ITEM 1.
DESCRIPTION OF BUSINESS
Company Overview
Azzurra Holding Corporation, formerly Wave Wireless Corporation (“Azzurra”, the “Company”, “we”, “us” “our”) was incorporated in 1991 as a Delaware corporation. Our executive offices are located at 600 West Broadway, Suite 700, San Diego, California 92101, and our telephone number is (619) 795-1134.
The Company currently has no ongoing operations. The Board has determined to maintain the Company as a public shell corporation, which will seek suitable business combination opportunities. The Board believes that a business combination with an operating company has the potential to create greater value for the Company’s stockholders than a liquidation or similar distribution.
During the year ended December 31, 2014, the Company was a non-operating shell company and its business operations were limited to sustaining the public shell.
Employees
As of December 31, 2014, we did not have any full- or part-time employees. Our President and Chief Executive Officer, who also serves as our Chief Financial Officer, works part-time as a consultant to the Company.
ITEM 1A.
ITEM 1A.
RISK FACTORS
An investment in our common stock is subject to many risks. You should carefully consider the risks described below, together with all of the other information included in this Annual Report on Form 10-K, including the consolidated financial statements and the related notes, before you decide whether to invest in our common stock. Our business, operating results and financial condition could be harmed by any of the following risks. The trading price of our common stock could decline due to any of these risks, and you could lose all or part of your investment.
THE COMPANY LACKS OPERATIONS AND HAS LOSSES WHICH ARE EXPECTED TO CONTINUE INTO THE FUTURE.
As a result of the sale of substantially all of the Company’s operating assets, the Company has no operations from which to derive revenue. The Company’s operating history is not a useful measure upon which an evaluation of its future success or failure can be made. The Company’s ability to achieve and maintain profitability and positive cash flow is dependent upon its ability to generate revenues, and the ability to raise the capital necessary to acquire an operating entity or engage in a merger or other transaction with an operating entity.
The Company is a “shell” corporation as that is defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon current plans, the Company expects to incur operating losses in future periods. The Company cannot guarantee that it will be successful in generating revenues in the future.
IF THE COMPANY DOES NOT SUCCESSFULLY CONSUMMATE A BUSINESS COMBINATION, THE COMPANY WILL REQUIRE ADDITIONAL FUNDS.
For the Company to once again engage in operations, it will either need to raise additional funds through public or private debt or sale of equity, or it will need to acquire or enter into a merger transaction with an operating entity. The Company is currently seeking to engage in such a merger with an operating entity, but there is no guarantee that this merger will reach a successful completion. If the merger fails and the Company seeks additional financing, this financing may not be available when needed. Even if this financing is available, it may be on terms that the Company deems unacceptable or materially adverse to its interests with respect to dilution of book value, dividend preference, liquidation preference, or other terms.
THE COMPANY IS NOT AN OPERATING COMPANY AND DOES NOT HAVE ANY SIGNIFICANT CAPITAL.
Because the Company does not have significant capital, it must limit its operations and there is little chance that operations will begin at any time soon, as a result of such limited capital, unless the Company obtains additional funding to acquire an operating entity or enters into a merger transaction with an operating entity.
BECAUSE OWNERSHIP OF MORE THAN 50% OF THE COMPANY’S OUTSTANDING COMMON SHARES ARE HELD BY A FEW SHAREHOLDERS, THESE SHAREHOLDERS WILL BE ABLE TO DECIDE WHO WILL BE OUR DIRECTORS, AND YOU MAY NOT BE ABLE TO ELECT ANY DIRECTORS.
Over 50% of the Company’s outstanding common stock is held by a few shareholders, who therefore control the Company. As a result, unless the Company issues more shares and/or these shareholders sell some of their shares, they will be able to elect all of the Company’s directors and control its operations. If the Company does enter into an acquisition or merger transaction, the Company may issue a significant number of shares in connection with that transaction. This could result in a reduction in value to the common stock you own because of the ineffective voting power. The concentration of holdings could adversely affect the value of your shares and prevent the Company from undergoing a change of control in the future.
THE COMPANY HAS NOT PAID DIVIDENDS AND NONE ARE ANTICIPATED.
To date, the Company has paid no cash dividends on its common stock. For the foreseeable future, the Company expects that earnings generated from the Company’s operations, if any, will be retained for use in its business and not to pay dividends.
"PENNY STOCK" RULES MAY MAKE BUYING OR SELLING THE COMPANY’S COMMON STOCK DIFFICULT.
Trading in the Company’s securities is subject to the “Penny Stock” Rules.
The Securities and Exchange Commission (“SEC”) has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. Broker-dealers who sell penny stocks to certain types of investors are required to comply with the Commission’s regulations concerning the transfer of penny stock. These regulations require broker-dealers to:
●
Make a suitability determination prior to selling a penny stock to the purchaser;
●
Receive the purchaser’s written consent to the transaction; and
●
Provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker-dealers to sell the Company’s common stock and may affect your ability to resell our common stock.
ITEM 1B.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 2.
ITEM 2.
DESCRIPTION OF PROPERTY
We do not own any real property. The Company’s corporate headquarters are located in the offices of our President and Chief Executive Officer, located in San Diego, California. The Company is not obligated under the terms of any lease or agreement with our President and Chief Executive Officer.
ITEM 3.
ITEM 3.
LEGAL PROCEEDINGS
None.
ITEM 4.
ITEM 4.
MINE SAFETY DISCLOSURES
Not Applicable.
PART II
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
There is no “established trading market” for our shares of common stock. We are not listed on any exchange or any OTC marketplace, including the Pink Sheets.
As of March 31, 2015, there were five stockholders of record of our common stock.
DIVIDENDS
We have never declared or paid any cash dividend on our common stock, nor do we currently intend to pay any cash dividend on our common stock in the foreseeable future. We expect to retain our earnings, if any, for the growth and development of our business.
EQUITY COMPENSATION PLANS
The Company does not currently have any equity compensation plans for which equity securities are authorized to be issued.
ITEM 6.
ITEM 6.
SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7.
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and results of operations contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Certain Factors Affecting the Company" beginning on Page 1 of this Annual Report on Form 10-K, and other documents filed by us with the Securities and Exchange Commission.
See also the Notes to the Consolidated Financial Statements in the accompanying consolidated financial statements.
RESULTS OF OPERATIONS
Sales
During each of the years ended December 31, 2014 and 2013, the Company had no sales, and no sales are anticipated to occur until such time as the Company merges with or acquires an operating company, or otherwise commences operations.
General and Administrative
During each of the years ended December 31, 2014 and 2013, general and administrative expenses were approximately $22,000. General and administrative expenses during the years reported consist principally of auditing, and related costs associated with the preparation and review of the Company’s consolidated financial statements, filing fees and expenses (including XBRL), and reimbursement of costs and expenses relating to franchise and related taxes, among other costs and expenses.
Other Expense
During the years ended December 31, 2014 and 2013, other expenses were $5,000 and $4,000, respectively. During both 2014 and 2013, other expense consisted of interest expense on outstanding notes payable.
Net Loss
During the year ended December 31, 2014, the Company had net losses of $27,000 as compared to net losses of $26,000 during the year ended December 31, 2013. The increase in net loss during the 2014 period is related to an increase in other expense discussed above.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2014, the Company had cash of approximately $3,000, compared to approximately $10,000 in cash at December 31, 2013. During the year ended December 31, 2014, overall cash decreased by approximately $7,000, primarily due to cash losses in the period, partially offset by the receipt of notes payable totaling $10,000 during 2014.
The Company currently has no operations and intends to locate and combine with an existing, privately-held company that is profitable or which, in management's view, has growth potential, irrespective of the industry in which it is engaged. However, the Company does not intend to combine with a private company, which may be deemed to be an investment company subject to the Investment Company Act of 1940. A combination may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets or any other form which will result in the combined enterprises becoming a publicly-held corporation.
Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue. To continue as a going concern, pending consummation of a transaction, the Company intends to either seek additional equity or debt financing. No assurances can be given that such equity or debt financing will be available to the Company nor can there be any assurance that a combination transaction will be consummated. Should the Company need to incur any significant liabilities prior to a combination transaction, including those associated with the current minimal level of general and administrative expenses, it may not be able to satisfy those liabilities in the event it was unable to obtain additional equity or debt financing.
ITEM 7A.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 8.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required hereunder in this Annual Report on Form 10-K is set forth in the financial statements and the notes thereto.
ITEM 9.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
ITEM 9A.
ITEM 9A.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Prior to the filing of this report, the Company's management assessed the effectiveness of our internal control over financial reporting. Based upon this assessment, management concluded that the Company’s controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports filed by it under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and the Chief Financial Officer of the Company, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
The Company’s Chief Executive Officer and Chief Financial Officer has determined that there have been no changes in the Company’s internal control over financial reporting during the periods covered by this Report identified in connection with the evaluation described in the above paragraph that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B.
ITEM 9B.
OTHER INFORMATION
None.
PART III
ITEM 10.
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The Company’s sole executive officer and director as of December 31, 2014 is Daniel W. Rumsey, age 53. Mr. Rumsey is currently the Company’s President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board of Directors. Mr. Rumsey was appointed Chief Restructuring Officer on March 10, 2005, and to the Board of Directors on May 13, 2005. Mr. Rumsey resigned from his position as Chief Restructuring Officer and was reappointed in October 2006. Prior to his appointment as Chief Restructuring Officer in March 2005, he served as the Company’s Vice President, Chief Financial Officer and General Counsel. Mr. Rumsey currently is the President and Founder of SEC Connect, LLC, an EDGAR filing agent, and is Managing Partner of the Disclosure Law Group. Mr. Rumsey received his J.D. from the University of Denver College of Law in 1985, and his B.S. from the University of Denver in 1983.
BOARD COMMITTEES AND MEETINGS
The Company currently does not have any committees of the Board of Directors.
CODE OF ETHICS
The Company has adopted a Code of Ethics that applies to the Company’s Chief Executive Officer and Chief Financial Officer, or persons performing similar functions. The Company will provide to the public, free of charge, a copy of the code of ethics upon request in writing to the Company’s Chief Executive Officer at Azzurra Holding Corporation at 600 West Broadway, Suite 700, San Diego, California 92101.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who beneficially own more than 10% of the Common Stock, to file with the SEC initial reports of beneficial ownership ("Form 3") and reports of changes in beneficial ownership of Common Stock and other equity securities of the Company ("Form 4"). Officers, directors and greater than 10% stockholders of the Company are required by SEC rules to furnish to the Company copies of all Section 16(a) reports that they file. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with for fiscal 2013.
ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information about the compensation paid or accrued during the fiscal year converted by this Annual Report to our Chief Executive Officer and our Chief Financial Officer.
(1)
No compensation was paid or accrued to Mr. Rumsey during the years ended December 31, 2014 and 2013.
DIRECTOR COMPENSATION
No compensation was paid to any directors for their service on the Company’s Board of Directors during 2014.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT ARRANGEMENTS AND CHANGE OF CONTROL AGREEMENTS
None.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table presents information concerning the beneficial ownership of all shares of common stock of the Company as of March 31, 2015. The Company has no other shareholders.
Beneficial ownership is determined under the rules of the Securities and Exchange Commission and generally includes voting or investment power over securities. Except in cases where community property laws apply or as indicated in the footnotes to this table, the Company believes that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as being beneficially owned by that stockholder. The percentage of beneficial ownership is based on 187,000 shares of common stock outstanding as of March 31, 2015.
*
JTA Resources LLC claims beneficial ownership of shares owned by CGA Resources LLC, which owns of record 10,000 shares of common stock. JTA and CGA may be considered a control group for purposes of calculating beneficial ownership, due to the relationship between the principals of each respective entity.
ITEM 13.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
During the years ended December 31, 2014 and 2013, we contracted with SEC Connect, whose principal is the Company’s Chief Executive Officer, to provide the Company with EDGAR filing services. For the years ended December 31, 2014 and 2013, we paid SEC Connect $6,000 and $4,500 in filing fees, respectively, which amounts included fees paid to comply with the requirement that the Company file its consolidated financial statements with the Securities and Exchange Commission in XBRL. We believe the terms of this agreement are no less favorable to us than we could have obtained from an unaffiliated party.
ITEM 14.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
Cherry Bekaert LLP ("Cherry Bekaert") has been retained by the Board of Directors as the independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ended December 31, 2014. The aggregate fees Cherry Bekaert billed us in 2014 and 2013 for audit services, including for review of our interim financial statements was $9,500 in each of the two years.
TAX FEES
The Company engaged Cherry Bekaert for preparation of the Company’s 2012 Federal and state tax returns prepared in 2013. The aggregate fees Cherry Bekaert billed us in 2013 for tax services was $2,000. Cherry Bekaert did not perform any other non-audit related services in 2014 or 2013.
AUDIT APPROVAL POLICIES
The Board of Directors has adopted procedures and policies pursuant to which services to be performed by the independent auditor are approved. Proposed services are pre-approved by agreeing to a framework with descriptions of allowable services with the Board of Directors ("general pre-approval"). Unless a type of service has received general pre-approval, it requires specific approval by the Board of Directors if it is to be provided by the independent registered public accounting firm.
PART IV
ITEM 15.
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
We have listed the exhibits filed as part of this Annual Report on Form 10-K in the accompanying exhibit index, which follows the signature page to this Annual Report. The exhibits marked with an asterisk (*) are included with and filed as part of this Annual Report on Form 10-K.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors
Azzurra Holding Corporation
We have audited the accompanying consolidated balance sheets of Azzurra Holding Corporation and subsidiary (the “Company”) as of December 31, 2014 and 2013, and the related consolidated statements of operations, stockholders' deficit, and cash flows for each of 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 audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Azzurra Holding Corporation and subsidiary as of December 31, 2014 and 2013, and the consolidated results of their operations and their cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.
As more fully discussed in Note 3, the Company currently has no operations and accordingly has no source of revenue. As a result, the Company is exploring opportunities to effect an acquisition of the Company by merger, exchange or issuance of securities. The discontinuance of all the Company's remaining operations in 2007 raises substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
PART I - FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
AZZURRA HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands)
The accompanying notes are an integral part of these consolidated financial statements.
AZZURRA HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
The accompanying notes are an integral part of these consolidated financial statements.
AZZURRA HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
(In thousands)
The accompanying notes are an integral part of these consolidated financial statements.
AZZURRA HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
The accompanying notes are an integral part of these consolidated financial statements.
AZZURRA HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
BACKGROUND AND ORGANIZATION
Azzurra Holding Corporation, formerly known as Wave Wireless Corporation (“Wave”), is a Delaware corporation. Wave became Azzurra Holding Corporation (the “Company”) on June 28, 2007.
The Company currently has no ongoing operations. The Board of Directors has determined to maintain the Company as a public shell corporation, which will seek suitable business combination opportunities. The Board believes that a business combination with an operating company has the potential to create greater value for the Company’s stockholders than a liquidation or similar distribution.
2.
BASIS OF PRESENTATION SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Since July 2007, the Company has been a non-operating shell company and its business operations were limited to sustaining the public shell.
Accounting Estimates
In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expense during the reporting period. Actual results could differ from those estimates.
Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant inter-company accounts and transactions have been eliminated.
Income Tax
Deferred income tax assets and liabilities are computed annually for differences between the financial statement and federal income tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Management has evaluated all the tax positions that could have a significant effect on the consolidated financial statements in accordance with the standard and determined that the Company had no uncertain income tax positions which would require adjustment or disclosure as of December 31, 2014 and 2013. The Company's federal income tax returns after 2010 are subject to examination by the Internal Revenue Service, generally for a period of three years after the income tax returns are filed.
Net Loss per Share
Basic and diluted loss per common share are computed by dividing the net loss by the weighted average common shares outstanding. No options or warrants were outstanding for any period.
Recent Accounting Pronouncements
There have been no recent accounting pronouncements which would have any impact on the Company.
3.
GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.
The Company currently has no operations and intends to locate and combine with an existing, privately-held company that is profitable or which, in management's view, has growth potential, irrespective of the industry in which it is engaged. However, the Company does not intend to combine with a private company, which may be deemed to be an investment company subject to the Investment Company Act of 1940. A combination may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets or any other from which will result in the combined enterprise's becoming a publicly-held corporation.
Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue. To continue as a going concern, pending consummation of a transaction, the Company intends to either seek additional equity or debt financing. No assurances can be given that such equity or debt financing will be available to the Company nor can there be any assurance that a combination transaction will be consummated. Should the Company need to incur any significant liabilities prior to a combination transaction, including those associated with the current minimal level of general and administrative expenses, it may not be able to satisfy those liabilities in the event it was unable to obtain additional equity or debt financing.
4.
NOTES PAYABLE
On March 25 and March 31, 2011, the Company issued promissory notes in the principal amount of $12,500 and $15,000, and on March 16 and March 19, 2012, and March 4, March 20 and December 27, 2013, the Company issued promissory notes in the principal amount of $10,000 each. In addition, the Company issued promissory notes in the principal amounts of $6,500 and $3,500 on August 13, 2014 and November 2, 2014, respectively (collectively, the “Notes”). Each of the Notes are payable on demand, and accrue interest at the rate of 7% annually. As of December 31, 2014, the total principal and accrued interest due under the terms of the Notes was $103,000.
5.
STOCKHOLDERS’ EQUITY
At December 31, 2014, the authorized shares of Azzurra Holding Corporation consist of 250,000 shares of common stock, $0.01 par value, and 187,000 shares were issued and outstanding.
6.
INCOME TAXES
The Federal net operating loss carryforward for tax purposes and state net operating loss carryforward for tax purposes is approximately $364 million and $138 million, respectively, at December 31, 2014, which expire in various amount annually through 2033. The Company's ability to utilize these carryforwards may be severely limited or lost pursuant to Section 382 of the Internal Revenue Code as a result of the change in control of the Company on June 14, 2007. Other limitations may apply as well. The Company has made no determination as to what these limitations may be.
Deferred income taxes reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their bases for financial reporting purposes. In addition, future tax benefits, such as net operating loss carry-forwards, are recognized to the extent that realization of such benefits is more likely than not. The Company has assessed its ability to realize future tax benefits, and concluded that as a result of the history of losses, it was more likely than not, that such benefits would not be realized. Accordingly, the Company has recorded a full valuation allowance against future tax benefits.
Reconciliation of the statutory Federal income tax rate to its effective tax rate is as follows:
7.
RELATED PARTY TRANSACTION
During the years ended December 31, 2014 and 2013, we contracted with SEC Connect, whose principal is the Company’s Chief Executive Officer, to provide the Company with EDGAR filing services. For the years ended December 31, 2014 and 2013, we paid SEC Connect approximately $6,000 and $4,500 in filing fees, respectively, which amounts included fees paid to comply with the requirement that the Company file its financial statements with the Securities and Exchange Commission in XBRL. We believe the terms of this agreement are no less favorable to us than we could have obtained from an unaffiliated party.
8.
SUBSEQUENT EVENTS
On March 17, 2015, the Company issued a promissory note in the principal amount of $5,000 payable on demand. The note accrues interest at the rate of 7% annually.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
AZZURRA HOLDING CORPORATION
Date: March 31, 2015
/s/ Daniel W. Rumsey
Daniel W. Rumsey
Chief Executive Officer
(Principal Executive Officer, Principal Financial and Principal Accounting Officer)
INDEX OF EXHIBITS