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EX-32 - CERTIFICATION OF CEO AND CFO - SECTION 906 - Newgioco Group, Inc.section906-certification.txt
EX-31 - CERTIFICATION OF CEO AND CFO - SECTION 302 - Newgioco Group, Inc.section302-certification.txt

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                  Form 10-K

(Mark one)
[X] Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
    1934. For the fiscal year ended December 31, 2010.

[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange Act
    of 1934. For the transition period from ______ to ______

                       Commission File Number 000-50045

                             EMPIRE GLOBAL CORP.
              (Name of small business issuer in its charter)

          Delaware                                             33-0823179
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                           Identification Number)

648 Finch Ave. East, Suite 2, Toronto, Ontario                  M2K 2E6
(Address of principal executive offices)                      (Zip Code)

                               (647) 229-0136
                       (Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:                 None

Securities registered pursuant to Section 12(g) of the Act:
                                                Common Stock (par value $0.0001)

Check whether the issuer is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.                                            Yes [ ] No [X]

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act.                                                [ ]

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.         Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this form 10-K or any
amendment to this form 10-K.                                                 [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Larger accelerated filer [ ]                               Accelerated filer [ ]
Non-accelerated filer    [ ]                       Smaller reporting company [X]
 (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the exchange Act).                                  Yes [X] No [ ]

The issuer had $0 in revenues for its most recent fiscal year.

The number of shares outstanding of the issuer's single class of common stock,
as of the close on December 31, 2010 is 18,675,800 shares with an aggregate
market value of $373,516 based on the average closing bid and asked prices for
the Common Stock on January 27, 2010 of $0.01 per share.


