Attached files
| file | filename |
|---|---|
| 8-K - Pershing Gold Corp. | v198113_8k.htm |
| EX-2.1 - SHARE EXCHANGE AGREEMENT - Pershing Gold Corp. | v198113_ex2-1.htm |
| EX-10.4 - SHELLY FINKEL EMPLOYMENT AGREEMENT - Pershing Gold Corp. | v198113_ex10-4.htm |
| EX-10.1 - 2010 EQUITY INCENTIVE PLAN - Pershing Gold Corp. | v198113_ex10-1.htm |
| EX-10.3 - FORM OF NQSO AGREEMENT - Pershing Gold Corp. | v198113_ex10-3.htm |
| EX-10.5 - GREGORY D. COHEN EMPLOYMENT AGREEMENT - Pershing Gold Corp. | v198113_ex10-5.htm |
| EX-10.2 - FORM OF ISO AGREEMENT - Pershing Gold Corp. | v198113_ex10-2.htm |
| EX-21 - LIST OF SUBSIDIARIES - Pershing Gold Corp. | v198113_ex21.htm |
| EX-99.2 - EMPIRE SPORTS UNAUDITED FINANCIAL STATEMENTS - Pershing Gold Corp. | v198113_ex99-2.htm |
| EX-99.3 - UNAUDITED PRO FORMA FINANCIAL STATEMENTS - Pershing Gold Corp. | v198113_ex99-3.htm |
| EX-10.6 - PETER LEVY EMPLOYMENT AGREEMENT - Pershing Gold Corp. | v198113_ex10-6.htm |
GOLDEN
EMPIRE, LLC
INDEX
|
Report
of Independent Registered Public Accounting Firm
|
F-2
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|
|
Financial
Statements:
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||
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Balance
Sheet at December 31, 2009
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F-3
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|
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Statement
of Operations –
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||
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For
the period from November 30, 2009 (Inception) to December 31,
2009
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F-4
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|
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Statement
of Changes in Members’ Deficit –
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||
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For
the period from November 30, 2009 (Inception) to December 31,
2009
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F-5
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|
|
Statement
of Cash Flows –
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||
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For
the period from November 30, 2009 (Inception) to December 31,
2009
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F-6
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|
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Notes
to Financial Statements
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F-7
to
F-11
|
F-1
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Members
Golden
Empire, LLC
We have audited the accompanying
balance sheet of Golden Empire, LLC (A Limited Liability Company) as of December
31, 2009, and the related statements of operations, changes in members’ deficit
and cash flows for the period from November 30, 2009 (Inception) to December 31,
2009. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Golden Empire, LLC as of December
31, 2009, and its results of operations and cash flows for the period from
November 30, 2009 (Inception) to December 31, 2009, in conformity with
accounting principles generally accepted in the United States of
America.
|
/s/ J.H. Cohn
LLP
|
|
Jericho,
New York
|
|
October
5, 2010
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F-2
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GOLDEN
EMPIRE, LLC
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|
BALANCE
SHEET
|
|
December
31, 2009
|
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ASSETS
|
||||
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CURRENT
ASSETS:
|
||||
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Advances
receivable
|
$
|
15,386
|
||
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Total
Assets
|
$
|
15,386
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||
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LIABILITIES
AND MEMBERS' DEFICIT
|
||||
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CURRENT
LIABILITIES:
|
||||
|
Loan
payable - related party
|
$
|
30,435
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||
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Due
to related party
|
15,502
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|||
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Total
Liabilities
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45,937
|
|||
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MEMBERS'
DEFICIT:
|
||||
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Members'
interest
|
22,500
|
|||
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Accumulated
deficit
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(53,051)
|
|||
|
Total
Members' Deficit
|
(30,551)
|
|||
|
Total
Liabilities and Members' Deficit
|
$
|
15,386
|
|
See
accompanying notes to financial
statements.
|
F-3
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GOLDEN
EMPIRE, LLC
|
|
STATEMENT
OF OPERATIONS
|
|
FOR
THE PERIOD FROM NOVEMBER 30, 2009 (INCEPTION) TO DECEMBER 31,
2009
|
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Net
revenues
|
$ | - | ||
|
Operating
expenses:
|
||||
|
Live
events expenses
|
2,000 | |||
|
Sales
and marketing expenses
|
7,800 | |||
|
General
and administrative expenses
|
43,251 | |||
|
Total
operating expenses
|
53,051 | |||
|
Net
loss
|
$ | (53,051 | ) |
|
See
accompanying notes to financial
statements.
|
F-4
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GOLDEN
EMPIRE, LLC
|
|
STATEMENT
OF CHANGES IN MEMBERS' DEFICIT
|
|
FOR
THE PERIOD FROM NOVEMBER 30, 2009 (INCEPTION) TO DECEMBER 31,
2009
|
|
Total
|
||||||||||||
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Members'
|
Accumulated
|
Members'
|
||||||||||
|
Interest
|
Deficit
|
Deficit
|
||||||||||
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Balance,
November 30, 2009 (Inception)
|
$ | - | $ | - | $ | - | ||||||
|
Members'
contribution
|
22,500 | - | 22,500 | |||||||||
|
Net
loss
|
- | (53,051 | ) | (53,051 | ) | |||||||
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Balance,
December 31, 2009
|
$ | 22,500 | $ | (53,051 | ) | $ | (30,551 | ) | ||||
|
See
accompanying notes to financial
statements.
|
F-5
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GOLDEN
EMPIRE, LLC
|
|
STATEMENT
OF CASH FLOWS
|
|
FOR
THE PERIOD FROM NOVEMBER 30, 2009 (INCEPTION) TO DECEMBER 31,
2009
|
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CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||
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Net
loss
|
$ | (53,051 | ) | |
|
Adjustments
to reconcile net loss to net cash
|
||||
|
used
in operating activities:
|
||||
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Contributed
member services
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22,500 | |||
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Changes
in operating assets and liabilities:
|
||||
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Advances
receivable
|
(15,386 | ) | ||
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NET
CASH USED IN OPERATING ACTIVITIES
|
(45,937 | ) | ||
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CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||
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Proceeds
from loan payable - related party
|
30,435 | |||
|
Proceeds
from related party advances
|
15,502 | |||
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NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
45,937 | |||
|
NET
INCREASE IN CASH
|
- | |||
|
CASH -
beginning of period
|
- | |||
|
CASH
- end of year
|
$ | - | ||
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||
|
Cash
paid for:
|
||||
|
Interest
|
$ | - | ||
|
Income
taxes
|
$ | - | ||
|
See
accompanying notes to financial
statements.
|
F-6
GOLDEN
EMPIRE, LLC
NOTES TO
FINANCIAL STATEMENTS
DECEMBER
31, 2009
NOTE 1 –
ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Golden
Empire, LLC (the “Company”), a New Jersey limited liability company, was formed
and commenced operations on November 30, 2009. The Company is an entertainment
company, principally engaged in the production and promotion of music and
sporting events. For the period from November 30, 2009 (Inception) to December
31, 2009, the Company had no revenues and recorded a limited number of
transactions related to the commencement of its operations. The
liability of the members of the Company is limited to the members’ total capital
contributions.
Basis of
presentation
The
financial statements are prepared in accordance with generally accepted
accounting principles in the United States of America ("US GAAP").
Use of
estimates
In
preparing the financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of the
date of the balance sheet, and revenues and expenses for the period then
ended. Actual results may differ significantly from those
estimates.
Cash and cash equivalents
The
Company considers all highly liquid investments purchased with a maturity of
three months or less when acquired to be cash equivalents. The Company places
its cash with a high credit quality financial institution. The Company’s account
at this institution is insured by the Federal Deposit Insurance Corporation
("FDIC") up to $250,000. For the period ended December 31, 2009, the Company had
no cash and cash equivalents. To reduce its risk associated with the failure of
such financial institution, the Company evaluates at least annually the rating
of the financial institution in which it holds deposits.
Fair value of financial
instruments
The
Company adopted Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) 820, “Fair Value Measurements and
Disclosures”, for assets and liabilities measured at fair value on a recurring
basis. ASC 820 establishes a common definition for fair value to be applied to
existing US GAAP that require the use of fair value measurements which
establishes a framework for measuring fair value and expands disclosure about
such fair value measurements.
ASC 820
defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at
the measurement date. Additionally, ASC 820 requires the use of valuation
techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs. These inputs are prioritized below:
|
Level 1:
|
Observable
inputs such as quoted market prices in active markets for identical assets
or liabilities
|
|
Level 2:
|
Observable
market-based inputs or unobservable inputs that are corroborated by market
data
|
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Level 3:
|
Unobservable
inputs for which there is little or no market data, which require the use
of the reporting entity’s own
assumptions.
|
The
carrying amounts reported in the balance sheet for due to related party
approximate their estimated fair market value based on the short-term maturity
of this instrument. The carrying amount of the loan payable - related party at
December 31, 2009, approximate their respective fair value based on the
Company’s incremental borrowing rate.
F-7
GOLDEN
EMPIRE, LLC
NOTES TO
FINANCIAL STATEMENTS
DECEMBER
31, 2009
NOTE 1 –
ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In
addition, FASB ASC 825-10-25 “Fair Value Option” was effective for
January 1, 2008. ASC 825-10-25 expands opportunities to use fair value
measurements in financial reporting and permits entities to choose to measure
many financial instruments and certain other items at fair value. The Company
did not elect the fair value options for any of its qualifying financial
instruments.
Accounts receivable
The
Company has a policy of reserving for questionable accounts based on its best
estimate of the amount of probable credit losses in its existing accounts
receivable. The Company periodically reviews its accounts receivable
to determine whether an allowance is necessary based on an analysis of past due
accounts and other factors that may indicate that the realization of an account
may be in doubt. Account balances deemed to be uncollectible are
charged to bad debt expense after all means of collection have been exhausted
and the potential for recovery is considered remote.
Advances
receivable
Advances
receivable represent cash paid in advance to athletes for their training. The
Company has the right to offset the advances against the amount payable to such
athletes for their future sporting events. The amounts advanced under such
arrangements are short-term in nature which totaled $15,386 as of December 31,
2009.
Property and
equipment
Property
and equipment are carried at cost. The cost of repairs and maintenance is
expensed as incurred; major replacements and improvements are
capitalized. When assets are retired or disposed of, the cost and
accumulated depreciation are removed from the accounts, and any resulting gains
or losses are included in income in the year of disposition. The
Company examines the possibility of decreases in the value of fixed assets when
events or changes in circumstances reflect the fact that their recorded value
may not be recoverable. Depreciation is calculated on a straight-line basis over
the estimated useful life of the assets.
Impairment of long-lived assets
Long-lived
assets of the Company are reviewed for impairment whenever events or
circumstances indicate that the carrying amount of assets may not be
recoverable. The Company recognizes an impairment loss when the sum of expected
undiscounted future cash flows is less than the carrying amount of the asset.
The amount of impairment is measured as the difference between the asset’s
estimated fair value and its book value. The Company did not consider it
necessary to record any impairment charges during the period ended December 31,
2009.
Income
taxes
The
Company is organized as a limited liability company whereby elements of income
taxation including income, expense, credits and allowances of the Company are
reflected in a proportional basis on the members’ individual income tax returns.
Accordingly, there is no provision for income taxes in these financial
statements.
F-8
GOLDEN
EMPIRE, LLC
NOTES TO
FINANCIAL STATEMENTS
DECEMBER
31, 2009
NOTE 1 –
ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue
recognition
The
Company records revenue when persuasive evidence of an arrangement exists,
services have been rendered or product delivery has occurred, the sales price to
the customer is fixed or determinable, and collectability is reasonably
assured.
The
Company will earn revenue primarily from live event ticket sales, sponsorship,
advertising, concession fees, television rights fee and pay per view fees for
events broadcast on television or cable.
The
following policies reflect specific criteria for the various revenues streams of
the Company:
|
|
·
|
Revenue
from ticket sales are recognized when the event occurs. Advance ticket
sales and event-related revenues for future events are deferred until
earned, which is generally once the events are conducted. The recognition
of event-related expenses is matched with the recognition of event-related
revenues.
|
|
|
·
|
Revenue
from sponsorship, advertising and television/cable distribution agreements
is recognized in accordance with the contract terms, which are generally
at the time events occur.
|
|
|
·
|
Revenues
from the sale of products are recognized at the point of sale at the live
event concession stands.
|
Cost of
revenue
Costs
related to live events are recognized when the event occurs. Event costs paid
prior to an event are capitalized to prepaid costs and then charged to expense
at the time of the event. Cost of other revenue streams are recognized at the
time the related revenues are realized.
Advertising
Advertising
is expensed as incurred and is included in sales and marketing expenses on the
accompanying statement of operations. Such expenses for the period
from November 30, 2009 (Inception) to December 31, 2009 totaled
$7,800.
Stock - based
compensation
Stock -
based compensation is accounted for based on the requirements of the Share-Based
Payment Topic of ASC 718 which requires recognition in the financial statements
of the cost of employee and director services received in exchange for an award
of equity instruments over the period the employee or director is required to
perform the services in exchange for the award (presumptively, the vesting
period). The FASB ASC also requires measurement of the cost of employee and
director services received in exchange for an award based on the grant-date fair
value of the award.
Pursuant
to ASC Topic 505-50, for share-based payments to consultants and other
third-parties, compensation expense is determined at the “measurement date.” The
expense is recognized over the vesting period of the award. Until the
measurement date is reached, the total amount of compensation expense remains
uncertain. The Company initially records compensation expense based on the fair
value of the award at the reporting date. The awards to consultants and other
third-parties are then revalued, or the total compensation is recalculated based
on the then current fair value, at each subsequent reporting
date.
F-9
GOLDEN
EMPIRE, LLC
NOTES TO
FINANCIAL STATEMENTS
DECEMBER
31, 2009
NOTE 1 –
ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Related
parties
Parties
are considered to be related to the Company if the parties directly or
indirectly, through one or more intermediaries, control, are controlled by, or
are under common control with the Company. Related parties also include
principal owners of the Company, its management, members of the immediate
families of principal owners of the Company and its management and other parties
with which the Company may deal if one party controls or can significantly
influence the management or operating policies of the other to an extent that
one of the transacting parties might be prevented from fully pursuing its own
separate interests. The Company discloses all related party transactions. All
transactions shall be recorded at fair value of the goods or services exchanged.
Property purchased from a related party is recorded at the cost to the related
party and any payment to or on behalf of the related party in excess of the cost
is reflected as a distribution to related party.
Recent accounting pronouncements
In June
2009, the FASB issued ASC Topic 810-10, “Amendments to FASB Interpretation No.
46(R)”. This updated guidance requires a qualitative approach to identifying a
controlling financial interest in a variable interest entity (“VIE”), and
requires ongoing assessment of whether an entity is a VIE and whether an
interest in a VIE makes the holder the primary beneficiary of the VIE. ASC Topic
810-10 is effective for annual reporting periods beginning after November 15,
2009. The adoption of ASC Topic 810-10 did not have a material impact on the
results of operations and financial condition.
In
October 2009, the FASB issued Accounting Standards Updates (“ASU”) No. 2009-13,
“Multiple-Deliverable Revenue Arrangements.” The ASU establishes the accounting
and reporting guidance for arrangements including multiple revenue-generating
activities and provides amendments to the criteria for separating deliverables,
measuring and allocating arrangement consideration to one or more units of
accounting. The amendments in this ASU also establish a selling price hierarchy
for determining the selling price of a deliverable. Significantly enhanced
disclosures are also required to provide information about a vendor’s
multiple-deliverable revenue arrangements, including information about the
nature and terms, significant deliverables, and its performance within
arrangements. The amendments also require providing information about the
significant judgments made and changes to those judgments and about how the
application of the relative selling-price method affects the timing or amount of
revenue recognition. The amendments in this ASU are effective prospectively for
revenue arrangements entered into or materially modified in the fiscal years
beginning on or after June 15, 2010. The adoption of this standard will not have
a material impact on the Company’s financial statements.
In
January 2010, the FASB issued ASU No. 2010-06, “Improving Disclosures about Fair
Value Measurements” an amendment to ASC Topic 820, “Fair Value Measurements and
Disclosures.” This amendment requires an entity to: (i) disclose
separately the amounts of significant transfers in and out of Level 1 and Level
2 fair value measurements and describe the reasons for the transfers and (ii)
present separate information for Level 3 activity pertaining to gross purchases,
sales, issuances and settlements. ASU No. 2010-06 is effective for the
Company for interim and annual reporting beginning after December 15, 2009, with
one new disclosure effective after December 15, 2010. The adoption of ASU No.
2010-06 did not have a material impact on the Company’s results of operations
and financial condition.
In
February 2010, the FASB issued an amendment to the accounting standards related
to the accounting for, and disclosure of, subsequent events in an
entity’s financial statements. This standard amends the authoritative
guidance for subsequent events that was previously issued and among other things
exempts Securities and Exchange Commission registrants from the requirement to
disclose the date through which it has evaluated subsequent events for either
original or restated financial statements. This standard does not apply to
subsequent events or transactions that are within the scope of other applicable
US GAAP that provides different guidance on the accounting treatment for
subsequent events or transactions. The adoption of this standard did not have a
material impact on the Company’s financial statements.
F-10
GOLDEN
EMPIRE, LLC
NOTES TO
FINANCIAL STATEMENTS
DECEMBER
31, 2009
NOTE 1 –
ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)
In July
2010, the FASB issued ASU No. 2010-20, Receivables (Topic 310) “Disclosures
about the Credit Quality of Financing Receivables and the Allowance for Credit
Losses”. ASU 2010-20 requires additional disclosures about the credit
quality of a company’s loans and the allowance for loan losses held against
those loans. Companies will need to disaggregate new and existing
disclosures based on how it develops its allowance for loan losses and how it
manages credit exposures. Additional disclosure is also required
about the credit quality indicators of loans by class at the end of the
reporting period, the aging of past due loans, information about troubled debt
restructurings, and significant purchases and sales of loans during the
reporting period by class. The new guidance is effective for interim-
and annual periods beginning after December 15, 2010. The Company
anticipates that adoption of these additional disclosures will not have a
material effect on its financial position or results of operations.
Other
accounting standards that have been issued or proposed by the FASB that do not
require adoption until a future date are not expected to have a material impact
on the financial statements upon adoption.
NOTE 2 –
RELATED PARTY
TRANSACTIONS
Loan
payable - related party
In
December 2009, one of the Company’s directors loaned $30,435 to the Company.
This loan is noninterest bearing and is due on demand.
Due
to related party
The
President of the Company, from time to time, provided advances to the Company
for operating expenses. At December 31, 2009, the Company had a payable to the
President of the Company amounting to $15,502. These advances are short-term in
nature and noninterest bearing.
NOTE 3–
MEMBER
CONTRIBUTION
One of
the members of the Company contributed services amounting to $22,500 during the
period of inception through December 31, 2009. These services were for general
corporate purposes and represented contributed capital from this
member.
NOTE 4–
SUBSEQUENT
EVENTS
The
Company transferred all assets, liabilities and assigned certain promotion
rights agreements to The Empire Sports and Entertainment Co., a newly formed
entity. On February 10, 2010, the assets (including promotion
agreements) were transferred at carrying value which approximated fair value.
The Empire Sports and Entertainment Co. was incorporated in Nevada on February
10, 2010. The Company transferred all assets, liabilities and certain promotion
rights agreements to the Empire Sports and Entertainment at carrying value of
($30,551) which approximated fair value on February 10, 2010. Golden Empire
ceased operations on that date. The results of operations for the period from
January 1, 2010 to February 9, 2010 of Golden Empire were not
material.
F-11