financial statements may significantly delay or essentially preclude consummation of an otherwise desirable acquisition by Empire. Acquisition prospects that do not have or are unable to obtain the required audited statements may not be appropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable. Notwithstanding a target business's agreement to obtain audited financial statements within the required time frame, such audited financials may not be available to Empire at the time of effecting a business combination. In cases where audited financials are unavailable, Empire will have to rely upon unaudited information that has not been verified by outside auditors in making its decision to engage in a transaction with the business entity. This risk increases the prospect that a business combination with such a target business might prove to be an unfavorable one for Empire.
Empire currently has no arrangements or understanding with respect to a proposed business combination with a specific entity. There can be no assurance that Empire will be successful in identifying and evaluating suitable target businesses or business opportunities or in concluding a business combination. Empire does not have an established operating history or a specified level of earnings, assets, net worth or other criteria that it will require a target business to have achieved, or deemed that without which Empire would not consider a business combination with such target business. Accordingly, Empire may enter into a business combination with a target business having no significant operating history, losses, limited or no potential for immediate earnings, limited assets, negative net worth or other negative characteristics. There is no assurance that Empire will be able to negotiate a business combination on terms favorable to Empire.
Empire currently has few assets, liabilities, limited financial resources and we have no cash on hand to acquire additional assets or to create an operating revenue stream sufficient to cover operating expenses or pay our outstanding liabilities. There is no assurance that Empire can identify such a target business and consummate such a business combination and our limited funds may not be adequate to take advantage of any available business opportunities that present themselves. We will require significant new capital in order to execute our strategic plan and believe that this capital will only be available through the sale of debt or equity securities. Our success in raising this capital will depend upon our ability to access equity capital markets and we may not be able to do so or to do so on acceptable terms. If we fail to obtain funds on acceptable terms, we will not be able to execute our strategic plan and would have to delay or abandon some or all of our plans for growth. If we are able to obtain financing, we believe that the terms of such arrangements will result in an offering that is highly dilutive to existing shareholders because of the price at which we would have to issue those shares and the large number of shares we would have to issue at those prices.
DISTRIBUTION METHODS FOR PRODUCTS OR SERVICES
We currently have no products or services available for distribution.
STATUS OF PUBLICLY ANNOUNCED NEW PRODUCTS OR SERVICES
As of the fiscal year ended December 31, 2008 the Company has no current business operations and is a holding company with a view to acquire undervalued small-to-medium size development stage companies or in the alternative, take direct ownership in revenue producing businesses. The Company has not entered into any new business arrangements.
COMPETITIVE BUSINESS CONDITIONS, COMPETITIVE POSITION IN THE INDUSTRY AND METHODS OF COMPETITION
The Company seeks opportunities primarily located in North America. There are numerous other competitors within the market area for which the Company will prospect. The competitive conditions in such areas could have a material adverse effect on the Company's (i) future operations, and (ii) development and acquisition opportunities. The Company will compete for acquisitions with others who may have greater resources.
SOURCES AND AVAILABILITY OF SUPPLIES
The Company has taken a broad view to delineate opportunities in international markets where the supply of target properties and businesses are abundant. 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 Independant Registered Public Accountanting Firm is Bernstein & Pinchuk LLP.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
As of the end of the period covered by this report Empire does not have any holdings in income producing commercial properties. Empire will continue to seek new potential acquisition targets to develop a portfolio of assets in conjunction with our plan of business.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR LABOR CONTRACTS
Empire Global Corp. does not have any patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts.
NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCTS OR SERVICES
There is no current need for Government Approval for its products or 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, 2008.
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.
C. 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 2.
Item 2. Description of Property.
Empire currently does not maintain a principal executive office. Empire's mailing address is 648 Finch Ave. East. Suite 2, Toronto, Ontario, M2K 2E6, 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 has made an investment in Armistice Resources Corp. which does. However, our investment in Armistice does 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 for Electronic Document Analysis and Retrieval (SEDAR) developed in Canada for the Canadian Securities Administrators (www.sedar.com).
Item 3.
Item 3. Legal Proceedings
The Company is subject to claims arising in the ordinary course of business. The Company and Management believe that, after consultation with counsel, the allegations against the Company included in the claims described below may be subject to substantial legal defences, and the Company is vigorously defending each of the allegations. At this time, it is not possible to estimate the ultimate loss or gain, if any, related to these claims, nor if any such loss will have a material adverse effect on the Company's results of operations or financial position.
Pending Legal Matters
Directly affecting the Company
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") claiming $6,000,000 in aggregate damages plus unspecified amounts against 16 co-respondents including the Company for unknown loses claimed by Advanced in its dealings with an unknown and unrelated entity or person (the "unrelated entity"). Advanced alleges that this unrelated entity, in a private transaction with Advanced, may have promised to exchange shares of the Company that the unrelated entity had claimed to have owned. The Company has never been a party to any dealings with Advanced or the unrelated party and prior to receiving notice from Advanced had never heard of Advanced. The Company denies any wrongdoing and is vigorously defending this claim. Although the claim remains a live issue, Advanced has made no attempt to further its claim. Because of the uncertainties inherent in litigation, the company cannot predict whether the outcome, which remains unresolved, will have a material adverse affect.
Indirectly affecting the Company
On December 10, 2004, the Ontario Securities Commission ("OSC") served upon the former President and C.E.O. of the Company (the "former executive"), and companies controlled by the former executive, as well as a shareholder of the Company related to the father of our former Chairman Kalson Jang and an unrelated party collectively the "respondents" an order to cease trading in shares of the Company formerly known as Pender International, Inc. ("Pender") and subsequently issued a Statement of Allegations against the respondents on December 21, 2004. The Company is aware of the proceedings; however, is not a respondent to these proceedings. The order was purportedly issued to allow the OSC an opportunity to investigate trading in shares of Pender over the period between October 27, 2004 and November 19, 2004. 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.
The Royal Canadian Mounted Police, and the Ontario Securities Commission (jointly IMET "Integrated Market Enforcement Team") conducted an investigation into the allegations and on September 26, 2006 the Royal Canadian Mounted Police ("RCMP") charged our former executive.
Our former executive is vigorously denying the allegations and challenging the charges and consequently has consented to a committal to trial. Between February and March 2008 a preliminary inquiry was held in the Ontario Court of Justice in respect of this matter.
A trial date had been set down to begin on September 8, 2009, however has been delayed. A new date has not been established as of the date of this filing.
On June 25, 2008 the Securities and Exchange Commission ("SEC") issued a notice to Michael Ciavarella, our former officer and director. The notice advised that the (SEC) investigation has been completed as to Mr. Ciavarella, against whom they do not intend to recommend enforcement by the commission.
Our former executive and the Company have been complying with orders imposed by the OSC and cooperating with informal inquiries made by the United States Securities and Exchange Commission ("SEC").
Legal Matters Settled or Dismissed
1. On November 26, 2007, the Company and Research Capital Corporation ("Research") a broker/dealer in Ontario entered into a Settlement Agreement pursuant to a claim initiated by Research on September 9, 2005. The Company agreed to settle the claim with Research for a total amount of CDN $25,000 this included $10,000 in legal costs plus $5,000 for a securities expert report incurred by Empire and $10,000 payable to Research. Accordingly, the matter was dismissed by Madame Justice Bennett of the Ontario Superior Court of Justice.
2. The complaint filed on September 6, 2006 in the Court of Chancery in the State of Delaware against the Company, and its management Ken Chu, Vic Dominelli and Xu Bing was abandoned by Hoi Ming Chan and his wife Florence Tsun (the shareholders of 501 Canada Inc.). Accordingly on May 6, 2007 the claim was dismissed and subsequent Stipulated Order Maintaining Status Quo was vacated by Chancellor Strine of the Court of Chancery.
Item 4.
Item 4. Submission of matters to a vote of security holders
There were no matters submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2008.
REPORTS TO SECURITY HOLDERS The Company is not required to deliver an annual report to security holders and does not plan to voluntarily deliver a copy of the annual report to the security holders. If we should choose to create an annual report, it will contain audited financial statements. We intend to file all of our required information including our 10-K, 10-Q and all other forms that are or may become applicable with the SEC. We file reports electronically with the Securities and Exchange Commission. Our public disclosure protocol complies with the requirements set forth by the Securities and Exchange Commission. Over the course of the past fiscal year we have filed several form 8-K's as described in Item 13 of this report and quarterly reports 10-Q's, these forms are attached as exhibits at the end of this report.