TABLE OF CONTENTS PART I ITEM 1. DESCRIPTION OF BUSINESS...............................................3 ITEM 2. DESCRIPTION OF PROPERTY...............................................5 ITEM 3. LEGAL PROCEEDINGS.....................................................5 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................5 PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS............. 5 ITEM 6. SELECTED FINANCIAL DATA..............................................10 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS.................................11 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...........18 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA...........................19 (Financial Statements - pages numbered as F1 to F15) ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE..................................35 ITEM 9A. CONTROLS AND PROCEDURES..............................................35 ITEM 9B. OTHER INFORMATION....................................................35 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.........36 ITEM 11. EXECUTIVE COMPENSATION...............................................39 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS...........................40 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................41 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES...............................42 ITEM 15. EXHIBITS.............................................................42 SIGNATURES....................................................................43 2
PART I. FORWARD-LOOKING STATEMENTS The matters discussed in this Annual Report on form 10-K contain forward-looking statements that involve risks and uncertainties, including primarily our ability to fund future operations and investment opportunities until such time that our cash flows from operations are sufficient for these purposes, changing market conditions and the other risks and uncertainties described throughout this Annual Report on form 10-K. Actual results may differ materially from those projected. These forward-looking statements represent our judgment as of the date of the filing of this Annual Report on form 10-K. We disclaim any intent or obligation to update these forward-looking statements. Item 1. Description of business A. GENERAL BUSINESS DEVELOPMENT The issuer, Empire Global Corp. ("the Company", "Empire") was organized as Pender International, Inc. ("Pender") under the laws of the state of Delaware on August 26, 1998. We are authorized to issue an aggregate amount of eighty million (80,000,000) shares of common stock with a $0.0001 par value, and twenty million (20,000,000) shares of preferred stock with a no par value. Each shareholder of the common stock shall be entitled to one vote for each share of common stock held. As of February 21, 2012 there were 18,675,800 shares of common stock outstanding and no preferred shares of stock outstanding. Since inception, the Company has explored a number of business ventures and in conjunction with the various business opportunities has changed its name. Contemporaneously with a plan of reorganization aimed at pursuing business opportunities in Canada and China the Company changed its name to Empire Global Corp. in September 2005. These business ventures proved to be difficult and unsustainable, therefore where abandoned. Since the ventures were abandoned, until the present, the Company has been inactive and could be deemed to be a so-called "shell" company. Our sole purpose as a "shell" company, at this time, except for filing required periodic reports with the U.S. Securities and Exchange Commission (the "SEC") pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations promulgated thereunder and making other related corporate filings, is to locate and consummate a merger or acquisition with a private entity. As of the date hereof, the Company can be defined as a "shell" company, an entity which is generally described as having no or nominal operations and with no or nominal assets or assets consisting solely of cash and cash equivalents. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements. As reported in footnote 9 Subsequent Events, on December 9, 2011, the Company entered into a Stock Purchase and Share Exchange Agreement (the "Agreement") with Avontrust Global Pte. Ltd. a Singapore company ("AVT") with its head office and operations in Singapore. When the transaction is closed, AVT will become a wholly-owned subsidiary of Empire Global Corp. 3
B. BUSINESS DESCRIPTION PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS During the period covered by this report the Company together with its subsidiaries was a diversified holding company seeking to acquire and operate income producing businesses that have a good prospect for growth. On July 9, 2004, the Company acquired 100% of the stock of IMM Investments Inc., an Ontario corporation ("IMM"), thus making IMM a wholly owned subsidiary of Empire. IMM owns 5 million (20 million pre-reverse split) shares of Armistice Resources Corp. a Canadian exploration company developing a gold mining interest in Northern Ontario. On January 4, 2010, the Company disposed of IMM. The Company previously reported that Montebello Developments Inc. ("Montebello") was a subsidiary of the Company. Montebello was a dormant private Ontario Corporation owned by our former Chairman, Kalson Jang with no assets, no liabilities and no business. Although the Company considered a business venture with Montebello, an Agreement was never completed and therefore the Company has no interest in Montebello. The Company did not record any carrying or disposal costs for Montebello and will no longer report Montebello as a subsidiary. As of December 31, 2010, the Company did not have interests in any business, however subsequent to the period covered by this report as a result of the Agreement to purchase AVT on December 9, 2011, upon closing of the Agreement the Company will have an interest in a social media applications producer and publisher. Refer to footnote 9 Subsequent Events for additional details. DISTRIBUTION METHODS FOR PRODUCTS OR SERVICES As of the fiscal year ended December 31, 2010 the Company has no products or services available. Subsequent to the period covered by this report, as a result of the Agreement to purchase AVT as described elsewhere, upon closing of the Agreement the Company will offer a suite of social media applications available over the internet. STATUS OF PUBLICLY ANNOUNCED NEW PRODUCTS OR SERVICES As of the fiscal year ended December 31, 2010 the Company has no current business operations. As described elsewhere, subsequent to the period covered by this report, on December 9, 2011 the Company entered into an Agreement to acquire AVT. COMPETITIVE BUSINESS CONDITIONS, COMPETITIVE POSITION IN THE INDUSTRY AND METHODS OF COMPETITION Due to the Agreement to acquire AVT the Company will offer a suite of online social media applications. There are numerous other competitors in the social media applications market, therefore competition is extensive. The competitive conditions in such areas could have a material adverse effect on the Company's (i) future operations, and (ii) development and acquisition opportunities. The Company will compete for acquisitions with others who may have greater resources. SOURCES AND AVAILABILITY OF SUPPLIES In addition to the acquisition of AVT, the Company has taken a broad view to delineate additional opportunities in international markets where the supply of target businesses are abundant. For Empire to operate, our needs or inputs would simply be legal counsel, accounting and auditor functions. Suppliers for these office and management functions are deemed to be ubiquitous. During the period covered by this report we did not retain legal counsel, and our Independent Registered Public Accounting Firm is Bernstein & Pinchuk LLP. 4
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS As of the end of the period covered by this report Empire does not have any active business interests. The Company will continue to seek new potential acquisition targets to develop a portfolio of assets in conjunction with our plan to acquire AVT as described elsewhere. PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR LABOR CONTRACTS Empire Global Corp. does not have any patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts. NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCTS OR SERVICES There is no current need for Government Approval for its products or services. EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS There is no current effect on us of existing or probable governmental regulations on the business. RESEARCH AND DEVELOPMENT COSTS The Company had no research and development costs during the year ended December 31, 2010. COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS Empire is not directly affected by any environmental laws, but may indirectly be affected if a subsidiary company project or property falls under the scope of any Federal, State and Local environmental laws. NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL TIME EMPLOYEES Empire currently has no employees and one active independent contractor. Management expects to use consultants, attorneys and accountants as necessary, and does not anticipate a need to engage any full-time employees so long as it is seeking and evaluating business opportunities. The need for employees and their availability will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities. C. RISK FACTORS Empire is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item. Item 2. Description of Property. Empire currently does not maintain a principal executive office. Empire's mailing address is 648 Finch Ave. East. Suite 2, Toronto, Ontario, M2K 2E6, Canada. Other than this mailing address, Empire does not currently maintain any other office facilities, and does not anticipate the need for maintaining office facilities at any time in the foreseeable future. Empire pays no rent or other fees for the use of the mailing address. It is likely that Empire will not establish an office until it has completed a business acquisition transaction, but it is not possible to predict what arrangements will actually be made with respect to future office facilities. 5
Note: Mining Operations Although Empire does not engage in mining operations, our wholly owned subsidiary IMM which we disposed of on January 4, 2010 had made an investment in Armistice Resources Corp. which does. However, our investment in Armistice did not deem us a controlling entity. Armistice Resources Corp. is a reporting Canadian company and information about its business can be found on the System for Electronic Document Analysis and Retrieval (SEDAR) developed in Canada for the Canadian Securities Administrators (www.sedar.com). As a result of our disposal of IMM, the Company no longer has an interest in Armistice. Item 3. Legal Proceedings The Company may be subject to claims arising in the ordinary course of business. We are not a party to, or the subject of, any pending legal proceeding. We are not aware of any legal proceeding or any action being contemplated by a governmental authority. Item 4. Reserved Not applicable. PART II Item 5. Market for common equity and related stockholder matters MARKET INFORMATION Our common stock is quoted on the Over the Counter Pink Sheet Quotation System (OTC-PK), which is a network of security dealers who buy and sell stock. The OTC-PK is an unorganized, inter-dealer, over-the-counter market that provides significantly less liquidity than other markets. Purchasers of our common stock may therefore have difficulty selling their shares should they wish to do so. The stock market in general and the stock prices of Empire's common stock in particular, have experienced extreme volatility that often has been unrelated to the operating performance of any specific public company. The market price of Empire's common stock has fluctuated in the past and is likely to fluctuate in the future as well, especially if Empire's common stock continues to be thinly traded. Factors that may have a significant impact on the market price of Empire's common stock include: a. announcements concerning Empire or its competitors, including the negotiation for or acquisition of a target business; b. announcements regarding financial developments; c. government regulations, including stock option accounting and tax regulations; d. acts of terrorism and war; or e. rumors or allegations regarding Empire's financial disclosures or practices. A small number of Empire's stockholders own a substantial amount of Empire's common stock, and if such stockholders were to sell those shares in the public market within a short period of time, the price of Empire's common stock could drop significantly. A large number of shares of outstanding common stock are restricted and are not freely-trading. An established public trading market for our common stock may never develop or, and if developed, it may not be sustained. 6
PENNY STOCK RULES Our common stock may be deemed a "penny stock." Penny stocks generally are equity securities with a price of less than $5.00 per share, other than securities registered on certain national securities exchanges. Trading in Empire's securities is subject to certain regulations adopted by the SEC commonly known as the "penny stock" rules. These rules govern how broker-dealers can deal with their clients and "penny stocks". The additional burdens imposed upon broker-dealers by the "penny stock" rules may discourage broker-dealers from effecting transactions in Empire's securities, which could severely limit the market price and liquidity of our common stock. We were listed and became eligible for trading on the OTCBB on March 4, 2004 and the first electronic trade of our stock occurred on October 14, 2004. We now trade under the symbol, EMGL.PK (formerly EMGL.OB, TGLC.OB, VGTL.OB, and PNDR.OB). Trading in our common stock in the over-the-counter market has been limited and sporadic and the quotations set forth below are not necessarily indicative of actual market conditions. Further, these quotations reflect inter-dealer prices without retail mark-up, mark-down, or commission, and may not necessarily reflect actual transactions. Such quotes are not necessarily representative of actual transactions or of the value of our common stock, and are in all likelihood not based upon any recognized criteria of securities valuation as used in the investment banking community. The following tables set forth the high and low sale prices for our common stock as reported on the Pink Sheets LLC for the periods covered by this report as indicated. 2009 BID PRICES PERIOD HIGH LOW January 1 - March 31 $ 0.07 $ 0.06 April 1 - June 30 0.14 0.06 July 1 - September 30 0.06 0.025 October 1 - December 31 0.025 0.02 2010 PERIOD January 1 - March 31 $ 0.015 $ 0.02 April 1 - June 30 0.015 0.015 July 1 - September 30 0.015 0.005 October 1 - December 31 0.01 0.001 SHAREHOLDERS As of December 31, 2010, there were an estimated 400 holders of record of our common stock. Certain of the shares of common stock are held in street name or are listed as undisclosed and may, therefore, be held by several beneficial owners. DIVIDENDS On July 26, 2004, shareholders of record on that date became entitled to receive a stock dividend of six new shares of common stock of the Company for each one share held pursuant to a forward split approved by the Board of Directors of the Company on July 12, 2004. We have never paid a cash dividend on our common stock since inception. The payment of dividends may be made at the discretion of our Board of Directors, and will depend upon, among other things, our operations, capital requirements, and overall financial condition. 7
DESCRIPTION OF SECURITIES As of December 31, 2010, there were 18,675,800 shares of common stock, of 0.0001 par value, issued and outstanding and at least 17,969,300 shares are restricted securities of Empire within the meaning of Rule 144(a)(3) promulgated under the Securities Act of 1933, as amended. These are restricted because such shares were issued and sold by us in private transactions not involving a public offering or issued as consideration for payments of fees and services provided to the Company. The restricted securities may only be sold pursuant to a registration statement or pursuant to Rule 144. In general, under Rule 144, as currently in effect, subject to the satisfaction of certain other conditions, a person, including an affiliate of ours (in general, a person who has a control relationship with us) who has owned restricted securities of common stock beneficially for at least six months is entitled to sell, within any three-month period, that number of shares of a class of securities that does not exceed the greater of (i) one percent (1%) of the shares of that class then outstanding or, if the common stock is quoted on NASDAQ, (ii) the average weekly trading volume of that class during the four calendar weeks preceding such sale. A person who has not been an affiliate of ours for at least the three months immediately preceding the sale and has beneficially owned shares of common stock for at least one year is entitled to sell such shares under Rule 144 without regard to any of the limitations described above. No prediction can be made as to the effect, if any, that future sales of shares of common stock or the availability of common stock for future sale will have on the market price of the common stock prevailing from time-to-time. Sales of substantial amounts of common stock on the public market could adversely affect the prevailing market price of the common stock. Pursuant to the Agreement to acquire AVT, the Company will purchase 150,000 shares of AVT representing 100% of the issued and outstanding shares of AVT in exchange for 169,995,000 restricted common shares of the Company, or a ratio of approximately 1,133.3 shares of the Company for each share of AVT. After closing the Company will have a total of 188,670,800 shares of common stock issued and outstanding all of the same class. In each of the foregoing described stock splits we filed a notice under rule 10b-17 with NASD of our intention to effect the stock split and reflected the approval of our Board of Directors and written consent of a majority shareholders. All fractional shares are rounded up to the nearest whole shares. 1 for 10 Reverse Split On September 30, 2005, we completed a 1 for 10 reverse split of our common stock. 1 for 10 Reverse Split Effective June 30, 2005, we completed a 1 for 10 reverse split of our common stock. 7 for 1 Forward Split On July 23, 2004, the Board of Directors approved a 7 for 1 forward split of our common stock. The common stock dividend payment date was July 26, 2004 to stockholders of record as at July 23, 2004. Each of the foregoing change in authorized shares was approved by the Board of Directors and the holders of a majority of the issued and outstanding shares of common stock and a Certificate of Amendment filed with the State of Delaware. On September 21, 2004, the Company amended its Certificate of Incorporation to increase the number of authorized common shares from 80,000,000 to 400,000,000. On December 28, 2006, the Company amended its Certificate of Incorporation to decrease the number of authorized common shares from 400,000,000 to 80,000,000. 8
Preferred Stock The Company has authorized 20,000,000 preferred shares of which none have been issued. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The purpose of the 2005 Incentive Stock Option Plan (the "Stock Plan") is to secure long-term relationships for the Company and its stockholders, from the benefits arising from capital stock ownership by the Company's Officers, Directors, Employees, Consultants and Advisors, who can help in the Company's growth and success and to provide an effective means of compensation for such persons and entities providing services to the Company in lieu of cash payments therefore. The Stock Plan became effective as of the 1st day of July, 2005, and shall expire on the 30th day of June, 2015, unless further extended by appropriate action of the Board of Directors. The Board of Directors of the Company may at any time, by appropriate action, suspend or terminate the Stock Plan, or amend the terms and conditions of the Stock Plan. Pursuant to the stock plan, 1,000,000 shares of common stock, par value $0.0001 per share, of Empire Global Corp., may be issued upon the exercise of stock options or stock grants. Consultants, Advisors, Employees and Directors, to the Company, or any of its subsidiary corporations, shall be eligible for participation in the Stock Plan. Each person or entity acquiring shares of Common Stock pursuant to the Stock Plan shall be acquiring such shares for investment purposes only, and in lieu of cash compensation for services rendered to the Company. A Compensation Committee appointed by the Board of Directors shall determine the manner in which each option or stock grant shall be exercisable and the timing and form of the purchase price to be paid by a grantee upon the exercise of an option or stock grant under the Stock Plan. To the extent provided in the option agreement, payment of the purchase price may be in cash, part in cash, part by personal promissory note or in lieu of payment for services performed. There are no restrictions on the resale of securities purchased under the Stock Plan. The Stock Plan is not qualified under Section 401(a) of the Internal Revenue Code. On July 26, 2005, options to purchase up to a total of 1,000,000 shares of common stock were granted at an exercise price of $0.50 per share to two consultants pursuant to Consulting Services Agreements entered into with the Company to perform research and analysis work with respect to business planning in the potential acquisition of technology based companies. The shares were issued in lieu of payment for services performed or to be performed. The Company relied on the exemption from the registration requirements of the Securities Act provided by Rule 701 under the Securities Act. More details of the Stock Plan and the shares issued pursuant to these consultant agreements can be found on form S-8 filed on July 27, 2005. RECENT SALES OF UNREGISTERED SECURITIES There are no recent sales of unregistered securities by the Company during the period covered by this report, which have not been previously disclosed in form 10-Q filings or form 8-K filings. Share exchange - IMM Investments Inc. On July 9, 2004, the Company acquired 100% of IMM Investments Inc., thus making IMM a wholly owned subsidiary of the Company. The Company acquired IMM from KJ Holding Inc. an Ontario Corporation owned by Kalano Jang father of our former Chairman Kalson Jang, by issuing KJ Holding Inc. 3,000,000 (21,000,000 post-forward split) restricted shares of the Company in exchange for 100% of the issued and outstanding stock in IMM. Details of this transaction are available on the form 8-K filed on July 14, 2004 to announce the acquisition of IMM Investments Inc. and the form 8-K/A filed on December 3, 2004 to amend 8-K filed on July 14, 2004. Items 2.01 and 9.01 were amended on this report. 9
Sale of Shares - Private Placements - Cancellation of Debt On June 27, 2005 the Company completed a private placement by issuing a total of 2,088,720 pre-split (20,888 post-split) shares of its common stock with a total value of $208,872 to an accredited investor in exchange for the cancellation of debt owed by the Company respectively to the investor. On July 27, 2005 the Company completed a private placement by issuing a total of 500,000 pre-split (50,000 post-split) shares of its common stock with a total value of $150,000 to an accredited investor in exchange for the cancellation of debt owed by the Company to the investor. On October 12, 2005 the Company completed a private placement by issuing a total of 814,100 shares of its common stock with a total value of $472,178 to a group of accredited investors in exchange for the cancellation of debt owed by the Company respectively to each investor. On August 21, 2006, the Company completed a private placement by issuing a total of 7,236,300 shares of its common stock with a total value of $922,595 to a group of accredited investors in exchange for the cancellation of debt owed by the Company respectively to each investor. On November 26, 2006, the Company completed a private placement by issuing a total of 1,000,000 shares of its common stock with a total value of $127,495 to First Federal Group in exchange for the cancellation of debt and rent for use of office space in New York. On November 5, 2007, the Company completed a private placement by issuing a total of 3,378,900 shares of its common stock with a total value of $405,468 to a group of accredited investors in exchange for the cancellation of debt owed by the Company respectively to each investor. On May 5, 2008, Empire completed a private placement of 5,500,000 shares of its common stock. The Company issued 3,000,000 shares of common stock with a total value of $200,000, as well as 2,500,000 shares of common stock with a total value of $175,000 to a group of accredited investors in exchange for the cancellation of debt owed by the Company to each investor. The shares issued in each private placement are exempt from the registration requirements of the Securities Act of 1933 (the "Act") pursuant to Section 4(2) of the Act and Rule 506 promulgated thereunder. Each investor is an "accredited investor" under the Act, and no form of general solicitation or general advertising was conducted in connection with the private placements. Each of the certificates representing shares of the Company's common stock issued in each private placement contain restrictive legends preventing the sale, transfer or other disposition of such shares, unless registered under the Securities Act. REGISTRATION STATEMENTS On July 27, 2005 Empire issued 500,000 shares each by way of S-8 registration to two consulting firms for an aggregate total of 1,000,000 pre-split (100,000 post-split) shares of its common stock. The consulting firms were engaged to assess and make recommendations with respect to the Company's plans to enter into a merger and reorganization with Vianet Direct, Inc. and subsequently Tradestream Global, AG. PURCHASES OF EQUITY SECURITIES BY THE REGISTRANT No stock repurchases were made by Empire or affiliated purchasers in a month within the fourth quarter of the fiscal year covered by this report. Item 6. Selected Financial Data Not Applicable. 10
Item 7. Management's discussion and analysis FORWARD-LOOKING STATEMENTS This management discussion and analysis of financial condition and results of operations ("MD&A") on form 10-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding guidance, industry prospects or future results of operations or financial position, made in this MD&A on form 10-K are forward-looking. We use words such as anticipate, believe, expect, future, intend, plan, aim, project, estimate, will, should, could and similar expressions to identify forward-looking statements. Forward-looking statements reflect management's current expectations and are inherently uncertain. Factors that could cause our future results to differ from these expectations include general economic conditions, particularly as they affect our ability to acquire a target business and raise sufficient working capital and the impact of foreign exchange fluctuations, changes in global economic conditions and consumer spending. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives requires the exercise of judgment. To the extent that the assumed events do not occur, our outcome may vary substantially from our anticipated or projected results, and accordingly, we express no opinion on the outcome of those forward-looking statements and give no assurance that any of the assumptions relating to the forward-looking statements are accurate. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management's expectations describes some, but not all, of the possible risk factors whether known or unknown to management on the date of this filing. ABILITY TO CONTINUE AS A GOING CONCERN The Company's auditors have issued an opinion on our ability to continue as a going concern. This means that its auditors believe there is doubt that the Company can continue as an on-going business for the next twelve months unless it obtains additional capital to pay its obligations. This is because the Company has not generated any revenues and no revenues are anticipated until it begins operations from a new business plan. We have suffered recurring losses from operations and are in serious need of additional financing. These factors among others indicate that we may be unable to continue as a going concern, particularly in the event that we cannot obtain additional financing or, in the alternative, complete a merger or acquisition. Our continuation as a going concern depends upon our ability to generate sufficient cash flow to conduct our operations and our ability to obtain additional sources of capital and financing. There is no assurance that we will be able to accomplish all or any of these items. In the event that these events do not take place, we will in all probability not be able to continue as a going concern. The following discussion and analysis should be read in conjunction with the financial statements of the Company and the accompanying notes appearing under the caption "Financial Statements and Supplementary Data." 11
GENERAL Empire was incorporated in the state of Delaware on August 26, 1998. Our principal executive office is located in Toronto, Canada. On July 9, 2004 we acquired 100% of the shares of IMM Investments Inc. ("IMM"), an Ontario Corporation. On January 4, 2010 the Company disposed of IMM. As of December 31, 2010, the Company has no business operations and has been seeking new business opportunities during the period covered by this report. However, subsequent to the period covered by this report as a result of the Agreement to purchase AVT on December 9, 2011, upon closing of the Agreement the Company will have an interest in a social media applications producer and publisher. AVT develops and has acquired a series of social networking entertainment applications on Facebook with approximately 7 million installed users as of the end of November 2011. According to Google Analytics, AVT applications are accessed by users represented in over 200 countries in approximately 134 languages and in more than 13,598 different cities from November 30, 2009 to December 1, 2011. AVT's Facebook application portfolio of products ranges from games, quizzes and social commerce storefronts. PLAN OF OPERATION At December 31, 2010 we had no cash and $2,932 in assets and 127,735 in current liabilities. Our cash flow requirement for the twelve-month period from January 2011 to December 2011 is estimated to be $179,735. Anticipated cash outflows are as follows: ANTICIPATED CASH OUTFLOWS: Amount (USD) ------------ General and administrative expenses: Consulting and Wages $ 25,000 Accounting 15,000 Legal 10,000 Office and General 2,000 ------------ Total General and Administrative $ 52,000 Accounts payable due 127,735 ============ Total 179,735 ============ Empire Consolidated General and Administrative Expenses: The general and administrative expenses projection of $52,000 is based on the actual expenses incurred during the two most recent years. Future general and administrative expenses are anticipated to be similar to those incurred during these most recent years. Empire Consolidated Current Accruals Due: The balance of the current accounts payable at December 31, 2010 due to various parties for services rendered was approximately $127,735. Terms on these accruals vary but they are all currently due on demand. 12
Empire Additional Working Capital: Empire has a working capital deficit as of December 31, 2010 of $127,735. Additional working capital is not currently assessable since the Company is seeking business opportunities. Subsequent to the period covered by this report, the Company entered into an Agreement to acquire AVT. Therefore, the amount of working capital required cannot be determined, if any, at this time. The company plans to fund the above operations, with loans and advances from our current management and to execute private placements with related and other parties over the next twelve months. CASH INFLOWS Research and Development: During the period covered this report and the subsequent twelve months the Company's plan of operation is actively seeking an acquisition or new business opportunity, finding a business partner, or locating a qualified company as a candidate for a business combination. We are authorized to enter into a definitive agreement with a wide variety of businesses without limitation as to their industry or revenues. It is not possible at this time to predict with which company, if any, we will enter into a definitive agreement or what will be the industry, operating history, revenues, future prospects or other characteristics of that company. Subsequent to the period covered by this report, the Company entered into an Agreement to acquire AVT. It is impossible at this time to determine the result of our business development as a result of the Agreement. Therefore, the Company will continue to seek additional opportunities and potential acquisition targets to develop a portfolio of assets in conjunction with our plan to acquire AVT. We may seek a business opportunity with entities which have recently commenced operations, or that may wish to utilize the public marketplace in order to raise additional capital to expand their business, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries. We are not limiting our search for business opportunities to any particular industry; therefore, our management may not be experienced in matters relating to the business of any such target and will rely upon its own reasonable efforts in accomplishing our business purposes. The Company may employ outside consultants or advisors to assist in the search for qualified target companies in which case any outside consultants or advisors fees will need to be assumed by the target business, as we have no cash assets with which to pay such obligation. In analyzing prospective business opportunities, management may consider factors such as: a. financial strength and quality of managerial resources; b. history of operations, if any; c. the available empirical and technical data; d. the availability of audited financial statements; e. the nature of its present business and future prospects; f. specific risk factors associated with the proposed activities; g. the potential for profit, growth or expansion; h. the perceived public recognition or acceptance of products, services, or trades; i. public identity; and other relevant factors. 13
Our Management does not have the capacity to conduct exhaustive due diligence of a target business as might be undertaken by a venture capital fund or similar institution. As a result, management may elect to merge with a target business which has one or more undiscovered shortcomings and may, if given the choice to select among target businesses, fail to enter into an agreement with the most investment-worthy target business. Following a business combination we may benefit from the services of others in regard to accounting, legal services, underwritings and corporate public relations. If requested by a target business, management may recommend one or more underwriters, financial advisors, accountants, public relations firms or other consultants to provide such services. A potential target business may have an agreement with a consultant or advisor, providing that services of the consultant or advisor be continued after any business combination. Additionally, a target business may be presented to us only on the condition that the services of a consultant or advisor are continued after a merger or acquisition. Such pre-existing agreements of target businesses for the continuation of the services of attorneys, accountants, advisors or consultants could be a factor in the selection of a target business. In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. On the consummation of a transaction, our present management and stockholders may no longer control the Company. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, appoint one or more new officers and directors. It is anticipated that any securities issued in any such reorganization would be issued in reliance upon an exemption from registration under applicable federal and state securities laws. In some circumstances however, as a negotiated element of a transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after we have entered into an agreement for a business combination or have consummated a business combination. Although there can be no assurance that a market for our common stock will develop or be sustained, the issuance of additional securities and their potential sale into any trading market may depress the market value of our securities in the future. While the terms of a business transaction to which we may be a party cannot be predicted, it is expected that the parties to the business transaction will desire to avoid the creation of a taxable event and thereby structure the acquisition in a tax-free reorganization under Sections 351 or 368 of the Internal Revenue Code of 1986, as amended. With respect to any merger or acquisition negotiations with a target business, management expects to give specific attention to the overall dilutive effect such a transaction would have on existing shareholders in exchange for the target business. Any merger or acquisition effected by us may have a dilutive effect on the percentage of shares held by our stockholders at such time, therefore, depending upon, among other things, the target business's assets and liabilities, our stockholders will in all likelihood hold a lesser percentage ownership interest in Empire. No assurances can be given that we will be able to enter into or complete a business combination, as to the terms of a business combination, or as to the nature of the target business. 14
We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes (but has not conducted any research to confirm) as previously described in this report that there are numerous firms in various industries seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, increasing the opportunity to use securities for acquisitions, and providing liquidity for our stockholders and other factors. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We can provide no assurance that we will be able to locate compatible business opportunities. On December 12, 2011 the Company filed a form 8-K report with the Securities and Exchange Commission containing material facts that management has entered into an agreement to acquire AVT as described elsewhere. Readers of this Annual Report are encouraged to consult our filings with the SEC to read the report and also to determine if we have subsequently filed additional information. OPERATIONS REVIEW We have no cash to satisfy our working capital needs for the next year, therefore, over the subsequent twelve months we plan to continue to seek additional business opportunities. We anticipate funding our working capital needs through the issuance of common stock to independent contractors, the equity capital markets, private advances and loans. Although the foregoing actions are expected to cover our anticipated cash needs for working capital and capital expenditures for at least the subsequent twelve months, no assurance can be given that we will be able to raise sufficient funds to meet our cash requirements. During the period covered by this report we have been seeking a business opportunity. Subsequent to the period covered by this report we entered into an Agreement to acquire a new business opportunity, as a result we may be required to hire additional employees, independent contractors as well as purchase or lease additional equipment. As described elsewhere, pursuant to the Agreement to acquire AVT, the Company will purchase 150,000 shares of AVT representing 100% of the issued and outstanding shares of AVT in exchange for 169,995,000 restricted common shares of the Company, or a ratio of approximately 1,133.3 shares of the Company for each share of AVT. There can be no assurance that the Agreement to acquire AVT will be closed, however, should the closing take place as anticipated on the closing date or as soon as practicable therafter, the Company will have a total of 188,670,800 shares of common stock issued and outstanding all of the same class. The issuance of these new shares will result in dilution to our existing shareholders and a change in control of the Company to the shareholders of AVT. We anticipate continuing to rely on equity sales of common shares or the issuance of convertible debt to fund our operations and to seek out or enter into new business opportunities. RELATED PARTY TRANSACTIONS The amount due to related parties at December 31, 2010, is $5,964. The amounts due to related parties are due on demand, bear no interest, have no fixed terms of repayment and are not secured. On January 4, 2010 the Company agreed to sell IMM Investments Inc. to a related party in exchange for the elimination of debts due in addition to $75,000 of accruals due at December 31, 2009 as a result of a repayment demand of amounts due to them. 15
COMPARISONS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 Overall Results of Operations The historical financial information about the Company upon which to base an evaluation of our performance has been interrupted by a number of failed business ventures. Accordingly, comparisons with prior periods are generally not meaningful. As described in Note 3(o) to the Consolidated Financial Statements presentation of certain prior period amounts have been reclassified to segregate assets disposed of on January 4, 2010. The Company is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the decision and implementation of a new business plan. Revenues The Company has no revenues for the period covered by this report. We do not expect to generate any revenue, unless we are able to merge with a revenue producing business. Expenses General and administrative expenses representing the bulk of our net operating results increased from $34,865 in 2009 to $70,846 in 2010. The increase was a result of additional costs incurred as a result of the disposal of IMM and the reclassification of fees incurred to complete and file our outstanding regulatory reports for discontinued operations. In 2010 we financed our capital needs with advances from a related party. In the subsequent twelve month period our operating costs are expected to decrease due to the limited scope of work and expenses anticipated to be incurred for filing our regulatory requirements and actively pursuing a new business venture. Net Income/Loss For the year ended December 31, 2010, we had a net loss from operations of $85,136 or $0.005 net loss per share which was a decrease of $92,229 in net loss from our net loss of $177,365 or $0.01 net loss per share for the year ended December 31, 2009. During 2009 our losses included $142,500, in general and administrative expenses associated with our discontinued operations of IMM. Assets and Liabilities Assets At December 31, 2010 we had no cash and our total assets were $2,932 compared to no cash and total assets of $211,570 at December 31, 2009. Liabilities Our current liabilities at December 31, 2010 were $127,735 versus $259,069 in 2009. The decrease is a result of the disposal of IMM to pay debts due to a related party. Liquidity and capital resources The Company had no cash balance at December 31, 2010 or 2009. The notes to our consolidated financial statements as of December 31, 2010, contain footnote disclosure regarding our uncertain ability to continue as a going concern. We have no revenues to cover our expenses, and we have an accumulated deficit of $5,029,126. As of December 31, 2010, we had $127,735 in current liabilities, when this is offset against our current assets we are left with a working capital deficit of $127,735 and as such we cannot assure that we will succeed in achieving a profitable level of operations sufficient to meet our ongoing cash needs or in locating a viable business opportunity. 16
We have not generated revenues from operations, consequently, we have been dependent upon cash advances from related or other parties and private investors as well as the issuance of our common stock to fund our cash requirements. Specifically, we engage an independent contractor when required to provide services for us. The contractor submits invoices for time and out of pocket expenses. No trends have been identified which would materially increase or decrease our results of operations or liquidity. We will need to raise significant additional operating capital to finance our operations and to acquire sources of operating revenues. Due to our poor financial condition, raising capital will be very difficult and expensive. The Company will seek funds from possible strategic and joint venture partners and financing to cover any short term operating deficits and provide for long term working capital. No assurances can be given that the Company will successfully engage strategic or joint venture partners or otherwise obtain sufficient financing through the sale of equity. Below is a discussion of our sources and uses of funds for the year ended December 31, 2010. CASH FLOWS Net Cash Used In Operating Activities Our net cash used in operating activities decreased to $12,347 during the year ended December 31, 2010 versus $29,963 in 2009. The decrease was primarily due to a decrease in accounts payable resulting from reclassification of assets to discontinued operations. Net Cash Used In Investing Activities There were no investing activities in 2010 or 2009. Net Cash Provided By Financing Activities Our cash from financing activities in 2010 were limited to an advance from a related party of $4,516 versus $1,448 during the year ended December 31, 2009. OFF BALANCE-SHEET ARRANGEMENTS We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities. INCOME TAXES Note 7 of the financial statements included in this report sets out our deferred tax assets as of December 31, 2010 and 2009. We have established a 100% valuation allowance, as we believe it is more likely than not that the deferred tax assets will not be realized. We based the establishment of a 100% valuation allowance against our deferred tax assets on our current operating results. If our operating results improve significantly, we may have to record our deferred taxes in our consolidated financial statements, which could have a material impact on our financial results. 17
CONTINGENCIES AND COMMITMENTS See Note 8 of Notes to Consolidated Financial Statements for a detailed explanation of our contingencies. We had no long-term commitments at December 31, 2010. CONTRACTUAL OBLIGATIONS We had no contractual obligations at December 31, 2010. INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY We have funded our operations primarily through cash injections from related and other parties. IMPACT OF INFLATION We do not believe that general price inflation will have a material effect on the Company's business in the near future. FOREIGN EXCHANGE Transactions involving the Company are generally denominated in U.S. dollars. For additional details see also Note 3(k) of Notes to Consolidated Financial Statements. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS See Note 3(n) "Recently Accounting Pronouncements" of Notes to Consolidated Financial Statements. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE See Note 9 "Subsequent Events" of Notes to Consolidated Financial Statements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Empire is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item. 18
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2010 and 2009 CONTENTS Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets F-2 Consolidated Statements of Operations and Comprehensive Loss F-3 Consolidated Statements of Changes in Stockholders' Equity (Deficiency) F-4 Consolidated Statements of Cash Flows F-5 Notes to Consolidated Financial Statements F-6 - F-15 19
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Empire Global Corp Toronto, Ontario, Canada We have audited the accompanying consolidated balance sheets of Empire Global Corp., ("the Company"), and subsidiary as of December 31, 2010 and 2009 and the related statements of operations and comprehensive loss, changes in stockholder's equity (deficiency), and cash flows for each of the years in the two-year period ended December 31, 2010. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has incurred significant losses from operations since its inception and has incurred a net loss, which substantially exceeds its working capital and has not yet established any source of revenues. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Bernstein & Pinchuk LLP New York, NY February 21, 2012 - F1 -
EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) Consolidated Balance Sheets December 31, 2010 2009 ------------ ------------ US$ US$ ASSETS Current Assets Pre-paid and other assets - - ------------ ------------ Total Current Assets - - Property and equipment, net 2,932 3,664 Assets held for sale - 207,906 ------------ ------------ 2,932 211,570 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current Liabilities Accounts payable and accrued liabilities 121,771 57,621 Advances from related parties 5,964 1,448 Liabilities held for sale - 200,000 ------------ ------------ Total Current Liabilities 127,735 259,069 Commitments and Contingencies - - Stockholders' Equity (Deficiency) Preferred Stock, $0.0001 par value, 20,000,000 shares authorized, none issued and outstanding - - Capital Stock, $0.0001 par value, 80,000,000 shares authorized, shares issued and outstanding 18,675,800 for both years 1,868 1,868 Additional - paid in capital 4,902,455 4,902,455 Accumulated other comprehensive income - (7,832) Deficit (5,029,126) (4,943,990) ------------ ------------ Total Stockholders' Equity (Deficiency) (124,803) (47,499) ------------ ------------ 2,932 211,570 ============ ============ See notes to consolidated financial statements - F2 -
EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) Consolidated Statements of Operations and Comprehensive Loss Years ended December 31, 2010 2009 ------------ ------------ US$ US$ Revenue - - General and administrative expenses 70,846 34,865 Loss from continuing operations before income tax expenses (70,846) (34,865) ------------ ------------ Other Income (expense) Loss on sale of IMM Investments Inc. - discontinued operations (15,738) (142,500) Gain from Loan Forgiveness 1,448 - ------------ ------------ Total Other expense (14,290) (142,500) Loss before income taxes (85,136) (177,365) Income tax expense - - ------------ ------------ Net Loss (85,136) (177,365) Other comprehensive income (loss) Foreign currency translation adjustment - 28,515 ------------ ------------ Comprehensive Loss (85,136) (148,850) ============ ============ Basic and fully diluted loss per share - continuing operations (0.004) (0.002) ============ ============ Basic and fully diluted loss per share - discontinued operations (0.001) (0.008) ============ ============ Basic and fully diluted loss per common share (0.005) (0.010) ============ ============ Basic and fully diluted weighted average number of shares outstanding 18,675,800 18,675,800 ============ ============ See notes to consolidated financial statements - F3 -
EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) Consolidated Statements of Changes in Stockholders' Equity (Deficiency) Accumulated Common Additional Other Total Stock Paid-In Comprehensive Accumulated Stockholders' Shares Par Value Capital Income Deficit Equity ------------------------------------------------------------------------------------- US$ US$ US$ US$ US$ US$ Balance at January 1, 2009 18,675,800 1,868 4,902,455 (36,347) (4,766,625) 101,351 Foreign currency translation adjustment - - 28,515 - 28,515 Net loss - - - (177,365) (177,365) ------------------------------------------------------------------------------------- Balance December 31, 2009 18,675,800 1,868 4,902,455 (7,832) (4,943,990) (47,499) Foreign currency translation adjustment - - 7,832 - 7,832 Net loss - - - (85,136) (85,136) ------------------------------------------------------------------------------------- Balance December 31, 2010 18,675,800 1,868 4,902,455 - (5,029,126) (124,803) ===================================================================================== See notes to consolidated financial statements - F4 -
EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) Consolidated Statements of Cash Flows Years ended December 31, 2010 2009 ------------ ------------ US$ US$ Cash Flows from Operating Activities Net loss from continuing operations (70,846) (34,865) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 732 917 Loss on discontinued operations (14,290) (142,500) Changes in operating assets and liabilities - continuing operations Accounts payable and accrued liabilities 64,150 32,500 Prepaid and sundry assets - 20,000 ------------ ------------ Changes in operating assets and liabilities - discontinued operations Assets held for sale 207,906 (28,515) Liabilities held for sale (200,000) 122,500 ------------ ------------ Net cash used in operating activities (12,348) (29,963) ------------ ------------ Net cash used in discontinued operations - - ------------ ------------ Cash Flows from Financing Activities Advances from related parties 4,516 1,448 ------------ ------------ Net cash provided by financing activities 4,516 1,448 ------------ ------------ Effect of foreign exchange fluctuation in cash 7,832 28,515 Net increase(decrease) in cash and cash equivalents - - Cash and cash equivalents - beginning of year - - ------------ ------------ Cash and cash equivalents - end of year - - ============ ============ Supplemental disclosure of cash flow information: Cash paid during the year for: Interest - - ============ ============ Income taxes - - ============ ============ Supplemental items not affecting cash: Common Stock issued for debt - - ------------ ------------ See notes to consolidated financial statements - F5 -
EMPIRE GLOBAL CORP. (FORMERLY TRADESTREAM GLOBAL CORP.) Notes to Consolidated Financial Statements 1. Nature of Business and Operations Empire Global Corp. ("Empire" or "the Company") was incorporated in the state of Delaware on August 26, 1998 as Pender International Inc. On September 30, 2005 contemporaneously with a change in management and business plan changed its name to Empire Global Corp. The Company's principal executive offices are headquartered in Toronto, Canada. In June 2004, the Company acquired IMM Investments Inc. an Ontario Corporation in exchange for 210,000 (21 million pre-reverse stock splits) shares of the Company paid to the former shareholder of IMM thereby making IMM a wholly owned subsidiary. On January 4, 2010 the Company disposed of IMM and is actively seeking new business opportunities. The Company previously reported that Montebello Developments Inc. ("Montebello") was a subsidiary of the Company. Montebello was a dormant private Ontario Corporation owned by our former Chairman, Kalson Jang with no assets, no liabilities and no business. Although the Company considered a business venture with Montebello, an Agreement was never completed and therefore the Company has no interest in Montebello. The Company did not record any carrying or disposal costs for Montebello therefore as of the fiscal year ended December 31, 2010 will no longer report Montebello as a subsidiary. As reported in footnote 9 Subsequent Events, on December 9, 2011, the Company entered into a Stock Purchase and Share Exchange Agreement (the "Agreement") with Avontrust Global Pte. Ltd. a Singapore company ("AVT") with its head office and operations in Singapore. When the transaction is closed, AVT will become a wholly-owned subsidiary of Empire Global Corp. 2. Going Concern These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company has incurred losses amounting to $5,029,126 since inception. We have no cash and we anticipate cash outflows of $179,735 during the year ended December 31, 2011. Continuation as a going concern is uncertain and depends upon obtaining additional sources of financing to sustain its existence and achieving future profitable operations, the outcome of which cannot be predicted at this time. In the event the Company cannot obtain the necessary funds, it will be unlikely that the Company will be able to continue as a going concern. Management plans to mitigate its losses in future years by significantly reducing its operating expenses and seeking out new business opportunities. However, there is no assurance that the Company will be able to obtain additional financing, reduce their operating expenses or be successful in locating or acquiring a viable business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. - F6 -
3. Summary of Significant Accounting Policies a) Basis of Financial Statement Presentation These consolidated financial statements include the accounts of the Company and IMM Investments Inc. a wholly owned subsidiary which was disposed of on January 4, 2010. b) Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and cash deposited with financial institutions, including money market accounts, and commercial paper purchased with an original maturity of three months or less. c) Use of Estimates In preparing the Company's financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. d) Equipment and Depreciation Equipment is stated at cost less accumulated depreciation. Depreciation, based on the estimated useful lives of the assets, is provided annually as follows: Equipment 20% Declining Balance e) Organization Costs Organization costs are tested annually for impairment in accordance with FASB ASC 350-30-65, "Goodwill and Other Intangible Assets". The impairment test consists of comparing the fair value of the incorporation cost with its carrying amount. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to the excess. As of December 31, 2010 and 2009, no impairment losses related to these items have been identified. f) Impairment of Long Lived Assets The Company accounts for long-lived assets in accordance with the provisions of FASB ASC 350-30, General Intangibles Other than Goodwill, formerly SFAS No. 142, "Accounting for the Impairment or Disposal of Long-Lived Assets". This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. g) Loss Per Share Net loss per common share is computed pursuant to FASB ASC 260-10-45. Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of December 31, 2010 or 2009. - F7 -
h) Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC 740-10 "Accounting for Income Taxes," which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company adopted the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. Additionally, the Company adopted ASC 740-10 which provided guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. The term "effectively settled" replaces the term "ultimately settled" when used to describe recognition, and the terms "settlement" or "settled" replace the terms "ultimate settlement" or "ultimately settled" when used to describe measurement of a tax position and clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. This adoption did not have an impact on the accompanying consolidated financial statements. i) Comprehensive Income The Company adopted FASB ASC 220-10-45, "Reporting Comprehensive Income.", ASC 220-10-45 establishes standards for reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income is presented in the statements of operations, and consists of net income and unrealized gains (losses) on available for sale marketable securities; foreign currency translation adjustments and changes in market value of future contracts that qualify as a hedge; and negative equity adjustments. At December 31, 2010 and 2009 the Company recorded $7,832 and $28,515 respectively in accumulated other comprehensive income from its foreign currency translation. - F8 -
j) Fair Value of Financial Instruments We measure our financial assets and liabilities in accordance with accounting principles generally accepted in the United States of America. The carrying value of the Company's short term investments, prepaid and sundry assets, accounts payable and accrued charges, and advances from shareholder approximate fair value because of the short term maturity of these financial instruments. The Company adopted accounting guidance for financial assets and liabilities (ASC 820). The adoption did not have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. The Company adopted a newly issued accounting standard for fair value measurements of all non-financial assets and liabilities not recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. k) Foreign Currency Translation The Company accounts for foreign currency translation pursuant to FASB ASC 830-20 "Foreign Currency Translation". The functional and reporting currency of the Company is the U.S. dollar ("US$"), while the functional and reporting currency for IMM Investments Inc., a wholly-owned Canadian subsidiary, which was disposed of on January 4, 2010, is the Canadian dollar. Although IMM had no operations, it owns shares of Armistice Resources Corp. a Canadian mining company. The purchase price and shares of Armistice are valued in Canadian dollars. Accordingly, the Company is exposed to foreign currency translation gains or losses as the relationship between the Canadian dollar and United States dollar fluctuates. Increases in the value of the Canadian dollar against the U.S. dollar will result in foreign exchange transaction gains and decreases in the value of the Canadian dollar will result in foreign exchange transaction losses. The items which are subject to translation adjustments were the investment in Armistice Resources Corp. and organization cost. Assets and liabilities are translated into United States dollars using the current exchange rate, while revenues and expenses are translated using the average exchange rates prevailing throughout the year. Translation adjustments are included in other comprehensive income for the period. All remaining expenses were incurred in US Dollars. - F9 -
l) Stock Based Payments The Company adopted ASC 718-20-10; Share Based Payments (formerly SFAS No. 123R) which establishes the financial accounting and reporting standards for stock-based compensation. As required by ASC 718-20-10, we recognize the cost resulting from all stock-based payment transactions as an expense. Stock based compensation is measured at fair value at the time of the grant. The Company had no outstanding options or warrants at December 31, 2010 and 2009. m) Subsequent events The Company follows the guidance in FASB ASC 855-10-50 for the disclosure of subsequent events. The Company evaluates subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. Refer to Note 9 Subsequent Events for additional details. n) Recent Accounting Pronouncements In June 2009, the FASB issued guidance now codified as ASC 105, Generally Accepted Accounting Principles as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the Company's financial statements, but did eliminate references to pre-codification standards. In February 2010, the FASB issued ASU 2010-09, "Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements". This update addresses both the interaction of the requirements of Topic 855, "Subsequent Events", with the SEC's reporting requirements and the intended breadth of the reissuance disclosures provision related to subsequent events (paragraph 855-10-50-4). The amendments in this update have the potential to change reporting by both private and public entities, however, the nature of the change may vary depending on facts and circumstances. The adoption of ASU 2010-09 did not have a material impact on the Company's consolidated results of operations or financial condition. In December 2010, the Financial Accounting Standards Board (FASB) issued ASC Topic No. 2010-29 Business Combinations (ASC Topic 805) - Disclosure of Supplementary Pro Forma Information for Business Combinations which amended ASC Topic 805 "Business Combinations" to specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the year had occurred as of the beginning of the comparable prior annual reporting period only. The ASC also expands the supplemental pro forma disclosures under ASC Topic 805 to include a description of the nature and the amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The ASC is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010 (October 1, 2011 for the Company). Early adoption is permitted. The Company does not expect the adoption of this ASC to have a material impact on the Company's consolidated financial statements. - F10 -
n) Recent Accounting Pronouncements (cont'd) In May 2011, FASB issued ASU No. 2011-04, Fair Value Measurement (ASC Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirement in U.S. GAAP and IFRS's. This update provides amendments to ASC Topic 820 so that fair value has the same meaning in U.S. GAAP and in IFRSs and that their respective fair value measurement and disclosure requirements are the same. The adoption of this update did not have a material effect on the financial position, results of operations or cash flows of the Company. In June 2011, FASB issued ASU No. 2011-05, Comprehensive Income (ASC Topic 220), Presentation of Comprehensive Income. This update provides amendments to ASC 220 to increase the prominence of items reported in other comprehensive income and to facilitate convergence of U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS). Most notably, the update eliminates the option to present components of other comprehensive income (loss) as part of the statement of changes in stockholders' equity (deficit). The amendment is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company currently displays comprehensive income (loss) in its statement of operations and accordingly, doesn't anticipate the adoption of this update having a material effect on the financial position, results of operations or cash flows of the Company. In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-28 "Intangibles-Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts" ("ASU 2010-28").Under ASU 2010-28, if the carrying amount of a reporting unit is zero or negative, an entity must assess whether it is more likely than not that goodwill impairment exists. To make that determination, an entity should consider whether there are adverse qualitative factors that could impact the amount of goodwill, including those listed in ASC 350-20-35-30. As a result of the new guidance, an entity can no longer assert that a reporting unit is not required to perform the second step of the goodwill impairment test because the carrying amount of the reporting unit is zero or negative, despite the existence of qualitative factors that indicate goodwill is more likely than not impaired. ASU 2010-28 is effective for public entities for fiscal years, and for interim periods within those years, beginning after December 15, 2010, with early adoption prohibited. In September 2011, the FASB issued ASU No. 2011-08, Intangibles-Goodwill and Other (Topic 350) - Testing Goodwill for Impairment, which is intended to simplify how entities test for goodwill impairment by permitting an entity the option of performing a qualitative assessment to determine whether further impairment testing is necessary. The standard will be effective for annual and interim goodwill impairments tests for fiscal years beginning after December 15, 2011. We are currently evaluating the impact of our pending adoption of ASU 2011-08 on our financial statements. There were various other accounting standards and interpretations issued recently, none of which are expected to have a material impact on our consolidated financial position, operations or cash flows. o) Reclassification The organizational costs of our wholly owned subsidiary and our investment in Armistice Resources Corp. have been reclassified for each period as Assets Held for Sale. - F11 -
4. Discontinued Operations - Impairment of Investment in Armistice Resources Corp. and Sale of IMM On January 4, 2010 we disposed of our wholly owned subsidiary IMM Investments Inc. (IMM) which owned 5,000,000 shares of Armistice Resources Corp. (Armistice). The investment in Armistice consisted of 5,000,000 shares of that company that were held in escrow. The terms of escrow contained an undertaking with respect to respondents named in allegations of the Ontario Securities Commission (Commission) action described in Note 11 (2) found elsewhere in this report as follows: that (a) none of the respondents will be appointed an officer or director of Armistice (Corporation); (b) until the Commission's investigations relating to the allegations against the Respondents is complete IMM will not nominate any individual to the board of directors without the consent of the TSX; (c) IMM will execute an amendment to an escrow agreement providing that its securities being held in escrow cannot be voted without the consent of the TSX (which amendment was executed by IMM on June 5, 2006); (d) none of the respondents will participate in future financings of the Corporation until the Commission has completed its investigation; and (e) until the Commission's investigation is complete, if any derogatory information is found on any officer or director of the Corporation, the TSX may require the resignation of any of these individuals if deemed unacceptable to the TSX. During the fourth quarter of 2008, we determined that due to the terms of escrow agreement, the risks and estimated legal costs to recover the shares of Armistice as well as selling costs, it was more likely than not that the assets of IMM would be disposed of significantly before our previous estimates of its useful life. Therefore, at December 31, 2008 the Company performed an impairment test resulting in an impairment of $624,939 in the value of our investment in Armistice. As a result, our investment in Armistice as of December 31, 2008 was $177,985. Through December 31, 2009, our investment in Armistice was recorded at cost net of impairment and included in long term assets, with unrealized gains and losses recognized as accumulated other comprehensive income (loss). On December 31, 2009, shares in Armistice had a quoted market value of $0.22 Canadian per share. Our assets held for sale of $207,906 on December 31, 2009 included our investment in Armistice as well as foreign currency translation of $28,291 and organizational costs of IMM of $1,629. On January 4, 2010 the Company entered into an Agreement of Purchase and Sale with Braydon Capital Corp. to dispose of IMM in exchange for elimination of debt in the amount of $200,000. As a result of the sale, we disposed of advances from related parties in the amount of $128,500 as well as $71,500 in accounts payable. In addition, Braydon agreed to forgive $1,448 in fees paid to our Transfer Agent which were also recorded as advances from a related party. The details of the sale of IMM are as follows: Assets held for Sale at December 31, 2009 Investment in Armistice net of impairment $ 206,277 Organization Costs 1,629 ---------- Total Value of Assets held for Sale 207,906 ---------- Liabilities held for Sale Accounts payable 71,500 Advances from related parties 128,500 ---------- 200,000 ---------- Loss on sale of IMM, excluding foreign currency translation gain $ 7,906 Foreign currency translation 7,832 (Gain) on forgiveness of Advance from realted party ( 1,448) ---------- Net loss on sale $ 14,290 =========== - F12 -
5. Equipment Equipment at December 31, 2010 and 2009 consists of the following: 2010 2009 ---------- ---------- Telephone system $ 11,192 $ 11,192 Less accumulated depreciation 8,260 7,528 ---------- ---------- $ 2,932 3,664 ========== ========== 6. Advances from Related Party As a result of the sale of IMM Investments Inc. on January 4, 2010, $128,500 of Advances from Related Parties was eliminated and were reclassified as Liabilities held for sale as follows: 2010 2009 ---------- ---------- Prosper Consulting $ - $ 40,000 Gold Street Capital - 17,500 Braydon Capital Corp. - 71,000 ---------- ---------- Advances from related parties (Liabilities held for sale): $ - 128,500 ========== ========== Advances due from related parties are non-interest bearing and are due on demand. Advances from related parties as of December 31, 2010 and 2009 are as follows: 2010 2009 ---------- ---------- Braydon Capital Corp. 5,964 1,448 ---------- ---------- Total advances from related parties: $ 5,964 $ 1,448 ========== ========== Also, as a result of the sale of IMM Investments Inc. on January 4, 2010, Advances from Related Parties of $1,448 was forgiven. (See Note 4) - F13 -
7. Income Taxes Income taxes are recognized for the following: a) amount of tax payable for the current year, and b) deferred tax liabilities and assets for future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. For 2010 the deferred tax of approximately $29,000 compared to $62,000 for 2009, (35% of net loss from operations excluding impairment loss) was offset by a valuation allowance of $29,000 and $62,000 resulting in a net income tax of zero for 2010 and 2009 respectively. The Company has tax losses available to be applied against future years income taxable in the United States of America. Due to the losses incurred in the current year and expected future operating results, management determined that it is more likely than not that the deferred tax asset resulting from the tax losses available for carryforward will not be realized through the reduction of future income tax payments. Accordingly a 100% valuation allowance has been recorded for deferred income tax assets as follows: At December 31, 2010 the Company had deferred tax assets of approximately $85,000 and $177,000 for 2009 due to net operating loss carryforwards available to reduce future Federal income taxes earned in the United States. A 100% valuation allowance of approximately $85,000 and $177,000 for 2010 and 2009 respectively has been established since management believes it is more likely than not that the deferred tax assets will not be realized. The Company has accumulated a net operating loss carryforward of approximately $5,029,126 as of December 31, 2010. This loss carryforward may be offset against future taxable income through the year 2030. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. In the event of certain changes in control, there will be an annual limitation on the amount of net operating loss carryforwards that can be used. No tax benefit has been reported in the financial statements for the year ended December 31, 2010 because it has been fully offset by a valuation reserve. The use of future tax benefit is undeterminable because we presently have no operations. NOL's incurred are subject to limitation due to any ownership change (as defined under Section 382 of the Internal Revenue Code of 1986) which resulted in a change in business direction. Unused limitations may be carried over to future years until the net operating losses expire. Utilization of net operating losses may also be limited in any one year by alternative minimum tax rules. 8. Commitments and Contingencies The Company may be subject to claims arising in the ordinary course of business. The Company was subject to direct legal proceedings which were concluded in June 2010 as well as indirect proceedings involving our current Chairman and Principal Executive Officer which were concluded in May 2011 subsequent to the period covered by this report. As a result of the conclusion of these matters, the Company and our Chairman and Executive Officer are no longer subject to legal proceedings. 1 On November 1, 2005, the Company was served with a Statement of Claim filed in the Ontario Superior Court of Justice by Advanced Refractive Technologies Inc. ("Advanced"). In June 2010, the matter was mutually settled between the parties. As a result of the mutual settlement the claim against the Company was discontinued with no loss to the Company. - F14 -
8. Commitments and Contingencies (Cont'd) 2. On December 10, 2004, the Ontario Securities Commission ("OSC") served upon the former President and C.E.O. of the Company ("executive officer"), and companies controlled by our executive officer, as well as a shareholder of the Company related to the father of our former Chairman Kalson Jang and an unrelated party hired by Kalson Jang's father, collectively the "respondents" an order to cease trading in shares of Pender International Inc. ("Pender") an Ontario corporation owned by our former Chairman Kalson Jang and his father Kalano Jang a former shareholder of the Company. The allegations stated among other things that Armistice was a worthless, flooded mine and that there was no basis for the increase in the share price of the Company. On September 26, 2006 the Royal Canadian Mounted Police ("RCMP") charged our executive officer. As a result of the court proceedings, it was learned that the individual co-accused with our executive officer, while employed by a company associated with Kalano Jang, was a rogue RCMP agent and acted to defraud our executive officer, it was also discovered that senior RCMP officers had tampered with evidence allegedly to cover-up certain improper RCMP procedures and actions leading to the fraud perpetrated against our executive officer and admitted to a violation of his Canadian Charter Rights. On May 17, 2011 our executive officer entered into a settlement agreement offered by the OSC whereby the OSC agreed that our executive officer had no involvement in the fraud perpetrated against him by the co-accused RCMP agent and our executive officer agreed that he failed to properly monitor his trading accounts leading to the fraud committed against him by the former RCMP agent. Our executive officer agreed not to act in the capacity of an officer or director of any Canadian issuer for a period of five years. Criminal charges and proceedings against our executive Officer were susbequently stayed on May 18, 2011. 9. Subsequent Events The Company has evaluated subsequent events through the date of this Annual Report on this form 10-K for the year ended December 31, 2010, and has disclosed such items in this note as follows: On December 9, 2011, Empire Global Corp. (the "Company") entered into a Stock Purchase and Share Exchange Agreement (the "Agreement") with Avontrust Global Pte. Ltd. a Singapore company ("AVT") with its head office and operations in Singapore. When the transaction is closed, AVT will become a wholly-owned subsidiary of Empire Global Corp. Pursuant to the Agreement the Company will purchase 150,000 shares of AVT representing 100% of the issued and outstanding shares of AVT in exchange for 169,995,000 shares of the Company, or a ratio of approximately 1,133.3 shares of the Company for each share of AVT. There can be no assurance that the Agreement to acquire AVT will be closed, however, should the closing take place as anticipated on the closing date or as soon as practicable therafter, the issuance of these new shares will result in a change in control of the Company to the shareholders of AVT. AVT develops and has acquired a series of social networking entertainment Applications on Facebook with approximately 7 million installed users as of the end of Nov 2011. According to Google Analytics, AVT applications are employed by users represented in over 200 countries in approximately 100 languages and in more than 11,000 different cities from Jan 2010 to Dec 2011. AVT's Facebook application portfolio of products ranges from games, quizzes and social commerce storefronts. AVT aims to tap this user base to virally promote innovative new applications it will be producing internally and with its business partners. At the closing of this agreement, the Company will also transform itself into the world's first public quoted company that is managed principally using the Facebook Application Platform. The Share Exchange Agreement is subject to, among other things, (i) completion of due diligence by the parties to the Agreement; (ii) approval of the respective board of directors of each party and (iii) there being no material adverse change in the financial condition, business or prospects of the Company or AVT prior to closing. The closing date of the Agreement has been extended until March 6, 2012 or as soon as practicable therafter. - F15 -
Item 9. Changes in and disagreements with accountants on accounting and financial disclosure None. Item 9a. Controls and procedures Annual Evaluation of Discloure Controls We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), who are the same person, to allow for timely decisions regarding required disclosure. As required by SEC Rule 15d-15(b), our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective in providing material information required to be included in our periodic SEC filings on a timely basis and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure about our internal control over financial reporting discussed below. Management's Annual Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Our internal control system was designed to, in general, provide reasonable assurance to our management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2010. The framework used by management in making that assessment was the criteria set forth in the document entitled "Internal Control - Integrated Framework" issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. Based on that assessment, our management has determined that as of December 31, 2010, our internal control over financial reporting was not effective due to material weaknesses resulting from our limited resources. This annual report does not include an attestation report of the Company's registered accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission. Changes in Internal Control, Over Financial Reporting There was no change in our internal control over financial reporting that occurred during the fiscal years ended December 31, 2010 and 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9b. Other information None. 35
PART III Item 10. Directors and executive officers, promoters and control persons On December 31, 2010, Empire had two directors and two executive officers, all of which do not have any other directorships with any other reporting company. All directors of our company hold office until the next annual meeting of the stockholders or until their successors have been elected and qualified or have resigned. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Subsequent to the period covered by this report, on June 6, 2011, Mr. Dominelli resigned as Chairman of the Board and as Interim Chief Executive Officer and Chief Financial Officer but remained as a director. On the same day Mr. Michael Ciavarella was appointed as Chairman of the Board and as President, Chief Operating Officer and Chief Financial Officer, while Mr. Merchant was appointed to Chief Executive Officer. Also, on October 27, 2011, Mr. Merchant resigned as Chief Executive Officer and director of the Company and on the same day Mr. Ciavarella resigned as president and was appointed Chief Executive Officer. Our directors, executive officers and significant employees, their ages, positions held, and duration as such, as of the date of this report is as follows: Name Age Position Date First Elected Term Expiry Michael Ciavarella 49 Chairman, Director June 6, 2011 None Chief Executive Officer, Chief Financial Officer, Chief Operating Officer Vic Dominelli 47 Director January 6, 2005 None Secretary Identity of Significant Employees There are no employees or personnel that are expected to make a significant contribution to the business. Family Relationships There are no family relationships among the current directors, executive officers, or persons nominated or chosen by the Company to become directors or executive officers. 36
Resumes Michael Ciavarella, B.Sc. - Chairman of the Board, CEO, COO, CFO 2005 - 2011 Director of Operations, Empire Global Corp. 2004 President and CEO, Empire Global Corp (formerly Pender) 1990 - 2007 Independent Investment Advisor, Limited Market Dealer 1986 - 1990 Teacher - Cree School Board Mr. Ciavarella is 49 years old and is our former president, and chief executive officer. Mr. Ciavarella graduated from Laurentian University with a Bachelor of Science degree in science with studies in mining engineering. From 2002 to 2004 Mr. Ciavarella has served as a senior executive, financial planner and life insurance underwriter with Dagmar Insurance Services and financial advisor with Manulife Financial. In 2004, Mr. Ciavarella was instrumental in financing Armistice Resources Corp. a distressed gold mining venture situated in Northern Ontario, Canada. As a result of Mr. Ciavarella's investment and the efforts invested by Armistice's current management and staff, Armistice has completed its initial exploration and development and is planning to commence mining operations and gold production. Since 2005, Mr. Ciavarella has been engaged as our Director of Operations and assisted in a number of acquisition endevours explored by the Company during the period. In 2011, Mr. Ciavarella was appointed as chairman and executive officer. Vic Dominelli - Director, Secretary 2002 - Current Construction Supervisor 1985 - 2002 Senior Human Resources Manager Bombardier Aircraft Canada Inc. 37
Involvement in Certain Legal Proceedings 1. No bankruptcy petition has been filed by or against any business of which any director was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time. 2. No current director has been convicted in a criminal proceeding and is not subject to a pending criminal proceeding (excluding traffic violations and other minor offences). 3. No current director has been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities with the exception of the specific temporary restrictions limited to Canada mutually agreed to between Mr. Michael Ciavarella and the Ontario Securities Commission. 4. No director has been found by a court of competent jurisdiction (in a civil action), the Securities Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, that has not been reversed, suspended, or vacated. Compliance with Section 16(a) of the Exchange Act Based solely on a review of forms 4 and 5 furnished to the Company and filed with the Securities and Exchange Commission under Rule 16a-3(e) promulgated under the Securities Exchange Act of 1934, which the exception of Braydon Capital Corp., and Gold Street Capital Corp. the Company believes that all directors, officers and beneficial owners of more than 10% of any class of equity securities filed on a timely basis the reports required by Section 16(a) of the Exchange Act during the most recent fiscal year. Nomination Procedure for Directors Empire has adopted a nominee committee charter however, due to our limited operations does not have a standing nominating committee; recommendations for candidates to stand for election as directors are made by the board of directors. Identification of Audit Committee Our audit committee is comprised of Angela S. Chu, a Certified General Accountant and David Ciavarella, a Chartered Accountant. The audit committee reports to the board of directors when performing the required functions of the audit committee. Code of Ethics On February 21, 2006, the Company's board of directors formally adopted a Code of Business Conduct and Ethics effective December 31, 2005. The Company filed the Code of Business Conduct and Ethics on April 17, 2006 with the Securities and Exchange Commission as an Exhibit to the annual report on form 10-KSB for the year ended December 31, 2005 and a copy is attached by reference herein as an Exhibit to this annual report. The Company will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to: Empire Global Corp., Suite 2, 648 Finch Ave. East, Toronto, Ontario, M2K 2E6 Attention: President and CEO. 38
Item 11. Executive compensation The following table sets out compensation and awards paid to our officers and directors during the period covered by this report. SUMMARY COMPENSATION TABLE - Restricted Securities Name and Stock Underlying LTIP All Other Total principal Salary Bonus Award(s) Options Payouts Compensation Compensation position Year ($) ($) ($) ($) SARs (#) ($) ($) --------------------- ---- --------- ---------- ------------ ----------- ---------- ---------- ------------ Vic Dominelli, I/CEO, CFO, Chairman 2010 0 0 0 0 0 0 0 2009 0 0 0 0 0 0 0 2008 0 0 0 0 0 0 0 2007 0 0 0 0 0 0 0 2006 0 0 0 0 0 0 0 2005 0 0 0 0 0 0 0 There are no current employment agreements between the Company and its executive officers and directors. Our directors and officers submit invoices for services provided to the Company for business development. The directors and officers have agreed to receive shares of common stock in lieu of cash until such time as the Company receives sufficient revenues necessary to provide proper salaries to all officers and compensation for directors' participation. At this time, management cannot accurately estimate when sufficient revenues will occur to implement this compensation, or the exact amount of compensation. There are no annuities, pensions or retirement benefits proposed to be paid to officers, directors or employees of the corporation in the event of retirement at a normal retirement date pursuant to any presently existing plan provided or contributed to by the corporation. Compensation of Directors Currently, there are no arrangements between Empire and any of its directors or between any of the subsidiaries and any of its directors whereby such directors are compensated for any services provided as directors. No payments have been made to our directors for their services as directors that have not been previously reported by the Company. 39
Item 12. Security ownership of certain beneficial owners and management SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The tables below set forth, as of December 31, 2010 the beneficial ownership of the Company's Common Stock (i) by any person or group known by the Company to beneficially own more than 5% of the outstanding Common Stock, (ii) by each Director and executive officer and (iii) by all Directors and executive officers as a group. Unless otherwise indicated, the Company believes that the beneficial owners of the shares have sole voting and investment power over such shares. The address of all individuals for whom an address is not otherwise indicated is 648 Finch Ave., East, Suite 2, Toronto, Ontario M2K 2E6. Name and Address Percent Title of Class of Beneficial Owner Amount of Class ---------------- -------------------------------- ------------ -------- Common Braydon Capital Corp. 4,568,700 24.5% 144-Restricted Shareholder Common Prosper Consulting Corp. 4,559,200 24.4% 144-Restricted Shareholder Common Gold Street Capital Corp. 2,676,500 14.3% 144-Restricted Shareholder The above table is based upon information derived from our stock records. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, it believes that each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based upon 18,675,800 shares of common stock outstanding as of December 31, 2010. SECURITY OWNERSHIP OF MANAGEMENT Name and Address Percent Title of Class of Beneficial Owner Amount of Class ---------------- -------------------------------- ------------ -------- Common Michael Ciavarella, Chairman 0 0% CEO, COO, CFO Common Vic Dominelli, Director 343,000 1.8% 144-Restricted and Director Suite 2 - 648 Finch Ave. East Toronto, Ontario, M2K 2E6 Common Total shares owned by officers 343,000 1.8% 144-Restricted and directors of the Company as a group. All directors and executive officers (2 persons) CHANGES IN CONTROL As described elsewhere in this report, upon closing of the Stock Purchase and Share Exchange Agreement with Avontrust Global Pte. Ltd., control of the Company shall change to the principal shareholders of Avontrust. 40
Item 13. Certain relationships and related party transactions In the last 2 years, there have been no transactions or proposed transactions in which Empire was or was to be a party where directors or executive officers, nominees for election as a director and members of the immediate family of such persons were involved. Empire Global Corp. has no parent company and was not involved in any transactions or agreements with any promoters in the last five years. Transactions with Related Persons No director, executive officer, security holder, or any immediate family of such director, executive officer, or security holder has had any direct or indirect material interest in any transaction or currently proposed transaction, which the Company was or is to be a participant that exceeded the lesser of (1) $120,000 or (2) one percent of the average of our total assets at year-end for the last three completed fiscal years, except for the following: Promoters and control persons During the past six fiscal years, Vic Dominelli has been a promoter of Empire's business, however Mr. Dominelli has not received anything of value from Empire or its subsidiaries nor is any person entitled to receive anything of value from Empire or its subsidiaries for services provided as a promoter of the business of Empire and its subsidiaries. Director independence Pursuant to Item 407(a)(1)(ii) of Regulation S-B of the Securities Act, the Company has adopted the definition of "independent director" as set forth in Rule 4200(a)(15) of the NASDAQ Manual. In summary, an "independent director" means a person other than an executive officer or employee of the Company or its subsidiaries or any other individual having a relationship which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and includes any director who accepted any compensation from the Company in excess of $200,000 during any period of 12 consecutive months within the three past fiscal years. Also, ownership of Empire's stock will not preclude a director from being independent. In applying this definition, our board of directors has determined that Vic Dominelli qualifies as an "independent director" pursuant to Rule 4200(a)(15) of the NASDAQ Manual As of the date of the report, Empire did not maintain a separately designated compensation or nominating committee, however, the company has also adopted this definition for the independence of the members of its audit committee. Mr. Dominelli does not serve on any committees of the board. 41
Item 14. Principal accountant fees and services AUDIT FEES Audit fees are for professional services for the audit of our annual financial statements, and for the review of the financial statements included in our filing on form 10-K and for services that are normally provided in connection with statutory and regulatory filings or engagements. The Company paid audit fees of approximately $20,000 in connection to audits for the periods ended December 31, 2009 and 2010. AUDIT RELATED FEES Audit related fees are funds paid for the assurance and related services reasonably related to the performance of the audit or the review of our financial statements. We paid no audit related fees during 2010 and 2009. TAX FEES Tax fees are those funds paid for professional services with respect to tax compliance, tax advice, and tax planning. We paid no professional tax fees during 2010 and 2009 other than those previously disclosed. ALL OTHER FEES Fees paid for permissible work that does not fall within any of the three other fees categories set forth above. No other fees were paid during 2010 and 2009. PRE-APPROVED POLICY FOR AUDIT AND NON-AUDIT SERVICES During the period covered by this report the Company had a standing audit committee to perform all functions of an audit committee, including the pre-approval of all audit and non-audit services prior to our engagement of an accounting firm and report to the Board of Directors. All of the services rendered for us by Bernstein and Pinchuk, LLP were pre-approved by our Board of Directors. Item 15. Exhibits EXHIBITS The exhibits required by Item 601 of Regulation S-B listed on the Exhibit Index are included herein. All Exhibits required to be filed with the form 10-K are included in this annual report or incorporated by reference to our previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-50045. Exhibit Description Status 14.1 Code of Ethics filed as an exhibit to Empire's form 10-KSB Filed filed on April 17, 2006, and incorporated herein by reference. 31 Certification of Principal Executive Officer and Principal Included Financial Officer required under Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended. 32 Certification of Principal Executive Officer and Principal Included Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 42
REPORTS ON FORM 8-K (SUBSEQUENT TO THE DATE OF THIS ANNUAL REPORT) On June 13, 2011, the Company filed an 8-K to report the following: That Mr. Ciavarella had entered into a settlement agreement with the Ontario Securities Commission (OSC) whereby the OSC agreed that Mr. Ciavarella had no involvement in an alleged fraud orchestrated by Michael Mitton a rogue agent of the Royal Canadian Mounted Police (RCMP) and Mr. Ciavarella agreed that he failed to properly monitor his securities account at HSBC Securities. In the same report, the Company reported that criminal Proceedings were stayed against Mr. Ciavarella on May 18, 2011. On June 13, 2011, the Company filed an 8-K to report the following: Mr. Dominelli tendered his resignation as Interim Chief Executive Officer and Chief Financial Officer and Chairman but would remain a director. At the same time, Mr. Ciavarella was appointed as Chairman, President, Chief Operating Officer and Chief Financial Officer and Mr. Sam Merchant, our Director was appointed as Chief Executive Officer. On October 28, 2011, the Company filed an 8-K to report the following: Mr. Merchant tendered his resignation as Chief Executive Officer and director. At the same time, Mr. Ciavarella was stepped down as President and was appointed as Chief Executive Officer. On December 12, 2011, the Company filed an 8-K to report the following: The Company entered into an Agreement to acquire Avontrust Global Pte. Ltd. with a closing date of January 6, 2012. On February 1, 2012, the Company filed an amendment to the form 8-K to report the following: The Company and Avontrust Global Pte. Ltd. mutually agreed to extend the closing date of the Agreement to March 6, 2012 to provide additional time to file required financial statements. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EMPIRE GLOBAL CORP. By: /s/ Michael Ciavarella Date: February 21, 2012. Michael Ciavarella Chairman of the Board Chief Executive Officer (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer) In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Michael Ciavarella Date: February 21, 2012. Michael Ciavarella Chairman of the Board Chief Executive Officer (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer