Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - Apollo Entertainment Group, Inc. | v195155_ex99-1.htm |
| EX-99.2 - EX-99.2 - Apollo Entertainment Group, Inc. | v195155_ex99-2.htm |
| EX-10.4 - Apollo Entertainment Group, Inc. | v195155_ex10-4.htm |
| EX-10.3 - Apollo Entertainment Group, Inc. | v195155_ex10-3.htm |
| EX-10.2 - Apollo Entertainment Group, Inc. | v195155_ex10-2.htm |
U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report: July 7, 2010
APOLLO CAPITAL GROUP,
INC.
(Exact
Name of registrant as specified in its Charter)
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Florida
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001-34296
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22-3962092
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State
of Incorporation
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Commission
File No.
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I.R.S.
Employer
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Identification
No.
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20900 N.E. 30th Ave., 8th Floor, Aventura, FL
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33180
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number ( 786 )
871
- 4858
n/a
(Registrant’s
former name and address)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions below:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240-14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240-13e-4(c))
TABLE
OF CONTENTS
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Item No.
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Description of Item
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Page No.
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Item
1.01
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Entry
Into a Material Definitive Agreement
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1
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Item
2.01
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Completion
of Acquisition or Disposition of Assets
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2
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Item
3.02
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Unregistered
Sale of Securities
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14
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Item
5.06
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Change
in Shell Company Status
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14
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Item
9.01
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Financial
Statements and Exhibits
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14
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i
As
used throughout this report, unless the context otherwise requires the terms
“Apollo,” “we,” “us,” “the Company” and “our Company” refer to Apollo
Capital Group, Inc. and its subsidiaries.
FORWARD-LOOKING
STATEMENTS
The
statements contained in this Current Report on Form 8-K that are not historical
fact are forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995), within the meaning of Section 27A of
the Securities Act of 1933, as amended (the “Securities Act”), and Section
21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The
forward-looking statements contained herein are based on current expectations
that involve a number of risks and uncertainties. These statements
can be identified by the use of forward-looking terminology such as “believes,”
“expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. The Company wishes to
caution the reader that its forward-looking statements that are historical facts
are only predictions. No assurances can be given that the future
results indicated, whether expressed or implied, will be
achieved. While sometimes presented with numerical specificity, these
projections and other forward-looking statements are based upon a variety of
assumptions relating to the business of the Company, which, although considered
reasonable by the Company, may not be realized. Because of the number
and range of assumptions underlying the Company’s forward-looking statements,
many of which are subject to significant uncertainties and contingencies that
are beyond the reasonable control of the Company, some of the assumptions
inevitably will not materialize, and unanticipated events and circumstances may
occur subsequent to the date of this report. These forward-looking
statements are based on current expectations and the Company assumes no
obligation to update this information. Therefore, the actual
experience of the Company and the results achieved during the period covered by
any particular forward-looking statements may differ substantially from those
projected. Consequently, the inclusion of forward-looking statements
should not be regarded as a representation by the Company or any other person
that these estimates and projections will be realized. The Company’s
actual results may vary materially. There can be no assurance that
any of these expectations will be realized or that any of the forward-looking
statements contained herein will prove to be accurate.
Item
1.01. Entry Into a Material Definitive Agreement.
On July
7, 2010, Apollo entered into a Share Exchange Agreement (the “Share Exchange Agreement”)
with the shareholders of Celestial Investments Limited (“Celestial Investments”), a
United Kingdom private limited company, including Ciaran S. Kelly, a director of
Apollo and consummated the transaction contemplated thereby. Pursuant
to the Share Exchange Agreement, Apollo acquired all of the outstanding shares
of Celestial Investments’ capital stock from its three shareholders, in exchange
for the issuance of an aggregate of 6,000,000 shares of Apollo common stock,
(the “Apollo Shares”)
including 1,800,000 Apollo Shares to Mr. Kelly (the “Share
Exchange”). The Apollo Shares were issued pursuant to the
exemption from registration afforded by Regulation S under the Securities
Act. Upon completion of the Share Exchange, Celestial Investments
became a wholly-owned subsidiary of Apollo.
1
Celestial
Investments has been appointed by Celestial Green, Ltd. (“Celestial Green”) as a sales
representative in the United Kingdom and Northern Ireland for the sale of carbon
credits generated by a project to reduce greenhouse gas emissions from
deforestation and forest degradation, which Celestial Green intends to conduct
on approximately 15.2 million hectares of land it owns or leases in the
Brazilian state of Rondonia and surrounding regions (the “Rondonia
Project”). Humberto Medeiras de Moraes, our Vice President and
João Borges Andrade, one of our directors, are members of Celestial Green’s
management team.
Item
2.01. Completion of Acquisition or Disposition of Assets.
The
Transaction
See
“Item 1.01 Entry Into a
Material Definitive Agreement” above for information on the Share
Exchange pursuant to which Apollo acquired all of the outstanding capital stock
of Celestial Investments.
Our
Business
Background
Apollo
was incorporated in the state of Florida on April 12, 2007 under the name “Pop Starz Publishing Corp.” as
a wholly-owned subsidiary of Pop Starz Records , Inc. (“PSR”) and on June 24, 2008
changed its name to “Apollo
Entertainment Group, Inc.” in connection with its spin-off to
shareholders of PSR.
Apollo’s
initial business, which was concluded through its initially wholly-owned
subsidiary, Alpha Music Mfg. Corp. (“Alpha”) was the pressing of
vinyl records, CD/CD Rom duplication and DVD duplication.
On
October 19, 2009, pursuant to a Stock Purchase and Sale Agreement dated October
1, 2009, Mr. Manfred H. Wutzer acquired 15,950,237 shares (or approximately
95.8%) of the Company’s then outstanding common stock from Mrs. Michelle Tucker,
the Company’s then President, Chief Executive Officer, sole director and
principal shareholder (the “Change in Control
Transaction”). Upon consummation of the Change in Control
Transaction, Ms. Tucker resigned from her positions with the Company and new
directors and executive officers were appointed.
In
connection with the Change in Control Transaction, Apollo agreed to distribute
the shares of Alpha it owned, to Apollo’s shareholders of record immediately
prior to the Change in Control Transaction. A registration statement
to effect such spin-off has been filed with the Securities and Exchange
Commission (the “SEC”),
but has not yet been declared effective. However, as of June 30,
2010, we now own less than 50% of the outstanding shares of
Alpha.
2
Mr.
Wutzer, as the Company’s new majority shareholder and new management, elected to
redirect our business activities into fields related to mining and
reforestation, as they believed this would afford Apollo and its shareholders
greater long-term growth potential. Initially, following completion
of the Change in Control Transaction, Apollo focused its efforts on expanding
our Company’s management and identifying potential business
opportunities. On December 10, 2009, we changed our name to “Apollo Capital Group, Inc.” to
better reflect our intended business plan. Ultimately, on July 7, 2010, we
entered into the Share Exchange Agreement and consummated the Share
Exchange.
Celestial
Investments
Through
Celestial Investments, our wholly-owned subsidiary, we will be a sales
representative in the Untied Kingdom and Northern Ireland for the marketing of
carbon credits generated by Celestial Green’s Rondonia Project.
Celestial
Investments was formed in November 2008 and spent the next year in
organizational activities in contemplation of its planned sales and marketing
business. Celestial Investments commenced active sales and marketing
activities of carbon credits for the Rondonia Project on a “when issued basis”
during the first quarter of 2010. As of July 31, 2010, Celestial
Investments has secured letters of intent for Celestial Green with various
non-affiliated third parties for the sale and purchase of 8,600,00 carbon
credits on a “when issued basis” at a total sales price of $45,150,000 or $5.25
per carbon credit. Pursuant to its agreement with Celestial Green,
Celestial Investments is entitled to receive a commission of ten percent (10%)
of the sales price or $4,515,000, as well as reimbursement of certain out of
pocket expenses. Celestial Investments anticipates that these sales
of carbon credits will commence closing either late in the third quarter or in
the fourth quarter of 2010, although there can be no assurance that any of these
sales will successfully close.
We intend
to continue to focus our efforts on Celestial Investment’s business activities
and to continue to explore the acquisition of other complementary ventures in
fields relating to mining and reforestation.
Carbon
Credits
A carbon
credit is a generic term meaning that a value has been assigned to a reduction
or offset of greenhouse gas emissions.
Greenhouse
gasses such as carbon dioxide, methane, nitrous oxide, and hydroflurocarbons are
generated through the burning of fossil fuels (coal, oil and natural
gas). In recent years, because of the concern about the adverse
effects greenhouses gasses have on the environment, there have been increasing
international attempts to mitigate the growth of greenhouse gas emissions by
imposing “caps” or quotas for greenhouse gas emissions through treaties such as
the Kyoto Protocol.
Under the
Kyoto Protocol and other agreements, subscribing countries (which does not
include the United States) are allocated quotas of greenhouse gas emissions,
which are in turn allocated by respective governments to individual businesses
who generate greenhouse gasses. Each business is allocated a certain
amount of carbon credits, with each carbon credit allowing the business to
generate one metric ton of greenhouse gasses. In addition, sponsors
of projects designed to reduce greenhouse gas emissions through methods such as
reforestation or the application of newly developed “green” technologies are
similarly given carbon credits which through their sale, can generate funding
for the project.
3
Carbon
credits are traded internationally, providing businesses with cost effective
options to reduce emissions either by investing in cleaner technology and/or
equipment or by purchasing carbon credits from a business which uses less than
its allocation or a greenhouse gas emission reduction project which generates
carbon credits. Accordingly, several exchanges have developed,
principally in Europe, on which carbon credits are traded, much like stocks,
bonds or commodities.
The
Rondonia Project
Carbon
credits can be generated by environmental projects, which are designed to reduce
or offset greenhouse gas emissions. When sold in the international
market, carbon credits generated by these “offset projects” provide funding for
these projects, as well as a financial incentive to undertake additional
projects.
One
category of offset project is a project which is targeted at Reducing Emissions
from Deforestation and Forest Degradation or REDD. Particularly since
the onset of the Industrial Revolution almost two centuries ago, the earth has
suffered from deforestation and forest degradation, with an increasing amount of
earth’s forests either shrinking or disappearing entirely. This has
occurred for many reasons, including increases in population, commercial use of
timber and conversion of forests to alternative uses, including farming and
mining. As trees and plants are the mechanism by which greenhouse
gasses such as carbon dioxide are recycled by nature into oxygen, continued
deforestation and forest degradation has had a significant adverse impact on
greenhouse gas emissions. Perhaps nowhere is REDD more welcome than
in the ecologically sensitive Brazilian rainforest, which has faced significant
human encroachment, deforestation and degradation in recent years.
REDD
represents, for the first time, a tangible market mechanism to reward forest
conservation, and to fight deforestation one hectare at a time, on purely
economic competitive terms, and thus unleashing the efficiency of market
forces. Forest conservation, however, represents much more than
climate and biodiversity. Forests generate critical ecosystem
services related to maintaining the global water cycle, preventing soil erosion,
mitigation regional changes in weather patterns, etc. Equally
important, forests are the homes and provide the livelihoods to indigenous and
other groups who derive their income and cultural traditions from
them. These groups would much prefer to conserve these forests, but
in many cases are unable to compete with alternative land uses that reward
deforestation. Intact forests, however, should not be synonymous with
idle forests. Forest conservation is compatible with economic uses
that do not imply deforestation, such as sustainable forestry management,
ecotourism, bio-prospecting, and many others. In most cases, however,
and without income from carbon markets, these uses cannot provide, alone,
sufficient economic incentives to stop deforestation.
4
The
Rondonia Project is a REDD project planned to be conducted over approximately
the next 30 years on approximately 15.2 million hectares of land which Celestial
Green has owned or has leased in the Rondonia state of Central Brazil and
surrounding regions. This amount of land will permit Celestial Green
to generate 400 carbon credits per hectare (1 hectare = 2.4956 acres), resulting
in excess of 6.0 billion carbon credits. If it successfully
implements the Rondonia Project, Celestial Green will become a worldwide leader
in the carbon credit market with potential revenues over the next 30 years of
approximately $32.0 billion based on current market value of $5.25 per carbon
credit.
The aim
of the Rondonia Project is to conserve a large portion of the territory covered
as rainforest, while ultimately reforesting the remainder of the land which will
initially be dedicated to mining. Celestial Green plans to sell the
carbon credits generated by the Rondonia Project on the international market
with a view to not only funding the Rondonia Project, but expanding its
geographic scope as well.
Marketing
and Sales Activities
In July
2009, Celestial Investments entered into an agreement with Celestial Green,
pursuant to which Celestial Investments was retained as a sales representative
in the Untied Kingdom and Northern Ireland for carbon credits generated by the
Rondonia Project. The agreement with Celestial Green provides that
Celestial Investments is entitled to receive a commission of ten percent (10%)
of the sales price of carbon credits it sells, as well as reimbursement of
certain out of pocket expenses continues until terminated by either party on one
month’s notice.
After
completing its own organizational activities and advising Celestial Green in
structuring the Rondonia Project, Celestial Investments commenced its sales and
marketing efforts for carbon credits generated by the Rondonia Project on a
“when issued” basis during the first quarter of 2010. As of July 31,
2010, Celestial Investments has secured letters of intent for Celestial Green
with various non-affiliated third parties for the sale and purchase of 8,600,000
carbon credits on a “when issued” basis, at a total sales price of $45,150,000
or $5.25 per carbon credit. Celestial Investments anticipates that
these sales of carbon credits will commence closing either late in the third
quarter or in the forth quarter of 2010, although there can be no assurance that
any of these sales will successfully close.
The
target purchasers for carbon credits include businesses, principally in various
European countries, who at present find it more economically efficient to
purchase carbon credits to increase their allocation of permissible greenhouse
gas emissions rather than investing capital in acquiring cleaner equipment or
“green” technology. In addition, Celestial Investments markets carbon
credits to investors who trade in the market for such
credits. Celestial Investments’ sales and marketing efforts consist
of directly approaching the industrial companies and other potential buyers
through its existing network of business relationships and
contacts.
Celestial
Investments’ sales and marketing activities are overseen by Messrs. Ciaran S.
Kelly and Phillip Jett, its executive officers. In order to avoid the
need for significant infrastructure, including the hiring of numerous employees,
Celestial has contracted with Industry RE, an unaffiliated party, to provide it
with the services of up to three sales representatives. Industry RE
is a London-based sales advisory firm. Pursuant to the agreement with
Industry RE, Celestial Investments will pay to Industry RE a commission equal to
3% of the sales price of carbon credits it sells and reimburse Industry RE for
certain out-of-pocket expenses. The agreement with Industry RE is
terminable by either party upon 30 days’ written notice.
5
Government
Regulation
At
present, the trading market for carbon credits, which is relatively new, is not
regulated. No assurance can be given, however, that the market will
not be so regulated in the future. The market for carbon credits is
also impacted by the extent of environmental regulation imposed by the
governments of industrialized nations. For example, the failure to
date by the United States to enact comprehensive climate control legislation
which imposes “caps” on greenhouse gas emissions, has diminished the
attractiveness of purchasing carbon credits to U.S. businesses.
Celestial
Green will need to comply with extensive government regulations in order to
ensure that the Rondonia Project generates the desired carbon
credits. Failure of Celestial Green to do so or any adverse change in
the regulatory scheme governing its planned operations may have a material
adverse effect on its business and consequently, that of Celestial
Investments.
Employees
Other
than Ciaran S. Kelly and Phillip Jett, its executive officers, Celestial
Investments currently has no employees. It outsources its personnel
needs to Industry RE pursuant to the agreement described in “Sales and Marketing Efforts”
above.
Facilities
Celestial
Investments occupies two office suites in Beckenham, Kent, England, which it
leases from a non-affiliated party for £1,250 per month plus VAT pursuant to a
month to month lease. We believe that these premises are adequate for
Celestial Investments’ current and proximate future needs.
Legal
Proceedings
Celestial
Investments is not a party to any legal proceeding.
6
Risk
Factors
There
are numerous and varied risks, known and unknown, that may prevent us from
achieving our goals. If any of these risks actually occur, out
business, financial condition or results of operations may be materially
adversely affected. In such case, the trading price of our common
stock could decline and shareholders could lose all or part of their
investment.
Risks
Relating to Our Business
Celestial
Investments has an extremely limited operating history.
Since its
formation in November 2008, Celestial Investments has largely focused on
organizational activities and only commenced its marketing and sales efforts for
carbon credits in the first quarter of 2010. To date, Celestial
Investments is a development stage company and has not generated any
revenues. There can be no assurance that we will ever generate
significant revenues from Celestial Investments’ operations or ever operate
profitably.
There
is substantial doubt about Celestial Investments’ ability to continue as a going
concern.
The
opinion of the independent registered public accounting firm on the Celestial
Investments’ December 31, 2009 financial statements states that the financial
statements were prepared assuming Celestial Investments will continue as a going
concern. As discussed therein, Celestial Investments had no revenues
and funded its operations by a loan from one of its former
shareholders. These matters raise substantial doubt about Celestial
Investments’ ability to continue as a going concern. Our plan in
regard to these matters is set forth in the notes to the financial
statements. If Celestial Investments does not generate sufficient
revenues from operations, we will be required to secure alternative financing to
fund its business. There can be no assurance that if needed, such
financing will be available, on commercially reasonable terms or at
all.
The
market for trading carbon credits is relatively new and
undeveloped.
The
international market for trading carbon credits is relatively new and
undeveloped. Accordingly, there can be no assurance that the trading
market will fully mature and be sustained. Celestial Investments’
business may be harmed by any volatility or other adverse developments in the
market. In addition, given the relatively early stage of development of the
carbon credit trading market, Celestial Investments’ experience in the market is
limited.
Celestial
Investments will be wholly-dependent upon its relationship with Celestial Green
and the success of the Rondonia Project for its business success.
As
presently contemplated, Celestial Investments’ sole initial source of revenue
will be commissions from the sale of carbon credits generated by the Rondonia
Project. Accordingly, Celestial Investments will be wholly dependent
upon its relationship with Celestial Green and the success of the Rondonia
Project for its own business success. There can be no assurance that
Celestial Green will be successful in its business efforts, whether in
implementing the Rondonia Project or otherwise. In the event the Rondonia
Project is not successfully implemented, or does generate the anticipated level
of carbon credits or if Celestial Green’s business or financial condition is
otherwise materially adversely impacted, Celestial Investments’ business may be
substantially harmed as well.
7
Moreover,
our agreement with Celestial Green is terminable by either party upon 30 days’
notice and permits Celestial Green to appoint other sales agents for carbon
credits in direct competition with Celestial Investments. If either
of the foregoing were to occur, our business and results of operations may be
adversely impacted.
We
are dependent on the executive officers of Celestial Investments and our third
party marketing firm for our success.
The
success of Celestial Investments’ marketing efforts is largely dependent on
Ciaran S. Kelly and Phillip Jett, its executive officers. We are not
party to employment agreements with either of these individuals. The
loss of either of their services could have a material adverse effect on our
business and prospects.
In
addition, Celestial Investments has contracted with Industry RE, an unaffiliated
party, to provide it with the services of up to three sales
representatives. The agreement with Industry RE is terminable by
either party upon 30 days’ written notice. Therefore, in the event of
a termination of the agreement by Industry RE, Celestial Investments may be
unable to secure alternative services during such notice period at comparable
cost and accordingly, its business may be harmed by such a
termination.
Celestial
Investments’ business may be impacted by government regulation.
At
present, the trading market for carbon credits, which is relatively new, is not
regulated. No assurance can be given, however, that the market will
not be so regulated in the future. The market for carbon credits is
also impacted by the extent of environmental regulation imposed by the
governments of industrialized nations. For example, the failure to
date by the United States to enact comprehensive climate control legislation has
diminished the attractiveness of purchasing carbon credits to U.S.
businesses.
Celestial
Green will need to comply with extensive government regulations in order to
ensure that the Rondonia Project generates the desired carbon
credits. Failure of Celestial Green to do so or any adverse change in
the regulatory scheme governing its planned operations may have a material
adverse effect on its business and consequently, that of Celestial
Investments.
We
may need additional financing to fully implement our business plan.
As noted
above, if Celestial Investments fails to generate revenues as anticipated, we
may require additional financing to fund its operations. Moreover,
our business plan contemplates the acquisition of complementary ventures in
fields related to mining and reforestation. No assurance can be given
that we can successfully identify and consummate any such
acquisition. In addition, we may require additional financing for any
such acquisition. Any additional financing we may obtain may dilute
the interests of existing shareholders. There can be no assurance
that additional financing, if needed for any reason, will be available on
commercially reasonable terms or at all. Failure to secure such
financing when needed may materially adversely affect our
operations.
8
Celestial
Investments will likely face significant competition.
Celestial
Investments will likely face significant competition in the marketing and sale
of carbon credits. Many of Celestial Investments’ competitors may
have more extensive financial resources and industry
experience. There can be no assurance given that Celestial
Investments can compete favorably.
Risks
relating to our common stock
Our
stock price may be volatile.
The
market price of our common stock is likely to be highly volatile and could
fluctuate widely in price in response to various factors, many of which are
beyond our control, including the following:
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changes
in our industry;
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competition;
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our
ability to obtain working capital
financing;
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additions
or departures of key personnel;
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a
limited “public float” which could result in positive or negative pricing
pressure on the market price for our common
stock;
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our
ability to execute our business
plan;
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operating
results that fall below
expectations;
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loss
of our strategic relationship with Celestial
Green;
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regulatory
developments;
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currency
fluctuations between the British Pound (in which Celestial Investments
generally does business) and the U.S.
Dollar;
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economic
and other external factors; and
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period-to-period
fluctuations in our financial
results.
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9
In
addition, the securities markets have from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. These market fluctuations may also materially
and adversely affect the market price of our common stock.
We
have not paid dividends in the past and do not expect to pay dividends in the
future. Any return on investment may be limited to the value of our
common stock.
We have
never paid cash dividends on our common stock and do not anticipate doing so in
the foreseeable future. The payment of dividends on our common stock
will depend on earnings, financial condition and other business and economic
factors affecting us at such time as our board of directors may consider
relevant. If we do not pay dividends, our common stock may be less
valuable because a return on your investment will only occur if our stock price
appreciates.
There
is currently on a limited and sporadic trading market for our common stock and
we cannot ensure that a liquid market one will ever develop; or be
sustained.
Our
common stock is quoted for trading on the Over-the-Counter Bulletin Board (the
“OTC Bulletin Board”)
and the Frankfurt Stock Exchange. However, trading of our common
stock is limited and sporadic.
For
companies such as ours whose securities are traded in the OTC Bulletin Board or
on the Frankfurt Stock Exchange, it is more difficult (1) to obtain accurate
quotations, (2) to obtain coverage for significant news events because major
wire services generally do not publish press releases about such companies, and
(3) to obtain needed capital. There can be no assurance that a liquid
market in our common stock will ever develop or be sustained.
Our
common stock is deemed a “penny stock,” which makes it more difficult for our
investors to sell their shares.
Our
common stock is subject to the “penny stock” rules adopted under Section 15(g)
of the Exchange Act. The penny stock rules generally apply to
companies whose common stock is not listed on The Nasdaq Stock Market or other
national securities exchange and trades at less than $4.00 per share, other than
companies that have had average revenue of at least $6,000,000 for the last
three years or that have tangible net worth of at least $5,000,000 ($2,000,000
if the company has been operating for three or more years). These
rules require, among other things, that brokers who trade penny stock to persons
other than “established customers” complete certain documentation, make
suitability inquiries of investors and provide investors with certain
information concerning trading in the security, including a risk disclosure
document and quote information under certain circumstances. Many
brokers have decided not to trade penny stocks because of the requirements of
the penny stock rules and, as a result, the number of broker-dealers willing to
act as market makers in such securities is limited. If we remain
subject to the penny stock rules for any significant period, it could have an
adverse effect on the market, if any, for our securities. If our
common stock are subject to the penny stock rules, investors will find it more
difficult to dispose of our common stock.
10
Availability
for sale of a substantial number of shares of our common stock may cause the
price of our common stock to decline.
If our
stockholders sell substantial amounts of our common stock in the public market,
it could create a circumstance commonly referred to as an “overhang” and in
anticipation of which the market price of our common stock could
fall. The existence of an overhang, whether or not sales have
occurred or are occurring, also could make more difficult our ability to raise
additional financing through the sale of equity or equity-related securities in
the future at a time and price that we deem reasonable or
appropriate.
Compensation
Arrangements
It is
anticipated that Messrs. Ciaran S. Kelly and Phillip Jett, the executive
officers of Celestial Investments, will be compensated on a commission only
basis for their services. While the precise terms of such
arrangements are still under negotiation, it is anticipated that commission
rates will be comparable to industry norms.
11
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth information with respect to the beneficial ownership
of our common stock as of August 25, 2010 for:
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each
of our directors and executive
officers;
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all
of our directors and executive officers as a group;
and
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|
any
other beneficial owner of more than five percent (5%) of our outstanding
common stock.
|
|
Directors and Executive Officers
(1)
|
Shares
Beneficially
Owned
|
Percentage
|
||||||
|
Anthony
J. Finn
|
0 | 0 | ||||||
|
Sigfried
M. Klein
|
0 | 0 | ||||||
|
Humberto
Medeiros de Moraes
|
0 | 0 | ||||||
|
Ramon
Cachafeiro Troitiño
|
0 | 0 | ||||||
|
João
Borges Andrade
|
0 | 0 | ||||||
|
Thorsten
Barth
|
0 | 0 | ||||||
|
Ciaran
Sheamus Kelly
|
1,800,000 | 7.9 | % | |||||
|
All
directors and executive officers as a group (7 persons)
|
1,800,000 | 7.9 | % | |||||
|
5% or greater beneficial holders
(1)
|
||||||||
|
Manfred
H. Wutzer
|
13,950,237 | 61.6 | % | |||||
|
Eurospaininvest,
P.L. (2)
|
2,000,000 | 8.8 | % | |||||
|
(1)
|
The
address of each director, executive officer and 5% or greater beneficial
owner is c/o the Company, 20900 N.E. 30th
Avenue, 8th
Floor, Aventura, FL 33180.
|
|
(2)
|
Mr.
Dieter Huhn is the majority owner and sole officer of Eurospaininvest,
P.L.
|
Certain
Relationships and Related Transactions
Ciaran S.
Kelly, who was a 30% shareholder of Celestial Investments, is a director of
Apollo. Mr. Kelly received 1,800,000 shares of our common stock in
the Share Exchange. In addition, Mr. Kelly advanced approximately
$26,000 to Celestial Investments to fund its operations. In
connection with the consummation of the Share Exchange, Mr. Kelly contributed
such advances to the capital of Celestial Investments.
Humberto
Medeiros de Moraes, Apollo’s Vice President and João Borges Andrade, a director
of Apollo, are members of Celestial Green’s management team.
12
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
Forward
Looking Statements
The
statements contained herein that are not historical facts are forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act. Forward-looking statements are made based upon management’s
current expectations and beliefs concerning future developments and their
potential effects upon the Company. There can be no assurance that
future developments affecting the Company will be those anticipated by
management. Actual results may differ materially from those included
in the forward-looking statements. You should not assume that the
information contained in this report is accurate as of any date other than the
date of this report. Changes to the information contained in this
report may occur after that date and the Company does not undertake any
obligation to update the information unless required to do so by
law.
General
Celestial
Investments is a development stage company which intends to act as a selling
agent in the United Kingdom and Ireland for carbon credits generated by the
Rondonia Project to be conducted by Celestial Green.
Results
of Operations
Six
months ended June 30, 2010.
Celestial
Investments did not have any revenues during the six months ended June 30,
2010. Expenses during the six months ended June 30, 2010 were $7,853
(representing general and administrative expenses). As a result,
Celestial Investments incurred a net loss of $7,853 during the six months ended
June 30, 2010.
Year
ended December 31, 2009 as compared to period from November 30, 2008 (Inception)
through December 31, 2008.
Celestial
Investments did not have any revenues during 2009 or the period from November
20, 2008 (Inception) to December 31, 2008. Expenses during 2009 were
$18,610 (representing general and administrative expenses) as compared to $0
during the prior period. As a result, Celestial Investments incurred
a net loss of $18,610 during 2009 as compared to $0 during the 2008
period.
Liquidity
and Capital Resources
To date,
Celestial Investments’ capital needs have been met through advances from Ciaran
S. Kelly, a principal shareholder, which aggregated approximately
$26,000. In connection with consummation of the Share Exchange, Mr.
Kelly contributed such advances to the capital of Celestial
Investments.
13
Celestial
Investments believes that it will be able to fund its planned operations through
cash flow generated from commissions on the sale of carbon credits, which sales
are expected to start closing in the late third quarter or early fourth quarter
of 2010. However, there can be no assurance that this will be the
case, that Celestial Investments will not require additional financing and as to
the availability and terms of any financing it may require.
|
Item
3.02.
|
Unregistered
Sale of Securities.
|
See
“Item 1.01. Entry
into a Material Definitive Agreement” above.
|
Item
5.06.
|
Change
in Shell Company Status.
|
As a
result of the consummation of the Share Exchange, we believe that we are no
longer a shell company as that term is defined in Rule 405 of the Securities Act
of 1933 and Rule 12b-2 of the Exchange Act.
|
Item
9.01.
|
Financial
Statements and Exhibits.
|
|
(a)
|
Financial Statements of
Business Acquired. The following financial statements
of Celestial Investments Limited are filed in this Current
Report on Form 8-K as Exhibit 99.1:
|
|
Report
of Independent Registered Public Accounting Firm
|
|
Balance
Sheets at December 31, 2008, December 31, 2009 and June 30,
2010
|
|
(unaudited)
|
|
Statements
of Operations for the Period from November 20, 2008
(Inception)
|
|
to
December 31, 2008, the Year Ended December 31, 2009, the Six
Months
|
|
Ended
June 30, 2010 (unaudited) and the period from Inception (November
20,
|
|
2008)
to June 30, 2010
|
|
Statements
of Changes in Stockholder’s Deficit for the Period from
November
|
|
20,
2008 (Inception) through December 31, 2008, the Year Ended
December
|
|
31,
2009 and the Six Months Ended June 30, 2010
|
|
Statements
of Cash Flows for the Period from November 20, 2008 (Inception)
to
|
|
December
31, 2008, the Year Ended December 31, 2009, the Six Months
Ended
|
|
June
30, 2010 (unaudited) and the period from Inception (November 20, 2008)
to
|
|
June
30, 2010 (unaudited)
|
|
Notes
to Financial Statements
|
|
(b)
|
Pro Forma Financial
Information. The following pro forma financial
statements of Apollo are filed in this Current Report on Form 8-K as
Exhibit 99.2:
|
|
Pro
Forma Condensed Consolidated Balance Sheet at June 30,
2010
|
|
Pro
Forma Condensed Consolidated Statement of Operations for the Year
Ended
|
|
December
31, 2009
|
|
Pro
Forma Condensed Consolidated Statement of Operations for the Six
Months
|
|
Ended
June 30, 2010
|
|
(c)
|
Exhibits.
|
|
Exhibit No.
|
Description
|
|
|
10.1
|
Share
Exchange Agreement dated as of July 7, 2010, by and among Apollo Capital
Group, Inc., Celestial Investments Limited and the shareholders of
Celestial Investments, Ltd. (1)
|
|
|
10.2
|
Sales
Agent Agreement dated as of July 18, 2009 between Celestial Investments
and Celestial Green
|
|
|
10.3
|
Services
Agreement dated as of August 1, 2009 between Celestial Investments and
Industry RE
|
|
|
10.4
|
License
Agreement dated as of January 7, 2009 between Celestial Investments and
360 ICT
|
|
|
99.1
|
Celestial
Investments Limited audited financial statements at and for the year ended
December 31, 2009 and for the period from November 20, 2009 (Inception) to
December 31, 2008 and unaudited financial statements as of and for the six
months ended June 30,
2010
|
14
|
99.2
|
|
Apollo
Capital Group, Inc. pro forma unaudited combined financial
statements at June 30, 2010, for the year ended December 31, 2009,
and for the six months ended June 30,
2010
|
|
(1)
|
Filed
as an Exhibit of the same number to Apollo’s Current Report on Form 8-K
dated August 3, 2010 and incorporated herein by
reference.
|
15
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
APOLLO
CAPITAL GROUP, INC.
|
||
|
Dated:
August 25, 2010
|
||
|
By:
|
/s/
Sigfried M. Klein
|
|
|
Sigfried
M. Klein,
President
|
||
16