The public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that website is (http://www.sec.gov). In compliance with the Securities and Exchange Commission, all press releases and SEC filings are also available on our website (http://www.emgl.us).
PART II
Item 5.
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 desire 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 for or acquisition of a target business; b. announcements regarding financial developments; c. government regulations, including stock option accounting and tax regulations; d. acts of terrorism and war; or e. rumors or allegations regarding Empire's financial disclosures or practices.
A small number of Empire's stockholders own a substantial amount of Empire's common stock, and if such stockholders were to sell those shares in the public market within a short period of time, the price of Empire's common stock could drop significantly. A large number of shares of outstanding common stock are restricted and are not freely-trading. An established public trading market for our common stock may never develop or, and if developed, it may not be sustained.
PENNY STOCK RULES
Our common stock may be deemed a "penny stock." Penny stocks generally are equity securities with a price of less than $5.00 per share, other than securities registered on certain national securities exchanges. Trading in Empire's securities is subject to certain regulations adopted by the SEC commonly known as the "penny stock" rules. These rules govern how broker-dealers can deal with their clients and "penny stocks". The additional burdens imposed upon broker-dealers by the "penny stock" rules may discourage broker-dealers from effecting transactions in Empire's securities, which could severely limit the market price and liquidity of our common stock.
We were listed and became eligible for trading on the OTCBB on March 4, 2004 and the first electronic trade of our stock occurred on October 14, 2004. We now trade under the symbol, EMGL.PK (formerly EMGL.OB, TGLC.OB, VGTL.OB, and PNDR.OB).
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.
2007 BID PRICES PERIOD HIGH LOW January 1 - March 31 $ 0.15 $ 0.150 April 1 - June 30 0.15 0.150 July 1 - September 30 0.15 0.150 October 1 - December 31 0.07 0.070
2008 BID PRICES PERIOD HIGH LOW January 1 - March 31 $ 0.07 $ 0.070 April 1 - June 30 0.07 0.070 July 1 - September 30 0.06 0.060 October 1 - December 31 0.07 0.070
PERIOD January 1 - March 31 $ 0.07 $ 0.06 April 1 - June 30 0.14 0.06 July 1 - September 30 0.06 0.025 October 1 - November 30 0.025 0.02
SHAREHOLDERS
As of November 1, 2009, 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.
DESCRIPTION OF SECURITIES
As of December 31, 2008, there were 18,675,800 shares of common stock, of 0.0001 par value, issued and outstanding and at least 17,969,300 shares are restricted securities of Empire within the meaning of Rule 144(a)(3) promulgated under the Securities Act of 1933, as amended. These are restricted because such shares were issued and sold by us in private transactions not involving a public offering or issued as consideration for payments of fees and services provided to the Company.
The restricted securities may only be sold pursuant to a registration statement or pursuant to Rule 144. In general, under Rule 144, as currently in effect, subject to the satisfaction of certain other conditions, a person, including an affiliate of ours (in general, a person who has a control relationship with us) who has owned restricted securities of common stock beneficially for at least one year is entitled to sell, within any three-month period, that number of shares of a class of securities that does not exceed the greater of (i) one percent (1%) of the shares of that class then outstanding or, if the common stock is quoted on NASDAQ, (ii) the average weekly trading volume of that class during the four calendar weeks preceding such sale. A person who has not been an affiliate of ours for at least the three months immediately preceding the sale and has beneficially owned shares of common stock for at least two (2) years is entitled to sell such shares under Rule 144 without regard to any of the limitations described above.
No prediction can be made as to the effect, if any, that future sales of shares of common stock or the availability of common stock for future sale will have on the market price of the common stock prevailing from time-to-time. Sales of substantial amounts of common stock on the public market could adversely affect the prevailing market price of the common stock.
In each of the foregoing described stock splits we filed a notice under rule 10b-17 with NASD of our intention to effect the stock split and reflected the approval of our Board of Directors and written consent of a majority shareholders. All fractional shares are rounded up to the nearest whole shares.
1 for 10 Reverse Split On September 30, 2005, we completed a 1 for 10 reverse split of our common stock.
1 for 10 Reverse Split Effective June 30, 2005, we completed a 1 for 10 reverse split of our common stock.
7 for 1 Forward Split On July 23, 2004, the Board of Directors approved a 7 for 1 forward split of our common stock. The common stock dividend payment date was July 26, 2004 to stockholders of record as at July 23, 2004.
Each of the foregoing change in authorized shares was approved by the Board of Directors and the holders of a majority of the issued and outstanding shares of common stock and a Certificate of Amendment filed with the State of Delaware.
On September 21, 2004, the Company amended it's 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 it's Certificate of Incorporation to decrease the number of authorized common shares from 400,000,000 to 80,000,000.
Preferred Stock The Company has authorized 20,000,000 preferred shares of which none have been issued.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The purpose of the 2005 Incentive Stock Option Plan (the "Stock Plan") is to secure long-term relationships for the Company and its stockholders, from the benefits arising from capital stock ownership by the Company's Officers, Directors, Employees, Consultants and Advisors, who can help in the Company's growth and success and to provide an effective means of compensation for such persons and entities providing services to the Company in lieu of cash payments therefore. The Stock Plan became effective as of the 1st day of July, 2005, and shall expire on the 30th day of June, 2015, unless further extended by appropriate action of the Board of Directors. The Board of Directors of the Company may at any time, by appropriate action, suspend or terminate the Stock Plan, or amend the terms and conditions of the Stock Plan.
Pursuant to the stock plan, 1,000,000 shares of common stock, par value $0.0001 per share, of Empire Global Corp., may be issued upon the exercise of stock options or stock grants. Consultants, Advisors, Employees and Directors, to the Company, or any of its subsidiary corporations, shall be eligible for participation in the Stock Plan. Each person or entity acquiring shares of Common Stock pursuant to the Stock Plan shall be acquiring such shares for investment purposes only, and in lieu of cash compensation for services rendered to the Company. A Compensation Committee appointed by the Board of Directors shall determine the manner in which each option or stock grant shall be exercisable and the timing and form of the purchase price to be paid by a grantee upon the exercise of an option or stock grant under the Stock Plan. To the extent provided in the option agreement, payment of the purchase price may be in cash, part in cash, part by personal promissory note or in lieu of payment for services performed. There are no restrictions on the resale of securities purchased under the Stock Plan. The Stock Plan is not qualified under Section 401(a) of the Internal Revenue Code.
On July 26, 2005, options to purchase up to a total of 1,000,000 shares of common stock were granted at an exercise price of $0.50 per share to two consultants pursuant to Consulting Services Agreements entered into with the Company to perform research and analysis work with respect to business planning in the potential acquisition of technology based companies. The shares were issued in lieu of payment for services performed or to be performed. The Company relied on the exemption from the registration requirements of the Securities Act provided by Rule 701 under the Securities Act. More details of the Stock Plan and the shares issued pursuant to these consultant agreements can be found on form S-8 filed on July 27, 2005.
RECENT SALES OF UNREGISTERED SECURITIES
There are no recent sales of unregistered securities by the Company during the period covered by this report, which have not been previously disclosed in form 10-Q filings or form 8-K filings.
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) 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) 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 First Federal Group in exchange for the cancellation of debt owed by the Company for funds advanced for payment to SF Group our former Certifying Public Accountant 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.
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.
Share Exchange - Empire Global Acquisition Corp. (Returned and Cancelled) On October 27, 2005 Empire Global Corp. acquired 100% of 501 Canada Inc. ("501") through its wholly owned subsidiary Empire Global Acquisition Corp. ("EGAC") Empire acquired 501 from the former shareholders of 501 by issuing to these former shareholders 6,240,000 (post-reverse split) restricted shares of Empire in exchange for 6,240,000 shares of EGAC that were acquired by the former 501 shareholders in exchange for 100% of the issued and outstanding stock in 501. Details of this transaction are available on the form 8-K filed on November 3, 2005 to announce the acquisition of 501 Canada Inc. and the form 8-K/A filed on November 3, 2005 to amend the form 8-K filed on November 3, 2005. Audited financial statements required under SEC regulations were attached and amended as exhibits on the report form 8-K/A. The agreement was contingent upon the survival of material representations made by Hoi Ming Chan on October 27, 2005. As a result of material misrepresentations made by Hoi Ming Chan which were discovered post completion, the Company delivered a written "Notice of Termination" to Hoi Ming Chan within the prescribed time as specified in the Plan of Merger and Reorganization with 501 Canada Inc. The agreement to acquire 501 Canada Inc. was rescinded on October 1, 2007 by the Company and the 6,240,000 shares were cancelled. The Consolidated Statement of Shareholders' Equity was given retroactive treatment to recognize the effect of the cancellation of 501 Canada Inc.
Share Exchange - Excel Empire Limited (Returned and Cancelled) On November 22, 2005 the Company instructed its transfer agent to issue shares pursuant to the Plan of Merger and Reorganization with Excel Empire Limited ("Excel")(the "Excel Plan"). The shares where issued as consideration for the shares of Excel to be acquired pursuant to the Excel Plan. The shares were to be delivered upon closing and the effective completion of the Excel Plan. The closing of the plan was defined as "5 pm on November 4, 2005" however; the effective date is specified as "upon filing of a Certificate of Merger with the Secretary of State of the State of Delaware". The agreement was amended on July 1, 2006 and was contingent upon the survival of termination provisions. Since the conditions of closing were not met a Certificate of Merger was not filed with the Secretary of State of the State Delaware as required pursuant to the Excel Plan. Excel neglected to provide financial statements as required, as a result, the Company delivered a written "Notice of Termination" to Xu Bing within the prescribed time period as specified in the Plan of Merger and Reorganization with Excel Empire Limited as amended. On May 5, 2008, Empire announced the cancellation of the 36,400,000 shares issued pursuant to the Plan of Merger and Reorganization with Excel Empire Limited as amended.
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-reverse 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. Five Hundred Thousand (500,000) of these shares were subsequently subject to a stop transfer and were the subject to legal proceedings that have been settled as described elsewhere in this report.
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.
Item 6. Selected Financial Data
Not Applicable.
Item 7.
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 unkown 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 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. The Company has no business operations and has been seeking new business opportunities during the period covered by this report.
On July 9, 2004 we acquired 100% of the shares of IMM Investments Inc. ("IMM"), an Ontario Corporation. IMM owns 5 million shares of common stock of Armistice Resources Corp. Warrants to purchase an additional 5 million shares expired in August 2008. Armistice shares trade on the Toronto Stock Exchange under the symbol AZ. The 5 million common shares and the expired 5 million common share warrants of Armistice owned by IMM are currently held in escrow as a result of certain legal proceedings related to events involving our former management as described elsewhere in this report. At time of this report, it is unknown if the Company will recover these assets.
PLAN OF OPERATION
At December 31, 2008 we had no cash and approximately $203,973 in assets. Our cash flow requirement for the twelve-month period from January 2009 to December 2009 was $207,122. Anticipated cash outflows are as follows:
ANTICIPATED CASH OUTFLOWS: Amount (USD) ------------
General and administrative expenses: Consulting and Wages $ 50,000 Accounting 80,000 Legal 50,000 Office and General 2,000 ------------ Total General and Administrative $ 182,000
Accounts payable due 25,122 ============ Total 207,122 ============
Empire Consolidated General and Administrative Expenses: The general and administrative expenses projection of $182,000 is based on the actual expenses incurred during the two most recent years. Future general and administrative expenses are anticipated to be similar to those incurred during these most recent years.
Empire Consolidated Current Accruals Due: On May 5, 2008 the Company issued 2,500,000 shares for payment of debts owed by the Company, of which to pay $175,000 of the accounts payable due at December 31, 2007 in addition the Company also issued 3,000,000 shares to pay $200,000 of the accounts payable due at December 31, 2008. The balance of the current accounts payable at December 31, 2008 due to various parties for services rendered was approximately $25,122. Terms on these accruals vary but they are all currently due on demand.
Empire Additional Working Capital: Empire has a working capital deficit as of December 31, 2008 of $82,622. Additional working capital is not currently assessable since the Company is seeking business opportunities but has not entered into any arrangement or agreement. Therefore, the amount of working capital 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 to execute private placements with related and other parties over the next twelve months.
CASH INFLOWS
Research and Development: The Company's plan of operation for the subsequent twelve months 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.
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 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 a business combination, as to the terms of a business combination, or as to the nature of the target business.
As of the date of this report, management has not made any final decision concerning or entered into any written agreements for a business combination. When any such agreement is reached or other material fact occurs, the Company will file notice of such agreement or fact with the Securities and Exchange Commission on form 8-K. Readers of this Annual Report are encouraged to refer to our filings with the SEC to determine if we have subsequently filed a form 8-K.
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.
OPERATIONS REVIEW
We have no cash to satisfy our working capital needs for the next year, therefore, over the subsequent twelve months we plan to seek new business opportunities. We anticipate funding our working capital needs through the issuance of common stock to independent contractors, the equity capital markets, private advances and loans. Although the foregoing actions are expected to cover our anticipated cash needs for working capital and capital expenditures for at least the subsequent twelve months, no assurance can be given that we will be able to raise sufficient funds to meet our cash requirements.
We are not currently conducting and do not anticipate conducting any research and development activities in the foreseeable future. If we enter into a new business opportunity, we may be required to hire additional employees, independent contractors as well as purchase or lease additional equipment.
We anticipate continuing to rely on equity sales of common shares or the issuance of convertible debt to fund our operations and to seek out or enter into new business opportunities. The issuance of any additional shares will result in dilution to our existing shareholders.
RELATED PARTY TRANSACTIONS
The amount due to related parties at December 31, 2008, is $77,500. None of the amounts due to related parties bear interest, have any fixed terms of repayment or are secured.
Subsequent to the period covered by this report, the Company received an additional $40,000 in advances from a related party to pay for auditing fees.
COMPARISONS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
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 not meaningful. As described in Note 3(b) to the Consolidated Financial Statements presentation of certain prior period amounts have been reclassified to segregate discontinued operations from continuing operations so that both years are comparative.
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 representing the bulk of our net operating results decreased approximately 37% from $207,118 to $129,544 in 2008. During the year ended December 31, 2007, the Company also incurred expenses related to a legal claim of $25,000 as well as losses of $251,940 associated with discontinued operations the details of which are described in Note 7 to the Consolidated Financial Statements and elsewhere in this report.
During 2008, we issued 2,500,000 shares of common stock to eliminate recorded expenses of $175,000 at December 31, 2007 and 3,000,000 shares to eliminate $200,000 of recorded expenses for the year ended December 31, 2008. During the subsequent twelve month period our operating costs are expected to decrease due to the limited scope of work and expenses are anticipated to be incurred for continued legal proceedings and active pursuit of a new business venture.
Net Income/Loss For the year ended December 31, 2008, we had a net loss from operations of $754,493 or $0.04 net loss per share which was an increase of $522,375 in net loss from our net loss of $232,118 or a $0.03 net loss per share for the year ended December 31, 2007. The increase is due to an impairment loss on our investment in Armistice of $624,939 in addition to $129,554 in general and administrative expenses. The Net loss of $484,058 recorded for the year ended December 31, 2007 included loss from discontinued operations of $251,940 incurred during the fourth quarter in the fiscal year 2007 resulting from the discontinuation and subsequent rescission of 501 Canada Inc. and Excel Empire Limited which were reported as discontinued operations.
Assets and Liabilities
Assets At December 31, 2008 we had no cash and our total assets were $203,973 compared to no cash and total assets of $996,393 at December 31, 2007.
Liabilities Our current liabilities at December 31, 2008 were $102,622 versus $158,621 in 2007. These liabilities are primarily accounts payable and advances from related parties.
The decrease is a result of stock based payments made to independent contractors to reduce accounts payable as described elsewhere in this report.
Results of discontinued operations As described elsewhere in this report the Company discontinued the operations of our wholly owned subsidiary EGAC, and abandoned the venture to acquire Excel Empire Limited.
As a result of the work involved in resolving the terms of the Excel Agreement as well as settling legal proceedings against the company in 2007, the company incurred significant losses due to discontinued operations. Specifically, during the period January 1, 2007 to December 31, 2007 in connection with the discontinuance of the Excel Empire venture, we incurred losses of $251,940 an explanation of which is provided in detail in Note 7 to the Consolidated Financial Statements. In addition the Company had $180,888 in cash used in operating activities of discontinued operations.
Liquidity and capital resources
The Company had no cash balance at December 31, 2008 or 2007. The notes to our consolidated financial statements as of December 31, 2008, contain footnote disclosure regarding our uncertain ability to continue as a going concern. We have no revenues to cover our expenses, and we have an accumulated deficit of $4,766,625. As of December 31, 2008, we had $102,622 in current liabilities, when this is offset against our current assets of $20,000 we are left with a working capital deficit of $82,622 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 issued 5,878,900 shares and 3,000,000 shares of common stock for debt due to a number of independent contractors on December 31, 2007 and December 31, 2008 respectively. The contractors submitted 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, 2008.
CASH FLOWS
Prior period amounts have been reclassified to segregate cash flows from discontinued operations versus cash flows from continuing operations.
Net Cash Used In Operating Activities Our net cash used in operating activities was $20,000 during the year ended December 31, 2008 versus $353,528 in 2007. The company took an impairment loss of $624,939 in our investment in Armistice while accounts payable decreased by $75,999 and prepaid assets increased by $17,652, non-cash adjustments included an in-kind contribution of $2,058, stock based payments of $200,000 while our net loss arises primarily from business administration, consulting and professional fees.
Net Cash Used In Investing Activities There were no investing activities in 2008 or 2007.
Net Cash Provided By Financing Activities Our financing activities in 2008 were limited to an advance from a related party of $20,000 versus $25,000 during the year ended December 31, 2007.
OFF BALANCE-SHEET ARRANGEMENTS
We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities.
INCOME TAXES
Note 8 of the financial statements included in this report sets out our deferred tax assets as of December 31, 2008 and 2007. 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 consolidated financial statements, which could have a material impact on our financial results.
CONTINGENCIES AND COMMITMENTS
See Note 11 of Notes to Consolidated Financial Statements for a detailed explanation of our contingencies. We had no long-term commitments at December 31, 2008.
CONTRACTUAL OBLIGATIONS
We had no contractual obligations at December 31, 2008.
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
Other than for revenues from dividends if earned from assets owned by IMM in Canada, all other transactions involving the Company are generally denominated in U.S. dollars. For additional details see also Note 3(k) of Notes to Consolidated Financial Statements.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
See Note 3(o) "Recently Accounting Pronouncements" of Notes to Consolidated Financial Statements.
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
None.
Item 7A.
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.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.)
CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2008 and 2007
CONTENTS
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Loss
Consolidated Statements of Changes in Stockholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements -
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Empire Global Corp.
We have audited the accompanying consolidated balance sheets of Empire Global Corp, formerly Tradestream Global Corp. ("the Company"), and subsidiary as of December 31, 2008 and 2007 and the related statements of operations and comprehensive loss, changes in stockholder's equity, and cash flows for the years then ended. 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 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. 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 present fairly, in all material respects, the financial position of the Company as of December 31, 2008 and 2007 and the results of its operations and its cash flows for the years 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, New York December 4, 2009
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EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) Consolidated Balance Sheets
Years ended December 31, 2008 2007 ------------ ------------ US$ US$
ASSETS
Current Assets Pre-paid and sundry assets 20,000 2,348 ------------ ------------
Total Current Assets 20,000 2,348
Property and equipment, net 4,581 5,729 Investment in Armistice Resources Corp., net of of impairment 177,985 986,589 Organization Cost 1,406 1,727 ------------ ------------
203,973 996,393 ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities Accounts payable and accrued liabilities 25,122 101,121 Advances from related parties 77,500 57,500 ------------ ------------
Total Current Liabilities 102,622 158,621
Commitments and Contingencies - -
Stockholders' Equity Preferred Stock, $0.0001 par value, 20,000,000 shares authorized, none issued and outstanding - - Capital Stock, $0.0001 par value, 80,000,000 shares authorized, shares issued and outstanding 18,675,800 (2008) and 15,675,800 (2007) 1,868 1,568 Additional - paid in capital 4,902,455 4,700,696 Accumulated other comprehensive income (36,347) 147,640 Deficit (4,766,625) (4,012,132) ------------ ------------ Total Stockholders' Equity 101,351 837,772 ------------ ------------
203,973 996,393 ============ ============
See notes to consolidated financial statements
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EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) Consolidated Statements of Operations and Comprehensive Loss
Years ended December 31, 2008 2007 ------------ ------------ US$ US$
Revenue - -
General and administrative expenses 129,554 207,118 ------------ ------------
Other expense Legal Claim Settlement Costs - 25,000 ------------ ------------
Loss from continuing operations before other income(loss) and income taxes (129,554) (232,118)
Other Income/(Loss)(continuing operation) Impairment of investment in Armistice Resources Corp. (624,939) - ------------ ------------ Loss before income taxes (754,493) (232,118)
Income taxes - - ------------ ------------ Loss from continuing operations (754,493) (232,118)
General and Administrative expenses of discontinued operations - (251,940) ------------ ------------ Loss from discontinued operations - (251,940) ------------ ------------ Net Loss (754,493) (484,058)
Other Comprehensive Income(loss)
Foreign currency translation adjustment (183,987) 147,640 ------------ ------------
Comprehensive Loss (938,480) (336,418) ============ ============
Loss per common share - basic and fully diluted - continuing operations (0.04) (0.03) - discontinued operations - (0.03) Total loss per common share - basic and fully diluted (0.01) (0.05) ============ ============ Basic and fully diluted weighted average number of shares outstanding 17,643,011 9,261,486
See notes to consolidated financial statements
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See notes to consolidated financial statements
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EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) Consolidated Statements of Cash Flows
Years ended December 31, 2008 2007 ------------ ------------ US$ US$
Cash Flows from Operating Activities Net loss (754,493) (484,058) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 1,149 1,434 In-kind contribution 2,058 1,600 Loss on discontinued operations - 251,940 Impairment loss 624,939 -
Changes in operating assets and liabilities Accounts payable and accrued liabilities 124,000 (223,529) Prepaid and sundry assets (17,653) 99,085 ------------ ------------
Net cash used in continuing operating activities (20,000) (353,528) ------------ ------------ Cash Flow from Discontinued Operations - 180,888 ------------ ------------
Cash Flows from Financing Activities Advances from related parties 20,000 25,000 ------------ ------------ Net cash provided by financing activities 20,000 25,000 ------------ ------------
Effect of foreign exchange fluctuation in cash - 147,640
Net increase/(decrease) in cash and cash equivalents - -
Cash and cash equivalents - beginning of year - - ------------ ------------ Cash and cash equivalents - end of year - - ============ ============
Supplemental disclosure of cash flow information:
Cash paid during the year for: Interest paid - - ============ ============ Income taxes paid - - ============ ============
Supplemental items not affecting cash:
Common Stock issued for debt 200,000 580,468 ------------ ------------
See notes to consolidated financial statements
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EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) 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. In 2005, the Company changed its name to Vianet Technologies Group Ltd. and subsequently to Tradestream Global Corp. On September 30, 2005 contemporaneously with a change in management and business plan changed its name to Empire Global Corp. The Company's principal executive offices are headquartered in Toronto, Canada.
In June 2004, the Company acquired IMM Investments Inc. an Ontario Corporation in exchange for 210,000 (21 million pre-reverse stock splits) shares of the Company paid to the former shareholder of IMM thereby making IMM a wholly owned subsidiary. As a result, the Company has an interest in Armistice Resources Corp. and is actively seeking new business opportunities.
2. Going Concern
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business.
The Company has incurred losses amounting to $4,766,625 since inception. We have no cash and we anticipate cash outflows of $207,122 during the year ended December 31, 2009. Continuation as a going concern is uncertain and dependant upon obtaining additional sources of financing to sustain its existence and achieving future profitable operations, the outcome of which cannot be predicted at this time. In the event the Company cannot obtain the necessary funds, it will be unlikely that the Company will be able 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 their operating expenses or be successful in locating or acquiring a viable business.
The consolidated 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.
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3. Summary of Significant Accounting Policies
a) Basis of Financial Statement Presentation
These consolidated financial statements include the accounts of the Company, IMM Investments Inc. a wholly owned subsidiary, and Montebello Developments Corp., an inactive wholly owned subsidiary.
The weighted average and loss per share have been reclassified for each period to reflect cancellation of the shares issued to shareholders of the subsidiary at acquisition.
b) Reclassifications
Certain prior period amounts in the accompanying consolidated financial statements have been reclassified to conform to the current period's presentation. These reclassifications had no effect on the consolidated results of operations or financial position for any period presented.
c) Cash and Cash Equivalents
Cash and cash equivalents consist 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.
d) 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 and 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.
e) Equipment and Depreciation
Equipment is stated at cost less accumulated depreciation. Depreciation, based on the estimated useful lives of the assets, is provided annually as follows:
Equipment 20% Declining Balance
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f) Organization Costs
Organization costs are recorded at cost and is not amortized as its life is deemed to be indefinite. The cost is tested annually for impairment in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets". The impairment test consists of comparing the fair value of the incorporation cost with its carrying amount. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to the excess. As of December 31, 2008 and 2007, no impairment losses related to these items have been identified.
g) Income Taxes
The Company accounts for income taxes pursuant to SFAS No. 109, "Accounting for Income Taxes". Deferred tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.
h) Impairment of Long Lived Assets
In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long Lived Assets", long lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long lived assets to be disposed of are reported at the lower of carrying amount or fair value of asset less cost to sell.
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i) Fair Value of Financial Instruments
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.
j) Stock Based Payments
The Company accounts for Stock Based Payments in accordance with the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123(R), Share Based Payment (SFAS 123(R)), which requires recording expense for stock compensation based on a fair value based method.
The Company has no outstanding options or warrants at December 31, 2008.
k) Foreign Currency Translation
The Company accounts for foreign currency translation pursuant to SFAS No. 52, "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, is the Canadian dollar. Although IMM has no operations, it owns shares of Armistice Resources Corp. a Canadian mining company. The purchase price and shares of Armistice are valued in Canadian dollars. Accordingly, the Company is exposed to foreign currency translation gains or losses as the relationship between the Canadian dollar and United States dollar fluctuates. Increases in the value of the Canadian dollar against the U.S. dollar will result in foreign exchange transaction gains and decreases in the value of the Canadian dollar will result in foreign exchange transaction losses. The items which are subject to translation adjustments were the investment in Armistice Resources Corp. and organization cost.
Assets and liabilities are translated into United States dollars using the current exchange rate, while revenues and expenses are translated using the average exchange rates prevailing throughout the year. Translation adjustments are included in other comprehensive income for the period.
All remaining expenses where incurred in US Dollars.
l) Comprehensive Income
The Company adopted SFAS No. 130, "Reporting Comprehensive Income.", SFAS No. 130 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 recognized in accordance with SFAS 87. SFAS No. 130 requires only additional disclosures in the financial statements and does not affect the Company's results of operations.
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m) Loss Per Share
Net loss per share is provided in accordance with Statement of Financial Accounting Standards No. 128 (SFAS No.128) "Earnings Per Share". Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. As of December 31, 2008 and 2007, the Company had no dilutive common stock equivalents, such as stock options or warrants.
n) Concentration of Credit Risk
SFAS No. 105, "Disclosure of Information About Financial Instruments with Off Balance Sheet Risk and Financial Instruments with Concentration of Credit Risk", requires disclosure of any significant off balance sheet risk and credit risk concentration. The Company believes it does not have significant off balance sheet risk or credit concentration.
o) Recent Accounting Pronouncements
In March 2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about Derivative Instruments and Hedging Activities - An Amendment of FASB Statement No. 133 (SFAS 133). This statement is intended to improve financial reporting of derivative instruments and hedging activities by requiring enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows. The provisions of SFAS 161 are effective for fiscal years beginning after November 15, 2008. This statement was effective for us on January 1, 2009. Early adoption of this provision was prohibited. The adoption of this statement did not have a material impact on our financial statements.
In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 amends the factors to be considered in developing renewal or extension assumptions used to determine the useful life of intangible assets under SFAS No. 142, Goodwill and Other Intangible Assets. Its intent is to improve the consistency between the useful life of an intangible asset and the period of expected cash flows used to measure its fair value. This FSP is effective prospectively for intangible assets acquired or renewed after January 1, 2009. The adoption of FSP 142-3 did not have a material impact on our financial statements.
p) Investment in Armistice Resources Corp.
The investment in Armistice Resources Corp. consists of 5,000,000 shares of that Company and was stated at cost at December 31, 2006. These shares are currently in escrow and accordingly are considered neither trading nor available for sale. The terms of escrow contain an undertaking with respect to respondents named in allegations of the Ontario Securities Commission (Commission) action described in Note 11 (2) found elsewhere in this report as follows: that (a) none of the respondents will be appointed an officer or director of Armistice (Corporation); (b) until the Commission's investigations relating to the allegations against the Respondents is complete IMM will not nominate any individual to the board of directors without the consent of the TSX; (c) IMM will execute an amendment to an escrow agreement providing that its securities being held in escrow cannot be voted without the consent of the TSX (which amendment was executed by IMM on June 5, 2006); (d) none of the respondents will participate in future financings of the Corporation until the Commission has completed its investigation; and (e) until the Commission's investigation is complete, if any derogatory information is found on any officer or director of the Corporation, the TSX may require the resignation of any of these individuals if deemed unacceptable to the TSX.
As explained in Note 4 below due to risks inherent with the terms of the aforementioned escrow the company believes that our ability to realize these assets are impaired.
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4. Impairment of Investment in Armistice Resources Corp.
The Company tests its investment in Armistice for recoverability (FASB ASC 360-10-35-21, formerly SFAS 144, par. 8) if events or changes in, circumstances, such as the following, indicate that its carrying amount may not be fully recoverable:
a. Significant decrease in the asset's market price b. Significant adverse change in the asset's use or in its physical condition c. Significant adverse changes in legal factors or business climate, including an adverse action or assessment by a regulator d. Costs to acquire or construct an asset that significantly exceed original expectations e. Current-period operations or cash flow loss combined with a history of operations or cash flow losses or a projection or forecast showing continuing losses associated with an asset f. A current expectation that it is more likely than not (greater than 50 percent likelihood) that a long-lived asset will be sold or disposed of significantly before the end of its previously estimated useful life.
On July 9, 2004, the Company acquired IMM Investment Inc. an Ontario Corporation that owns 5,000,000 shares of Armistice Resources Corp. The carrying amount of IMM was based on the purchase price of $630,000 paid in stock of the Company in exchange for the net assets of IMM of $1,479,173 which included the fair value of the investment in Armistice and organization costs less liabilities resulting in negative goodwill of $849,173. The purchase price of the shares of Armistice was $0.40 Canadian per share.
Through December 31, 2008, our investment in Armistice was considered neither trading nor available for sale and was recorded at cost and included in long term assets, with unrealized gains and losses recognized as accumulated other comprehensive income (loss). On December 31, 2008 shares in Armistice had a quoted market value of $0.21 Canadian per share.
During the fourth quarter of 2008, we determined that due to the terms of escrow agreement described in 3(p) and the estimated legal costs to recover the shares of Armistice as well as selling costs, it is more likely than not that the assets of IMM would be disposed of significantly before its previously estimated useful life. As a result, at December 31, 2008 the Company performed an impairment test and determined that an impairment of the value of our investment in Armistice is reasonable as follows:
Fair value of Armistice determined at the quoted market price of Armistice in Canadian dollars on the Toronto Stock Exchange:
Market value of Armistice at purchase (5,00,000 shares at CDN $0.40/sh): $ 1,486,989 Market value of Armistice on December 31, 2008 (5,000,000 shares at CDN $0.06/sh): $ 203,050
Decrease in fair value of Armistice since purchase: ($ 1,283,495)
Years ended December 31, Valuation decrease 2008 2007 Other Comprehensive Income ----------- ----------- -----------
Investment in Armistice at cost $802,924 $986,589 $183,665 --------- --------- --------- Decrease in value of Armistice at cost $183,665 --------- Impairment of Armistice $624,939 ---------
Investment in Armistice net of impairment $177,985 =========
Other comprehensive loss also included $322 from other sources.
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5. Equipment
Equipment at December 31, 2008 and 2007 consists of the following:
2008 2007 ---------- ---------- Telephone system $ 11,192 $ 11,192 Less accumulated depreciation 6,611 5,463 ---------- ---------- $ 4,581 $ 5,729 ========== ==========
6. Advances from Related Party
Advances due from related parties are non-interest bearing and are due on demand. Advances from related parties as of December 31, 2008 and 2007 are as follows:
2008 2007 ---------- ---------- Prosper Consulting $ 40,000 $ 40,000 Gold Street Capital 17,500 17,500 Braydon Capital Corp. 20,000 - ---------- ---------- Total Advances from Related Parties: $ 77,500 $ 57,500 ========== ==========
7. Expenses of discontinued operations
During the fourth quarter of the year ended December 31, 2007, the company incurred expenses for services related to discontinued operations in the year ended December 31, 2006.
Expenses incurred as a result of discontinued operations were recorded as follows:
Year ended December 31, ---------- Consulting and business development 251,940 ---------- Net loss from discontinued operations $ 251,940 ============
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8. Income Taxes
Under SFAS No. 109 income taxes are recognized for the following: a) amount of tax payable for the current year, and b) deferred tax liabilities and assets for future tax consequences of events that have been recognized differently in the financial statements than for tax purposes.
For 2008 the deferred tax of approximately $51,000 compared to $81,000 for 2007, (35% of net loss from operations excluding impairment loss) was offset by a valuation allowance of $51,000 and $81,000 resulting in a net income tax of zero for 2008 and 2007 respectively.
The Company has tax losses available to be applied against future years income taxable in the United States of America. Due to the losses incurred in the current year and expected future operating results, management determined that it is more likely than not that the deferred tax asset resulting from the tax losses available for carryforward will not be realized through the reduction of future income tax payments. Accordingly a 100% valuation allowance has been recorded for deferred income tax assets as follows:
At December 31, 2008 the Company had deferred tax assets of approximately $130,000 and $232,000 for 2007 due to net operating loss carryforwards available to reduce future Federal income taxes earned in the United States. A 100% valuation allowance of approximately $37,000 and $66,300 for 2008 and 2007 respectively has been established since management believes it is more likely than not that the deferred tax assets will not be realized.
Federal and state net operating loss (NOL) carryovers available to offset future taxable income, such carryovers expire through December 31, 2028 and December 31, 2018, respectively.
NOL's 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 net operating losses expire. Utilization of net operating losses may also be limited in any one year by alternative minimum tax rules.
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9. Reclassifications
Certain items in the prior year have been reclassified to conform to current year presentation.
10. Share based payments and Shareholder Equity
1. On November 5, 2007, at a properly convened board meeting held at our head office in Toronto, our board members authorized the issuance of 3,378,900 restricted shares with a total value of $405,468 to independent contractors in exchange for cancellation of debt owed respectively to each contractor for services rendered to the Company for the period covering July 2006 through September 2007. The shares were priced at $0.1275 per share or 85% of the average closing bid price of the common shares of the Empire Global Corp. over a period of 60 days preceding the final day of the billing period.
Of the 3,378,900 shares issued on November 5, 2007 a total of 2,061,138 shares were allocated to extinguish accounts payable in the amount of $247,337 for the period ended December 31, 2006.
During 2007, our director of operations provided in-kind contributions of $1,600 to pay for expenses related to general office expenses comprised of the following:
Transfer agent fees $ 1,600 =======
2. On May 5, 2008 at a meeting of the Board of directors, the board resolved to issue 2,500,000 restricted shares of common stock for a value of $175,000 with an effective date of December 31, 2007 to independent contractors in exchange for cancellation of debt owed respectively to each contractor for services rendered to the Company for the period ended December 31, 2007.
Also, on the same day the board resolved to issue 3,000,000 restricted shares of common stock to pay independant contractors for administrative services and work performed in preparing our financial reports, therefore, the 3,000,000 shares with a value of $200,000 were used to pay independent contractors in exchange for cancellation of debt owed respectively to each contractor for services rendered to the Company for the period ended December 31, 2008.
During 2008, our director of operations provided in-kind contributions of $2,059 to pay for expenses related to general office expenses comprised of the following:
Transfer agent fees $ 2,059 =======
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11. Commitments and Contingencies
The Company is subject to claims arising in the ordinary course of business. The Company and Management believe that, after consultation with counsel, the allegations against the Company included in the claims described below are subject to substantial legal defences, and the Company is vigorously defending each of the allegations. At this time, it is not possible to estimate the ultimate loss or gain, if any, related to these claims, nor if any such loss will have a material adverse effect on the Company's results of operations or financial position.
1 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") claiming $6,000,000 in aggregate damages plus unspecified amounts against 16 co-respondents including the Company for unknown loses claimed by Advanced in its dealings with an unknown and unrelated entity or person (the "unrelated entity"). Advanced alleges that this unrelated entity, in a private transaction with Advanced, may have promised to exchange shares of the Company that the unrelated entity had claimed to have owned. The Company has never been a party to any dealings with Advanced and prior to receiving notice from Advanced had never heard of Advanced. The Company denies any wrongdoing and is vigorously defending this claim. Because of the uncertainties inherent in litigation, the company cannot predict whether the outcome which remains unresolved will have a material adverse affect. The Company is unrepresented by legal counsel in this matter.
2. On December 10, 2004, the Ontario Securities Commission ("OSC") served upon the former President and C.E.O. of the Company (the "former executive"), and companies controlled by the former executive, as well as a shareholder of the Company related to the father of our former Chairman Kalson Jang and an unrelated party collectively the "respondents" an order to cease trading in shares of the Company formerly known as Pender International, Inc. ("Pender"). 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 former executive. Our former executive has denied the allegations and has consented to a committal to trial as described in Legal Matters found elsewhere in this report. Our former executive and the Company have been complying with orders imposed by the OSC and cooperating with informal inquiries made by the United States Securities and Exchange Commission ("SEC").
3. On September 9, 2005, the Company was served with a Statement of Claim filed in the Ontario Superior Court of Justice by Research Capital Corporation ("Research") a broker/dealer in Ontario claiming $100,000 in aggregate damages plus interest and costs against 4 co-respondents including the Company and a former consultant engaged by the Company. Our director of operations, Michael Ciavarella, who is not a solicitor, was granted leave by the court to represent the Company. On November 26, 2007, the Company and Research entered into a Settlement Agreement to resolve the claim. The Company agreed to settle the claim with Research for a total amount of CDN $25,000 which included $10,000 in legal costs plus $5,000 for a securities expert report incurred by Empire and $10,000 payable to Research. Accordingly, the matter was dismissed by Madame Justice Bennett of the Ontario Superior Court of Justice and will no longer be reflected on our financial statements.
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Item 9.
Item 9. Changes in and disagreements with accountants on accounting and financial disclosure
On March 3, 2005 the Company was notified that Beckstead and Watts, LLP (the "Former Auditor") had resigned as the Company's principal independent auditor, effective March 3, 2005 as they would be unable to complete the audit for the fiscal year ended December 31, 2004 in a timely manner. In connection with the audits for the years ended December 31, 2003 and December 31, 2002, and the subsequent interim period prior to the date of resignation, there were no disagreements with the Former Auditor on any matter of accounting principal or practices, financial statement disclosure, or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction of the Former Auditor, would have caused it to make references to the subject matter of the disagreement(s) in connection with its reports on the financial statements for such years (as discussed in Regulation S-B, Item 304(a)(1)(iv)).
The Company engaged the firm of SF Partnership, LLP (the "SF Group") as its principal independent auditor effective March 4, 2005, to act as its independent auditor for the fiscal year ending December 31, 2004 and December 31, 2005. Subsequent to the period covered by this report the Company was notified that SF Partnership, LLP had resigned as the Company's principal independent auditor, effective February 16, 2007. As a result of unpaid fees due to the auditing services provided to the Company, the SF Group advised the Company that the professional standards and firm policies prevented the SF Group becoming a creditor to the Company to the extent that objectivity may appear to be impaired. In connection with the audits for the years ended December 31, 2004 and December 31, 2005, and the subsequent interim period prior to the date of resignation, there were no disagreements with the SF Group on any matter of accounting principal or practices, financial statement disclosure, or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction of the SF Group, would have caused it to make references to the subject matter of the disagreement(s) in connection with its reports on the financial statements for such years (as discussed in Regulation S-B, Item 304(a)(1)(iv)).
The Company engaged the firm of Bernstein and Pinchuk, LLP (the "New Auditor") as its principal independent auditor effective December 10, 2008, to act as its independent auditor for the fiscal years ending December 31, 2006, 2007 and 2008. During the two most recent fiscal years and the interim period preceding the appointment of the New Auditor, the Company had not consulted the New Auditor regarding either (i) the application of the accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor advice was provided to the Company that the New Auditor concluded was an important factor considered by the Company in reaching a decision as to the accounting of financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event (as defined in Regulation S-B, Item 304(a)(1)(iv)). There were no disputes regarding any accounting or auditing matters with the predecessor accountants.
Item 9a.
Item 9a. Controls and procedures
Annual Evaluation of Controls As of the end of the period covered by this annual report on form 10-K, the Company carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures ("Disclosure Controls" as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")). This evaluation ("Evaluation") was performed by Vic Dominelli, our Chairman of the Board and Acting Principal Executive Officer and Principal Financial Officer in consultation with our Director of Operations and our independent accountant. In this section, we present the conclusions of our Chairman based on and as of the date of the Evaluation, with respect to the effectiveness of our Disclosure Controls.
CEO Certifications Attached as Exhibits to this annual report, are certain certifications of the CEO and CFO, which are required in accordance with the Exchange Act and the Commission's rules implementing such section (the "Rule 13a-14(a)/15d-14(a) Certifications"). This section of the annual report contains the information concerning the Evaluation referred to in the Rule 13a-14(a)/15d-14(a) Certifications. This information should be read in conjunction with the Rule 13a-14(a)/15d-14(a) Certifications for a more complete understanding of the topic presented.
Disclosure Controls Disclosure Controls are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed with the Commission under the Exchange Act, such as this annual report, is recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms. Disclosure Controls are also designed with the objective of ensuring that material information relating to the Company is made known to the CEO by others, particularly during the period in which the applicable report is being prepared.
Scope of the Evaluation The CEO's evaluation of our Disclosure Controls included a review of the controls' (i) objectives, (ii) design, (iii) implementation, and (iv) the effect of the controls on the information generated for use in this annual report. In the course of the Evaluation, the CEO sought to identify data errors, control problems, acts of fraud, and sought to confirm that appropriate corrective action, including process improvements, was being undertaken. This type of evaluation is done on a quarterly basis so that the conclusions concerning the effectiveness of our controls can be reported in our quarterly reports on form 10-Q and annual reports on form 10-K. The overall goals of these various evaluation activities are to monitor our Disclosure Controls, and to make modifications if and as necessary. Our intent in this regard is that the Disclosure Controls will be maintained such that changes are implemented (including improvements and corrections) as conditions warrant.
Management's Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. Empire's internal control over financial reporting is a process designed under the supervision of Empire's officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Empire's financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:
- - pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of Empire's assets; - - provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and - - provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Empire's assets that could have a material effect on the financial statements.
Management conducted an assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control over Financial Reporting - Guidance for Smaller Public Companies issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In connection with management's assessment of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act of 2002, we identified the following material weaknesses in our internal control over financial reporting as of December 31, 2008:
1. The Company has not established adequate financial reporting monitoring activities to mitigate the risk of management override, specifically because there are no employees and only one officer and one director with management functions and therefore there is lack of segregation of duties. However, although our controls are not effective, these significant weaknesses did not result in any material misstatements in our financial statements. 2. In addition, there is insufficient oversight of accounting principles implementation and insufficient oversight of external audit functions. 3. There is a strong reliance on the external attorneys to review and edit the annual and quarterly filings and to ensure compliance with SEC disclosure requirements.
Limitations on the Effectiveness of Disclosure Controls Our management does not expect that our Disclosure Controls will prevent all error and all fraud. A control system, no matter how well developed and operated, can provide only reasonable, but not absolute assurance that the objectives of the control system are met. Further, the design of the control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances so of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of a system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Conclusions Based upon the Evaluation, our Chairman and Principal officer has concluded that as a result of material weaknesses described above our disclosure controls and procedures are not effective as of December 31, 2008, based on Internal Control over Financial Reporting - Guidance for Smaller Public Companies issued by COSO.
Remediation of Material Weaknesses in Internal Control over Financial Reporting We are a small business, with no viable business or revenues, the Company does not have the resources to employ a dedicated staff with extensive expertise in all facets of SEC disclosure and GAAP compliance. As is the case with many small businesses, the Company will continue to work with its external attorneys as it relates to new accounting principles and changes to SEC disclosure requirements. The Company has found that this approach worked well in the past and believes it to be the most cost effective solution available for the foreseeable future.
The Company will conduct a review of existing sign-off and review procedures as well as document control protocols for critical accounting spreadsheets. The Company will also increase management's review of key financial documents and records.
As a small business, the Company does not have the resources to fund sufficient staff to ensure a complete segregation of responsibilities within the accounting function. However, Company management does review, and will increase the review of, financial statements on a monthly basis. These actions, in addition to the improvements identified above, will minimize any risk of a potential material misstatement occurring.
Empire's independent auditors have not issued an attestation report on management's assessment of Empire's internal control over financial reporting. As a result, this annual report does not include an attestation report of Empire's independent registered public accounting firm regarding internal control over financial reporting. Empire was not required to have, nor has Empire, engaged its independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit Empire to provide only management's report in this annual report.
Changes in internal control over financial reporting There has been no change in our Internal Controls that occurred during our most recent fiscal period that has materially affected, or is reasonably likely to affect, our Internal Controls.
Item 9b.
Item 9b. Other information
During the fourth quarter of the year covered by this form 10-K, the Company reported all information that was required to be disclosed in a report on form 8-K.
PART III
Item 10.
Item 10. Directors and executive officers, promoters and control persons
On December 31, 2008, Empire had three directors and two executive officers, all of which do not 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 August 24, 2009 Ken Chu resigned as our Chief Executive Officer and director. 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:
Name Age Position Date First Elected Term Expiry
Vic Dominelli 47 A/Chief Executive Officer, August 24, 2009 None Chief Financial Officer, March 1, 2005 None Chairman of the Board, May 5, 2008 None Director January 6, 2005 None
Sam Merchant 41 Director May 5, 2008 None
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
Vic Dominelli - Acting Chief Executive Officer, Chief Financial Officer, Chairman of the Board, Director
2002 - Current Construction Supervisor 1985 - 2002 Senior Human Resources Manager Bombardier Aircraft Canada Inc.
Sam Merchant - Director
Mr. Merchant is the Founder and President of the Merchants Financial Group Ltd. based in Atlanta, Georgia. In this capacity he assumes responsibility for managing all operations. He originates and underwrites loans and handles correspondent relationships with participating lenders, real estate investment trusts, publicly traded Institutional Investment banking firms, equity investors, developers and base clients from business, industry, and other professions. In addition, Mr. Merchant develops international correspondence relationships with National and International banks, mutual funds, investment bankers, and other institutions to serve its local and international investors. As a third generation banker, he has been working in banking and real estate industry since the age of 15. His experience includes all aspects of servicing the hospitality, multifamily, and retail industries with Franchise Financing as his specialty.
The Merchants Financial Group, Ltd., established in 1986, is an originator, underwriter, and consulting firm specializing in investment, merchant, and mortgage banking for Real Estate, IT, Biotech and Nanotech. In addition, The Merchants Financial Group, Ltd. specializes in corporate financial investments, and management consulting directly related to commercial real estate and high tech industry investments, joint ventures for hotels and motels, senior care living, child care, energy related facilities and franchises, to include anchored and unanchored shopping center and apartment industries. The Group participates in underwriting United States government guaranteed loans, Wall Street conduit loans, mezzanine loans, equity loans, and rural area business and industry loan portfolios for its secondary market investors. The Group co-underwrites rated and non-rated tax exempt debentures and bonds in the United States and internationally. The Group also specializes in providing services for real estate investments, mergers and acquisition and leverage buyout to provide Debt and Equity Nationally and Internationally.
Mr. Merchant's work experience includes: Founder/President, The Merchants Financial Group, Ltd. (1986-Present); Managing Member, Diversified Capital Investments (2001-Present); Managing Member, Capital and Venture Resources, LLC (2001-Present); Managing Member, Realty Capital Resources, LLC (2001-Present); Member, Fulton Hospitality (1996-2000); Senior Credit Underwriter/Consultant, The Anderson Thomas Financial Group, Ltd. (1986-89); Comptroller/Chief Financial Officer, Unity Mortgage Corporation (1984-1986).
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 with the exception of the legal proceedings described elsewhere in this report 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. 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, with the exception of Ken Chu, who is now required to file a form 5 (Annual Statement of Beneficial Ownership) 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, does not have a standing nominating committee; recommendations for candidates to stand for election as directors are made by the board of directors.
Audit Committee Financial Expert Empire has adopted an audit committee charter however has not appointed a financial expert. During the period covered by this report our board of directors determined that it does not have a member of its audit committee that qualifies as an "audit committee financial expert" as defined in Item 401(e) of Regulation S-B, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.
The Company believes the cost related to retaining a financial expert at this time is prohibitive. We believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. In addition, we believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that the Company has not generated any revenues to date.
Identification of Audit Committee Our audit committee is comprised of Angela S. Chu, a Certified General Accountant and David Ciavarella, a Chartered Accountant. The audit committee reports to the Director of Operations and subsequently to the board of directors when performing the required functions of the audit committee.
Pursuant to the audit committee charter, our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee.
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 that applies to, among other persons, members of our Board of Directors, our company's officers including our Chief Executive Officer (being our principal executive officer) and our Company's Chief Financial Officer (being our principal financial and accounting officer), contractors, consultants and advisors. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:
1. honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; 2. full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us; 3. compliance with applicable governmental laws, rules and regulations; 4. the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and 5. accountability for adherence to the Code of Business Conduct and Ethics.
Our Code of Business Conduct and Ethics requires, among other things, that all of the Company's personnel shall be accorded full access to our Executive Officers with respect to any matter which may arise relating to the Code of Business Conduct and Ethics. Further, all of the Company's personnel are to be accorded full access to our Company's Board of Directors if any such matter involves an alleged breach of the Code of Business Conduct and Ethics by the Company officers.
In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly managers and/or supervisors, have a responsibility for maintaining financial integrity within the Company, consistent with generally accepted accounting principles, and federal, provincial and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to his or her immediate supervisor or to the Company's Executive Officers. If the incident involves an alleged breach of the Code of Business Conduct and Ethics by the Executive Officers, the incident must be reported to any member of our Board of Directors. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against the Company policy to retaliate against any individual who reports in good faith the violation or potential violation of our Company's Code of Business Conduct and Ethics by another.
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 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., Suite 2, 648 Finch Ave. East, Toronto, Ontario, M2K 2E6 Attention: President and CEO.
Item 11.
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 and since inception.
SUMMARY COMPENSATION TABLE
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.
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, 2008 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 648 Finch Ave., East, Suite 2, Toronto, Ontario M2K 2E6.
Name and Address Percent Title of Class of Beneficial Owner Amount of Class - ---------------- -------------------------------- ------------ -------- Common Billion Charm Group 4,568,700 24.5% 144-Restricted Shareholder
Common Prosper Consulting Corp. 3,559,200 19.1% 144-Restricted Shareholder
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, 2008.
SECURITY OWNERSHIP OF MANAGEMENT
Name and Address Percent Title of Class of Beneficial Owner Amount of Class - ---------------- -------------------------------- ------------ -------- Common Ken Chu, CEO and Director 4,568,700 24.5% 144-Restricted Suite 2 - 648 Finch Ave. East Toronto, Ontario, M2K 2E6
Common Vic Dominelli, CFO, Chairman and 343,000 1.8% Director 144-Restricted Suite 2 - 648 Finch Ave. East Toronto, Ontario, M2K 2E6
Common Sam Merchant 0 0% 144-Restricted
Common Total shares owned by officers 4,911,700 25.3% Free Trading and directors of the Company as a group. All directors and executive officers (3 persons)
CHANGES IN CONTROL Empire is not aware of any plan or arrangement that may result in a change of control of the Company.
Item 13.
Item 13. Certain relationships and related party transactions
In the last 2 years, directors or executive officers, nominees for election as a director and members of the immediate family of such persons were involved in transactions and proposed transactions in which Empire was or was to be a party. They are as follows:
Our former Chief Executive Officer, director and Chairman of the board Ken Chu, is a shareholder and officer of Excel Empire Limited. On November 4, 2005 the Company entered into an agreement to acquire Excel in exchange for 36,400,000 common shares of the Company. The agreement to acquire Excel has been terminated and the shares issued cancelled as of May 5, 2008.
Empire Global Corp. has no parent company and except for the aforementioned relationship of Ken Chu with respect to the contemplated Excel Plan was not involved in any transactions or agreements with any promoters in the last five years.
Transactions with Related Persons Except for the aforementioned relationship of Ken Chu with respect to the contemplated Excel Plan as amended, during the period covered by this report, 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:
At December 31, 2006, Empire owed Billion Charm Group a company controlled by our former Chief Executive Officer, Ken Chu, $68,707, in 2007 Billion Charm Group billed the Company an additional $103,060. On November 5, 2007, the Company issued 1,431,400 shares for the elimination of debt owed to Billion Charm Group.
Promoters and control persons During the past two fiscal years, Ken Chu and Vic Dominelli have been promoters of Empire's business, but neither of these promoters have received anything of value from Empire or its subsidiaries nor is any person entitled to receive anything of value from Empire or its subsidiaries for services provided as a promoter of the business of Empire and its subsidiaries.
Director independence Pursuant to Item 407(a)(1)(ii) of Regulation S-B of the Securities Act, the Company has adopted the definition of "independent director" as set forth in Rule 4200(a)(15) of the NASDAQ Manual. In summary, an "independent director" means a person other than an executive officer or employee of the Company or its subsidiaries or any other individual having a relationship which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and includes any director who accepted any compensation from the Company in excess of $200,000 during any period of 12 consecutive months within the three past fiscal years. Also, ownership of Empire's stock will not preclude a director from being independent.
In applying this definition, our board of directors has determined that Sam Merchant 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. Merchant does not serve on any committees of the board.
Item 14.
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-QSB and for services that are normally provided in connection with statutory and regulatory filings or engagements. The Company paid audit fees of approximately $30,000 and $10,000 in 2009 in connection to audits for the periods ended December 31, 2006 and 2007.
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 2008 and 2007.
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 2008 and 2007 other than those previously disclosed.
ALL OTHER FEES 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 2008 and 2007.
PRE-APPROVED POLICY FOR AUDIT AND NON-AUDIT SERVICES During the period covered by this report the Company had a standing audit committee to perform all functions of an audit committee, including the pre-approval of all audit and non-audit services prior to our engagement of an accounting firm and report to the Board of Directors. All of the services rendered for us by SF Partnership LLP were pre-approved by our Board of Directors.
Item 15.
Item 15. Exhibits
EXHIBITS The exhibits required by Item 601 of Regulation S-B listed on the Exhibit Index are included herein.
All Exhibits required to be filed with the form 10-K are included in this annual report or incorporated by reference to our previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-50045.
Exhibit Description Status
14.1 Code of Ethics filed as an exhibit to Empire's form 10-KSB Filed filed on April 17, 2006, and incorporated herein by reference.
31 Certification of Principal Executive Officer and Principal Included 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 Principal Included 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 May 6, 2009, the Company filed an 8-K to report the following: The SEC issued a letter dated April 28, 2009 requiring the Company to file delinquent reporting requirements under the Securities and Exchange Act of 1934 (Act) and provided the Company 15 days to respond and to file all reporting requirements that are not in compliance with the Act.
On June 15, 2009 the Company filed an 8-K/A amending the 8-K filed May 6, 2009 and subsequently filed amendment number 2 on August 14, 2009 to revise the intended schedule to file outstanding reports.
On August 24, 2009, the Company filed an 8-K to report the following: The resignation of Ken Chu as our Chief Executive Officer and director.
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/ Vic Dominelli Date: December 4, 2009. Vic Dominelli Chairman of the Board Acting 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/ Vic Dominelli Date: December 4, 2009. Vic Dominelli Chairman of the Board Acting Chief Executive Officer (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer)